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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: 2017
Dec 26, 2017

My guest this week is Chris Dixon, who has written some of my favorite essays on technology and venture investing. Chris is a prolific investor and thinker, having been an entrepreneur, angel investor, and now partner at the well-known venture capital firm Andreessen Horowitz.

Our conversation focuses on major trends in technology, including cryptocurrencies and the future of autonomous vehicles and drones.

Chris has a rule of thumb for technology trends: find out what smart people are working on during the weekend, and you’ll know what other will be doing years in the future. After surveying his old essays, it’s clear you use Chris’s writings as a similar litmus test.

Hash Power is presented by Fidelity Investments

Please enjoy this great conversation with Chris Dixon on the future of tech.

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

Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages

Who Controls the Internet?: Illusions of a Borderless World

 

Links Referenced

Douglas Hofstadter

Daniel Dennett

How Aristotle Created the Computer

New Yorker Cover on automation

The World of Numbers website

Jerry Neumann podcast episode

David Tisch podcast

ERC-20 Token Standard

Eleven Reasons To Be Excited About The Future of Technology

 

Show Notes

2:04 (First Question) – Why did Chris choose to study philosophy

            2:23 – Douglas Hofstadter

            2:24 – Daniel Dennett

            3:20 – How Aristotle Created the Computer 

3:35 – Where has his thinking and viewpoints changed the most having been in the real world 

4:42 – What is the real driving force behind all of the technology that we are creating and will automation kill all of the jobs

            6:16 – New Yorker Cover on automation

            6:57 – The World of Numbers website

8:36 – A look at his history in networks and network design

            11:03 – Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages

            11:07 – Jerry Neumann podcast episode

            12:32 – Who Controls the Internet?: Illusions of a Borderless World

13:06 – What are the market and technological forces that make it difficult to regulate software hardware companies

14:39 – The best features of proprietary centralized networks and open networks

16:40 – What things are better centralized vs decentralized

            22:30 – David Tisch podcast

23:03 – When it comes to cryptocurrencies, what are the concerns that the protocols themselves hold value and could this lead to centralization of the system problems

            24:02 – Block size debate (topic)

            26:40 – ERC-20 Token Standard

27:23 – Is the blockchain the answer to the stagnation of the big tech players 

32:47 – Does Chris find investment in individual crypto tokens analogous to seed funding in companies 

34:39 -  How does Chris think about the dichotomy of investing in people vs technologies

            34:59 – Eleven Reasons To Be Excited About The Future of Technology 

37:45 – What organizational structures of companies are most compelling 

41:50 – Any major trends in technology a cause for concern for Chris 

42:34 – Any interesting trends by people looking to disrupt the centralization of internet power to a small few 

44:09 – What major trends is Chris passionately pursuing 

51:15 – If everyone agrees on a future trend of technology, can you still make money investing in them 

52:20 – How do you encourage younger people to approach the world and a career differently in this ever-changing world 

57:39 – Kindest thing anyone has done for Chris

 

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

Dec 19, 2017

So far I’ve spent no time in the podcast discussing real estate, so I was excited to get the chance to talk to the team at Sorin Capital, a billion dollar hedge fund which specializes in commercial real estate, REITs, and commercial mortgage backed securities.  Sorin is lead by Jim Higgins, who founded the firm, and Tom Digan, who coincidentally was a college classmate of mine at Notre Dame.

The conversation has two unique angles. The first, which starts about 20 minutes into the conversation after we introduce the sector and opportunity set, is a deep dive into a specific trade: a fairly contrarian take on the retail industry, specifically comparing different types of retail real estate. As you’ll hear, the dispersion of mispricings in the sector may be huge, creating opportunities for specialists to earn real alpha by doing bottom up work.

The second angle we explore is what I believe to be a strong model for the future of asset management businesses, that is tailoring products, strategies, and even specific trades to the needs and risk-return profiles that clients want and need, instead of just selling a one-size-fits-all comingled fund. 

You’ve probably heard me joke that this podcast should be called “This is who you are up against,” and this episode is a good example. I always enjoy exploring a niche part of the market, and this conversation on real estate is a perfect example of the type of work that firms do on behalf of their clients.  Please enjoy my conversation with the team from Sorin Capital.

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

Ugly Americans: The True Story of the Ivy League Cowboys Who Raided the Asian Markets for Millions

Liars Poker

Barbarians at the Gate: The Fall of RJR Nabisco

 

Show Notes

2:43 - (First Question) –Outline the Real Estate Investment Trust world and what the assets and total value look like

6:10 – What does the profile of investors in the space look like compared to investors in the broader debt markets

9:43 – What are the characteristics of a liquid real estate portfolio that make them so attractive to investors

10:54 – Looking at the history of Sorin Capital and how the business has evolved to where it is today

12:35 – Understanding the idea of securitization of commercial mortgages

17:01 – What really led to the formation of Sorin after working for Bear Stearns

20:19 – Looking at the retail sector in real estate in the scope of actual trades that are being made

25:08 – From an investing standpoint, how do you craft a portfolio that takes advantage of the real estate space as retail appears to be suffering on the surface

30:09 – The different type of real estate investments in the retail sectors and what piece of the pie do they make up

32:43 – How does the business model of the mall work and why is it so connected to the department stores

34:08 – What is the future of malls itself with the big changes happening to the legacy stores that helped them proliferate

37:44 – Why won’t the same thing that has happened to apparel stretched to all sectors of the retail industry

39:09 – How do they search for inefficiencies in the market

41:20 – One of the craziest things they saw on the road that outlined real world craziness in real estate investment

42:23 – What is the duration involved in these types of investments

44:41 – How the portfolio is positioned across these different real estate types

47:49 – Why haven’t others come in and taken advantage of the investments that Sorin is able to

49:03 – Reaction to the idea that the growth of passive ETF’s and investing styles has lengthened the time over which certain inefficiencies would be corrected and are distorting things

51:27 – How much does momentum play into their thinking

54:19 – How evenly distributed are the vintages of these ten year cycles

57:15 – Explaining the idea of deep value bottom up work in the real estate investment world that they have done a deep dive on

59:31 – Best stories from boots on the ground visits

1:04:04 – The origin story for the original Sorin partnership

            1:04:42 – Ugly Americans: The True Story of the Ivy League Cowboys Who Raided the Asian Markets for Millions

            1:04:43 - Liars Poker

            1:04:44 – Barbarians at the Gate: The Fall of RJR Nabisco

1:07:51 – What was it like for Tom getting started and the lessons he learned after an incredible hard time for the market

1:09:24 – What was it like for Jim coming through the crisis

1:11:18 – What is the trend for funds to craft investments specific to investors vs having them buying products that they produce

1:18:29 = Are other hedge fund firms moving to a client demand or solutions-based model? Or are we still very early in the transition

1:22:50 – What would the generalists miss in this space vs someone like Sorin that is a specialist

 

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

Dec 12, 2017

My guest this week is Franklin Foer, the author the recently published book “World Without Mind.” The topic of our conversation is one that I’ve been thinking through often this past year: the impact that large technology companies have on our minds and behavior. This conversation is only indirectly related to markets, but given that the companies we discuss are now several of the largest by market cap in the global stock market, what happens to them likely impacts all of our portfolios whether we own them or not. Given that these companies compete for our attention and dollars, they also affect our businesses.

As an example, My friend Brent Beshore and his team at Adventures wrote a long and incredibly thoughtful piece on how they think about Amazon as a force in the market, and how they plan on navigating around such a fierce competitor.

Franklin’s book, especially the early history, is very thought-provoking, so it was no surprise that our conversation was too. Please enjoy our talk on the tech giants.

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

Free PDF of The Whole Earth Catalog

Amazon Must Be Stopped (New Republic)

Hannah Arendt Philosophy

Time Well Spent

 

Books Referenced

World Without Mind: The Existential Threat of Big Tech

The Whole Earth Catalog

The Lessons of History

 

Show Notes

1:40 - (First Question) – As part of Jonathan’s new book, World Without Mind: The Existential Threat of Big Tech, exploring the idea of the whole earth catalogue.

            4:09 – The Whole Earth Catalog

            4:36 – Free PDF of The Whole Earth Catalog

4:49 – What happened next for Brand and how he laid the early groundwork for today’s modern Silicon Valley

7:43 – Franklin’s personal journey into writing this book

            10:00 – Amazon Must Be Stopped (New Republic)

11:48 – Thoughts on the advancement of technology in our world

15:52 -  Filling the gap into Brand’s influence on Silicon Valley from the early 80’s to today

18:57 – How does the current state of the free internet without gatekeepers hold up for the next generation

20:53 – Is there a chance that technology’s unlimited mining of our attention is not the horrible thing we often make it out to be

24:47 – What are the ways we can have a free internet and other technologies, but not let them get perverted

28:09 – How will people respond to our tech monopolies

31:54 – The Lessons of History and the rise and fall of centrist powers

33:02 -  A look at Franklin’s work and how its impacted by the reliant on a few large tech companies

35:28 – The dangers that tech giants like Facebook, Amazon, etc, have created for us

40:45 – Is there a technology, company, or trend that Franklin is really excited for

42:19 – Will there be movements that emphasis detachment from technology

44:05 – Why most innovations have happened to people thinking in a very separated or contemplative mode

45:58 – What’s the most exciting thing that Franklin is thinking about now

49:30 – What was the most memorable content in researching this book that Franklin would suggest other check out

            49:59 – Hannah Arendt Philosophy

52:37 – Are there specific things that Franklin does to be more contemplative

            53:26 – Time Well Spent

54:47 – Kindest thing anyone has done for Franklin

 

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

Dec 5, 2017

My guest this week is Adam Ludwin, the founder and CEO of Chain, a blockchain technology company targeted at large enterprises. Before shifting his career to focus solely on crypto, Adam was a venture capitalist focused on FinTech, which is how he came across the Bitcoin whitepaper earlier than most. I called this episode “a Sober View on Crypto” because Adam’s take is so balanced. He is certainly long crypto, both in his portfolio and career, but he is very skeptical of much of what is happening in the ecosystem today. For example, he offers the best reason I’ve heard for not launching an ICO or investing in them. 

If you haven’t read Adam’s widely shared open letter to Jamie Dimon, it has become a must-read piece for crypto-enthusiasts. Read it as soon as you can.

I edited out an earlier chunk of our conversation as it was largely introductory. If you need a broader introduction to cryptocurrencies, I suggest starting with episode one of Hash Power and working your way forward. One key insight from Adam in our offline discussion what how cryptocurrencies function very much like equities or bonds. Just as equity financing enables the activity of joint stock corporations, cryptocurrencies enable activity in decentralized applications. We pick up our discussion with Adam discussing whether anyone really uses these decentralized apps today.

Hash Power is presented by Fidelity Investments

 

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

 

Show Notes

2:35 - (First Question) – Will anyone use cryptocurrency in the real world at a large scale

3:43 – The idea of censorship resistance

12:29 – Will society be accepting of this technology

14:39 – Why decentralized apps can’t be acquired

18:24 – The idea of exponential vs linear improvements on a trend and if there are limits to the growth of decentralized technologies

23:26 – The struggle with early adaption of blockchain

25:41 – Best application for bitcoin, storing value

29:52 – Adam’s introduction to cryptoassets and how his thinking has evolved in the space

36:44 – In this hyper frothy market, is there a situation that makes an ICO exciting to Adam

43:51 – Even though it appears to be easy money, Adam explains why you shouldn’t just create an ICO

50:59 – A look at what Chain is doing and what Adam is excited about

53:23 – How does what Adam is working on help to improve the ledger of his clients

1:02:00 – Why you can easily be an early investor in crypto currency

1:04:27 – Kindest thing anyone has done for Adam

 

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

Nov 28, 2017

My guest today is Joanne Wilson, a New York City based angel investor, writer, podcaster, trend spotter, and self-described “woman around town.” Joanne has had a multifaceted and winding career, and began angel investing a decade ago when she put money into NYC-based media company Curbed media which we discuss in detail. Since then, she’s invested in more than 90 companies and been pitched by countless more. She is an instantly likeable person, you can literally tell in 10 seconds you are going to have a great conversation, so it’s no surprise that part of what makes her unique among angels is a very close relationship with many of the founders she backs.

We cover a lot of ground. We talk about the personality traits of entrepreneurs, Joanne’s evolving investment style, her focus on female founders, fashion, business models, restaurants and a lot more. Please my conversation with the Gotham Gal, Joanne Wilson.

 

For more episodes go to InvestorFieldGuide.com/podcast.

To get involved with Project Frontier, head to InvestorFieldGuide.com/frontier.

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

 

Show Notes

2:12 - (First Question) – How does Joanne orient herself towards what’s new, in the context of food in New York city

4:10 – Can that mindset of forward thinking be cultivated

5:18 – Latest thing that got Joanne excited before everyone else

6:57 – Why the new frontier is going niche and local

10:23 – Joanne’s first investment

11:48 – Why do VC’s typically stay away from media

12:55 – How Joanne got into her first investment as a customer

14:11 – What is the skillset of making money that Joanne as

14:45 – Can you sense if a founder has that innate ability to just make money

17:04 – Are there common traits in founders

18:07 – Joanne’s progression into angel investing after her first investment

19:58 – Red flags when looking at investments

20:40 – Impression on growth without goals

23:30 – Trends among Joanne’s investments

25:56 – How much knowledge is transferrable between different industries that Joanne invests in

27:06 – The dichotomy and unique challenges between raising capital with female founders vs male founders

29:07 – How does Joanne balance her time and stay engaged with all of her investments

30:50 – Time when Joanne has helped a founder side step a pothole

31:35 – Most memorable first impression Joanne experienced

35:05 – How often does someone not have the right idea but is still worth investing in

37:19 – Why Joanne won’t start a fund

38:22 – Data on female founders returns and time

40:38 – Criteria for identifying emerging trends, especially in the more creative/artistic fields 

43:29 – The changing costs of launching a brand, in the contest of fashion

47:11 – What has Joanne most excited right now

      48:11 – Interesting facts about the fashion business 

52:01 – Kindest thing anyone has done for Joanne

 

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

Nov 21, 2017

This week’s conversation is an ode to old school, fundamental public market investing. My conversation is with IMC’s Connor Leonard, who spends most waking hours thinking and reading about markets. His mandate is to invest purely as if it was his own money, with no pressure to hug a benchmark, and no pressure to do much of anything other than earn strong long-term returns.

The portfolio that results from this approach is highly concentrated and unique. Connor’s strategy is to sort companies into four categories based on their type of sustainable competitive advantage. As you’ll hear, the vast majority fall into the first category, which means they don’t have such an advantage and therefore should be largely set aside.

We spend the majority of our conversation talking about the other three categories: 1) companies with a legacy moat, 2) companies with a re-investment moat, and 3) an interesting category Connor calls “capital light compounders,” which we explore in detail.

When you step back and think about public markets, you realize how amazing it is that we can, from afar, buy an interest in so many companies around the world. A select few go on to deliver outstanding returns. This conversation highlights how hard that can be, but also how fun and ultimately rewarding. Please enjoy my talk with Connor Leonard.

                                              

For more episodes go to InvestorFieldGuide.com/podcast.

To get involved with Project Frontier, head to InvestorFieldGuide.com/frontier.

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

Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor

The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success     

 

Links Referenced

Pat Dorsey Podcast Episode

David Tisch podcast   

Will Thorndike Podcast episode

 

Show Notes

2:31 - (First Question) –   Trends in value investing

            2:52 – Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor

4:43 – A look at Connor’s backstory and the history of IMC, parent company of Golden Corral

8:01 – Why Connor loves the public markets so much  

9:21 – The concept of intrinsic value when looking at companies

12:36 – How Connor categorizes MOATS

            13:21 – Pat Dorsey Podcast Episode

14:27 – Legacy MOATS

16:11 – Reinvestment MOATS

17:58 – Capital light compounder MOAT

20:00 – Why classifieds are an interesting business model

25:12 – Looking at platform businesses

26:56 – Looking at companies in the 500 million to 5 billion range and what makes it so enticing

30:34 – What is the process that gets Connor to find investment opportunities

            35:53 – David Tisch podcast  

36:15 – How Connor looks at industry classifications

41:30 – Connor’s strategy for running his portfolio

46:36 – The circumstances in which Conno would buy a legacy MOAT company

            46:49 – Will Thorndike Podcast episode

            46:51 – The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success    

49:21 – How do you pick managers that will beat the markets

52:21 – Second reason to buy a legacy MOAT

54:48 – Comparing the reinvestment MOAT and Capital A compounder in Connor’s portfolio

58:16 – Connor’s Mt Rushmore of Capital Allocators

1:00:03 – Impactful mentorships for Connor

1:01:52 – kindest thing anyone has done for Connor

103:04 – What in the discussion with founder of IMC got him the job

 

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

Nov 14, 2017

My guest this week is unique. As you will hear early and often, he is programmed to go his own way, to, as he says, go one way when everyone else is going another. His name is Dhani Jones, a name I knew as a Notre Dame football fan, because he won a championship with our arch-rivals, the University of Michigan, in the late 90’s. Dhani went on to a long and successful career in the NFL, but even more interesting has been his many pursuits in business and investing outside of football. Like my conversation with Tim Urban, I’ll remember this conversation as a reminder to use a first principles mindset. Dhani seems to have this fresh mindset baked into his character, and as you’ll hear this has led to many a great adventure. Please enjoy my conversation with athlete, businessman, investor, philanthropist, movie buff, and bowtie wearer, Dhani Jones.

                                              

For more episodes go to InvestorFieldGuide.com/podcast.

To get involved with Project Frontier, head to InvestorFieldGuide.com/frontier.

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

 

Show Notes

1:30 - (First Question) –  A introduction into Dhani Jones and everything he’s done

5:35 – How did Dhani change throughout his football career

9:55 – The power of your mind in every aspect of life

10:34 – Most memorable experience in the NFL

13:10 – Making the transition from the NFL to the business world

18:20 – Looking at Bowtie Cause

22:40 – The role of creative agencies in Dhani’s ventures and why story telling is so important for him

26:48 – Looking at some of the TV stuff that Dhani has done, particularly around travel

28:21 – Dhani’s favorite movie

30:35 – Back to the joy of travel and “Dhani Tackles the Globe.”

36:54 – How does Dhani think about risk

38:56 – Some of the other sports and activities Dhani did while filming his show

41:45 – The psychological benefit of travel in your personal and business life

44:41 – Looking into the business part of Dhani’s career

51:19 – How to expand diversity in the financial world

54:56 – Kindest thing anyone has done for Dhani

 

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

Nov 7, 2017

This episode is a continuation of the Hash Power series. It is the first of what we will call a Hash Power single—a series of conversations each with a single guest on a specific topic. In this case my guest is Chris Burniske, and the topic is cryptoasset valuation. This conversation is loaded with information, I think you are going to love it.

Chris recently released book called Cryptoassets, which is a must read for those interested in this field. Chris was at one point the only tradintional buy side analyst covering bitcoin, and is now a partner at a new crypto firm called Placeholder. Chris has developed new frameworks for evaluating and valuing cryptocurrencies, marrying techniques and ways of thinking for several different asset classes to assess the newest asset class. Chris prefers the term cryptoassets because as you’ll hear, several of these tokens aren’t really currencies at all. We discuss the differences between cryptocurrencies, cryptocommodities, and cryptotokens. We begin our conversation with a deep dive into the equation of exchange, which Chris has been using as a starting point for understanding utility value. 

You can see all crypto related conversations at investorfieldguide.com/Hashpower. Please enjoy this conversation with Chris Burniske.

Hash Power is presented by Fidelity Investments

 

For more episodes go to InvestorFieldGuide.com/podcast.

To get involved with Project Frontier, head to InvestorFieldGuide.com/frontier.

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

Cryptoassets: The Innovative Investor's Guide to Bitcoin and Beyond

 

Links Referenced

Hash Power Podcast Documentary

Nic Carter (twitter)

Cryptoasset Valuations (Medium)

 

Show Notes

4:58 - (First Question) – Chris’s overall method for evaluating cryptocurrencies

            5:14– Cryptoassets: The Innovative Investor's Guide to Bitcoin and Beyond

6:47 – The equation exchange

11:19 – Bonding

12:35 – How bonding may represent a more efficient way of representing consensus over proof of work

14:29 – Why the amount being bonded and held should be taken out of the float

16:58 – Using bitcoin as an example to figure out remittances in the PQ side

18:31 – Looking at the velocity of various crypto-assets

21:04 – Chris’s impression of the different way of categorizing various crypto assets

24:37 – Explaining Auger as an example of a cryptotoken

25:38 – How could these networks be impacted by not having any censorship

27:57 – Exploring the gap between expectation vs reality in the value of crypto currency

30:43 – Other ways of valuing these crypto assets

            30:50 – Hash Power Podcast Documentary

33:32 – Explaining the idea of billion dollar a day onchain transactions

36:05 – How to measure the value of the underlying network

            36:37 – Nic Carter (twitter)

37:13 – What are the variables that matter when investing in cryptocurrency on a long-term horizon

39:24 – Determining when it’s better for a network to be centralized vs decentralized

42:03 – Networks that Chris is most excited about

44:06 – Understanding the consumption side of the steam marketplace

46:01 – Deep dive into the Aragon network

47:27 – How does Chris evaluate existential risk of networks

51:09 – Could these assets really ever go to zero?

54:07 – Is there a scenario in which velocity gets so high that it negatively effects the price

56:10 – What are the unknowns of cryptocurrency that Chris is most interested in

            56:24 – Cryptoasset Valuations (Medium)

 

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

Oct 31, 2017

My guest this week is Brad Katsuyama, the founder of the IEX exchange and protagonist of Michael Lewis’s famous book Flash Boys, which chronicled the role of high frequency trading in markets.

This conversation was yet another reminder of how complicated markets can be, and that very few participants know all aspects of the process well. Brad and I get deep into the history behind his company, and the ways in which markets and exchanges have evolved, better or worse. 

One of my favorite parts of this conversation was our exploration of entrepreneurship. Brad’s whole story is one that entrepreneurs will appreciate, and is full of lessons for those aspiring to start their own business.

Please enjoy my conversation with Brad Katsuyama

 

For more episodes go to InvestorFieldGuide.com/podcast.

To get involved with Project Frontier, head to InvestorFieldGuide.com/frontier.

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

Flash Boys: A Wall Street Revolt

 

Show Notes

2:10 – (First Question) Brad’s original discovery of a latency problem in trading stocks

12:51 – how the business model of the NASDAQ and exchanges and how it may surprise people 

14:16 – The edge that exchanges are now monetizing 

16:46 – How Brad went from finding a solution to his current firm 

20:18 – Types of high frequency traders that there are 

24:33 – The formation of IEX 

27:56 – Funding IEX

30:48 – What happens to the initial funding

32:30 – Describe what IEX is as it was sold to early buy side investors 

34:31 – Explaining the concept of a speedbump 

38:18 – Pitching companies so they will be listed on their index 

40:37 – Explains maker-taker fees 

44:47 – The sources of revenue for IEX vs traditional exchanges 

46:53 – Most memorable meeting Brad has had in establishing IEX 

49:39 – How did he do this with young kids?

52:38 – Has the pool of potential profits that high-frequency trading firms can earn gone down

53:53 – What has Brad most excited about the future in terms of helping the buyside

55:17 – What was it like to see Brad’s venture get turned into a best-selling book. (Flash Boys: A Wall Street Revolt)

59:00 – Biggest thing that Brad has learned

1:00:56 – What would Brad do if he couldn’t work in the investing world.

1:02:25 - Kindest thing anyone has done for Brad       

 

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

Oct 24, 2017

This week’s episode is part of an experiment and so requires a longer than normal introduction.

I’ve come to view this podcast as a learning tool, a means to understand a new topic in a short window of time. One of those areas is venture capital and startups—an area that one year ago was completely foreign to me. I think the best way to learn is aggressive immersion in a topic along with some consequences, what we often call some skin in the game. Accordingly, this is a conversation with the founder of a startup in which I am an investor.

I say this in full disclosure because I believe in being very transparent with you, but also obviously want this business to do well. Part of the reason I invested was because I thought I could affect the outcome of the business personally, in part by exposing the model and ideas to you all. I deeply respect your opinions and collective breadth of knowledge, and welcome thoughts you have on this topic. 

The founder is Brett Maloley and his company is called Ladder. Ladder represents an overlap of many topics we’ve explore together over the last year. We’ve talked about venture capital, health and wellbeing, the difficultly of fundraising and power law outcomes in startups. We also spent an entire episode, with Alex Moazed, talking about the business model that Ladder is pursing: what Alex calls platform business model and what my favorite technology writer Ben Thompson calls the Aggregator model.

Alex wrote the book Modern Monopolies about this model, which describes how companies like Uber, Airbnb, and others serve clients. Platform companies sit at the intersection between consumers and producers in a given category, helping make life easier, cheaper, and/or better for consumers and more profitable and flexible for producers. But the value creation itself is about the facilitating the exchange of value more efficiently than it is about actually creating the underlying product. Airbnb, for example, doesn’t own real estate (the value in this case), but they unlock the potential of real estate owned by others.  Same for Uber which, so far, doesn’t own cars.

As Alex explained to me in our discussion, a key sign of a market which might benefit from a platform company is some form of latent, untapped supply. Which brings me back to Ladder. The company is being built to unlock latent potential in fitness and potentially other types of coaching. Personal trainers are typically on the job [or; "at work'] 11 horus a day, of which four on average are downtime. That is the untapped supply. Ladder will allow two key things: much cheaper access to a real fitness coach for consumers who don’t want to spend hundreds of dollars a month in the current format, and a way for trainers with lots of free time to both get new customers and to better engage with their existing customers. Think of it almost like Opentable—which started as a way for restaurants to better manage their reservations, but turned into a liquid market for consumers to make reservations. 

The reason this is so interesting, I think, is the enormous size of the commercial fitness industry and the fact that it hasn’t changed for a long time. I love people who have an almost bizarre level of knowledge in a niche field, and Brett certainly fits that bill. He grew up with the industry, his mentors and relatives having literally build the commercial fitness industry, what we think of today as gyms and personal training. He knows how this legacy model works and ticks, the flaws and benefits of different business models, and why the future might be different, with a much larger percent of the population using a fitness coach, and maybe other types of coaches, in categories like nutrition and health. 

To see the app in action and get paired with a coach, Brett kindly set up a promo code of sorts like you often hear on other podcasts. If you search for “ladder coach” in the app store, download the app, and then use the promo code ILTB (as in, invest like the best) you’ll get 50% off the service forever. I don’t get any cut of that at all. Brett and his team are data heads, and their main goal early in this company’s life is to generate data on the relationships between consumers and their new coaches to figure out what works best for both groups to constantly improve the service, so the early adopters among you get a permanent discount. 

Now this will be obvious, but nothing about what I do personally is investment advice—it should not be mimicked. Like my investment in bitcoin, this investment represents a small part of my portfolio, and as always I think the majority of anyone’s portfolio should be balanced and well-priced. I do not expect that I have any skill at selecting startups, as probably very few people do. But I know that having some skin in the game means you learn differently: more efficiently, and faster. I hope you enjoy this collective experiment, which is largely the result of what I’ve learned from past guests and from all of your support which helps me meet those great people in the first place. Let’s dive in to my conversation with the founder of Ladder, Brett Maloley, who starts by describing how he got his start in the fitness world.

 

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

For more episodes go to InvestorFieldGuide.com/podcast.

To get involved with Project Frontier, head to InvestorFieldGuide.com/frontier.

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

 

Show Notes

5:25 – (First question) – Brett describes his history in the fitness industry

10:04 – Realized he could fix the commercial fitness industry by changing it

12:46 – Explain how Ladder works

14:14 – What does the ratio of digital to in-person coaching need to be in order to be effective coaching

17:12 – Explaining the platform business model as a whole and how to scale these types of business

22:15 – Origin of health clubs

24:01 – Current state of the health fitness space through some key stats

26:44 – What happened where gyms were able to start charging a lot less for memberships

30:20 – How Ladder is going to attract customers in the beginning

36:10 – How to drive engagement

37:46 – The opportunity for coaches on the platform

40:28 – How will ladder ensure the quality of coaches on the platform remains high

42:41 – Exploring the value of the data

45:32 – How will Ladder work with gyms in the scope of how a new business can take advantage of existing businesses

48:58 – Comparing Ladder to crossfit and what is not sustainable about 

53:14 – Difference between a franchise model vs a license model

55:12 – Strategy for building an audience

59:56 – Competitors to this business

1:03:39 – Brett’s thoughts on brand broadly speaking and how he’s worked to shape Ladder’s brand

1:05:00 – Best individual experience of the platform so far 

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

Oct 17, 2017

This week’s conversation is about artificial intelligence and interplanetary travel. Its about content creation, thinking from first principles, and death progress units. Its about brain machine interfaces and why it is crucial that you be a chef and not a cook. 

My guest is Tim Urban, along with his business partner Andrew Finn. Tim is the most entertaining writer I’ve come across in years, who explains complicated and interesting topics to his millions of dedicated readers on the website “Wait, But Why.” As an example, Tim’s last post on Elon Musk’s neurlink venture is 40,000 words long, roughly the length of a short book. It explains almost all of human progress and our potential future using drawings and cartoons. Its impossible to stop reading.

While this conversation is wildly entertaining, it is also chock full of metaphors and lessons that will be useful to anyone doing creative work or building a company. I hope this leaves you as energized as it left me. I called this episode Grand Theft Life because that is the name that Tim and Andrew give to their worldview, which I think will change the way you behave, too. Please enjoy my conversation with Tim Urban.

 

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

For more episodes go to InvestorFieldGuide.com/podcast.

To get involved with Project Frontier, head to InvestorFieldGuide.com/frontier.

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

Superintelligence: Paths, Dangers, Strategies

 

Links Referenced

The Cook and the Chef: Musk’s Secret Sauce

Wait But Why

Neuralink and the Brain’s Magical Future

Wait But Hi

YouTube Channel  Kurzgesagt – In a Nutshell

 

Show Notes

1:50 – (First question) –  Explaining his concept of planets 1, 2, 3 and 4 and understanding the human colossus

5:46 – Tim’s favorite idea of the human knowledge compounding

7:52 – Die Progress Units (DPU)

9:45 – Different stages of AI and the positives and negatives of each stage

14;04 – What happens when AI gains breadth and general intelligence

16:23 – The idea of a cook vs a chef and how Tim had the chance to interview Elon Musk

17:48 – Why you should reason from first principles instead of reasoning by analogies

25:19 – Why it’s possible to turn a cook into a chef

30:08 – Why being a chef is the safer route in a world with AI and what Tim has changed in himself as to why.

31:22 – Looking at the discovery process

            34:39 – Superintelligence: Paths, Dangers, Strategies\

40:01 – Being the person who creates the metaphor vs being the people who simply using them

            43:41 – YouTube Channel  Kurzgesagt – In a Nutshell

44:54 – Most fun that Tim has had researching a topic

46:08 – Musk model for attaining your goals

53:43 – Why not caring what people think is one of the world’s best superpowers, grand theft life

56:50 – Neuralink – what is it and how did Tim come to research it

1:02:38 – Elon Musk’s concerns about AI

1:14:28 – What then if the Neuralink concept works out

1:18:02 – Kindest thing anyone has done for Tim

 

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

Oct 10, 2017

In episodes one and two of Hash Power, we explored blockchain technology and cryptocurrency investing. In this episode, we discuss the current and potential future states of the crypto world. We cover new forms of cooperation, regulation, security and storage, and why blockchains allow systems to evolve at such a rapid pace. 

Be sure to listen until the end, where we close with some advice about conducting ourselves in a new world where creativity reigns and repetitive jobs disappear—a trend that may only accelerate thanks to blockchain technology and cryptocurrencies.

Hash Power is presented by Fidelity Investments

 

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

For more episodes go to InvestorFieldGuide.com/podcast.

To get involved with Project Frontier, head to InvestorFieldGuide.com/frontier.

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

  

Show Notes

0:05 – Intro to episode 3 and what to expect 

4:00 - Olaf Carlson-Wee, founder of Polychain, on how the funding and investing in cryptocurrencies could easily get out of hand 

5:00 – How people are creating holding companies to fund cryptocurrencies protocols 

6:45 – Decentralized Autonomous Organization (DAO) and how they will replace the aforementioned holding companies 

8:32 – Could fully decentralized organizations replace other more traditional organizational structures, even outside of crypto currency 

9:59 – How can DAO’s impact everyday lives 

12:39 – Why your skills and accomplishments will become more important than who you are or where you are from

            15:38 – Ready Player One: A Novel 

16:09 - Naval Ravikant, CEO of Angellist, on the way humans cooperate and build new entities 

17:51 – When people will demand oversight and regulation over crypto currency 

20:42 - Peter Van Valkenburg, Director of Research at Coincenter on the current state of regulation 

26:06 - Jameson Lopp on security needed to protect your cryptocurrency

            26:22 - Glacierprotocol.org 

27:51 - Ari Paul, co-founder of Blocktower, on how nail polish is used to protect their crypto wallet 

30:03 – Juan Benet explains the Filecoin Protocol 

35:52 - Muneeb Ali, co-founder of Blockstack, on how his team is plans to provide basic tools that will allow the broader developer community to build apps that the cryptocurrency population will use. 

38:01 - Comparing blockstack to the analogy of creating a city 

40:17 – How the blockstack token fits into everything 

43:15 – Fred Ehrsam, co-founder of Coinbase, on forking in blockchains 

47:52 – Naval Ravikant on how the idea of work will change in the future, and how that change helped to produce the idea of a blockchain in the first place. 

49:31 – Why curiosity should govern what you do in life

53:22 - Naval’s framework for making money

 

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

Oct 3, 2017

In episode 1 of Hash Power, we explored blockchains as a technology—how they work, why tokens (also known as cryptocurrencies) are an integral part of any blockchain, and how these new networks might change the world. In episode two, we spend time with the leading investors in the field. Like any frenzied asset class, there are countless cryptocurrency hedge funds popping up everywhere. But founders from three of the original firms—Polychain, Metastable, and Blocktower Capital—are our primary guides this week.

As I speak, the total market cap of cryptocurrencies is $136B. There are hundreds of tokens currently available, but bitcoin and Ethereum represent 75% of the total market cap. $136B sounds like a big number, but its tiny relative to any other asset class—and I use that term with hesitation. To put it in perspective, that’s exactly the same size as the market cap of IBM. But IBM had more than $10B of earnings in 2016. Tokens have none. As you will hear, valuing tokens is a very hard exercise.

In such a nascent world, we are seeing investing strategies take hold. Olaf Carlson-Wee, Josh Seims, and Ari Paul walk us through different takes on cryptocurrency investing, be it early stage, long term buy and hold, or more hedge fund style strategies.

Hash Power is presented by Fidelity Investments

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

For more episodes go to InvestorFieldGuide.com/podcast.

To get involved with Project Frontier, head to InvestorFieldGuide.com/frontier.

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

Fat Protocols (Joel Monegro)

 

Show Notes

0:05 – Recap of part 1 and introduction to part 2 of Hash Power

2:58 – Ari Paul, CIO of Blocktower explains how he got involved in cryptocurrencies

5:23 – Why do we need bitcoin

7:23 – Polychain Capital founder Olaf Carlson-Wee on why the value of tokens accrue

9:23 – How main stream money is getting into this space

12:26- Useful comparisons when talking about ICOs when compared to IPOs

15:01 - Naval Ravikant, CEO of Angellist, is asked to explain the protocols of cryptocurrencies to platform businesses like Uber or Airbnb

17:43 – Naval’s interest in investing in cryptocurrencies

18:42 – Why average folks should avoid it before they dive thoroughly into the topic

20:25 – what are the most compelling counter arguments to using cryptocurrencies

23:07 - Olaf Carlson Wee on the lifecycle of a token

24:02 – SAFT note, Simple Agreement for Future Tokens

25:31 – What is the earliest stage that edge is most present for investors in cryptocurrency protocols

28:12 – How do you mitigate the volatility that is present in blockchain

31:18 - Jeremiah Lowin, a risk and statistics expert, who runs risk management for a large private family office, talks about why he no longer owns cryptocurrencies

 34:19 - Jordan Cooper, a venture capital investor, is optimistic about blockchains in general, but thinks there may be some overvaluations in current currencies

37:02 – How Jordan would value a single cryptocurrency

42:10 – Fat Protocols (Joel Monegro)

43:52 - Josh Seims, of Metastable, the value investor in blockchain?

51:15 - Ari Paul on the equivalent of listed stocks in the crypto currency world

52:33 – Understanding the concept of a coin in blockchain and how people are getting access to them

55:07 – The fairground analogy to understand cryptocurrencies

57:57 – What lessons from traditional markets can you apply to investing in cryptocurrencies

1:02:48 – Where do family offices stand when it comes to jumping into this space

1:06:51 – Ari is asked to discuss some of the alternative cryptocurrencies outside of Bitcoin and Ethereum. He starts with Ripple

1:10:27 – What would help firms or traders create edge in investing in cryptocurrencies

 

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

Sep 26, 2017

Welcome to the first episode of Hash Power, an audio documentary that explores the world of blockchain and cryptocurrencies with leaders in the field like Naval Ravikant, Olaf Carlson-Wee, Fred Ehrsam, & Ari Paul. Hash Power is meant to be an introduction, but really, it is an invitation to explore this emerging world on your own. 

In the coming weeks, we will cover the technology, the power of decentralization, bitcoin, Ethereum, ICOs, cryptography and hashing. We will spend time with the leading active hedge fund managers in the field, and with outside investors who are both optimistic and skeptical. Episode one covers the big picture, and answers the question: what is blockchain and why might it significantly affect our world?

If you enjoy what follows, you’ll still be very early in understanding this field. Most don’t. So help me spread it like wildfire, because the more people that understand blockchain, the better its impact might become. Please enjoy episode one, and stay tuned next week for episode 2, which explores investing in cryptocurrencies.

Hash Power is presented by Fidelity Investments

 

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

For more episodes go to InvestorFieldGuide.com/podcast.

To get involved with Project Frontier, head to InvestorFieldGuide.com/frontier.

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 Sovereign Individual: Mastering the Transition to the Information Age

Nostalgia for the Absolute

 

Links Referenced

Bitcoin: A Peer-to-Peer Electronic Cash System

Reddit User jav_rddt

SHA-256 Calculator

The BitCoin Model for Crowdfunding

Fat Protocols

#cryptotwitter

 

Show Notes

0:05 – Introduction

  

CHAPTER 1 – Understanding the Concept of Blockchain (3:25)

4:30 – Jeremiah Lowin explains how blockchain is like a database

            5:14 – Bitcoin: A Peer-to-Peer Electronic Cash System

5:46 – Owning a digital asset

7:14 – Naval Ravikant, CEO of Angelist on how blockchains can help to create personal networks and organize humans

11:01 – How blockchains represent a way to coordinate global activity through tokens

13:33 – New coins popping up around data storage and utility needs like solar panels

14:57 – Permission vs permissionless networks

16:37 – Protocols and the introduction of scarcity

18:13 – Keeping track of scarcity and the introduction of tokens

18:49 – Societal structures and how blockchains will change them again

            18:51 – The Sovereign Individual: Mastering the Transition to the Information Age

21:55 – The role of blockchains in the informational age and the rise of more individual sovereignty

23:29 - Fred Ehrsam, co-founder of Coinbase, on the increasing shift to digital worlds led by incentive structures

 

CHAPTER 2 – Blockchain Technology (27:48)

            29:09 - Reddit User jav_rddt

            30:43 - SHA-256 Calculator

31:53 - Charlie Noyes, Pantera Capital, explains how SHA-256 was developed and what make its so special

35:48 – How miners create new blocks and the incentives to do so

40:22 – The nonce field

43:48 – The incentives that exist for miners and the arms race to build more powerful systems to mine

45:20 – The development of mining pools

46:54 – Ethereum, the “spiritual successor” to bitcoin

48:36 – How the Ether network is an ecosystem in which other tokens can sit

50:51 - Naval Ravikant on alternative coins or tokens

            50:50 - The BitCoin Model for Crowdfunding

51:37 – How the protocol creators are the ones getting wealthy

            52:35 – Fat Protocols

53:22 – Blockchain as an experiment in distributed government

54:47 – How cryptocurrency is more than just technology, it’s a movement

            54:50 – Nostalgia for the Absolute

            57:27 - #cryptotwitter

1:00:58 - Peter Jubber, of Fidelity, on how huge institutions, like theirs, are getting into the cryptocurrency game

1:4:01 –The notion of cooperation in an open source project or protocol

1:05:21- Olaf Carlson-Wee, first employee at Coinbase and the founder of Polychain, on the early excitement for cryptocurrency

1:06:56– Closing thoughts from Patrick

            Looking to work in this space - hashpowerdeveloper@gmail.com

 

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

Sep 19, 2017

My guest this week is David Tisch, who was instrumental in building and fostering venture capital investing in New York City. If you liked my conversation with Jerry Neumann--who, incidentally, introduced me to David--you are going to love this one. 

David was a co-founder at tech stars, New York's answer to Silicon Valley’s famous tech incubator Y Combinator. He now runs the Box Group, a prominent seed stage venture capital firm, which has looked at thousands of startups and invested in more than 200. 

We explore tech investing outside of Silicon Valley, the tech accelerator model, the evolution of early stage investing, and why the best companies may start coming out of non-traditional venture hubs. 

David does a great job of explaining how things have changed for technology startups and why certain strategies--especially those for acquiring customers--won't work nearly as well in the future. 

I learned a lot during this hour, and I think you will too. Please enjoy. 

 

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

For more episodes go to InvestorFieldGuide.com/podcast.

To get involved with Project Frontier, head to InvestorFieldGuide.com/frontier.

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

 

Show Notes

2:16 – (First question) – Looking at David’s motivation and role in building up the venture capital tech investment scene in New York

6:14 – What David did to further the mission of fostering tech startups in New York, namely his work with TechStars

10:11 – What is Y Combinator and how does that differ from Tech Stars

13:02 – What is the procedure for getting into a startup incubator  

17:08 – Most memorable applications

19:12 – What is the boot camp/incubator experience like

20:34 – What should future incubators be focused on to help develop the right ideas

23:46 – What aspects of the business should a start up be focused on in the beginning

26:46 – What got David interested in investing

28:47 – The challenges of launching new tech today and the colonization of identity

32:04 – Exploring David’s investing strategy

35:45 – Finding the consumer facing companies that can scale and provide a return for venture capitalists

38:03 – The problem of scaling up for start ups

39:20 – What business models does David prefer when making venture investments

40:53 – What’s important to look at when investing in other sectors, starting with Fintech

44:41 – Where does David think we are in the venture capital cycle

49:37 – How much does the exit strategy play into the initial seed investment

50:18 – David’s thinking on the portfolio of companies when picking an investment

52:48 – David’s biggest sin of omission

53:56 – Common personality traits among potential founders

55:24 – Is storytelling relevant for startups focused on the enterprise side of the business

56:07 – David’s story to convince founders to work with him

57:51 – biggest mistakes that David has seen

1:01:47 – What does it mean for our health that are time has become completely consumed by technology

1:03:58 – What trend has David most excited looking forward

1:06:44 – Kindest thing anyone has done for David

 

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

Sep 12, 2017

The investment strategy discussed in this week's episode is diametrically opposed to my own value tendencies, but it still one that has done exceptionally well.  

My guest is David Gardner, co-founder of the Motley Fool. He is unique in that he is both a pure investor--a true stock junkie--and an entrepreneur. His energy is remarkable. His positive vibes are something to behold. You'll hear it over audio, but it's ever more palpable in person. 

Our conversation is about finding companies which are breaking rules in the right way and reshaping industries. David's goal is to find these companies early in and hold them forever. 

If you love investing, you are going to love this regardless of your prior beliefs. Please enjoy my conversation with David Gardner on rule breakers.

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

For more episodes go to InvestorFieldGuide.com/podcast.

To get involved with Project Frontier, head to InvestorFieldGuide.com/frontier.

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 Innovator's Dilemma: When New Technologies Cause Great Firms to Fail (Management of Innovation and Change)

The New Penguin Dictionary of Modern Quotations

Moneyball: The Art of Winning an Unfair Game

The Motley Fool Investment Guide: How The Fool Beats Wall Street's Wise Men And How You Can Too

The Wisdom of Crowds

The Motley Fools Rule Breakers Rule Makers : The Foolish Guide To Picking Stocks

 

Links Referenced

Totally Absorbed

FANG stocks

Henry Cloud (author)

“I had a lover’s quarrel with the world” by Robert Frost

As You Like it (Shakespeare)

Invest Like the Best episod with Morgan Housel

Don't Be a Dip: The 1 Thing You Need to Know About Buying on Dips

Board Game Agricola

Boardgamegeek.com

 

Show Notes

2:03 – (First question) – Among the experiments that David has run in his podcast, which one has he enjoyed the most

3:42 – A deep dive into the rule breaker mentality that David uses

            4:39 -  The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail (Management of Innovation and Change)

3:52 -  How his model may mimic venture capital early stage investing

7:22 – What helps you to not sell a rule breaker amid big drawdowns.

            7:33 – Totally Absorbed

            8:32 – FANG stocks

12:25 – List of criteria in picking rule breaker stocks…starting with top dogs and first movers

19:34 – Second criteria…visionary leadership and the traits David looks for in a leader

            22:02 – Henry Cloud (author)

            22:58 – “I had a lover’s quarrel with the world” by Robert Frost

24:07 – Smart backing as part of that second criteria

26:16 – Third criteria – competitive advantage and moats

30:50 – Looking at the development of the Motley Fool brand and business

            32:47 – The New Penguin Dictionary of Modern Quotations

32:49 – As You Like it (Shakespeare)

39:29 – Looking at David’s writing and how it has evolved over the years

            40:36 – Moneyball: The Art of Winning an Unfair Game

            41:31 – The Motley Fool Investment Guide: How The Fool Beats Wall Street's Wise Men And How You Can Too

            42:43 – Invest Like the Best episod with Morgan Housel

            42:45 – The Wisdom of Crowds

43:33 – Back to criteria, the fourth one, price momentum

            45:47 – Don't Be a Dip: The 1 Thing You Need to Know About Buying on Dips

50:03 – Last criteria, something being overvalued and weigh that against the idea of whether a product or service is important based on whether people would miss it

            52:10 – The Motley Fools Rule Breakers Rule Makers : The Foolish Guide To Picking Stocks

1:01:21 – Looking at David’s process for finding a stock and analyzing it

1:07:38 – The importance of taking these criteria in concert and how you can see the power of overvaluation

1:10:39 - Board Game Agricola

1:10:54 – Boardgamegeek.com

1:14:38 – Kindest thing anyone has done for David

 

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

Sep 7, 2017

My guest this week is Meb Faber, who started a podcast similar to this one right before mine and was a big reason I was open to the idea in the first place. Meb is a quantitative researcher whose firm Cambria has been behind many interesting investment strategies that break the Wall Street mold. We talk investing factors, dividends, angel investing, podcasts and more. This was a fun catch up with a close friend in the industry who has been in a leader in using data to explore the best active strategies in a variety of asset classes. Please enjoy our conversation, which begins with a factor draft.

 

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

For more episodes go to InvestorFieldGuide.com/podcast.

To get involved with Project Frontier, head to InvestorFieldGuide.com/frontier.

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

Dr. Tatiana's Sex Advice to All Creation: The Definitive Guide to the Evolutionary Biology of Sex

 

Links Referenced

Update on the Valuation Metric Horserace: 2011-2015

Jason Calacanis on Meb Faber Show

Brent BeShore episode of Invest Like the Best

Team Ritholtz episode of Invest Like the Best

 

Show Notes

1:55 – (First question) – Drafting quant factors

            4:10 – Update on the Valuation Metric Horserace: 2011-2015

10:25 – Most interesting thing Meb’s learned over the past year       

            14:05 – Jason Calacanis on Meb Faber Show

            14:49 – Brent BeShore episode of Invest Like the Best

16:10 – What is Meb’s process for investing in private companies

18:35 – What part of the fintech landscape would Meb be most excited about

26:50 – What has been working well on the business front for Meb

30:34 – Looking at investor behavior and changing fee structures

35:54 – What has Meb enjoyed most about doing a podcast

            36:26 – Team Ritholtz episode of Invest Like the Best

40:55 – A list of guests that meb would like to have on

            41:27 – Dr. Tatiana's Sex Advice to All Creation: The Definitive Guide to the Evolutionary Biology of Sex

43:19 – If Meb couldn’t work in this business, what would he do

45:02 – Same question for Patrick

47:28 – Kindest thing anyone has done for Meb

  

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

Aug 29, 2017

My guests this week don't need to be introduced. In celebration of the one year anniversary of invest like the best, I asked Josh Brown, Mike Batnick, and Barry Ritholtz to join me for a hour, during which I spent more time laughing than asking questions.

I chose this team because they are the pioneers of mold breaking honesty and personality in our industry. They all figured out that just being themselves yields incredible results. This is a strategy that everyone should try, but very few do. Honesty and transparency require vulnerability, which is hard for most of us. I still struggle with it. But the evidence is in. The Ritholtz team has grown as fast as almost any RIA. Listen to this and tell me you wouldn't want to spend your career working with people this friendly, funny and open. Hell, I want to give them some money just so I have an excuse to drop by more often. 

Thanks to everyone who has listened in the past year. We are past 1.25mm listens, and growing fast. You own this thing as much as I do, because the size helps me penetrate deeper and get the best people, which begets more listeners. This podcast is one hell of a discovery machine, and the first year was our warm up. We have a ton of new angles, formats, and events coming in year two. Stay tuned. But first, time to laugh in celebration of year one. Please enjoy my conversation with team Ritholtz

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

For more episodes go to InvestorFieldGuide.com/podcast.

To get involved with Project Frontier, head to InvestorFieldGuide.com/frontier.

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

Barry @ritholtz on twitter

a16z Podcast

Scott Galloway and Aswath Damodaran on Bitcoin vs Gold

Latest 'These Are the Goods' post

 

Show Notes

2:35 – (First question) – What stock best represents you 

5:09 – How was this team assembled at Ritholtz 

8:50 – Why larger asset management firms are slow to pivot on new technology 

10:00 – The humor of Barry @ritholtz on twitter 

11:48 – What technology channels are working best

13:08 – What would happen in a Ritholtz stock picking contest

15:19 – How do you keep investors from wanting to move money into or out of buzzworthy trades

20:23 – Pricing out the news and the value premium

23:41 – Why people want complexity and activity in their portfolios

29:51 – People always want to be a part of the next frontier, example bitcoin

            31:08 – a16z Podcast

33:13 – Exploring research in action and living the investments

39:35 – Biggest argument against bitcoin could be the underlying utility and what will make it successful

45:13 – The Hindenburg Omen

            46:34 - Scott Galloway and Aswath Damodaran on Bitcoin vs Gold

47:38 – How the relationship with clients has evolved

49:50 – Mike’s new book project that he is working on

51:41 – Why the Mark Twain chapter is the most interesting in his book thus far

53:32 – How a business should balance sales and marketing

58:09 – Who would they draft to the Ritholtz team

            58:22 – Latest These Are the Goods post

1:05:18 – Kindest thing anyone has done

 

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

Aug 22, 2017

My guest this week is Pat Dorsey, who was the longtime director of equity research at Morningstar, where he specialized in economic moats: sources of sustained competitive advantage that allow a few companies to deliver huge returns over time. Several years ago he left Morningstar to form his own asset management firm, Dorsey asset management, and build a portfolio of companies with wide moats like those he studied at Morningstar. And while moats are critical, equally important is how companies allocate the capital generated--or made possible--by the existence of the moat.  

A special thank you to Brian Bares who introduced me to Pat, and to Will Thorndike--an earlier guest on the show. In the vast majority of conversations you hear on this show, I'm meeting the guest for the first time. I mention this to encourage you to connect me with anyone whose story or way of looking at the world might resonate. Always feel free to contact me with ideas.  

Pat and I begin our discussion with the key differences between the sell side and the buy side, and then discuss all aspects of moats and capital allocation. 

 

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

For more episodes go to InvestorFieldGuide.com/podcast.

To get involved with Project Frontier, head to InvestorFieldGuide.com/frontier.

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

 

Show Notes

2:23 – (First question) – Transition from the sell side to the buy side and the biggest surprise 

3:40 – What is a moat 

5:16 – What part of the stock market universe has a moat 

6:57 – Pat’s framework for identifying moat, starting with intangibles 

8:32 – The power of brands 

9:44 – what chance does an upstart have to come in and usurp a well-established brand   

12:24 – Switching costs as part of the framework for identifying a moat 

14:55 – The third component of identifying a moat, network effects, and what businesses should do to effectively build one 

17:29 – Last component, cost advantages/economies of scale 

19:29 – How do you analyze these four components into an investing framework that can be built into an actual strategy 

21:13 – How does Pat think about this from a mis-pricing standpoint 

23:37  – How does Pat incorporate current price of a company in consideration for future returns when pricing a moat 

25:39 – How should a company with a moat operate to protect that characteristic, especially when it comes to their capital allocation 

26:51 – Which characteristic of a moat does Pat find most intriguing 

30:35 – What makes for good and smart capital allocation 

35:58 – What is Pat’s process for identifying the best investment opportunities 

38:38 – What are good economics when looking at a company 

41:03 – If Pat could take any business, but have to swap leadership, what would he choose. 

44:13 – Back to his process of finding investment opportunities 

46:05 – Kindest thing anyone has ever done for Pat

 

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

Aug 15, 2017

My guests this week are both veterans of the podcast, Jason Zweig and Morgan Housel. They are two of the best in the world at making the complicated simple, and in that spirit, I’ll keep this introduction short. Morgan shifted from public markets to the private markets a year ago when he joined the Collaborative Fund, so we begin with what he has learned about venture capital in his first year on the job.

 

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

For more episodes go to InvestorFieldGuide.com/podcast.

To get involved with Project Frontier, head to InvestorFieldGuide.com/frontier.

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 Devil's Financial Dictionary

Modern Monopolies: What It Takes to Dominate the 21st Century Economy

Thinking, Fast and Slow

Shoe Dog: A Memoir by the Creator of Nike

Life and Fate

 

Online References

A Rediscovered Masterpiece by Benjamin Graham

Rishi Ganti podcast

Small Companies Are Gone, But Should they Be Forgotten (Zweig Column)

 

Show Notes

1:43 – (First question) – Morgan on why he got disenchanted with the investment industry and shifted to venture capital

4:05 – Jason’s thoughts about investing in the private markets

            5:19 - A Rediscovered Masterpiece by Benjamin Graham

7:57 – Morgan’s thoughts on how private market investments differ from public market investments

10:24 – Exploring valuations of businesses and what they say about broader trends in the market

13:21 – How much does Jason think about individual companies when exploring the overall market trends

            18:41 – The Devil's Financial Dictionary

19:28 –What does it take to be a successful founder

23:40 – How does Jason look at activities that are work related vs just for pleasure

25:33 – If Jason had to start a business, what would he do

27:22 – What business would Morgan start

29:18 – Problems with the financial planning industry

30:56 -  The role of stress in personal and business development

            31:04 – Modern Monopolies: What It Takes to Dominate the 21st Century Economy

38:17 – Are there signs that let you know when to cut and run vs when to keep slogging along with something

            42:02 – Thinking, Fast and Slow

            44:03 – Shoe Dog: A Memoir by the Creator of Nike

44:20 – Principals to approach learning

50:10 – The idea of keeping your identity small in a world where social media encourages one-upmanship

53:56 – Last significant thing Morgan changed his mind about

55:23 – Why Morgan chooses passive investing with stocks, but as a VC, essentially is a stock picker in private markets

            1:00:44 – Rishi Ganti podcast

1:02:14 – What major thing did Jason change his mind about

            1:02:30 – Small Companies Are Gone, But Should they Be Forgotten (Zweig Column)

1:06:33 – What was the most interesting idea Jason and Morgan have been tackling and what data helped to spark that interest

            1:09:32 – Life and Fate

Aug 8, 2017

This week's conversation is about performance. More specifically, it is about the ins and outs of steady progress and growth. My guest is Brad Stulberg who coauthored the book Peak Performance, which combines research from many fields into a description of how athletes, creatives and others continue to push boundaries in their respective crafts.

As someone who is intermittently lazy, the growth equation framework that Brad and I explore has impacted me often since I first read the book several months ago. I hope you enjoy this conversation, which isn't about investing, but which is, at its heart, still about the power of compounding. 

 

Books Referenced

Outliers: The Story of Success

Peak: Secrets from the New Science of Expertise

 

Online References

Jool Health

 

Show Notes

1:32 – (First question) – How Vick Stretcher influenced the book, Peak Performance

4:32 – Looking at some of the preliminary research at the science of purpose

7:58 – The idea of a growth equation and the components that can lead to success

11:47 – How the introduction of stress can help in all sorts of creative and entrepreneurial pursuits.

13:39 – The ratio between physical and mental as an impact on this formula

14:56 – Just manageable challenges and the role that they play in the growth equation

18:06 – The idea of just manageable challenges through the example of an athlete

22:19 – Favorite example of a crazy feat of physical performance, stress on older athletes operating at high levels

23:30 – Thoughts about outside influences like mentors/coaches and how they help high performance individuals advance

25:51 – Describe catabolic and anabolic states and why anabolic is so important

29:13 – How the relationship of catabolic and anabolic states also helps the mind

30:47 – How does the idea of practice play into the growth equation

32:49 – Exploring the nuances of practice and why you don’t go all out

            32:56 – Outliers: The Story of Success

33:00 - Peak: Secrets from the New Science of Expertise

34:24 – The idea of designing of a day

42:06 – What role can environment play on us

43:40 – How far is it healthy to run

46:25 – How does ego play into all of this

48:06 – The idea of camaraderie and study of Air Force Cadets highlighting this

49:28 – Fatigue and why it is believed to happen in the mind and not the body

54:00 – Most memorable day

55:43 - Method for finding purpose

            56:29 – Jool Health

58:26 – Kindest thing anyone has ever done for Brad

 

Learn More

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

For more episodes go to InvestorFieldGuide.com/podcast.

To get involved with Project Frontier, head to InvestorFieldGuide.com/frontier.

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

 

Aug 1, 2017

Several weeks ago my conversation with Leigh Drogen on quant investing proved timely and popular--because everyone in asset management is facing the rise of big data, and the use of data science in investing strategies. Because of the rise of quants, many are asking themselves how to survive and thrive in a changing industry. In short, how can traditional managers compete with quants?

This second conversation with Leigh was set up to answer many of the questions posed in the first one. If quants are taking over, what should other investors do about it?

Leigh proposes a method by which old school asset managers can restructure their thinking and their process to compete with and even beat purely quantitative competitors. The method involves pulling the best from both worlds and combining them into a hybrid structure. But it will be impossible without a wholesale change in mindset, which is where we begin. Please enjoy round two with Leigh Drogen.

 

Links Referenced

Revenge of the Humans Part II: A New Blueprint For Discretionary Management

 

Show Notes

2:14 – (First question) –  What role will ego and mindset play for traditional hedge funds looking to transition into quantitative investing strategies

4:21 – Describes the traditional process that hedge funds use to make investment decisions and how the internal politics can hamper it

6:08 – What value has portfolio managers played at hedge funds traditionally as the quarterback of a fund

9:57 – A look at what Leigh has seen as he sits with teams

12:20 – A look at places that have tried to simply add quant to their firm’s strategies without “tearing it down to the studs” and properly integrating them into the process

15:00 – Leigh is asked to define the basics of a good investment firm’s strategies

16:57 – Strategies for writing down core beliefs, whether it’s for yourself or your firm

17:49 – Exploring the second step, finding a differentiating view and how to succeed with it.

21:43 – The importance of force ranking and structuring the unstructured

26:14 – Building factor models

29:42 – How the portfolio manager position should have less room for subjectivity than at the analyst level

33:44 – Is anyone integrating this kind of high level data at the portfolio manager level into the decision making the way Leigh describes

35:07 – What blind spots are created by systematizing their processes

36:18 – Why much of this applies more to shorter and structured periods

38:23 – Shifting to portfolio constructions and what Leigh would do to create the right mix

43:39 – Shifting to management structures in these firms starting with the role of the CIO

45:24 – Looking at the different quant roles that exist in a firm and what they should be responsible for; data engineers, data analysts, pure quants, and quantitative engineer

48:20 – If you are an undergrad or grad student right now interested in asset management, what are the roles you should be thinking about targeting

49:25 – Why communication skills are still so important, no matter what role you are in

50:25 – With all of the tools and skills that Leigh has at his disposal at Estimize, why not institute an active strategy

52:01 – What has Leigh observed in the dispersion of skill in the Estimized data set

53:47 – What is the relationship between specialization and accuracy among funds

55:29 – The pros and cons of the generalist

56:56 – A look at Leigh’s background into War Theory and what lessons that he still draws on today

1:00:19 – How the field of study around war and battle relates to the investing world

 

Learn More

For more episodes go to InvestorFieldGuide.com/podcast

For complete shownotes, go to InvestorFieldGuide.com/leigh

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

Jul 25, 2017

My guest this week is a version of me—a funnier, cooler version who has a PhD and served as an active duty marine. Lots of you will already be familiar with Wes Gray, and those of you who are not are in for a treat. Wes is the founder of Alpha Architect, a firm which manages quantitative equity strategies for clients using factors like value and momentum. He also advocates for a more concentrated, pure approach to factor investing, which listeners know is music to my ears.

While we share a lot of the same views on markets and investing, you will still find this refreshing. The conversation was easy to structure--I just took all the questions clients and prospective investors always ask of me and my firm, and turned them on Wes. These range from very specific questions on quant investing to big existential ones.  I listened to this on a long drive home and laughed out loud in the car at least 5 times. You are going to love it all.

I close this introduction by offering you an opportunity which is not for the faint of heart. On September 16th, I will be joining Wes and his crew on a 28-mile trek called “March for the Fallen” which is a small but important way of honoring those who have given their lives in service of our country. Wes and I invite you to join as well. If you are interested, check out the post on Wes’s site with all the details. I will link to it in the shownotes at investorfieldguide.com/wes. If you are still interested, then email me with the subject heading “March for the Fallen.” I told you Wes is a much cooler version of me, and true to form he will be doing the hike with a 40-pound rucksack. I will be doing the version without a rucksack. Either way, it will be a day of comradery and remembrance that we won’t soon forget. Join us.

 

Books Referenced

The Devil Dogs at Belleau Wood: U.S. Marines in World War I

Thinking, Fast and Slow

 

Online References

The Limits of Arbitrage

 

Show Notes

3:07 – (First question) – Exploring the mindset that is ingrained into Marines

            3:16 – The Devil Dogs at Belleau Wood: U.S. Marines in World War I

5:27 – Most memorable experience growing up in the mountains of Colorado

6:29 – What experiences in the military have transferred to what Wes sees in the public markets

            6:48 – Thinking, Fast and Slow

7:51 – Wes’s first foray into stocks

10:51 – What was the transition into the quantitative investing space

12:29 – How Wes would describe quantitative investing and what the landscape looks like today

17:10 – What is the nature of the strategies Wes uses, like high-frequency and market-making, and what makes them stand out in those

20:57 – What about the human capital arms race in this space and how different firms are attracting the top talent

23:21 – What the approach is for Wes and what his research suggests is the best predictor of performance in stocks

25:36 – Wes’s approach to portfolio construction

33:19 – What is the thinking behind the number of and the size of names in the QVAL ETF

35:19 – Over a 20-year horizon, does Wes pick value or momentum

36:20 – Why the data suggests momentum is the better pick

37:36 – Why price-to-book sucks relative to other value factors

39:55 – What things worry Wes about the future of this strategy

44:39 – How does Wes think about research and what to explore next.

50:05 – Who would Wes have manage his money since he thinks Vanguard is not the best choice

57:01 – Exploring his firm Alpha Architect, how it started and has evolved since launch

            57:39 – The Limits of Arbitrage

1:02:36 – talk about the profile of the right investor

1:08:15 – How the influx of people to passive investments are impacting the overall market, especially for active investment strategies

1:13:13 – Wes’s most memorable day of his career both in the military and as an investor

1:17:19– Kindest thing anyone has ever done for Wes

 

 

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

Jul 18, 2017

My guest this week is Rishi Ganti, who invests in what he calls esoteric assets. I'm not sure what to do other than laugh in amazement at his professional credentials -- PhD in economics, CFA, CPA, lawyer, speaks six languages, and so on. The best part is he isn't lording those over anyone and in fact casts some shade on the whole idea of credentials in our conversation. He just did it all because he's a learning fiend.

Rishi's core idea about markets is this: avoid markets at all costs. As he explains off the bat, the minute there are multiple buyers for anything, prices get efficient very quickly and there opportunity to find alpha shrinks. Instead he searches for what esoteric assets: things without a market, orphaned assets that require high human capital and human touch. We explore several interesting examples, from charter school financing to

A stark realization I had during he episode is how big the worlds asset base is. Almost all of our attention goes to the most highly refined ones: stocks and bonds. But there is a whole other world out there.

The closing sections, on what Rishi would do if not investing, and his answer for the kindest thing anyone has done for him were among the best answers I've heard.

 

Show Notes

3:30 – (First question) – Rishi’s broad take on markets and whether or not he really likes them

5:30 – Defining esoteric markets

8:31 – Looking at the mountain of assets that are most impacted or made most efficient by markets and how Rishi describes each level of that pyramid

12:28 – Looking at an esoteric asset at the early part of Rishi’s career

16:23 – Why is there little competition in these types of investment opportunities

23:06 – How they created a market and turned an esoteric asset into a return opportunity, starting with the charter school funding example

31:54 – Looking at how this is done internationally

38:55 – What they consider a platform

41:08 – How they are able to provide their service and skirt the government, legally

44:18 – A simplified explanation of what Orthogon does

50:30 – What are the main reasons people don’t want to go down this road since it seems like an obvious choice

59:00 – Looking at the most memorable experiences in esoteric investing

1:01:10 – What value has Rishi found in his extensive education, credentials, and certifications

1:07:31 – Another topic that Rishi finds interesting and he’d want to lecture on if he could other than investing.

1:09:48 – What is the right formula and types of goals you should consider in planning your life

1:14:39 – Kindest thing anyone has done for Rishi

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

Jul 11, 2017

I am drawn to a group of investors that I call practitioner philosophers. These are people who have gotten their hands dirty in their respective fields, but despite being doers, they still often sit back and ponder the big questions in business and life.

My guest this week is one such practitioner philosopher, NYC based venture capitalist Jerry Neumann. I came across Jerry's essays a year ago, and he is on a very short list of writers whose work I read without fail and almost always more than once.

You can think about this conversation on business, investing, and venture capital as a big funnel. We start very broad, discussing where we may be in a large 70-year economic cycle. We then break down the so-called power law which seems to govern venture capital returns and business outcomes. Then we get even more specific, discussing Jerry's process for evaluating early stage companies, and the particulars of what might make a good venture capitalist. I say "might" because as Jerry explains often, nothing is certain, and luck may always play a huge role.

I just loved this conversation. It is the type that without the podcast as an excuse would be a very odd and intense one if I were just meeting someone for the first time. You'll find no small talk or even medium talk here. This is a meaty discussion with one of the smartest and most straightforward people I've come across.

 

Books Referenced

Carlotta’s Perez - Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages

Thomas Hughes – Networks of Power: Electrification in the Western Society, 1880 – 1930

Frank Knight – Risk, Uncertainty, and Profit

Jeffrey West - Scale: The Universal Laws of Growth, Innovation, Sustainability, and the Pace of Life in Organisms, Cities, Economies, and Companies

 

Links Referenced

Deployment Age

Oswald Spangler

About Men; Corporate Man

Howard Mark’s 2x2 matrix of superior investment results

Michael E. Porter - How Competitive Forces Shape Strategy

DJ Teece: Profiting from Technological Innovation

Porter’s Five Forces

 

Show Notes

3:27 – (First question) – Start with Jerry’s essay the Deployment Age and a look at what it means for where we sit today (looking forward as investors)?

            3:40 - Deployment Age

            4:26 - Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages

9:28 – What time in history can you compare our current deployment age to and what does that say about the next 10, 20, and 30 years?

            9:40 – Oswald Spangler

            11:09 – About Men; Corporate Man

15:36 - How have your views evolved over time and how do you square the 1950s-time period for venture capitalists?

            18:06 - Networks of Power: Electrification in the Western Society, 1880 – 1930

20:40 -  What lessons should venture capitalists make from these deployment age cycles

            25:27 - Risk, Uncertainty, and Profit

24:10 – Exploring how powerlaws govern returns for venture capital

            26:50 – Howard Mark’s 2x2 matrix of superior investment results

32:19 – Providing context and understanding to Alpha within Powerlaws.

32:56 – Nassim Taleb: Powerlaw

39:18 - Portfolio concentration and scaling

            42:31 – Venture Follow-on and the Kelly Criterion (Jerry's Blog)

44:34 - How have you have actually done this, Jerry? What is your process like and your focuses?

54:00 – Are there any circumstances where it is wise for friends and family to make venture investments?

59:20 - What is this idea of who profits from innovations?

            56:12 - DJ Teece: Profiting from Technological Innovation

1:02:57 – Understanding complimentary assets

            1:05:06 - Porter’s Five Forces

1:09:24  - Are Augmented and Virtual Reality interesting areas for venture capital and why?

1:15:28– What makes a successful venture capitalist? What makes you special?

1:23:43 – What is the most memorable day in your career in venture?

1:26:03 – Kindest thing anyone has ever done for Jerry

 

Learn More

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

For more episodes go to InvestorFieldGuide.com/podcast.

To get involved with Project Frontier, head to InvestorFieldGuide.com/frontier.

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

 

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