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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: July, 2018
Jul 31, 2018

My guest this week is Cathie Wood, the founder of ARK invest. Cathie and her team believe that disruptive innovation is the key to long-term growth and, therefore, alpha in the public markets.

Because their style of investing is entirely contingent on what will happen and change in the future, it is about as different a style as exists from the quantitative approach to investing, which relies on what is currently knowable about stocks and businesses. 

The future is notoriously hard to predict, so I am always interested to hear about investing approaches which try to model or handicap the future and build portfolios against that work.

In this conversation, we explore all the most interesting and exciting technology trends at play in the world today—and how those trends may play out for investors. We discuss genome sequencing, blockchain, software 2.0, mobility as a service, automation, and more. 

We also discuss Cathie’s take on building a bridge between the worlds of finance and Silicon Valley, and why starting with a benchmark is anathema to their process.

It is hard to deny Cathie’s passion and enthusiasm, and I credit her for building a unique firm culture that emphasizes openness and collaboration. Please enjoy our conversation on investing in innovation. 

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

2:30 - (First Question) – Cathie’s idea of bringing open source to Wall Street

4:47 – Deep dive into the platform

            6:09 – White Paper on Bitcoin – Could Bitoin serve as the role of money

7:43 – Why disruptive innovation is so inefficiently priced

10:04 – How well does the market discount cash flow of disruptive businesses

14:09 – A look at their investing strategies, starting with top-down. 

16:10 – How they picked their 5 categories of technological change, starting with foundational    

19:42 – Changes in energy

21:53 – Robotics

24:17 – Excitement over deep learning

28:03 – How they express their top-down ideas from the bottom up

36:06 – Mobility as a service as a key area of focus

45:25 – The power of public mistakes

46:39 – What she looks for when hiring

51:14 – her philosophy on building and maintain a portfolio

56:38 – Behind the growth of the company

1:04:01 – Most exciting area for her right now

1:07:52 – Kindest thing anyone has done for Cathie

 

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 24, 2018

I’ve often heard that good investors are a bit like journalists: doggedly collecting evidence and building an understanding of how all the pieces of a company or investment fit together. My guest this week is one of my favorite writers and journalists, Bethany McLean. Across her career, Bethany has covered many of the most interesting stories in business and investing, including Enron (which became the famous book and documentary, the Smartest Guys in the Room), Valeant, Wells Fargo, SAC Capital, Fannie Mae and Freddie Mac, the great financial crisis, and most recently, fracking and the energy revolution.

Given how deeply she has investigated all of these topics-- and thought about the common threads across them all--this was an amazing conversation. When talking to her, you can feel how much she cares and how diligent and fair she is when analyzing a topic. In addition to all of the great stories already listed, we discuss the art of persistence and other lessons she has learned about businesses and people gone bad. I especially loved her evolving take on housing in America.

Please enjoy my conversation with Bethany McLean

 

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

Mindsets: Optimism vs. Complacency vs. Pessimism

Disgraced ex-BofA exec raises uncomfortable questions about #MeToo

The Hunt for Steve Cohen

 

Books Referenced

The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron

Free Radicals: The Secret Anarchy of Science

Shaky Ground: The Strange Saga of the U.S. Mortgage Giants

Saudi America: The Truth About Fracking and How It's Changing the World

Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy

All the Devils Are Here: The Hidden History of the Financial Crisis

 

Show Notes

2:22 - (First Question) – Differences and similarities between investors and journalists

3:19 – What has more of an impact on business practices, exposing negatives or reporting positive

4:57 – first story that got Bethany intrigued with finding bad behaviors

6:19 – The process of getting to know the people who know more than the market

            7:43 – Mindsets: Optimism vs. Complacency vs. Pessimism

8:18 – First short seller that garnered her interest

8:57 – The process that led to The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron

10:36 – How to ask questions

12:18 – Importance of preparation

12:49 – Commonalities among the motivations for people who do bad things

14:20 – Difference between a visionary and a fraud

            15:42 – Free Radicals: The Secret Anarchy of Science

16:23 – Any standout frauds that told a really compelling story

17:33 – Looking into Valient

19:32 –Writing about the #MeToo movement

            19:34 - Disgraced ex-BofA exec raises uncomfortable questions about #MeToo

21:49 – Thoughts on the spectrum of chasing this story

23:26 – Ways journalist can fairly impact this movement

24:14 – The romance of owning a home in America and what it has meant for the market

            24:34 – Shaky Ground: The Strange Saga of the U.S. Mortgage Giants

28:27 – What has changed on her thinking about housing

30:24 – What role does Fannie and Freddie have in the market today

31:13 – Her desire to look into energy

            32:26 – Saudi America: The Truth About Fracking and How It's Changing the World

35:05 – What have been the changes in energy market in the US

            34:40 – Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy

37:01 – Where are we in the life cycle of energy production

38:27 – The more boring things that are actually the drivers of our economy

            38:29 – Technologies that shaped industrial revolution in America

39:42 – Where can people learn more about how our energy independence will impact other markets

41:10 – Why is Peter Elkin the best investigative journalist

42:24 – Most relentless she has ever been

43:58 – Who is doing it right

            44:38 – All the Devils Are Here: The Hidden History of the Financial Crisis

45:36 – Her take on reporting the The Hunt for Steve Cohen story

49:01 – How her views have evolved over her career and lessons learned

50:40 – Are there ways to prevent success from leading people down a bad path

53:48 – The role of empathy in her career

55:13 – Kindest thing anyone has done for Bethany’s career

 

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 17, 2018

A very short introduction today because my guest is anonymous. Suffice it to say he manages a large pool of private capital.

He goes by the pseudonym “modest proposal” and his twitter presence is one of the reasons I first got on and now stay on the platform.

He is level headed, smart, and skeptical by nature, all of which made for a great conversation. We discuss how difficult the market has become for active investors, thematic investment opportunities, and the potential sources of market mispricings.

Please enjoy our conversation, and let me know which other anonymous accounts you’d like to hear from.

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

Factors from Scratch: A look back, and forward, at how, when, and why factors work

Josh Wolf Podcast Episode

Mike Zapata Podcast Episode

Michael Mauboussin Podcast Episode

 

Show Notes

1:55 - (First Question) - How value investing has changed

5:45 – How does he apply the lens of market over-reaction to the current market today

            5:47 – Factors from Scratch: A look back, and forward, at how, when, and why factors work

            7:06 – Josh Wolf Podcast Episode

8:35 – Areas where he prepares most

            8:36 – Mike Zapata Podcast Episode

12:18 – Where markets may be over reacting in media

20:10 – How does he invest on this thinking

            20:44 – Michael Mauboussin Podcast Episode

22:35 – Other parts of media that he finds interesting

27:35 – Aggregation theory and how it plays into his investment philosophy

31:06 – Structuring a long-short portfolio in today’s media market

35:59 – Customer acquisition costs and how it’s impacting retailers

40:51 – The role of physical locations in a world that was upended by virtual retailers

49:41 – Consumer Internet Story thesis and what he’s seen during his career

58:11 – Why the FANG stocks can’t win in the niches

1:02:25 – The distrusted 50

1:05:00 – How he thinks about Capital Allocation and buybacks

1:11:08 – His view on international equity markets

1:13:58 – His take on the asset management business

1:19:38 – Allocation of a portfolio in between periods of conviction

1:21:08 – People that he has learned the most from

1:23:54 – How do you identify people who are capable of evolving after a rough spot

1:26:53 - How does he force himself to adapt to new conditions and evolve

1:30:31 - Thoughts in investing in cannabis industry

1:32:31 – Conditions where he would get interested in crypto currency

1:36:20 – Kindest thing anyone has done for him

 

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 10, 2018

With Patrick out of the country this week, we thought we'd play an old favorite that many of you have not heard.

Please Enjoy!

 

 

This week we explore a rare and underappreciated skill through the lens of an incredible story. My guest is Eric Maddox, whose name you probably don’t know but won’t soon forget. Just trust me that you need to listen to this entire episode, and listen carefully—because that is what the episode is ultimately all about: how to listen to others, with care and empathy, in the age of distraction.

Sometimes it’s fun not to know what’s coming and be surprised, so I won’t say anymore. After the episode, you can learn more about Eric at Ericmaddox.com.

On his wall, Eric has a framed Cuban cigar, he starts his story by explaining the significance of that cigar. Enjoy this episode, and try Eric’s method. It has worked wonders for me.

Please enjoy!

 

For comprehensive show notes on this episode go to investorfieldguide.com/maddox/

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 3, 2018

This week’s episode covers a new set of topics. The conversation, with Niel Robertson, covers media, e-sports, content distribution, marketing, and a lot more. Niel started a software company out of his bedroom when he was 14, and sold his first company in 1999 for $280 million, when he was 24 years old. He has started and sold other companies to Twitter and Cisco. He started another large business that ultimately failed. He’s been an investor, venture partner, and serial entrepreneur. You can find more in the shownotes. 

As I often do, I cut the long background section from the interview so we can get right to the meat of things, but Niel concluded that section saying: “I think that could be all summed up by I just liked building things and I can't stop doing it.”

In addition to the overall media landscape, we discuss the role that the biggest media platforms will play, and where other opportunities may exist. We cover digital collectibles stored on blockchain, and what type of digital assets may be leased to others. We close with a discussion of leadership, company structure, content creation, and something you should do each year.

Please enjoy this unique conversation with Niel Robertson.

 

For more episodes go to InvestorFieldGuide.com/podcast.

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

Follow Patrick on Twitter at @patrick_oshag

 

Books Referenced

The Start-up of You: Adapt to the Future, Invest in Yourself, and Transform Your Career

 

Show Notes

2:30 - (First Question) – Overview of the media landscape as it relates to influencer marketing

6:42 – How does he think about this space as an investor

12:21 – What is the future of distribution of products

17:01 - An overview of the e-sports ecosystem

18:20 – The shift of people watching others play video games

20:06 – Will we see power shift from the platform to the influencer

27:03 – Why Amazon is the sleeper in this game

29:38 – Reviewing some of the other platforms, starting with Snapchat

30:54 – Twitter

32:06 – Other platforms that should be focused on…Pinterest

33:38 – His interest in blockchain and digital collectibles

36:34 – Who will be disrupted by digital collectibles

37:55 – Why does the decentralization of these assets matter

39:49 – The tokenization of assets

42:11 – What companies have the largest hurdles to innovate in these spaces

44:57 – His thoughts on leadership

            46:44 – The Start-up of You: Adapt to the Future, Invest in Yourself, and Transform Your Career

47:52 – Advice for content creators and content aggregators

50:10 – His thoughts on companies that aggregate top content creators

53:17 – His experience owning restaurants

55:46 – His experience in motocross

57:31 – Kindest thing anyone has done for Neil

 

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

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