My guest this week is Harvey Sawikin, a co-founder and lead portfolio manager at Firebird Management, which manages funds dedicated to investing in emerging market equities. Emerging markets are often a blind spot for investors of all types: most of us have never traveled to the far east or eastern Europe, where many of the thousands of emerging market public equities operate.
I’ve been very lucky to travel quite a bit in Asia and the Middle East, but never to eastern Europe, which where Firebird focuses its investments. Harvey and I discuss his 24 years of experience evaluating emerging and frontier market countries, industries, and individual stocks. We discuss his experience buying privatization vouchers in Russia, banks in the Baltics, and how today’s emerging market opportunity set compares to the past.
Like so many of these conversations with investors who have earned significant excess returns, its clear investing opportunities in emerging markets are often disguised. Finding them requires risk, hard work, discipline, and a dose of luck and timing. Please enjoy my conversation with Harvey on Emerging Market Opportunities.
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
Books Referenced
The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel
Education of Rick Green, Esquire
Show Notes
2:26 – (First Question) – Most memorable travel experience since the beginning of Firebird
5:41 - How Harvey got interested in emerging markets investing, specifically, Eastern Europe and Russia
10:00 – How does the landscape for emerging markets today compare to when he first started
12:30 – What are the factors of an emerging market to look at and why do some not pan out
15:04 – Do countries have to meet minimum criteria before Harvey and his team will even start to do work on an emerging market
17:33 – How does Harvey distinguish between frontier and emerging markets
18:37 – Thoughts on the access points that regular investors have into emerging markets, such as ETF’s and Mutual Funds
23:48 – How does Harvey think about risk exposure when constructing a portfolio
25:56 – Looking at the bottom up part of the equation, what factors within a company or sector are considered as part of the investing decision
31:05 – Dividends in emerging markets
33:09 – How do US equities stack up as an investment against fixed income
34:53 - The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel
36:52 - How do US equities stack up as an investment against emerging markets
39:38 – What type of investor allocate funds to emerging markets
42:37 – The value of travel in understanding emerging markets
50:19 – Biggest mistakes that emerging market investors make
54:49 – What in today’s markets has the smell of opportunity
55:53 – Harvey’s interest in Via
56:58 – Interest in buying gold coins
1:00:05 – If Harvey could only choose one country to visit, business or pleasure, where would he go
1:01:09 – Kindest thing anyone has done for Harvey
1:01:38 – Education of Rick Green, Esquire
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
My guest this week is Anthony Pompliano. Pomp began his career in the military, and has since been a successful entrepreneur, worked as a head of growth at Facebook, and started Full Tilt Capital, an early stage investing firm in North Carolina.
This conversation has three memorable sections. Early on, we discuss the four traits Pomp looks for in founders, which we cover in detail. These double as traits that are important when hiring anyone. Next, we discuss his unique take on cryptocurrencies, where he is excited about the prospects for tokenized securities. Finally, we explore a unique media company, Bar Stool Sports, and what makes it such a powerful brand.
Please enjoy our somewhat abbreviated discussion and know we will continue the conversation soon.
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
Dave Portnoy and Barstool Sports’ Secret Billion Dollar Plan
Books Referenced
Win Bigly: Persuasion in a World Where Facts Don't Matter
Show Notes
2:06 - (First Question) – Recap of Anthony’s military career
4:07 – Most memorable experience while deployed
5:27 – Transition out of the military and how it shaped his investing philosophy
11:19 – investing philosophy of Full Tilt, starting with deal economics
10:00 – Attributes of an ideal founder
13:50 - Where you actual learn the attributes that make you a good founder
14:40 – Time that Anthony has taken the biggest risk in life
16:45 – What is the viewpoint that Full Tilt has today that gives it Alpha in the market
18:47 – Why tokenized securities could be advantageous for investors in a company
19:51 – Anthony’s explanation of a tokenized security and what needs to happen for this idea to be fully realized in the market
22:22 – What could be the impact on the markets of making liquidity in venture so readily available
24:39 – What are tokenized securities actually invested in in the real world
27:42 – What does Anthony think about the commodity risk
29:04 – Describing Standard American Mining, a company they incubated
29:58 – Exploring the shift from a CPU world to a GPU world
31:49 – Getting involved in places where we haven’t caught up with the rest of the world
33:05 – Anthony’s interest in Barstool Sports
33:11 – Dave Portnoy and Barstool Sports’ Secret Billion Dollar Plan
37:09 – Win Bigly: Persuasion in a World Where Facts Don't Matter
39:02 – What lessons from Full Tilt world would Anthony share with others in the more traditional business world
40:35 – Kindest thing anyone has done for Anthony
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
My guest this week is Dr. Ben Hunt, the chief investment strategist at Salient and the author of the extremely popular epsilon theory.
I’ve always enjoyed Ben’s writing style, particularly his use of farm and animal based analogies to describe market phenomenon.
In this conversation, we discuss his recent post the three body problem, why growth has been beating value, and why a strategy that he calls profound agnosticism—a take on risk parity—may be the most appropriate investing strategy in what he views as a very uncertain world. We also discuss some of his favorite lessons from the farm.
Please enjoy our conversation!
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
Show Notes
1:54 - (First Question) – Applying the three-body problem to investing
7:24 – Fundamental view of investing, Profound Agnosticism
8:24 – Why has value done so poorly relative to growth in this framework
11:01 - Ben’s thoughts on why value has been underperforming for so long
13:52 – Investors should be able to adapt
17:49 – Thoughts on the risk parity approach
23:23 – Ben’s strategy for working with several teams
26:48 – What’s the best way to gain an edge, top down factors vs company/bond individual analysis
28:29 – How do you measure risk amid the large amount of uncertainty that exists in markets
32:40 – How does Ben personally think about investing
34:41 – Ben’s farm and the investing lessons learned by some of the animals
39:55 – How bees can plan out their entire work structure by the angle of the sun
42:58 – Defining basis risk
44:59 – Personal risk vs portfolio risk
49:30 – The concept of fingernail clean and our perception of what eggs are
53:57 – How ETFs are like mass produced eggs
54:56 – Exploring the idea of quality vs scaling
58:39 – What is the current challenge/puzzle that Ben is focused on right now
1:01:59 – What is Ben looking for when looking into game theory and applying it to the words that are published and spoken about investing
1:03:57 – Most memorable day on Ben’s farm
1:05:04 – Kindest thing anyone has done for Ben
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
My guest this week is Preston Byrne. Preston is vocal critic of crazy prices and projects in the world cryptocurrencies. His background is in the legal world and also as a founder and former COO of Monax, which made the first open-source permissioned blockchain client.
As Preston says, he is a “blockchain without bitcoin” guy, who believes that this crypto mania will end in some sort of apocalypse for token holders and ICO issuers .
We tackle several issues, from his broad skepticism of crypto assets, to the potential regulatory reaction from major governments, to types of coins like stable coins, which Preston views as analogous to perpetual motion machines.
Please enjoy our conversation and for any crypto investors out there, let me know if this conversation affects your opinion of the investing prospects for cryptocurrencies.
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
Links Referenced
Preston tweet on Reverse network effect
Show Notes
2:12 - (First Question) –Ponzi scheme vs pyramid scheme vs Nakimoto scheme
5:29 – Why there are regulatory challenges to cryptocurrency
5:33 – The Bear Case for Crypto
9:59 – Who are the most influential people supporting this and how are they swaying the regulatory minefield on this issue
10:28 – Hash Power series
13:23 – Looking into the idea of a digital asset and the difference between blockchain and the token itself
16:09 – What about the idea that cryptocurrency’s only feature is that it’s censorship resistant
18:39 – Why cryptocurrencies become less usable the more successful they are
18:59 – Zero Hedge
21:04 – Why can’t we rely on offchain solutions to solve the scaling issue
22:29 – The idea of bubbles and what happens next in this one
25:41 – What are the incentives to build technology to support cryptocurrencies
29:23 – Explaining Ripple
31:21 – What would precipitate a massive reversal in the inflated valuations of cryptocurrencies
34:52 – Understanding reverse network effects
34:36 – Preston tweet on Reverse network effect
37:45 – The principles behind Stablecoin
42:20 – What has been the greatest lesson that Preston has learned about blockchain he wish he knew when he first got started
44:05 – How embedded will blockchain be by 2024/2025
45:12 – ICO’s, why Preston is not a fan and if there are any positives to them
50:20 – What are the conditions under which these things will be viewed legally.
54:00 – Preston’s history owning cryptocurrencies
55:35 – What has Preston most excited in the space
59:02 – Utility settlement coin
1:00:36 – Why the fascination with marmots
1:02:10 – What to reference before getting started with cryptocurrencies
1:04:03 – Understanding supply chains in block chain
1:07:14 – Some smart people on block chain to follow
1:08:24 – Kindest thing anyone has done for Preston
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
I have a special request this week: share this episode with every curious person in your life.
The conversation, with a 26-year old investor named Ali Hamed, serves as an example of what’s possible when you think creatively.
Ali views the world with a fresh set of eyes, and has already become an expert at identifying new investment opportunities where others have not. As the second prodigy 26 year old in as many weeks on the podcast, these young guns are making me feel like an ancient 32 year old.
We talk a lot about “alpha” in our world, earning returns better than the market. But the key word in that last sentence isn’t alpha, it’s earning. Hopefully you, like me, will use this conversation as a reminder of what it takes to earn differentiated returns. It’s not just the hard work, but also the mindset. We explore many examples of how to create new investment opportunities, from rolling up Instagram accounts, to financing perishable fruit like watermelons, to heavy machinery software.
Please enjoy this special conversation with Ali Hamed. Follow him and his partners. And then go figure out how to earn success yourself in whatever it is you do by helping other people solve problems with empathy.
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 Big Short: Inside the Doomsday Machine
Links Referenced
Seed Investing is a B2C Business, While Growth Stage investing is a B2B Business
Free Content and Digital Media Are Increasing Socio-Economic Disparity
Show Notes
2:24 - (First Question) Ali’s investment philosophy
3:33 – History of Coventure and its unique structure
6:30 – The story of how Coventure was seeded
12:29 – What makes cost of capital such an interesting topic for Ali
14:13 – Exploring fee structures and the expectations for return in the current environment
17:02 – The current state of the VC world
21:42 – Ali’s investment process on the VC side
25:32 – What other requirements are there for Ali to make a VC investment
28:00 – Understanding the difference between judgement and empathy in founders
28:20 – The Big Short: Inside the Doomsday Machine
29:47 – Dealing with LP’s
32:47 – Sheel Tyle Podcast
33:39 – At one point did Ali feel the most personally at risk in his career
37:55 – Why did they get involved in cryptocurrency
43:30 – What excites Ali most about crypto
46:09 – Lending as an alternative way to invest in businesses
48:09 – An overview of their lending business
50:21 – How does deal flow and sourcing work in these arrangements
52:54 – How much encroachment will Ali face from competitors
54:28 – Exploring the idea of valuing and buying digital accounts
59:36 – How Ali thinks about marketing for his own firm and the ones he invests in
1:00:06 – Seed Investing is a B2C Business, While Growth Stage investing is a B2B Business
1:03:59 – Longer term aspirations for Ali and industries that he would avoid
1:04:25 – Ira Judelson podcast
1:08:05 – Ali’s view on the potential negative impact of free content
1:08:19 - Free Content and Digital Media Are Increasing Socio-Economic Disparity
1:12:48 – Kindest thing anyone has done for Ali
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
My guest this week is Sheel Tyle, who at just 26 years old has already had a successful career in venture capital. His most recent stint was as the co-head of the seed investing business at NEA, the largest venture capital firm in the world, where Sheel was also a partner. Now, Sheel has set off on his own, setting up his own firm called Amplo and having recently raised a $100M venture fund where he is the sole general partner. He aims to invest with young, mission driven entrepreneurs with a global focus. As you can tell from this resume, which also includes a degree from Stanford and a law degree from Harvard, this is one ambitious guy.
There are several aspects of this conversation that will really stick with me, specifically his points on networking and the smartest decision that he’s seen entrepreneurs make. I also loved our discussion of some of the same trends we explored last week with Chris Dixon—topics like drones, automated cars, and blockchain, where Sheel often has a different take than the consensus.
Please enjoy my conversation on Africa, entrepreneurship, venture capital trends, technology, and more with Sheel Tyle.
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
Originals: How Non-Conformists Move the World
Links Referenced
Show Notes
2:20 - (First Question) Sheel’s upbringing and how it shaped his interest in Africa
4:43 – The outlook for Africa
6:10 – Primary differences in valuations and momentum in Africa vs opportunities in other places which Sheel conveys through the story of Andela
10:45 – The perspective returns of venture capital investments
15:16 – Does the hyperfroth in ICO’s serve as a threat to traditional venture capital
17:53 – Where Sheel falls on the importance of networking in terms of his venture capital interests
20:38 – The stronger impact of a smaller, more tight-knit network
22:46 – Sheel’s feelings on driverless cars and the timeline for this sector
27:17 – What are the positive side effects of driverless cars taking over
29:01 – What is the best way to invest in driverless cars from a venture capital standpoint
31:30 – Sheel’s overrated/underrated take on different technology spaces
31:30 – VR/AR
32:21 – Blockchain
32:54 – Machine learning/AI
33:41 – Drones
34:53 – Other categories that we should be thinking about
36:54 – OneConcern
38:21 – Should entrepreneurs be raising more money over future liquidity concerns of the venture capital markets
39:40 – What are the places that Sheel can help a founder in the early stage formation of the company
40:02 – Andy Rachleff Podcast Episode
42:53 – What does the breakdown of domestic vs international investments potentially look like in fund 1 for Sheel
44:53 – Sheel’s most memorable travel experience
47:34 – what is the best decision Sheel saw a founder make
48:10 – Mark43
50:31 – Resources for people interested in venture capital
51:06 – TechCrunch
51:07 – VentureBeat
51:17 – Bill Draper (author)
51:25 – Originals: How Non-Conformists Move the World
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
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
How Aristotle Created the Computer
New Yorker Cover on automation
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
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
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
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)
Books Referenced
World Without Mind: The Existential Threat of Big Tech
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
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
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
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
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
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
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
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
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
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
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
Neuralink and the Brain’s Magical Future
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
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
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
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
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
Links Referenced
Bitcoin: A Peer-to-Peer Electronic Cash System
The BitCoin Model for Crowdfunding
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
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
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 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 Motley Fools Rule Breakers Rule Makers : The Foolish Guide To Picking Stocks
Links Referenced
“I had a lover’s quarrel with the world” by Robert Frost
Invest Like the Best episod with Morgan Housel
Don't Be a Dip: The 1 Thing You Need to Know About Buying on Dips
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
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
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
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
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
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