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Invest Like the Best

Exploring the ideas, methods, and stories of people that will help you better invest your time and money. Learn more and stay-up-to-date at InvestorFieldGuide.com
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Now displaying: June, 2017
Jun 27, 2017

If you told me a year ago that I’d be learning critical life and business lessons from the founder of a ketchup company, and that thirty to fifty thousand people would listen to our conversation, well, I’d have told you that’s impossible. But the fact that it is true proves many of the points laid out by this week’s guest Scott Norton, co-founder of Sir Kensington’s which was recently acquired by Uni-Lever. Sir Kensington’s, which makes “condiments with character” is no ordinary Ketchup company, and Scott is no ordinary founder.

We talk about the most elemental aspects of business: product, relationships, sales, marketing, and culture. I love that we can do so through the lens of such a seemingly simple product, something that we use all the time with our families at a BBQ. Scott’s observations on culture, the importance of relationships in sales, and competitive edge are all memorable. But above all, I’ll remember his line: seek to learn that which cannot be taught. And I will continually return to the mental image of the Temple of Poseidon.

Oh, and as a bonus we also talk about biking around Asia, which like all of Scott’s stories comes complete with thought provoking lessons.

Enjoy this unique conversation with one of the most interesting people I’ve met on this journey. We begin with the history of ketchup.

 

For comprehensive show notes on this episode go to http://investorfieldguide.com/norton

For more episodes go to InvestorFieldGuide.com/podcast.

Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub.

Follow Patrick on Twitter at @patrick_oshag

 

Links Referenced

They Call Me Supermensch: A Backstage Pass to the Amazing Worlds of Film, Food, and Rock’n’Roll  (Movie)

 

Books Referenced

Getting to Yes: Negotiating Agreement Without Giving In

How to Win Friends & Influence People

They Call Me Supermensch: A Backstage Pass to the Amazing Worlds of Film, Food, and Rock’n’Roll  (Book)

 

Show Notes

2:40 – (First question) – A look at the history of ketchup

5:16 – The milestones of ketchup’s history in the US

10:26 – What were the early days like to compete in a market where the leaders have such a stronghold on the consumer

13:03 – A ketchup party to survey users

14:41 – Effective ways to negotiate

            14:57 – Getting to Yes: Negotiating Agreement Without Giving In

16:32 – How may stages were there in the early products

19:04 – A look at kaizen and what it means to Scott

20:38 – Scandinavian business principles that they bring to the company

23:40 – As the company has grown, has Scott seen downsides to the stakeholder model especially when competing against larger companies that use the shareholder model

28:19 – How did they use outside capital in getting started

31:07 – What was the most memorable story from the early days of disrupting this legacy industry, especially as it relates to the sales of this product

            33:30 – How to Win Friends & Influence People

33:58 – How do you create trust and show the benefits of your product in sales

37:48 – How culture started for the company, how it’s shifted since then and what competitive advantage the right culture creates

41:47 – Some of the best outcomes are the result of mindset and culture

43:28 – What new frontiers is Scott and the company looking at today

46:53 – How often has Scott had to course correct and continue down the path of the unknown

49:28 – Kindest thing anyone has done for Scott outside of the company

51:41 – The power of giving and how it will bring large returns, especially when you don’t expect them as part of the giving

            53:04 – They Call Me Supermensch: A Backstage Pass to the Amazing Worlds of Film, Food, and Rock’n’Roll  (Book and Movie)

55:37 – Look at Scott’s decision to bike around Asia and what he experienced during that time

1:02:49 – Best advice for someone in their early 20’s

 

Learn More

For more episodes go to InvestorFieldGuide.com/podcast

Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub

Follow Patrick on twitter at @patrick_oshag

Jun 20, 2017

My guest this week is Andy Rachleff, who is the CEO of the automated investing platform Wealthfront. Andy was also a co-founder and long-time partner at Benchmark capital--one of the most interesting and successful venture capital firms in the world.

We spend most of our conversation discussing venture capital investing and entrepreneurship. Andy coined the now ubiquitous term “product/market fit,” and has great insight into how investors and entrepreneurs should think about business. In that vein, we discuss both what we refer to as the value hypothesis: building a product or service that customers love, and the growth hypothesis: scaling that product or service to a large market.

We finish our conversation by talking about Andy and his teams mission at Wealthfront, and this conversation is perfectly timed, as Wealthfront just released a new feature that allows investors to buy factor portfolios, similar to Smart Beta ETFs.

Above all, I’ll remember Andy’s advice to “put the gun in the other person’s hand,” a strategy that we explore in the middle of our talk.

 

For comprehensive show notes on this episode go to http://investorfieldguide.com/andy

For more episodes go to InvestorFieldGuide.com/podcast.

Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub.

Follow Patrick on Twitter at @patrick_oshag

 

Books Referenced

The Four Steps to the Epiphany

The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses

Millennial Money: How Young Investors Can Build a Fortune

Diffusion of Innovations

Crossing the Chasm: Marketing and Selling High-Tech Products to Mainstream Customers

 

Show Notes

2:36 – (First question) – The partnership setup and how they came to be 5 equal partners

7:57 – Why benchmark would not take on the chairman role in companies they invested in

9:28 – What made John Doerr the greatest capitalist investor ever

11:59 – Looking at the venture process and what made it an attractive investment for Benchmark, using eBay as an example.

18:06 – If you are willing to help other people, without an expectation of return, it can create other opportunities

20:08 – Andy is asked to explain the idea of Product Market Fit, a term that he coined

22:18 – How does one go about finding a Product Market Fit

            23:05 – The Four Steps to the Epiphany

            23:19 – The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses

25:55 – What are the components of the Growth hypothesis

26:51 – Why you can learn more professionally from success vs failure

28:13 – What it’s like to shift from venture capitalist to operator/CEO

30:24 – The rate at which technology gets adopted and what will help Wealthfront

            30:53 – Millennial Money: How Young Investors Can Build a Fortune

            31:26 – Diffusion of Innovations

            31:38 – Crossing the Chasm: Marketing and Selling High-Tech Products to Mainstream Customers

32:38 – What does it look like to innovate on top of current platforms

41:07 – Will platforms like Wealthfront help to democratize access to private markets

44:23 – Kindest thing anyone has done for Andy

 

 

Learn More

For more episodes go to InvestorFieldGuide.com/podcast

Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub

Follow Patrick on twitter at @patrick_oshag

Jun 13, 2017

I’ve often joked that this show should be called “this is who you are up against,” because I am so often having conversations with brilliant people across the investment landscape who are effectively my competition and yours. This week’s conversation fits that description because it gives you an inside view into how things work among some of Wall Street’s most competitive investment firms. My guest is Leigh Drogen, who has worked as a statistical arbitrage portfolio manager and who founded and now runs Estimize, a data company which works with some of the world’s largest hedge funds.

Our conversation centers on the massive shift from what we call discretionary portfolio management—basically stock picking—to a landscape that is increasingly dominated by quantitative investors of various types. We talk about how any investor might hope to earn alpha, and how doing so is harder and harder.

There are so many great stories in this episode, told by someone with the perfect career experience to know how the system actually works. After many episodes where I’ve been learning on the fly about topics like venture capital, permanent equity, or health, this episode marks a return to my world of quantitative investing. I think you’ll learn a lot, and that you’ll likely finish with an even deeper appreciation of just the type of investors that we are all up against.
 

Books Referenced

Revenge of the Humans: How Discretionary Managers Can Crush Systematics

 

Links Referenced

The Undoing Project: A Friendship That Changed Our Minds

Force Rank (App)

Founder of Estimize Explains How He Plans To Disrupt The World Of Wall Street Research

 

Show Notes

2:45 – (First question) – A look at Leigh’s early career and how he got started in investing

            3:13 – Revenge of the Humans: How Discretionary Managers Can Crush Systematics

5:39 – Leigh is asked to describe the inefficiency in sell-side analysts’ estimate set

8:04 – What happened when things stopped working towards the end of 2007.

9:35 – The proper dimensions to separate any sort of potential Alpha edge

11:15 – The traits that help a fund perform well

            11:42 – The Undoing Project: A Friendship That Changed Our Minds

            14:05 – Force Rank (App)

14:49 – How the scientific process plays into Leigh’s research strategies

19:18 – Explain what Estimize is and what it does

20:55 – How people are compensated for the estimates

23:33 – The scale of how many estimates they get per company

24:57 – Why you need to be part of this informational arms race if you hope to survive

28:30 – What happens if everyone buys Estimize data and the Alpha built into it goes away

31:04 – What has been the evolution in these hedge fund platform type companies

35:00 – If Leigh was designing a firm from scratch, what would it look like

37:25 – Understanding Numerai and crowdsourcing in funds

41:41 – What is an example of interesting data set that Leigh as come across

45:38 – What is the potential for a hybrid model between a quant only with a discretionary picker.

51:35 – How do you know when something is busted or broken?

55:33 – Exploring his most memorable individual day in his career – Flash Crash

58:16 – With all the algorithms and automation, will we continue to see more of these unforeseeable dislocations like the flash crash?

            1:01:00 – Bloomberg article about passive investing rates

1:07:50 – What is Leigh most excited about the future

1:13:15 – Kindest thing anyone has ever done for Leigh

            1:13:41 – Founder of Estimize Explains How He Plans To Disrupt The World Of Wall Street Research

 

Learn More

For comprehensive show notes on this episode go to http://investorfieldguide.com/drogen

For more episodes go to InvestorFieldGuide.com/podcast.

Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub.

Follow Patrick on Twitter at @patrick_oshag

 

 

Jun 6, 2017

This week’s episode is very unique. It is the first episode devoted to bonds, just not the kind of bonds you are used to. My guest is Ira Judelson, who is the leading bail bondsman in New York City. I met Ira through my friend and former podcast guest Danny Moses, who is also a part of this conversation.

I have always had a passion for understanding how different businesses work. In this case, this week we are exploring a different business, but also a different world. Ira’s story is larger than life. He is as authentic and hard working as they come. In both his book and this conversation, there is a lot about family, loyalty, and hard work—principles which really resonate with me.

You’ll emerge from this hour with an appreciation of hustle and what it takes to get ahead. I can’t stop thinking about our discussion on how sources of power in any career morph through time, a framework that can help anyone think about their work and where to apply effort.

The conversation goes all over the place, but suffice it to say we discuss bond collateral, Dominique Strauss-Kahn, and DMX—and that is but one small fraction.

Please enjoy my conversation with Ira Judelson and Danny Moses.

 

For comprehensive show notes on this episode go to http://investorfieldguide.com/ira

For more episodes go to InvestorFieldGuide.com/podcast.

Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub.

Follow Patrick on Twitter at @patrick_oshag

 

Books Referenced

The Fixer: The Notorious Life of a Front-Page Bail Bondsman

 

Links Referenced

Rao’s Restaurant

 

Show Notes

1:55 – (First question) – The role that Rao’s restaurant has meant to Ira’s business and career

 

6:11 – A look at Ira’s bail bonds business and how that industry works

            6:22 – The Fixer: The Notorious Life of a Front-Page Bail Bondsman

 

8:31 – The story of how a pizzeria was a bad piece of collateral

 

11:10 – How often does Ira deal with bail jumpers

 

12:10 – What is the size of the open liabilities

 

13:14 – How long will the open liabilities last

 

14:55 – Ira’s relationship with his clients and the importance of character in this business

 

17:46 – the amazing story of how Ira got started in this business

 

31:05 – His early years of being a bail bondsman and how important his wife was to his success

 

29:52 – How Ira balances family with this kind of work

 

32:22 – Ira’s ability to be amazingly efficient on the phone when in social settings and a work call comes in

 

33:14 – Ira is the fixer

 

36:40 – Exploring the “Sources of Power” and where the balance for Ira of who he knows vs who he has shifted in this line of work.   

 

38:29 – The importance of intense reliability, consistency and empathy, and why Ira can trust his clients may be considered bad people

 

30:19 – Two cases where Ira got emotionally involved

 

47:26 – Why Ira is not worried about people coming after him

 

48:57 – When a bunch of detainees were wailing to wait an extra day in jail for Ira because his wife was pregnant with their first daughter

 

54:06 – Ira’s relationships with Ja Rule and DMX

 

58:32 – What does Ira enjoy most about the business still

 

1:01:51 – Will Ira ever stop?

 

1:04:02 – What advice would Ira give to someone early in their career just getting started

 

1:08:42 – The importance in having a willingness to fail mixed with the passion for what you are doing

 

1:10:11 – Ira’s health scare and what it taught him about appreciating life

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