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Invest Like the Best with Patrick O'Shaughnessy

Conversations with the best investors and business leaders in the world. We explore their ideas, methods, and stories to help you better invest your time and money. Hear stock market and boardroom insights you can't find anywhere else. If you're a professional investor, CEO, entrepreneur, or business strategist, this is for you. Explore all our episodes and learn more at https://www.joincolossus.com
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Now displaying: Page 13
Aug 7, 2018

Ryan Selkis - The Crypto Barbell and Token Curated Registries - [Invest Like the Best, EP.98]

This week’s conversation is for those interested in the nitty gritty of cryptocurrencies and for those who, like me, are fascinated by that world but more than a bit skeptical of the investing prospects for the many cryptocurrencies now in existence.

My guest is Ryan Selkis, who I met at an event hosted by Union Square Ventures and Blocktower Capital. At that event, in a crowd of many brilliant people, Ryan was consistently asking hard questions and raising counterpoints.

I love his perspective because he is both passionate, but realistic, excited about crypto, but worried about many aspects of the ecosystem.

We discuss many new topics like his barbell analogy for thinking about different kinds of coins, token curated registries, and the need to better transparency around decentralized projects.

Hash Power is presented by Fidelity Investments


Please enjoy our conversation.

 

March for the Fallen

Want to meet other curious investors, get in good shape, and support a fantastic cause? Consider joining a great group to hike 28 miles in honor of those who have fallen in defense of our nation. 

Learn more and sign up at alphaarchitect.com/mftf

 

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

2:55 - (First Question) – how he best explains blockchain technology

4:12 – How does he categorize each cryptocurrency

9:11 – How Numeraii is valued

10:04 – Explaining token curated registries (TCR)

12:58 – How Token Curated Registries are being applied

15:05 – Innovations that will protect against nefarious actors in the crypto space

16:37 – How do you convince investors to commit to TCR’s

18:40 – Biggest headwinds to this industry

22:12 – What are the quality filters to root out the bad actors

25:42 – Thoughts on the ICO market as an alternative to capital raising

29:23 – Litmus test for who should use an ICO to raise capital

34:28 – What is unique about creation of a token vs the normal exchange of cash to determine if a company needs a token

36:21 – How many ICO projects are really necessary

38:28 – How should people form an investment opinion about this space

41:35 – Core mission of his company

44:28 – What are some of the reasons his goals won’t happen

49:30 – Lessons learned while working at Coindesk

49:58 – What is he most excited about for the future of this space

52:56 – Kindest thing anyone has done for Ryan

 

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 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

Jun 26, 2018

My guest this week is Eric Balchunas, the senior ETF analyst for Bloomberg and the author of the Institutional ETF toolbox. This episode is intended for those in the asset or wealth management industry who have considered using ETFs in their portfolios, or for the individual investor who likes to stay up to date on trends in the market for asset management products. We cover all aspects of ETFs in some detail, and luckily in ways that have little overlap with a few other recent ETF-centric episodes on two of my favorite podcasts: the Meb Faber Show and Capital Allocators with Ted Seides with Matt Hougan and Tom Lydon respectively.

We open with Eric’s favorite ETF tickers, discuss the pros and cons of ETFs versus other investment vehicles, and explore the largest areas of opportunities for new ETFs coming to market in the years to come. ETFs have become the vehicle of choice for many investors, so it was about time we covered them in depth in this forum. As you’ll hear, Eric is the right person to teach the world about ETFs, thanks to deep domain knowledge and unflagging enthusiasm. Please enjoy my conversation with Eric Balchunas on the past, present, and future of ETFs.

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

Quantitative Momentum: A Practitioner's Guide to Building a Momentum-Based Stock Selection System

Links Referenced

Chart – There Are Now More Indexes Than Stocks

Show Notes

2:32 - (First Question) – Eric’s favorite ETF tickers

4:07 – How Eric got started into his career and how it led him into the ETF world

8:04 – An overview of the ETF landscape

10:10 – Active managed ETFs

            12:17 – Chart – There Are Now More Indexes Than Stocks

13:32 – Key variables he thinks about when assessing a new ETF

15:18 – Evaluating shiny object ETFs

17:30 – The appeal of ETFs

20:18 – Future regulatory concern of the tax treatments of ETFs

22:10 – The liquidity advantage of ETFs and why that can actually be bad for investors

24:19 – What would Eric do to build the perfect ETF

26:03 – What are the future trends for new ETF’s launched

29:40 – Categories that work well in the ALT world of ETFs

31:32 – Most effective marketing strategy for ETFs

35:50 – Quantitative Momentum: A Practitioner's Guide to Building a Momentum-Based Stock Selection System

36:28 – How will the winning asset managers have done differently in this space

41:56 – How the next downturn could impact ETFs

46:17 – Do ETF’s create pricing distortions

50:33 – What trend is Eric most interested in right now

53:21 – Alpha through Beta

55:51 – Kindest thing anyone has done for Eric

Learn More

For more episodes go to InvestorFieldGuide.com/podcast

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

Follow Patrick on twitter at @patrick_oshag

Jun 19, 2018

My guests this week are Kyle Samani and Tushar Jain, both managing partners at Multicoin Capital.

I’ve taken a bit of a break from crypto because I hadn’t sensed many new angles to explore in this forum, from an investor’s point of view. I felt that while things keep evolving, the major investment theses have been established and explored.

Kyle and Tushar are interesting because of their often divergent views. For example, Kyle has been an outspoken supporter of Ethereum relative to bitcoin.

This conversation, which is meant for those still curious about crypto, offers lots of new food for thought. We discuss smart contract platforms, network effects, the coming platform wars, and why blockchains may not matter in ten years. Please enjoy my conversation with the partners of Multicoin Capital.

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

Paths to Tens of Trillions

An (Institutional) Investor’s Take on Cryptoassets

On the Network Effects of Store Value

If SaaS Products Sell Themselves, Why Do We Need Sales?

Money, blockchains, and social scalability

Nakamoto Institute

Token Economy

Multicoin.capital

Crypto Cannon           

 

Show Notes

2:11 - (First Question) – What would get the entire cryptocurrencies ecosphere to 5-10 trillion dollars

            2:53 – Paths to Tens of Trillions

4:37 – What will be the effective uses for crypto currencies, store value vs utility value

            4:38 – An (Institutional) Investor’s Take on Cryptoassets

8:48 – Why they are negative on bitcoin and more positive on Ethereum

10:07 – Where will start to see widespread adaption of the utility value of cryptocurrencies

14:44 – What is the major breakthrough that cryptocurrencies create

21:21 – How do we gain confidence that a utility token will become a sound investment

25:16 – The different type of network effects

            25:47 – On the Network Effects of Store Value

31:18 – How do you convince institutional investors to consider the crypto space

34:21 – Factors that they care about when first evaluating a crypto currency

39:21 – How does technological development and marketing factor into their decision when picking a crypto currency

            40:31 – If SaaS Products Sell Themselves, Why Do We Need Sales?

41:42 – Where these two men disagree the most right now

44:07 – Why there’s a chance blockchain technology as we know it today could be irrelevant

            44:25 – Money, blockchains, and social scalability

47:56 – Most compelling trends in this world today

51:51 – A favorite resource or person people can look into if they want to learn more

            52:22 – Nakamoto Institute

            52:57 – Token Economy

            53:24 – Multicoin.capital

            53:30 – Crypto Cannon         

54:14 – Kindest thing anyone has done for them

 

Learn More

For more episodes go to InvestorFieldGuide.com/podcast

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

Follow Patrick on twitter at @patrick_oshag

Jun 12, 2018

My guest this week is Michael Recce, the chief data scientist for Neuberger Berman. The topic of our conversation is the use of data in the investment process, to help cultivate what is commonly referred to as an information edge.

I call the episode “Tim Cook’s Dashboard” because of an interesting question that Michael poses: if you armed the best apple analyst in the world with Tim Cook’s private business dashboard, what might that be worth? Effectively Michael’s goal is to recreate the equivalent of a company dashboard for many businesses, helping analysts understand the fundamental health and direction of companies a bit better than the market does, and in so doing create an actionable edge.

This is a daunting task, and you will hear why. It requires both a fundamental understanding of business and of data, statistics, and methods like machine learning. In our own work, we’ve found machine learning to be useless for predicting future stock prices, but extremely useful for other things, like extracting and classifying data.

This conversation can get wonky at times, but as listeners know that is the best kind of conversation, even if it requires a second, slower listen. I hope you enjoy this talk with Michael Reece. Afterwards, I highly recommend you invest the time to read a series of posts called Machine Learning for Humans, which I will link to in the show notes. It helps demystify the buzz words and explain how these new technologies are being used.

 

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

Crossing the Chasm

One Two Three Infinity

 

Links Referenced

Sam Hinkie Podcast Episode

 

Show Notes

2:44 - (First Question) –  Changes in data science through the lens of Michael’s career

5:17 – The basic overview of using data and machine learning to create an edge

6:58 – How the state of business is more than just a single data point

7:53 – How you know when you’ve pulled a real signal from the noise of data

10:49 – The advantages that data provides

13:01 – Is there still an edge in decaying data

15:34 – Building data that would predict stock prices

19:43 – Prospectors vs miners in data mining

22:18 – Knowing when your prospectors are on to truth

27:09 – Understanding machine learning

30:10 – Defining partition

32:17 – Applying the parameters of selection process to stocks

36:05 – What’s the first step people could take to use data and machine learning to improve their investment process

38:54 – Building a sustainable advantage within data science

41:35 – Predicting the uncapped positive vs what’s seemingly easier, eliminating the negative

43:58 – How do we know to stop using a signal

46:22 – The importance of asking the right question

47:09 – Categories of objective functions that are interesting to measure data against

            47:42- Crossing the Chasm

48:37 – Most exciting things he’s found with data

51:17 – What investors, individual or firms, has impressed him most with their use of data

52:17 – Will everyone eventually shift to being data informed or data driven

55:33 – Wall Street’s use of data vs other industries

            55:36 – Sam Hinkie Podcast Episode

57:48 – Why everyone should know how to code

58:52 – Kindest thing anyone has done for Michael

            59:22 – One Two Three Infinity

 

Learn More

For more episodes go to InvestorFieldGuide.com/podcast

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

Follow Patrick on twitter at @patrick_oshag

Jun 5, 2018

My guest this week is Ash Fontana, a managing partner at venture capital firm Zetta, who invests in companies which build software that uses artificial intelligence methods like machine learning to predict and prescribe outcomes. Ash’s combined experience as a founder, entrepreneur, and investor give him the perfect background to discuss with us one of the hottest topics in business and investing.

This conversation is useful for anyone trying to evolve their own way of dealing with data. Of particular interest are the ways that Ash and his team evaluate data sets and how they think about competitive advantage in this new world—where he advocates a new term to replace the concept of moat: loops. 

If we can use data to do things better than humans, or if we can supercharge our intuitions with predictive models, we can harness the power of this new technology. What Ash has taught me is that data itself is dumb. But great data sets can represent the fuel for incredible companies. Let’s dive into how that may be. Please enjoy this conversation on how AI is changing business, and how we might profit from that change.

 

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 Most Important Thing: Uncommon Sense for The Thoughtful Investor

 

Links Referenced

Jerry Neumann Podcast Episode

Ali Hamed Podcast Episode

 

Show Notes

2:25 - (First Question) – A look at their very specific investment strategy

3:35 – Future of competitive advantage in the SaaS industry

6:45 – How startups and new companies can compete against software giants that are pretty well entrenched in the market

8:38 – How do copies with narrow focuses attract VC money which is looking for massive returns

12:28 – The stages in which AI will be enabled

15:55 – Framework of an AI company

18:49 – Importance of the feedback in the AI company framework

20:56 – Examples of AI companies

23:50 – Why companies that are AI from the start will have a significant advantage in the space

26:21 – How do companies change their thinking about compiling useful data

32:18 – Regulation of AI

35:03 – Preventing other companies from leap frogging you in the AI space

37:57 – Some of his favorite AI companies

40:43 – How much has he seen in the finance world

            41:07 – Jerry Neumann Podcast Episode

43:10 – Why the focus on B2B AI companies

45:34 – Major components of the enterprise stack that he focuses on for AI

49:30 – What impact will all of this AI have the daily lives of people

51:38 – Biggest problems that he is excited to see AI tacklet

53:04 – How do you value the intangible asset of an AI model

57:13 – How Ash thinks about getting other investors into firms they seeded

1::00:27 – Other investors that Ash really respects

            1:01:15 – The Most Important Thing: Uncommon Sense for The Thoughtful Investor

            1:03:29 – Ali Hamed Podcast Episode

1:04:04 – Where would Ash invest outside of AI

1:07:11 – More about his family nut business

1:11:18 – Favorite macadamia nut story

1:12:05 – Kindest thing anyone has done for Ash

 

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

May 29, 2018

My guest this week is remarkable. He now applies his talents on Wall Street, searching for smaller cap companies trading at huge discounts in an effort to compound wealth for his investors. He is classically trained, having earned his graduate degree from Colombia, a school known for producing value investors. But his method also reflects what he learned across more than a decade of active duty in the U.S. military.

Mike Zapata served us all as a Navy SEAL in the aftermath of 9/11 and ultimately as a member of the SEAL’s “Development Group,” commonly known as SEAL team 6. I think everyone listening strives for excellence in what they do. This week we get to hear from someone who has pursued excellence on our behalf.

I’ll let him explain the meaning of his firm’s name, Sententia, but for now suffice to say we are lucky to have quiet professionals like Mike. If you are interested in supporting the families of soldiers who fought with Mike and lost their lives, I encourage you to check out the Tip of the Spear foundation and make a donation along with me, small or large.

Please enjoy my conversation with Mike Zapata.

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 Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel

Fearless: The Undaunted Courage and Ultimate Sacrifice of Navy SEAL Team SIX Operator Adam Brown

Boyd: The Fighter Pilot Who Changed the Art of War

 

Show Notes

2:23

 

2:23 – (First Question) – A quick overview of Mike’s career leading up to his time at Columbia

3:43 – What led him down the path of value investing at Columbia 

            3:51 – The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel

5:57 – The focus and goal of the firm

7:12 – Where the name of the firm, Sententia comes from

8:04 – His experience in the Basic Underwater Demolition/SEAL (BUD/S) program and lessons learned from it

13:14 – How much grit is innate vs can be learned

14:59 – What the actual job was in BUD/S

17:33 – Difference between the broader SEAL community and being part of the more exclusive development group

19:03 – The team dynamic within the SEALS

20:26 – Fearless: The Undaunted Courage and Ultimate Sacrifice of Navy SEAL Team SIX Operator Adam Brown

21:18 – The sacrifice that SEALs make with the story of Adam Brown as an example

24:35 – Waiting for darkness before deployment

27:23 – How do you know when to violate your best practices for a risk

29:26 – A look at three pictures in his office and why they are meaningful

31:36 – Lessons that would be useful to other people

            33:10 – Boyd: The Fighter Pilot Who Changed the Art of War

33:17 – How is Mike’s skillset applied to the investing world

39:24 – Factors that would be seen as good alignment in businesses

40:18 – How the view the profiles of other investors in these small businesses

41:46 – Examples of “smoke and fire”, markers of an attractive investment

43:42 – Other investors that he has learned the most from and what those lessons were

44:54 – Importance of balance sheets in value investing

47:33 – Is value investment oversaturated

50:28 – Market blind spots that are attractive to Mike

52:03 – What point in Mike’s career has he felt the most alive

53:14 – Any other lessons Mike would want to share

55:12 – Kindest thing anyone has done for Mike

 

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

May 22, 2018

I came across this week’s guest thanks to the overlap of three passions of mine: data informed investing, value creation, and basketball. 

Sam Hinkie worked for more than a decade in the NBA with the Houston Rockets, and then most recently as the President and GM of the Philadelphia 76ers. He helped launch basketball's analytics movement when he joined the Houston Rockets in 2005, and is known for unique trade structuring and a keen focus on acquiring undervalued players. Today, he is also an investor and advisor to a limited number of young companies in which he feels his experience can improve outcomes. 

At one point in our conversation, Sam mentions that he tracked success via future financial outcomes, so I did some research and found many interesting stats about the 76ers surrounding Sam’s tenure. When he took over the franchise, it was 24th in ESPN’s franchise rankings, and today it is 4th. This is the result of an impressive crop of young talent—players like All-Star Joel Embiid and Ben Simmons—which resulted in large part from unconventional decisions Sam and his team made. 

While I’m sure these estimates are imperfect, Forbes estimated the 76ers value at around $418M when Sam took over and $1.2B a few months ago. NBA teams in general have grown in value, so a lot of that appreciation is obviously “beta,” but given that the 76ers had the top percentage growth number more recently of any team, some of it is “alpha,” too. While we can’t parse the exact amount, it seems his unique approach to building a team clearly created some large amount of current franchise equity value. And it looks like the dividends from those decisions will compound for many years to come. 

While basketball was where Sam plied his talents in the past, his approach is more elemental. It is about finding great people, using data, and structuring decisions that create the possibility of huge returns, be they financial or otherwise. I don’t know what Sam will do next, be it investing in companies, running one, or taking over another team, but I know it will be fun to watch. 

Please enjoy this unique episode with Sam Hinkie. 

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

Empire of the Summer Moon: Quanah Parker and the Rise and Fall of the Comanches, the Most Powerful Indian Tribe in American History

Selfish Reasons to Have More Kids: Why Being a Great Parent is Less Work and More Fun Than You Think

 

Links Referenced

International Justice Mission

 

Show Notes

3:24 – (First Question) Advantages of having a long view and how to structurally harness one

6:08 – Using technology to foster an innovative culture

            6:18– Empire of the Summer Moon: Quanah Parker and the Rise and Fall of the Comanches, the Most Powerful Indian Tribe in American History

10:16 – Favorite example of applied innovation from Sam’s career

11:34 - Most fun aspect of doing data analytics early on the Houston Rockets

13:38 - Is there anything more important than courage in asymmetric outcomes

14:29 – How does Sam know when to let the art of decision making finish where the data started

16:29 - Pros and cons of a contrarian mindset

17:26 – Where he wanted to apply his knowledge in sports when first getting out of school and how his thinking is best applied in the current sports landscape

21:39 – How does he think about trying to find the equivalent of mispriced assets in the NBA

23:12 – Where tradition can be an impediment to innovation

25:07 – What did the team and workflow of the team look like in the front office

27:03 -  The measure of truth in a sports complex

29:10 – What were the early factors coming out of the data that helped to shape NBA teams

30:42 – Best tactics for hiring

33:59 – Process of recruiting spectacular people

35:39 – Thoughts on fostering a good marriage

37:57 – Picking your kids traits in your spouse

            38:02 – Selfish Reasons to Have More Kids: Why Being a Great Parent is Less Work and More Fun Than You Think

40:45 – What kind of markers does he look for when evaluating long term investment ideas

42:44 – His interest in machine learning

45:55 – What’s more exciting, the actual advances in machine learning or the applications that can be imagined as a result

            47:15– International Justice Mission

48:11 – How he got started teaching negotiations and some of the points he makes in that class

49:16 – Effective techniques for negotiating

50:03 – Is negotiating contentious, do you need empathy

50:41 – A Rorschach test of Sam based on his reading of Lessons of History (book)

53:01 – Biggest risk Sam took in his career

54:37 – Biggest risks Sam took while with the 76ers

58:09 – Do people undervalue asymmetric outcomes in the NBA
1:00:11 – The players Sam has enjoyed watching over the years

1:02:45 – Why Robert Caro is a favorite author of his

1:04:30 – Kindest thing anyone has done for Sam

 

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

May 15, 2018

My guest this week is a bundle of curiosity, and that is one of the nicest things I could say about someone. For several years, Tren Griffin has been writing a weekly blog post that highlights things he has learned from various investors, businesspeople, musicians, comedians, and more. Lately, he has also been tackling individual businesses, and broad topics like scaling, competitive forces, and product market fit.

Tren’s full time job is serving as a director at Microsoft. He’s also worked with or for several well know businesspeople and investors like Craig McCaw, and written several books including one on lessons for entrepreneurs, one on Charlie Munger, and another on negotiation.  

We discuss value creation vs. value capture, alpha in investing, sales, hip hop, and why he’d teach high school students about convexity through a drunk driving analogy. I could have talked to Tren for much longer than I did, but sadly, we both had flights to catch. 

If you take anything away from this, I hope its just how much fun it is to just be curious about business, and how you can learn a tremendous amount if you just keep reading about the things that interest you and talking to others. Please enjoy my conversation with Tren Griffin.

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

2:26 – (First question) –  key levers of the universal business model

4:26 – How do you know when you’ve achieved real value creation

6:24 – Importance of value capture and how they enhance value creation 

            6:31 – Zero to One: Notes on Startups, or How to Build the Future

9:08 – Price power

10:28 – Are discussions of moats more useful to businesses than to investors

13:12 -  What Tren learned during his early years working with Craig McCaw

            16:28 – The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success

16:36 – The skill of capital allocation

18:37 – How would Buffett and Munger bet on tech if they were starting out today and their philosophy of betting against change

21:57 – How Tren became so fascinated with Charlie and what he’s learned from him

            22:32 – The Alchemy of Finance

            23:17 – Damn Right: Behind the Scenes with Berkshire Hathaway Billionaire Charlie Munger

            23:19 – Poor Charlie's Almanack: The Wit and Wisdom of Charles T. Munger

25:21 – Most memorable moment or lesson from Charlie

28:19 – There are more pockets of Alpha

19:20 – How he thinks about factor investing

31:25 – What are the scalability features that make a business attractive

31:28 – A Dozen Attributes of a Scalable Business

35:37 – Exploring some of the other important levers of businesses, such as subscriptions, customer acquisition cost, and more.

            36:20 – Getting to Yes: Negotiating Agreement Without Giving In

37:11 – Wholesale transfer pricing

39:18 – Pros and cons of subscription business models

43:14 – Magic of getting products distributed

44:58 – Best sale Tren’s ever made

46:46 – Most important lesson for young people

49:01 – Any businesses that are piquing Tren’s interest right now

50:16 – Tren’s interest in hip-hop and how it helps him reach more people

53:49 – A look at some interesting quotes from Jim Barksdale

58:22 – Learning by doing

            1:00:48 – Seeing like a State: How Certain Schemes to Improve the Human Condition Have Failed

1:01:06 – Period of his career that he felt most alive

1:03:03 – Advice for young people thinking about business and entrepreneurship

1:04:56 – Why are so few people passionate about what they do for a living

1:10:44 – Kindest thing anyone has done for Tren

 

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

 

May 8, 2018

I believe that any investment strategy that will deliver strong returns in the future must evolve. Any strategy should rest on rock solid foundational principles, which change rarely if ever—things like price discipline, or business growth. But the features of the strategy must keep getting better, because the marketplace is incredibly competitive.

That evolution is the topic of today’s conversation with Jason Karp. Jason is the founder and CIO of Tourbillon Capital Partners, a multi-billion dollar asset manager based in New York City.

We cover a ton of interesting ground. We start with what has happened in public and private markets, discussing the role of quants, passive indexes, and value vs. deep value investing. We compare the relative merits of investing in private equities, and where and how opportunities arise.

We then focus in on two interesting private investing trends: the health and wellness sector and the cannabis industry. First, we discuss Hu kitchen and Hu Products, the food business that Jason started with his family several years ago in response to personal health challenges. Second, we discuss his evolved views on Cannabis as an investment space and why it may also represent a massive growth opportunity.

You all know I value transparency, so it is important to note that since I recorded the conversation, my family became an investor in Hu Products. It has been a fascinating means to learn about the food, health, and wellness industry which has grown rapidly in recent years. We were customers of Hu in New York City long before I even knew Jason, which made that part of the conversation especially interesting for me.

This episode re-enforced my believe in pushing one’s investing strategy to adapt to change market conditions and competitive pressures. If we have any hope of beating Vanguard, we can’t ever rest on our laurels.

This was an especially eclectic and fun conversation, I hope you enjoy my chat with Jason Karp.

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

3:06 – (First question) –  Jason’s view on private markets vs public markets and how his view has evolved

6:02 – Phase of the private markets where companies can achieve huge size and scale without going public

10:31 – Framework of Jason’s value-based investing strategy

13:47 – Reverse discounted cash flow

16:27 – Are there areas of the market that are easier to predict using Jason’s models

20:29 – Tech dominance the longer they are around

            21:01 – Jerry Neumann Podcast Episode

22:08 – How markets have changed over Jason’s career

25:58 – Types of edge that you can have in the market

30:00 – Broad examples of sectors that are high-quality, but momentum is hurting them

31:32 – Backstory of Hu Kitchen

38:33 – Investment research into health and wellness

42:56 – State of acquisitions, particularly in consumer product goods

47:13 – Jason’s research into Cannabis

50:43 – The misperceptions of Cannabis

56:30 – Why cannabis is a more important sector to consider than crypto

57:51 – What are the most important levers to growing a business

1:02:24 – Biggest lessons learned in hiring good people

1:06:10 – Investing lessons

1:09:27 – Kindest thing anyone has done for Jason

 

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

 

 

May 1, 2018

My guest this week is Chris Douvos, a managing partner at Venture Investment Associates, which allocates 1.6B in behalf of investors. 

Chris is the first professional allocator I’ve spoken with who focuses specifically on venture capital funds, so I had a ton of questions for him on how to build a portfolio in an asset class known for uncertain, but often enormous, outcomes.

We discuss the major recent changes in the asset class and where things might be going.

I sought Chris out because while this is an investment style that is full of creativity and hope, I’ve always felt it could use a healthy dose of skepticism and a value investor’s mindset. He delivers in spades as we try to separate the real from the ideal. 

We didn’t record it, but Chris’s tour of Palo Alto was one of the most interesting and entertaining hours I’ve spent. He is a student of history and markets, and I look forward to learning more from him in the future. 

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

 

Books Referenced

Pioneering Portfolio Management: An Unconventional Approach to Institutional Investment

 

Links Referenced

Domino Rally Business Models

All About the Benjamins

Speak Like the Locals

David Salem podcast episode

Curveball

 

Show Notes

2:18 – (First question) – Four factors that Chris thinks are important for future success of venture firms; portfolio concentration; repeatability; being early; size discipline

7:40 – What the venture landscape looks like today from Chris’s viewpoint

            8:32 – Pioneering Portfolio Management: An Unconventional Approach to Institutional Investment

14:07 – Is there a glut of startups making it difficult for investors

17:33 – How does Chris think about the investments that are a bit different from what everyone else is investing in in Silicon Valley

19:17 – Why he focuses on college campuses for innovation

20:54 – The role that geography plays in venture

25:06 – The Four M’s; money, momentum, mentorship, entrepreneurial management

27:13 – Chris’s perspective on crypto currency as a threat to venture capital

31:44 – The idea of venture capitalists as service providers to the companies they are investing in

35:15 -  Views on investing in hyper focused VC’s vs those that are generalists and just go after the best opportunities in any sector

39:00 – What hot button areas are of most interest to Chris and why, from an investment standpoint

            39:38 – Domino Rally Business Models

42:22 -  What can a public market investor learn from a value venture investor who mostly has to rely on qualitative metrics

            43:08 – All About the Benjamins

44:38 – Portfolio construction in the world of venture

            46:40 – Speak Like the Locals

48:00 -  What are the characteristics that Chris looks for in managers, as an allocator

53:52 – What type of investors should and should not be in venture

59:15 – What type of allocator would Chris give all of his money to

            59:47 – David Salem podcast episode

            1:01:06 – Curveball

1:01:40 – 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

Apr 24, 2018

My guest today is Arianna Simpson, who has spent her career in an around the world of technology working at startups, Facebook, and now in venture capital as an investor focused on the world of cryptocurrencies.

I met Arianna when I hosted a panel at a big investing conference in New York City and she was one of the panelists. On the panel, I found her style to be very straightforward and compelling. It is clear that she loves to learn and that the best manifestation of her style of learning is investing in technology.

In our conversation we discuss broad trends in crypto that we haven’t spent much time on before: decentralized versus centralized exchanges, privacy coins, and evaluating a found or early team. We build a framework for learning about this new asset class, discuss the importance of travel, and the value of pushing oneself outside of comfort zones.

Hash Power is presented by Fidelity Investments

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

 

Show Notes

2:12 – (First question) – How to teach someone else to build an investing philosophy around crypto

4:00 – The major risk factors to investing in crypto

6:28 – best practices for mitigating risk

7:39 – What factors to think about when it comes to whether a token will lose all value or not

8:39 -  Taking a pulse of the investment community on crypto

11:36 – How she heard about and became interested in crypto currencies

12:34 – Are people really using crypto currency as a hedge against rampant inflation

13:52 – Investing thesis in the space

14:07 – Arianna’s systems for learning about cryptocurrencies and staying up to date on them

15:19 – Arianna’s take on the issue of increasing transactional through put

16:49 – Layer 1 solutions and making it all scalable on a blockchain

17:56 – her take on the fat protocol thesis

20:32 – Defining utility vs security tokens

21:54 – evaluating different coins

21:02 – Why cross currency swaps are important and how they work

26:17 – What are the chances of a scenario where there’s just one token and everything is built off of that one

28:02 -  Comparing centralized and decentralized exchanges

29:47 – How the traditional investing world is going to regulate transaction involving cryptocurrencies and view security around those transactions

31:54– Impact this will have on capital formation

33:44 – Evaluating teams behind crypto companies

35:48 – The importance of gut when evaluating people

38:47 – How Arianna’s global upbringing impacts her thinking on the technology

39:51 – What countries or regions have had the largest impact on Arianna’s investing philosophy

42:41 – Doing things you’re not qualified for

43:59 – Gender imbalance in crypto and what can be done to shift that

45:28 – Most recent thing that has gotten Arianna excited in the crypto space

46:15 – Explaining Zero X

47:33 – How her views on reading have evolved

48:54 - Kindest thing anyone has done for Arianna

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

Apr 17, 2018

We’ve always found that even in public equities, you learn more once you have a live portfolio. One of the best ways to learn is to put some capital at risk.

To learn about the venture capital world, for example, I made an investment in a startup called Ladder, a platform business which connects coaches (fitness trainers to begin with) with consumers who need or want a coach to help them improve their fitness and their health. The idea is by making the entire coaching system more efficient, Ladder can provide consumers with a real person as a coach, but at a fraction of the cost, and provide coaches with both new customers and a much better way of managing their existing businesses.  If you are interested in the businesses backstory, you can listen to episode #60 of the podcast to hear founder Brett Maloley’s story and his vision for Ladder.

We are now six months into the launch of the business, with thousands of users and coaches on the platform and run rate revenue past a million dollars. What I was most curious about at this stage, aside from building something useful, was the relationship between a startup and institutional venture capitalists, who are allocating capital from their funds into startups at various stages.

For this episode, I asked two VCs to sit down with me and Brett and treat the conversation as they would a normal pitch meeting, so that we, the audience, can get a peek into their world and the types of questions they ask. 

The venture capitalists in question are Thatcher Bell, of CoVenture, and Taylor Greene, of Collaborative Fund. Both have experience evaluating new companies, but also have specifically spent time on companies like ladder, which follow the platform or marketplace model. 

While we do cover a little bit of background on the company, I’ve edited most of that part out so we can talk about the business model itself. While I don’t spend much time talking in this episode, you will hear me asking Thatcher and Taylor some questions to better understand why they care or don’t care about certain aspects of a business.

Lastly, I love the data aspect of all this. The interaction between coaches and customers produces a wealth of data of different types, all of which is analyzed and used to improve each aspect of the process. To help gather more data—about onboarding, working with a coach, and tracking results—Brett and the Ladder team set up a little promo code for listeners, which can be accessed by going to joinladder.com and using the promo code ILTB2 as in Invest Like the Best 2.

The first voice that you’ll hear is Thatcher, and the next person asking questions is Taylor. I began by asking Thatcher to give us a bit of background on how he approaches young companies before diving in with questions of his own.

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

3:12 – (First Question) –  getting a flywheel business going

4:49 – Brett’s background and how that led to the formation of Ladder

7:58 – Breakdown of the product

9:29 – The sign-up process

10:29 – Key problem for each party of the ladder transaction

12:34 – Diving deeper into the problem of being a health coach

14:29 – How does Ladder differentiate itself from other apps that help people locate a trainer

17:01 – A deeper dive into the consumer using this product

20:28 – The accountability factor being the moat for Ladder

24:12 -  How successful is the product right now in terms of recruiting new customers and trainers

28:38 – Their pre-launch interview and research process

31:49 – Going from hypothesis to product development

35:25 – What should founders think about when doing customer discovery, even after they have a product in the market

39:22 – Optimizing in the early stage of a business

43:24 – The defensive moat of a startup

46:20 – Their take on their ability to corner the coaches in this market

49:57 – Is there a side of the producer/consumer side of the equation that is more important.

55:42 – Getting and giving value to your supply, in this case the coaches

58:22 – How to view different phases of a business

1:00:43 – Growing the supply and demand so that neither side gets aggravated

1:02:28 – Market opportunity for Ladder

1:10:55 – Top 2 or 3 goals that Ladder has over the next 12-18 months

1:13:00 –  Looking at Ladder, what are the strengths and weaknesses as a potential investment

1:20:40 – Pros and cons of a startup seeking institutional VC money

1:25:11 – Reviewing the pitch

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

Apr 10, 2018

My guest this week helps me complete the first trilogy of guests on the podcast. His name is Nikhil Kalghatgi. Along with past guests Ali Hamed and Savneet Singh, Nikhil is a partner at the asset management firm CoVenture. If you liked those two conversations, you will love this one—it is somehow even more wide-ranging than the first two.

Nikhil is the CEO of CoVenture Crypto, but he ended up there because of an overarching investing style that he calls moonshot investing, which we explore right from the start and in great detail.

He is obsessed with productivity and happiness, and we spend a long time on those topics. One of the most interesting experiments I’ve heard about on the podcast is his Happiness project, for which he interviewed more than 100 of the wealthiest people in the world. The lessons he gleaned from those conversations are very helpful, and I won’t soon forget the lesson related to sacrifice.

We also discuss asteroid mining, networking, shared experience, and philosophy. Oh and crypto currencies. Nikhil’s take on crypto has always been refreshing to me. In fact the first time I met him he was throwing cold water on a room full of enthusiastic crypto investors. Within crypto we discuss business opportunities, mining, and how new retail and institutional capital will affect the asset class. 

Hash Power is presented by Fidelity Investments.

Please enjoy this sparkling conversation with Nikhil Kalghatgi.

 

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

2:42 – (First Question) –  What moonshot investing is

4:41 – Creating sustainable differential investment advantage

9:30 – Assessing the market for moonshots

12:15 – Types of people suited for moonshots 

13:42 – The Happiness Project

17:45 – Commonalities among successful people

25:15 – The importance of humor in life

17:16 – Recipe for a good joke

28:00 – The night Patrick and Nikhil met

29:17 – His perspective on the world of venture capital

33:26 – What did Nikhil learn from his time at SoftBank

34:52 – Craziest thing Nikhil has done

40:27 – What he took away from his time in military intelligence

46:10 – The idea of manufactured serendipity

47:13 – Nikhil’s approach to investing in cryptocurrency and what he finds interesting about it

53:23 – How Nikhil reconciles the excitement of crypto with the lack of tangible asset

58:10– The timeline of retail and institutional investors becoming more involved in crypto

1:02:43– Exploring their liquidity strategy

1:04:10 – What happens if regulators shut down the cryptomarkets

1:09:48– The role of miners in crypto and how that might change moving forward

1:10:43 – What is the frontier of crypto mining

1:12:31 – What’s the most compelling rabbit hole in crypto

1:16:23 – How would the original creators of crypto currency feel about the current state of the market

1:20:01 – What Nikhil sees as the value proposition for the whole ecosystem.

1:21:00 – Kindest thing anyone has done for Nikhil

 

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

 

Mar 27, 2018

This week’s episode was the first one that I’ve recorded live. It was the second dinner in what I expect to be a long series where I bring together 30 people from a variety of backgrounds to discuss an interesting and emerging topic, whether that be cryptocurrencies, health, cannabis investing, or some other compelling, emergent thing. 

My guest, for the second time on the podcast, is Peter Attia, who has lead one of the more interesting careers I’ve ever come across and who is focused on understanding longevity, health span, and quality of life. We dive into many dimensions of health, scientific research, what we can and cannot learn from evolution and our ancestors, and the 7 primary modalities we should focus on when it comes to our health and well-being. 

Excuse the lack of clear audio quality on some of the audience questions—the ones that are a little difficult to hear are fairly short and I felt it was better to include them for some context. 

As have all of my conversations with Peter, this one has sparked countless subsequent conversations with my wife, my friends, and my colleagues on what is important and how we can change out behavior to improve our quality of life. My partner and sponsor at these events is Peter Tiboris of Strongpoint Wealth Advisors, who with me loves exploring these topics and understanding how they might affect our lives and out portfolios. Thanks to Peter for helping me realize this series in New York City. Now, please enjoy my live conversation with Peter Attia. 

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

Marvin HAGLER vs Tommy HEARNS: FULL FIGHT

longevity chart

Senescence

Skin in the Game: Hidden Asymmetries in Daily Life 

 

Show Notes

2:07 – (First Question) –  Peter’s career journey that led him to where he is today 

            2:31 – Marvin HAGLER vs Tommy HEARNS: FULL FIGHT 

3:46 – How he thinks about longevity 

4:37 – Peter’s longevity chart 

6:31 – Four things most likely to kill you 

7:47 – The quality of your life in the later part of your life 

9:03 – Four ways he defines health span; cognition, physical dimension, sense of purpose and social support, capacity to cope with distress or distress tolerance. 

10:56 – The problem with clinical studies in analyzing longevity and his mission to get from medicine 1.0 to 2.0 to 3.0

12:15 – Medicine 1.0 and major leaps in longevity

13:01 – Medicine 2.0 and clinical trials

14:52 – Medicine 3.0 and personalized medicine 

16:22 – The playbook for living longer 

19:26 - Senescence, the cells that are programmed to do bad things 

22:17 – Understanding our evolutionary needs to learn what as individuals do to increase lifespan and quality of life as it pertains to food, sleep, and movement. 

30:32 – Where evolution doesn’t offer insight into living a better life; mindfulness 

33:27 – What are the changes that Peter has made that he’s been doing the longest and most recently

            33:35 – Skin in the Game: Hidden Asymmetries in Daily Life 

37:54 – Peter’s philosophy on mastery 

40:13 – Audience Question: How does something who seemingly doesn’t take care of themselves seem to be in such good health?

38:38 - Audience Question: Peter’s favorite car to race and how it effects his health 

51:19 – Audience Question: Is the key to life a minimalist lifestyle 

53:54 – Audience Question: the role of the microbiome 

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

Mar 20, 2018

[After talking to the brilliant string of guests the past several weeks, Patrick’s brain needed a rest—oh and a concussion didn’t help matters. To hold you over until next week, here is one of the most interesting but less well known conversations from the invest like the best archives.]

This week’s episode is the most unique to date. My guest is Boyd Varty, who grew up in the South African Bush, living among and tracking wild leopards. The main theme of our conversation is tracking, and how the same strategy for pursuing animals in the wild can be applied to all aspects of our lives. Boyd’s family has been tracking animals for four generations, and he is bringing what they have learned to a larger audience around the world.

The episode includes the best answer I’ve ever heard (which comes when I ask Boyd to describe his most memorable experience). We also discuss the dangers of an achievement or goal oriented mindset, and what he learned from spending time with Nelson Mandela as a boy.

This episode is one I hope you share with those you love, because I think Boyd’s ideas will have a profound impact on many who are thinking about what to do with their lives—whether they are young or old.

Please enjoy.

 

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

 

0:00 – Exploring Boyd’s childhood through a story about a black mamba

3:13 – Looking at the early history of Boyd’s family and their foundation in the bush of South Africa

7:00 – The launch of their safari business

8:06 – How they connected with an ecologist that encouraged them to “partner” with the land and how that led to the leopards of Londolozi 

14:25 – Expanding their model to other areas and creating an economy of wildlife. 

15:12 – How Boyd discovered what he wanted to do with his life in healing 

15:20 – Cathedral of the Wild: An African Journey Home by Boyd Varty   

20:49 – The concept of Ubuntu, the African value “I am, because of you.”

25:18 – How Patrick got to meet Boyd

26:15 – Exploring the idea of building your villages and some of the forces that combat that in our daily lives. 

31:23 – The difficulty in following your inner compass  

32:06 – Mr. Money Mustache

36:55 – Looking at Boyd’s early experiences in tracking and how he applies those principles in his current life. 

42:23 – Exploring the two different types of confidence and why there’s a benefit to throwing yourself into difficult situations, especially as a tracker. 

47:13 – Identifying the places where you can be relentless in life 

49:56 – The single most memorable tracking experience for Boyd, which is an incredible tale of tracking lions.   (Also one of the best answers to a question yet) 

1:01:49 – What can people do to get the holistic experience of the African bush  

1:02:20 – The PResencing Institute

1:04:15 – Ways that people can learn more about Boyd.  

1:04:31 – Ted Talk 

1:04:43 – The book 

1:04:48 – Workshops/Tracking Retreats 

1:05:05 – Seminar in Deer Valley  

1:05:13 – Martha Beck’s work 

1:05:15 – Finding Your Way in a Wild New World: Reclaim Your True Nature to Create the Life You Want  

1:05:36 – Website 

1:06:56 – When Nelson Mandela stayed with his family after getting out of prison

1:13:34 – Kindest thing anyone has ever done for Boyd

1:15:15 – A story of how his friend Sully saved his life from a crocodile  

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

Mar 13, 2018

My guest this week is Albert Wenger, a managing partner at Union Square Ventures and the author of the book World After Capital.

Albert studied economics at Harvard and earned a PhD in information from technology, but if you’d asked me to guess before looking those up, I’d have guessed that he studied philosophy because of how widely he has thought about the world and the impact of technology.

Our conversation is about how technology is changing the world from an Industrial Age to a knowledge age. We explore how cryptocurrencies, low cost computing, and regulation will impact our future and why the transition may require delicate care.

I loved this conversation because of my obsession with the concept of scarcity. We explore what has been scarce through time and what may be scarce in the future. Albert is one of the most interesting thinkers I’ve come across and was a pleasure to speak with. I hope you enjoy our conversation.

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

World After Capital

Show Notes

2:16 – (First Question) –  Defining what it means to be human

            2:58 – World After Capital

3:56 – Trans-humans vs neo-humans

4:37 – The concept of Qualia

5:25 – Albert’s investment philosophy=

8:27 – How Albert began his exploration into cryptocurrencies

12:59 – Most exciting things blockchains could enable

14:27 – How does Albert view blockchain technology from the view of an venture capital investor

17:00 -  Why Albert thinks that the dominate cryptocurrency of our time may not exist just yet and what he is looking for in protocols that will become the leader in the space

20:16 – What are the central functions that will be important in cryptocurrencies

21:22 -   The state of regulation in the cryptocurrency space

27:37 – What has Albert most excited for the future of blockchain

29:10 – The idea of universal basic income

32:26 – How do you solve the problem of giving money value in a world of universal basic income

35:00 – How scarcity has changed over time

39:01 – Role of financial capital in the last 200 years of civilization

42:39 – Are we as a society only capable of solving problems once they become an immediate threat

44:15 – Explaining the idea of attention as a scarce resource

47:56 – The two key drivers of change; zero marginal cost distribution and universality of computational power

53:13 -  What should we as investors and inventors be focusing on as the new objective function

57:24 – Scariest aspect of this transition into the knowledge age

59:45 – Three basic freedoms we all seek; informational, economic, psychological

1:02:13 – Fermi’s paradox and the scarcity of attention

1:02:56 – How Albert thinks about his own day and wellbeing given all of this information

1:05:01 – Kindest thing anyone has done for Albert

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

Mar 6, 2018

My guest this week is another in a recent series of people that makes me want to work harder, learn more, and do more for others. His name is Savneet Singh, and he has already accomplished a remarkable amount in the worlds of business and investing. He’s preferred to keep a bit of a low profile, but I’m hoping, for everyone’s sake, to change that a little bit.

Savneet has invested in unique things like Spanish real estate, famous startups like Uber, cryptocurrencies before they were cool, and even websites. He founded and built a fintech company. And now, he both a partner at the wide-ranging investment firm CoVenture, with my previous guest Ali Hamed, and the co-founder of Tera Holdings, which is trying to become the Berkshire Hathaway of software companies.

To say this conversation is wide-ranging is an understatement. What’s neat is that my favorite parts aren’t even on investing, but are instead on principles for living.                                                                                                    

Savneet is one of the best people I’ve met in this journey. I’ve had several other conversations with him with shockingly low overlap with the one you are about to hear—a testament to his active and curious mind. I hope you enjoy learning from him as much as I have.

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

Ali Hamed podcast episolde

The VERY simple bear case for bitcoin

Owl Mountain

Books Referenced

Buffett: The Making of an American Capitalist

The Gorilla Game: Picking Winners in High Technology

 

Show Notes

2:30 – (First Question) – How Savneet started thinking about Spanish real estate.

4:29 – Why Airbnb could be the most impactful and interesting of the companies like this

5:25 – Savneet’s early entrepreneurial ventures

 

6:42 – His big investing influences    

        7:02 – Buffett: The Making of an American Capitalist 

7:40 – What did Savneet learn in his two years on the sell-side of Wall Street 

8:50 – How the financial crisis impacted Savneet 

10:11 – The entrepreneurial journey and GBI 

11:40 – Savneet’s observations on the FinTech space and investing in it 

14:59 – How we can use FinTech to get into an actual new business 

16:22 – His thoughts on venture capital style investing 

18:36 – Transition out of GBI into his partnership with Ali Hamed 

20:46 – What Savneet took from his tennis career 

22:13 – The impactful things that his parents did for him 

23:23 – How Savneet thinks about justice in his life 

24:39 – Most memorable trip Savneet took 

25:50 -  Why you have to take action 

26:19 – Why value investing struck a chord with Savneet  

27:22 – How culture plays an important role in the compounding companies he would invest in 

28:14 – Defining the proper long-term mindset when starting a company 

29:44 – Back to culture of successful compounding companies 

31:21 – Knowing what he knows now, what does he think about Berkshire today 

33:22 – The strategy behind Terra and how it came together

35:00 – His checklist for deciding to invest in a firm

37:31 – How do they think about the defensibility of the companies they invest in

39:58 – The importance of cyclicality in the customer base of companies they invest in

41:38 – Why does Savneet think this is the space he wants to remain in for the long-term

44:39 – How they are thinking about pricing a company they invest in

47:03 – Lessons learned in sales and marketing that he can and will bring to the software world

52:05 – What Savneet has learned from Constellation

54:39 – What does Savneet’s funnel for bringing in new companies look like

56:31 – What helps to drive a lot of conversion for them

59:08 – What lessons has Savneet learned about taxes in their company structure

1:00:32 – How does Terra think about diversification

1:02:13 – How they think about capital sourcing

1:05:08 – His balanced view on crypto as an asset class

            1:05:18 – The VERY simple bear case for bitcoin

1:09:45 – Savneet shares the Sikh philosophy with Patrick

1:11:43 – What Sikh traditions does Savneet take part in and what are their significance to him

1:13:21 – A look at Owl Mountain

            1:15:59 – The Gorilla Game: Picking Winners in High Technology

1:16:42 – Any other areas that people are underestimating

1:17:22 – Kindest thing anyone has done for Savneet

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

Feb 27, 2018

It has been a while since we discussed private equity on the show, so I was excited for this week’s conversation. My guest is Dan Rasmussen, the founder of Verdad advisers. Dan worked in private equity and has spent years studying the entire field.

Dan identified several key drivers of private equity’s outsized returns: size, value, and leverage. His firm uses these factors as a starting point to build a portfolio of public equities that behave like their private brethren.

We cover a ton of ground, discussing the prospective returns for equities, forecasting, and tons of investing strategies.

Please enjoy this conversation with Dan Rasmussen.

 

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

Subscribe to Dan

The Gospel According to Michael Porter

Tobias Carlisle

Steven Pinker

E.O. Wilson

 

Books Referenced

What Works on Wall Street, Fourth Edition: The Classic Guide to the Best-Performing Investment Strategies of All Time

Quantitative Value, + Web Site: A Practitioner's Guide to Automating Intelligent Investment and Eliminating Behavioral Errors

Expert Political Judgment: How Good Is It? How Can We Know?

Superforecasting: The Art and Science of Prediction

 

Show Notes

2:03 – (First Question) – The current state of private equity investing       

4:09 – The three myths of private equity 

6:51 – Taking a deeper dive into the myth of growth through operational improvements

            9:29 – What Works on Wall Street, Fourth Edition: The Classic Guide to the Best-Performing Investment Strategies of All Time 

11:25 – Valuations for private market investment and where they’re going 

14:03 – Private equity companies that have a higher chance of delivering results that exceed expectation 

16:39 – Other observations on the private equity space that would be interesting to investors considering the asset class 

19:33 – Importance of being very purposeful in picking your reference classes

            19:42 – Subscribe to Dan 

22:03 – How do the lessons Dan has learned in private equity translate to his investment strategies 

25:21 – How do you apply purely technical, systematic thinking into public market investing 

29:23 – Analyzing leveraged stocks and the value they could create 

30:06 – How Dan thinks about the direction of debt vs just the level 

33:11 – Predicting a firms ability to deleverage 

35:20 – How Dan’s company whittle down a company and are able to see value beyond their quantitative screens 

41:29 – How does Dan think about the global vs US opportunity set 

44:22 – What originally drew Dan to the Japan market 

47:03 – How do rising rates impact Dan’s strategy in investing in highly leveraged companies

51:19 – Importance of having investor money locked up for a longer period of time both for the fund and investor

55:03 – Porter’s five forces

            55:25 - The Gospel According to Michael Porter

1:00:51 – How Dan thinks about competitive advantage

1:04:41 – Exploring Dan’s personal process in pursuit of his ideal strategy

            1:05:19 – Quantitative Value, + Web Site: A Practitioner's Guide to Automating Intelligent Investment and Eliminating Behavioral Errors

            1:05:20 – Tobias Carlisle

            1:06:27 – Steven Pinker

            1:06:28 – E.O. Wilson

1:07:11 – What other markets pique Dan’s interest

1:09:39 – Why there is such a focus on small for Dan

1:11:11 – Source or person that Dan has learned the most from that might surprise people

            1:11:24 – Expert Political Judgment: How Good Is It? How Can We Know?

            1:11:28– Superforecasting: The Art and Science of Prediction

1:12:54– What was it like writing the book

1:17:19 – If Dan was going to write another book today, what would it be about

1:19:08– Kindest thing anyone has done for Dan

 

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

Feb 20, 2018

My guest this week, back for a second conversation, is Pat Dorsey. Pat ran equity research at Morningstar before leaving to start his own asset management company: Dorsey Asset Management. His areas of deep interest are competitive advantage and capital allocation. He believes that capital allocation should be in service of competitive advantage and invests in a concentrated portfolio that he and his team feel embody these ideas. 

If you have not already, I strongly recommend listening to our first conversation, which is a sort of crash course on moats. In this conversation, we cover different ground. We spend much more time on individual stocks like Facebook, Google, and Chegg, using them as examples to explore Pat’s investment philosophy and strategy. 

Across a few conversations with Pat, I can tell he is in love with this stuff, and I always enjoy talking to investors like him who so passionately pursue and edge. Please enjoy round two with Pat Dorsey.  

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

Pat Dorsey's first appearance on the podcast

HQ - Live Trivia Game Show

 

Books Referenced

World After Capital

Principles: Life and Work

 

Show Notes

2:15 – (First Question) – Pat’s methods for valuing a business 

4:17 – Is this process done after they would first identify potential targets for investment 

5:11 – Pat’s take on how the market classifies stocks as growth vs value 

6:40 – Qualitative insights and why the market can’t price them very accurately 

9:57 – The business model behind zero marginal cost distribution business model 

12:00 – Network effects and the potential downside to them down the road 

13:54 – Valuing Facebook as a business heavily reliant on network effects

16:45 – What would have to change for Pat’s position on Facebook to radically change 

18:58 – Most important lessons that a smaller/private business could learn from Facebook or Google’s business models 

19:48 – Where is Amazon in Pat’s portfolio 

20:27 – Primary research and the value that is derived from it 

22:06 – An example of where primary research led to a big surprise about a company 

24:05 – The value of travel in this business, starting with recent travel to India 

26:05 – Why are they targeting India and Japan 

27:24 – How does he think about the risk of investing in foreign markets 

29:52 – His thinking on relative vs absolute market share 

31:26 – Exploring the SaaS business model 

34:35 – The application of moats and pricing power with SaaS businesses

            34:36 – Pat Dorsey's first appearance on the podcast 

36:17 – Understanding how to evaluate a SaaS or subscription-based business (Lifetime Value of the Customer vs Acquisition Cost) 

40:07 – Other models that Pat explores and how to screen for them 

41:37 – How does he parse the difference between attention and demand 

43:19 – How would Pat monetize something like HQ - Live Trivia Game Show that has aggregated massive amount of attention 

45:19 – How does Pat react to the idea that attention is scarce and human capital is so crucial

            45:14 – World After Capital 

47:04 – How does Pat evaluate human capital in a business 

48:09 – Experience in starting an asset management business 

50:20 – What are the levers that are biggest value drivers in the asset management business 

53:57 – Pat’s view on the strength of the relationship between risk and return        

57:06 – The most risk Pat has taken in the face of uncertainty 

59:23 – Favorite recent learning resource

            59:43 – Principles: Life and Work

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

Feb 13, 2018

Long-time listeners will have heard me joke before that this podcast should really be called “this is who are you up against.” I’ve been waiting for the right episode to deploy the joke as a title, and this week we have it. 

The joke is meant to convey how incredibly impressive these people are who we get to hear from every week. My guest this week is Josh Wolfe, a founding and managing partner at Lux Capital in New York City. Lux is a venture capital firm, but a highly unique one. They’ve spent more time in hard sciences and interesting nooks and crannies of the market than the typical VC firm.

Some of investing is zero sum: my outperformance is someone else’s underperformance. Sometimes, though, investing is positive sum. The combination of capital, ideas, people, drive, and raw energy leads to amazing new things. 

I think the best investing and best investors of the future will be more collaborative than competitive. After finishing with Josh, I couldn’t stop thinking “god, do I want to be involved with whatever he’s doing, if only just to learn.” 

This conversation made me rethink my joke “this is who are you up against.” Now I won’t think of it as a zero-sum joke, but instead as a reminder: this is the kind of person who is out there. You better find your niche, and still be the absolute best you can within that niche.  

Please enjoy this killer conversation with Josh Wolfe. We cover just about everything. 

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

Investing in Biofuels or Biofools?

Ali Hamed podcast

Alex Moazed podcast

Andy Rachleff podcast

Popplet

@wolfejosh

 

Books Referenced

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

 

World After Capital

 

Show Notes

2:35 – (First Question) – Lux Capital and the kind of investments they have made over the years 

5:42 – The formation of the investment philosophy for Lux 

8:17 – Why randomness and optionality are important cornerstones to the philosophy 

9:52 – Investment philosophy 100-0-100 (ambition, arrogance, intellectual humility) 

10:40 – How Josh manages his time and attention

            12:53 – Investing in Biofuels or Biofools? 

13:29 – Obsession with nuclear 

15:15 – Investment in metamaterials 

18:28 – Focus on autonomous vehicles 

21:02 – How all of these gambles are viewed by Josh’s investors 

22:56 – Tattoo technology

            24:20 – Ali Hamed podcast 

24:36 – How Josh evaluates people when considering early stage investments

            24:45 – Alex Moazed podcast

            24:49 – Modern Monopolies: What It Takes to Dominate the 21st Century Economy 

28:10 – Why the minority opinion tends to lead to the best outcomes 

29:50 – Memorable experience investing in a founder 

30:44 – The idea of thesis driven approach to private investment    

            30:56 – Andy Rachleff podcast   

32:38 – Crazy thesis – understanding the emotional needs of our pets 

34:59 – Crazy thesis – Turning genetic abnormalities into treatments and cures for common conditions

38:03 – Josh’s learning process through these theses

            38:34 – Popplet

39:56 – Understanding rebel scientists when it’s impossible to predict what is going to happen

44:35 – Can the charge forward mindset be cultivated, or does it have to come naturally

45:49 – Investors that Josh has learned the most from

47:37 – Josh’s comfort investing outside of his usual asset class

            49:03 – @wolfejosh

50:56 – What is the thinking with the short strategy at Lux

52:31 – SpaceX vs Tesla, good business vs bad business

53:42 – How Josh approaches the quality of a business

            54:15 – World After Capital

55:16 – How does Josh evaluate competitive advantage

56:45 – Where are we in the venture capital landscape

1:01:42 – How does his outlook on venture capital affect the way Lux is run

1:02:48 – thoughts on cryptocurrency

1:05:28 – An overview of Santa Fe Institute

1:07:22 – What is the most memorable conversation Josh has ever had

1:09:34 – What is Josh’s objective function in life

1:12:43 – Are there people that Josh disagrees with but deeply respects

1:13:32 – Kindest thing anyone has ever done for Josh  

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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