cover of episode How the Greatest Investors Win in Life and Markets

How the Greatest Investors Win in Life and Markets

2024/12/21
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William Green: 本书探讨了巴菲特、芒格、坦普尔顿等传奇投资者的成功秘诀,以及这些秘诀如何应用于人生决策。作者通过多年的采访,揭示了这些投资者独特的思维方式,包括严谨的思考、韧性和直觉。他们能够在不确定的环境中做出明智的决策,有效地管理风险,并最终获得财务自由和人生的成功。 作者自身经历也印证了这些理念,他从一个文学背景的人转变为专注于金融领域的作家,并通过采访众多投资者,学习他们的思维方式和生活哲学。作者强调了在决策过程中寻求不同意见的重要性,以及如何克服自身思维的局限性。他认为,在投资和生活中,都应该选择自己能够胜出的游戏,并避免参与自己不擅长且风险极高的游戏。 作者还探讨了如何应对不确定性,以及如何从错误中学习。他认为,承认自身弱点和盲点,并向比自己更聪明的人寻求建议,是获得成功的关键。同时,他也强调了长期投资和逆向投资的重要性,以及如何通过控制风险来提高投资回报。 作者最后总结道,成功的投资和幸福的人生都需要理性思维、韧性、以及对自身局限性的清醒认识。 Michael Shermer: 节目的讨论涵盖了美国人的金融素养、财富创造机制、投资决策背后的心理学、股票市场、韧性的重要性以及金钱、幸福和运气之间的关系。讨论中还包括了来自传奇投资者的智慧、复利的力量以及实现财务独立的实用策略。

Deep Dive

Key Insights

Why did William Green initially fall in love with the stock market?

Green found the stock market appealing because it allowed him to use his brain to achieve financial independence without requiring physical labor, which suited his lazy and indolent nature.

What unique advantage did William Green have as a journalist when interviewing famous investors?

As a journalist, Green could interview legendary investors like Peter Lynch and Sir John Templeton, which provided him with insights into their thinking and strategies, making the process both exotic and high-stakes.

How did Charlie Munger approach decision-making to counteract cognitive biases?

Munger consciously sought out disconfirming evidence and built conflict and disagreement into his intellectual life, often sparring with Warren Buffett to challenge his ideas and avoid echo chambers.

What practical advice did Ken Schubenstein give to avoid making poor decisions under stress?

Schubenstein suggested using a mnemonic called PS (hungry, angry, lonely, tired, in pain, or stressed) to recognize when one is likely to make poor decisions and to slow down decision-making in such states.

How did Bill Miller justify his investment in Bitcoin despite its lack of intrinsic value?

Miller viewed Bitcoin as a bet on limited supply and growing demand, focusing on its potential for explosive upside rather than its intrinsic value, which aligned with his philosophy of making money regardless of the underlying asset's utility.

What does William Green believe is the key to a happy and abundant life?

Green emphasizes the importance of autonomy, peace of mind, rich relationships, and giving back to society. He believes that financial independence allows one to live in alignment with their values and avoid working for people they dislike.

Why does William Green think many people fail to apply simple financial principles?

Green attributes this to human resistance to cloning successful practices and the tendency to seek complex solutions. He advocates for studying and internalizing simple, effective ideas like compounding and avoiding stupidity.

How did Sir John Templeton's global travels give him an edge in investing?

Templeton traveled to over 30 countries during a time when few Americans did, gaining an informational advantage by understanding different economic systems and identifying investment opportunities in emerging markets early.

What lesson did William Green learn from his investment in Alibaba based on Charlie Munger's advice?

Green realized that following Munger's advice without proper due diligence led to a significant loss, highlighting the importance of understanding one's own limitations and not blindly trusting even the smartest investors.

How does William Green describe the relationship between money and happiness among the world's greatest investors?

Green notes that while money provides autonomy and the ability to live according to one's values, many investors still face personal dysfunction, such as divorce or strained relationships. True happiness, he argues, comes from relationships, peace of mind, and giving back.

Chapters
William Green, initially aspiring to be a novelist, unexpectedly fell in love with the stock market in his mid-twenties. His journalism career allowed him to interview famous investors, revealing their fascinating stories and high-stakes decision-making processes. This led to his fascination with how these individuals' thinking and life approaches could be learned.
  • Initially aspired to be a novelist or screenwriter
  • Unexpectedly fell in love with the stock market
  • Interviewed famous investors like Peter Lynch and Sir John Templeton
  • Fascinated by high-stakes decision-making and the potential to learn from the smartest people in the world

Shownotes Transcript

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online university for working adults. Start your comeback at purdueglobal.edu. You're listening to The Michael Shermer Show. Give us a little bit of background. What's your story? How'd you get into writing about, you know, the financial markets and all that?

It's a very unlikely thing for me to have ended up doing, because as you said, I read English literature at Oxford and I came out of Oxford really just wanting to be a famous novelist. Or maybe if I couldn't hack it as a novelist, I'd be a screenwriter. You know, the second best, the default option. Is that the ranking? Oh, that's good to know. Or I'd end up writing long narrative features for magazines like The New Yorker and the like. And yeah.

And so I did do a lot of writing for magazines like The New Yorker and, you know, The Spectator. I would write book reviews and the like. And so I was kind of pretentious and figured I would be, you know, this great English man of letters. But then I had this unexpected thing happen to me around my mid-twenties where I just fell in love with the stock market. And partly it was because you could basically use your brain

to get rich without having to do anything too arduous. This was at least my fantasy. And to a great extent, it actually is true. I mean, for someone as lazy and indolent as I am, it's an amazing game. The idea that you can just outthink people and achieve financial independence is an amazing thing. But I was in this very unusual position because I could actually go interview famous investors for magazines.

because I was a journalist at that point. So I would go off and I would interview all these people like Peter Lynch, who was, you know, this legendary figure from Fidelity. Or I'd interview Sir John Templeton, this legendary global investor who had gone off to live in in Lyford Quay, which is where people like, you know, Sean Connery were living and Princess Grace of Monaco. And so it became kind of exotic in a weird way. And actually, for someone who wanted to be a novelist and write about colorful characters,

What I discovered is that these people were weirdly interesting characters. And at the same time, there was so much at stake. You know, if they screwed up, it wasn't like a journalist like me screwing up or an academic screwing up. You know, they could lose an absolute fortune. And likewise, if they were really smart, they could make a fortune. So there were high stakes, which made it a really interesting story.

but also means that it forces them to be good thinkers. You know, it's probably a little bit like being a, you know, a medical researcher, right? If you know that your lousy thinking is actually going to kill someone, it concentrates the mind admirably, as Dr. Johnson said about the prospect of hanging. And so I think the fact that these guys had so much skin in the game

forced them to be very good thinkers. And so I gradually became weirdly obsessed, not only with how to make money by really reverse engineering what they'd figured out, but I actually started to think, well, wait a second, these are some of the smartest people in the world. Maybe you could actually learn how to think. And maybe even more counterintuitively, you could learn how to live.

because they're really thinking hard about some of the most profound issues that we have to deal with. So things like, how do you deal with the fact that the future is unknowable? And yet we have to make decisions about the future. So these are almost like...

Questions of practical philosophy, not like, you know, does this chair exist? But, you know, how do I live in an incredibly uncertain world where I don't know what the hell is going to happen tomorrow? Yeah, like the Kahneman-Tversky research on making decisions under uncertainty, and it's all uncertain.

Yeah. And if you think about Kahneman and Tversky, who are these geniuses, they were probably not quite as obsessed as the great investors with figuring out workarounds to actually deal with the glitchiness of our brains. So Kahneman and Tversky were amazing at proving how irrational we are.

But, you know, I have this friend, Jason Zweig, who worked on a book with Kahneman. He was a co-author with Kahneman initially of his Thinking Fast and Thinking Slow book. And then they sort of parted ways at a certain point. And he pointed out that Kahneman grossly underestimated how long his own book would take him. So even Kahneman was massively irrational when it came to his own life. And so...

I think what's different with the great investors in some ways is that they don't just learn that the brain is this really glitchy, wonky, defective thing that's going to mess us up and that we're really irrational and biased. They actually have to figure out ways around it. So you think of someone like Charlie Munger, who you mentioned before. One of the things that Charlie would do is very, very consciously...

mimic what the great scientists like Darwin and Einstein had done, which is to seek out disconfirming evidence. So you think of what most of us do, right? Where we're, we're sitting in our echo chambers, studying whatever everyone, everyone agrees with already. You know, we, we, we go on Facebook or Twitter or X or whatever it is. And, uh,

You know, just hear people who think the same as us. Munger was very, very consciously building conflict and disagreement in his intellectual life. And so one of the ways that he did it was to have this sparring partner. He and Warren Buffett were sparring partners. And Buffett famously referred to Charlie as the abominable no man.

Because he said no to so many things. You know, Warren would come up with some deal that he thought was amazing. And Charlie would say, here are all the reasons why it's stupid. And so just to know, OK, so I should I should structure my life with disagreement instead of structuring my life. So everyone is a yes man. It's really important. I interviewed Danny Duke about this, who was a great poker player and an author.

And she actually pointed out to me, I interviewed her on my RicherWise, a happier podcast. And she was friends with Daniel Kahneman and Richard Thaler. And she pointed out that Kahneman literally appointed Richard Thaler, this fellow Nobel Prize winning economist, to be the president of the United States.

to tell him when he was being stupid and when he was being blind. So they consciously had to actually compensate for their own blindness and biases, which is something probably all of us should do. Aren't corporations doing that now where they have like a red team or whatever they call it, where your job is to point out why this thing we're about to do is a terrible idea?

Yeah, I read something the other day about debate within Amazon. Someone was talking, some guy who'd been very high up at Amazon was talking about how year after year he and this colleague of his would object to some particular policy. And at a certain point, people would get kind of irritated and would sort of say to Jeff Bezos, should we shut this debate down? And Bezos said,

never allowed the debate to be shut down like he encouraged the debate to continue but of course he never actually um bent to their will but he did listen to what they said in his book uh rationality pinkers steve pinker's got that story maybe it's apocryphal but it was uh

a professor who taught like logic and reasoning and decision making and so on. And he had like a whole formula of what you should do when you're having a difficult time making a decision. Anyway, that he got an offer from another university and he's trying to decide if he should take the job or not. So he consults with his colleague and he says, why don't you just plug this all into your formula to make the decision? He goes, Oh, come on, this is serious. Huh?

I love that. Well, one of the great jokes is, you know, I spent so much time interviewing the world's most rational people, right? I mean, I can't tell you how many billionaires I've interviewed over the years. And I'm so not rational myself.

And actually, I don't even really particularly attempt to be rational. But I do, I guess I do when there is sort of really serious decisions to make, like where to move, you know, because I've moved country multiple times, or whether to get married, things like that. I guess I have invited people in. You know, I've been married for about 33 years, I think. And when...

So I was in my early 20s when I was about to propose to my wife, which is very unusual for our generation. And I called my mother, my father, and my brother independently and said to each of them, am I missing something here? Am I doing something foolish? And they each said, no, no, she's wonderful. And I think they were so shocked that anyone would have me, that they all thought I should just snap up my wife immediately. But I do think it's a very important thing to be aware that...

you need sparring partners, you need people. And also just this mindset of very consciously seeking disconfirming evidence. And so one of the things that Charlie Munger did, which I think was very helpful to him, is he said any year in which you didn't destroy one of your most cherished ideas or beliefs was probably a wasted year. And so he actually would congratulate himself

for destroying an idea that he believed in. So in a way, what you're doing is you're making yourself proud of your ability to disconfirm what you believe. You're congratulating yourself on it. Whereas I think most of us tend to regard abandoning our existing ideas as a sort of source of shame, as if somehow it proves that we're stupid. On the contrary, I think Charlie worked on the basis that it proved that we were wise and open-minded.

Yeah. You know, Darwin made a list famously of whether he should marry Emma, his second cousin or not, you know, pros and cons. And the interesting thing about it is kind of a rational calculation, but is that really the right vision?

venue to do that? Like, what if your spouse finds the list and said, oh, okay, so, you know, you gave me an eight on this and a six on that, but what if you meet somebody who's a nine or a seven and they're better than me, then you're going to dump me. Shouldn't it be, I don't know why I love you. I'm just completely head over heels, totally irrational. There's no logic behind it at all. I just love you. And that's the end of the story.

Maybe, but it's one of those things where years later you don't want after your life has fallen apart for people to say, well, I always hated her or I always thought he was such an ass and they just kept it quiet. So I don't know. I've done this with investments as well. There was one point where I'd invested in a hedge fund and they changed the structure completely.

so that I wasn't rich enough to keep investing in it. So I had to decide what to do with the money. And it should be a relatively easy thing to do as someone who spends a lot of his life interviewing famous money managers. But actually, it's surprisingly difficult. And so I talked to this friend of mine, Guy Spear, whose book you mentioned before, The Educational Value Investor, which I helped him to write.

And I'd already invested with Guy for 20-something years. So I said to him, well, look, I don't want to give you more money. Who should I invest with? And he mentioned a couple of people. And so it was sort of going through his filter. And so he was very consciously saying, well, look, Guy is smarter about this than I am. There are certain things that I'm smarter about than he is. Not very many, but, you know, if...

If he needed... Well, for example, when the cover of the Educational Value Investor was getting designed, I introduced him to this woman, Cecilia Wong, who's amazing, who'd been the art director of the International Editions of Time when I was there. And so she came and designed the cover. And likewise, she designs his annual reports, which I often edit. And so...

There was something where he deferred to me because actually I was more knowledgeable than him. But when it came to investing, I need to actually recognize that he was smarter than I am and more rational and could see things that I couldn't necessarily see. And even with that guy who I invested with eventually.

I remember, you know, you're usually not really allowed to talk about what their investments are. And I was in Vancouver once and I kind of furtively showed the portfolio to another famous investor, a guy called Monish Pabrai, very, very smart. And I just said,

what do you think of this? Like, what do you think of the portfolio? Am I missing something? Like, is this okay? And he looked and he's like, yeah, yeah, he knows what he's doing. He's good. And so I just, and then I was sitting in Omaha. I went to a Berkshire Hathaway annual meeting. I go most years. I was there a couple of years ago. And Monish sat me next to this 300 and something pound footballer from the Kansas City Chiefs. He's a famous footballer.

And I said to him at one point, just make sure as you get richer and richer, anytime you make it, you're tempted to make an investment, just run it by Monash first, just make sure. And so I think just this, I mean, this sounds so trivial and mundane, but actually just that attitude of,

of recognizing our own vulnerabilities and flaws and blind spots, knowing that we're bound to miss stuff is very helpful. And the other thing I think that has been a very profoundly practical lesson related to this is you learn from people like Charlie Munger, just play games that you can win.

And stay away from games that you're utterly ill-equipped to win. And so one of the great realizations for me in interviewing so many famous investors was just to discover, well, I'm not them. I'm not rational in the way they are. I'm not unemotional in the way they are. They tend to be extraordinarily unemotional about markets. Whereas

There's a part of me that's actually quite fearful and quite neurotic. And, you know, I have the fear of a guy whose family, you know, were Jewish refugees from Russia and Ukraine and Poland. And, you know, always a sense that we might have to pick up and flee at any moment. And so I think I've probably internalized a lot of that kind of just a general sense of vulnerability and fearfulness, which is...

you know, probably fine for a writer, but maybe not so good for an investor. Yeah. I'm just thinking of a couple of things that come to mind.

Kurt Gingerinser is a longtime critic of Tversky and Kahneman. His argument is that we're not that irrational. A lot of Tversky and Kahneman's experiments were fairly complex logic chopping type problems. You know, a disease has a 50% chance of killing 200 million people or a 10% chance of killing 600 million people in the next year. What would you do? You have to do these calculations.

And his criticism is that, you know, these are just kind of thought experiments that are fairly complicated to rattle around in your head, mostly college students running these experiments. But if you put the problems in terms of real-life problems, you know, like the famous Wasson test, you know, there's four cards and the three on one side and a D on the other. And which card do you have to flip over to see what the rule is about? If there's an odd number, there's a letter, whatever. I forget what it was, but whatever.

But so he reframed it as, let's say you're the bartender and you have to card the patrons at a bar. You know, do you card the person who's obviously over 21? Do you card the person who's drinking Coca-Cola?

You know, it's obvious what the answer is of the logical thing to solve if it's in an environment that's ecologically, I don't know, normal for humans to be in, social interactions and things like that, rather than the kind of logic chopping that goes on in these thought experiments. Anyway, I'm just going to point that out.

Have you read Ian McGilchrist at all? Like The Matter with Things? No, I know about it, but I haven't read that. He's very extraordinary. I often dip into it. I'll never make it from the beginning to the end because it's only like 1,400 pages. But he's kind of a polymathic genius, I think, McGilchrist. He was a fellow of all souls at Oxford as an English literature professor and then discovered Oliver Sacks and decided, oh, the brain is pretty interesting and became a psychiatrist and then a brain expert.

And I was reading a chapter of his on intuition the other day. And he was talking about some of Kahneman's experiments. And I sort of feel like you have to be as smart as McGilchrist to do battle with Kahneman and Tversky and debate anything. You know, I mean, they're so much smarter than I'm ever going to be, so I don't feel qualified. But I don't know if you remember, Malcolm Gladwell in one of his books said that

that the most simple IQ test in the world was to say, if you're in a room with Amos Tversky, how long is it before you realize he's smarter than you and is the smartest person in the room? And so, yeah, he was a real genius. But I do think, you know, with some of these things, the real key is how do you find the practical workaround?

You know, so once you understand from Kahneman and Tversky that we're not really that rational, that our minds are glitchy, what are you going to do about it? And so for me, one of the most practical and down-to-earth things I learned that actually I applied a lot in my own life is from a guy

called Ken Schubenstein, who I write about, who is a venture capitalist and private equity investor, who then became a neurologist. So he's a real expert on the brain. And he taught the advanced investment research course at Columbia Business School, which I sat in on for a semester. And one of the things that he said is, look, if you study the addiction literature,

you see that there are certain states in which we're just absolutely primed to make terrible decisions. So he just used this mnemonic called PS, where he said, okay, if I'm hungry, angry, lonely, tired, in pain, or stressed, there's a really good chance that I'm going to make a lousy decision. And so I love that because it's such a practical response to the realization of how glitchy our brains are. And so

Early in the COVID pandemic, he had a newborn child, his first child, and he had to go live in a hotel away from his child and his wife so that he could deal with patients who were all on ventilators. And he said he just used this checklist so many times just to see, well, OK, so is my PPE equipment just hurting so much? Is my back that I broke wrestling at college hurting so much?

Am I so sad and stressed and upset that the equipment isn't good enough and that I'm not with my baby?

that I can't actually make rational decisions. And so he would very consciously slow down his decision-making and he would go into the bathroom and just breathe for a few seconds. And he would clear his schedule because he said, the more stressful your life becomes, the more you want to reduce complexity. And so those were sort of very practical steps that I just, I used the whole time because I'm never going to be as smart as Kahneman and Tversky, but I figure I can actually...

I can meditate enough that then I become aware of like, oh, I'm really flooded and I'm just so full of anxiety that I actually, I should not be making an investment decision. I shouldn't be making a decision about, you know, anything important until I get back to some kind of base state in which I'm going to function okay. Yeah. Very practical. Yeah. Yeah. The point of that little Gingerenzer story was that maybe your guys are successful, these entrepreneurs,

investors you interviewed, because it's not a thought experiment for them. It's not a hypothetical. They have $100 million in this decision, so they really have to think it through pretty carefully. Yeah, very practical about probabilities as well. So they think a great deal about things like,

what's the downside if I'm wrong here? So they're always looking at asymmetric situations where there's tremendous upside and limited downside. And so just that habit of thinking in terms of probabilities is incredibly helpful because, so one of the things that I'm trying to do in Richer, Wiser, Happier is say, well, look, there are these methods of thinking that actually turn out to be really helpful in life as well. So for someone like Munger,

One of the things that he was trying to do was very consciously avoid being stupid. He was trying to reduce what he called standard stupidities or inanities and asininities, as he would put it. And so he would very consciously say, OK, so let's collect all the examples of dumb things that people do that blow up their lives, like that blow up their financial lives, blow up their finances.

their families, blow up their health, all of these things, and then don't do that. And so one of the things in particular that you would do is you would say, well, okay, let me look for situations where the asymmetry is terrible, right? So there's limited upside, an enormous downside. So you think of that in terms of investing, and it's pretty obvious, right? Like if I put 150% of my net worth in some cryptocurrency, right?

You know, there's a pretty good chance that something's going to go wrong. And a friend of my mother's during the tech and dot-com bubble, who is a scientist who I think was widely tipped to win a Nobel Prize, basically lost his family's entire fortune betting on tech stocks and dot-com stocks.

And ended up living in a tiny house in the woods, having to sell their home. Right. So so these things where there's tremendous downside and limited upside you want to avoid. But then you apply that same way of thinking in life and you start to think, well, OK, so think about, say, texting while you drive or or having a few glasses of wine and then driving and thinking, well, I'm probably OK, but what if I'm not?

Or thinking about things like cheating on your taxes. There's a beautiful example of this where a guy called Tom Gaynor, who's the CEO of a company called Markel, said to me, look, if I apply Charlie's technique of inversion, where you take Carl Gustav Jacobi and you say invert, so you say, okay, how can I screw up this situation? Instead of thinking, how can I have a great life? How can I screw up my life? He said, if I go to a bar,

While I'm on a work trip. You know I really love my wife. I've been with my wife since I was 15 years old. In his case. And he says. So if I have 10 drinks. I'm much more likely to get myself in trouble. Than if I have two drinks. And so he's very consciously.

avoiding situations that can have a catastrophic downside. And one of the things that Nassim Taleb said that's hugely valuable, I think it was probably an anti-fragile, is he said, the fragile breaks with time. So you can get away with doing these really dumb things a few times,

But if you keep doing them, sooner or later, the odds of you blowing yourself up are enormous. Well, in the case of the marriage, you probably got one mistake. That's probably about it. Something like that. Maybe. Or you just get really unlucky. You and I were sort of discussing this earlier this week by email when we were talking about investing in tech stocks, right? Yeah.

You know, I hope you don't mind me saying it's pretty clear that you'd had a great run investing in, you know, large US tech stocks, all these great businesses. And, you know, one of the things that we never know is whether things will revert to the mean in some way, whether everything's some kind of pendulum. And so Taleb talks about this concept of the lucky fool. And I think this is one thing that makes things so painfully difficult with investing is you never know

whether something has fundamentally changed. And for example, now the U.S. is just going to be fantastic forever because, you know, we have a better and more dynamic economy. And there's something about the flow of capital to big tech stocks. And so you don't want to invest in emerging markets and the like anymore.

or whether this is just yet another pendulum swing. And then, you know, as they say, the first should be last and the last should be first. And suddenly, after years of everyone thinking that emerging markets are terrible or bonds are terrible or whatever it might be, gold or whatever, everything suddenly shifts. And so I think that's part of what makes investing sort of exquisitely difficult. And so for me, one of the big questions is always,

you know, how just to operate in a way where you ensure that you stay in the game, whatever happens. And so you're in a way I'm often hedging against my own hubris. Right. So so I try to buy actively managed funds by people who I think are really smart and concentrated on a few great ideas. But then I'm like, yeah, but I'm probably delusional. And it's probably really going to turn out to be hard to beat the market over 50 years or 30 years or whatever the course of my investing career is.

So maybe I should invest my wife and kids' money in index funds so they don't suffer from my delusion. So you're always kind of hedging against your own capacity for hubris and self-delusion. Yeah. Yeah, well, so my main portfolio is just the Magnificent Seven, you know, Apple, Google, Amazon, and so forth, Intel, Facebook, Microsoft.

And then a few others like Tesla. But I guess this would be an example. I mean, Tesla as a stock has been unbelievable. But Schwab still has it ranked as an F.

And you think, well, why? I don't even read corporate reports or anything like that. But my guess is Elon could do something crazy on Joe Rogan, and the next thing you know, the stock tanks tomorrow. There's no predictability to it. So maybe that's kind of a big risk. And the other thing I was thinking about, the Magnificent Seven have done so well, but what if it turns out they're like Kodak?

And they miss out on the digital revolution or their General Motors or IBM or whatever. And they're just now big slope, you know, BMS that don't do much of anything interesting. And who are the next ones? I have no idea. But maybe somebody like a Charlie Munger or Buffett or any of these guys that you know, maybe they have a little more forecasting ability because they do read all those reports and pay attention.

And even they are deeply flawed. That's a really important thing to see. I had this extraordinary meeting over Zoom. Sorry to interrupt you. An extraordinary meeting after my book came out first where

Charlie had read the book and loved the book and invited me to talk for a couple of hours with him and some other great investors over Zoom. And I initially thought I was being pranked. I thought, you know, wait, so I'm going to tell Charlie Munger, you know, what he should learn from me and my writing about how to invest better. And one of the things that happened during that call is I said to him and this other great investor, Lou Simpson, I asked them about Alibaba.

And Charlie basically said, look, if I had more cash, I would be all in with Alibaba. This is a couple of years ago, right? And Charlie had already made these big bets on Alibaba, which had started to tank because of all this Chinese government regulation. They turned on, you know, I think Jack Ma, the famous CEO, founder, had sort of got too big for his britches and they decided to punish him. And so he'd sort of...

He'd fallen out of favor and the stock had been killed. And Charlie was so enthusiastic. And then Lou Simpson, who some people said was even greater than Buffett, you know, had this amazing record and was widely tipped to replace Buffett for a long time. He said, yeah, I bought it yesterday. And I asked him about it. And he said, well, it's screamingly cheap. And it's a dominant tech company in a country that's going to grow faster than the U.S.,

And so I then go away and I'm like feeling so good about myself, right? Because both Lou Simpson and Charlie Munger told me my book's fantastic. And so I'm, you know, so I have this kind of tribal thing. This is one of the things that Annie Duke helped me to see is just I was perfectly set up.

to make these great behavioral mistakes, right? Because I love these people. They're my tribe. They love my book. They love me. They love Alibaba. So I go and I buy Alibaba. And when I checked the other day, it's down about 57%, 58% since I bought it then. And it's just a great reminder. You know, I was playing a game that I didn't really have any right to be playing, right? What the hell do I know about Chinese tech stocks?

I didn't do any due diligence. All I was doing was betting on the fact that Charlie and Lou Simpson were unbelievably smart. And it played to all of my prejudices and biases and weak spots. Not all, I have plenty of others. But, you know, it was, I felt like I belonged to the smart money, right? I felt like I had access to the smartest people, right?

you know, it was sort of really not a game that I was equipped to play. And so just if people as smart as Munger and Lou Simpson can screw up that badly,

you really have to be hedging against your own hubris and incompetence. And so for me, one of the things that saved me there is that I didn't have a very big position. And so even though it got crushed, it doesn't really matter at all. I mean, it doesn't affect my lifestyle or anything like that. And I kind of enjoy talking about it because it, you know, as Charlie would say, you have to rub your nose in your mistakes. And it's helpful because if you rub your nose in your mistakes, you're less likely to repeat them.

But it's, you know, it's just a recognition that if we can be so badly wrong about stuff, you need to ask yourself this question that this guy who's often called the king of bonds, Jeffrey Gundlach, said to me, he asked before he makes any investment, he says, what's the consequence if I'm wrong?

And so I think that's also a hugely practical question, you know, for any of us as we're getting into our car, having drunk a bottle of wine, or as we're, you know, thinking about whether to screw our partner in some deal or whether to behave in some nefarious, unethical way and hoping no one will notice, you know, just to say, what's the consequence if I'm wrong?

The guys you worked with, did they have some formula for that? Like, I can lose 10% of everything and I'll still be okay, so I'm going to gamble with that amount and not worry about it too much. I think this whole question of position sizing is really important. It's always to ask

You know, how much could I afford to lose on this? If it goes wrong, how devastating will it be? And people like Charlie, Charlie talked about how you could have a perfectly well diversified portfolio with just three or four stocks and that would be fine. And I say, yeah, if you're Munger, if you're as smart as that, maybe you can. But even there, you know, he...

He also had an enormous property portfolio. And, you know, when these guys say they're all in, what does it really mean? It's like they have so much other money, you know, in their houses and their art collections and the like. So I don't know. I don't think it's so much that there's a formula. I think it's really just saying, literally asking that question, what's the consequence if I'm wrong? Like, will I survive? Will I live to fight another day?

And so I think for you, for example, as you look at your beautiful tech stock portfolio, you know, you could just be like, well, let's say I'm wrong. And it goes through a lousy period and it's just an anomalous period. And then suddenly we go through a 15 year period where everyone loves emerging markets because they got really cheap and stuff.

Would it affect my lifestyle or am I okay? Because I own my home and I love my job and I get paid decently and, you know, it's fine. And so I, I think it's always just thinking about the downside. And so,

For me, I often come back to something that Sir John Templeton said to me many years ago when I interviewed him in the Palm. It's probably 25, 30 years ago. And he said, he said, look, you shouldn't be arrogant enough to think that you can find the one asset class, the one fund manager, the one country, you know, just just.

recognize the fact that it's probably smarter to own, say, I think he told me you should own about five or six funds that gave you exposure to different asset classes. And that's something that Ray Dalio, who I've interviewed on my podcast, also talks about, right? Just having non-correlated assets. And so I think there's always this tension because if you concentrate in one asset class,

you know, the, or in a handful of stocks, there's a chance that you'll actually outperform massively. But then if you diversify too much, there's a chance that you'll underperform. So there's this sort of tension where you want to, you want to diversify enough so that you survive. Um,

but not so much that you're doomed to, you know, really just mimic the market with much higher costs, with much higher fees. So I think there's always a tension here. And maybe that's the case in all of our lives, right? It's like you, you know, you want to go wide and deep with your reading, right? Like you want to study lots of subjects, but you also want to be a specialist enough that you really know a lot about something. So I think often in life,

The things you want to pursue are kind of contradictory, right? You're holding these contradictory virtues in some kind of balance. Yeah.

Here's another thing they don't do that my tennis buddy Sammy likes to do, day trading. We were playing the other day, and every time we switched sides, he ran over to his phone to check on how NVIDIA was doing. I was like, I got like $10,000 in NVIDIA. It's up 3.5%. Oh, my God. I got to wait. I got to time it just right to sell it today. It's like, why don't you just let it sit there for a year? I mean, it's just going to go up.

That's boring. Okay, so maybe for some people it's like gambling. It's kind of an excitement. And your guys would never do something like that. I think they're probably... I mean, I focus on people who tend to be very long-term and tend to be kind of contrarian. They're waiting for these moments of disruption where something great happens

is briefly under such a cloud that everyone hates it and they can get it cheap and then they can ride it for a long time. But there are a lot of different ways of making money. And I remember interviewing this multi-billionaire Howard Marks for the book who oversees something like $200 billion at Oak Tree. And he said to me, look, there are all of these ways that I say it's not possible to make money that actually...

Then I'll find someone who can make money that way because you can never rule out the human factor. There is this X factor where, you know, for example, it's more or less impossible to predict the direction of the market. Like people like Buffett regard it as a totally futile pursuit. And yet there are a few people who actually seem to have managed to make enormous amounts of money doing that. Not very consistently, but, you know, more than once.

Day trading. There are some amazing traders who can make money trading and they have a feel for the market. So these things that I think are kind of dumb and tend not to work very often, at least not for almost all of us, there are these rare individuals who can pull it off. And so

I think one of the questions is just to ask yourself, am I one of these rare individuals who's, uh, who's equipped to win this game? And I, there's a legendary investor called Ed Thorpe, who's actually the guy who figured out how to beat the casino at blackjack and then roulette. And, um, and yeah, he's an amazing guy. And, um,

I said to him, how do I know if I had an edge? And he was basically like, look, if you have to ask that question, you don't have an edge, dude. And, um, it was kind of very humbling. And so one of the things that I've done is very consciously to say when I'm taking on projects, for example, you know, if it's a writing project or, or a podcast or something like that to say, do I have an edge here? I mean, I probably have an edge in terms of, uh,

finding great value-oriented long-term investors who are unemotional you know there's it's an area of the market where i spent so much time interviewing these people and it's easier for me to triangulate and to say to one of them is this guy honest is this guy decent is he this is it

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with Purdue Global, Purdue's online university for working adults. You know you're worth it. We do too. So don't wait another second to get the degree that will take your career to the next level. Start your comeback today at purdueglobal.edu. Is he rational? You know, it's easier for me to make good decisions there. But when it comes to deciding to host a podcast or something like that,

That's a game I can win because I've spent the last 30 years interviewing people. So I think just very consciously avoid, you know, there's a guy called Chris Davis who I wrote about in the book briefly, but also interviewed on my podcast. And he's a director of Berkshire Hathaway. So he knows Buffett and Munger very well. And he talked to me recently about

He knows about as much about about sport as I do, but nonetheless talked about Tiger Woods deciding that, you know, apparently Tiger Woods was terrible out of bunkers and they and so.

Someone said to him, so are you going to be practicing a lot your bunker shots before the British Open or whatever it was 20 something years ago? And he said, no, I'm practicing my drives because I want to stay out of the bunkers. And so he then proceeded to win the British Open, if I'm getting this right, without landing in a single bunker. And so Chris's point is very consciously stay away from your weaknesses and

And so I think that's a sort of very practical, rational advice that just gently tilts the odds in your favor. And that to me in a way became...

Almost, you know, when you're writing a book, as you know, having written books, I think you try to come up with kind of one master principle, a sort of central guiding principle, whether it's, you know, Gladwell on the tipping point or whatever it might be. And for me, I just thought, oh, there are all of these ways in which you can subtly tilt the odds in your favor and you still don't know what the outcome will be because life is so uncertain and

But you can optimize the odds with certain ways of behaving. I think it was Thorpe that I read on this on Blackjack, where you sort of do card counting where you have to be at a table where there's a shoe, so you have like half a dozen decks in there. And then you sit at the end of the table so all the other players get their cards first.

And then for every face card and up, you have a one. And for below, it's a zero. And you just sort of keep track of the number of face cards that are flowing across the table. And at some point when the number is, I guess if it's a low number, it means there's more likely to be some face cards coming and you can hedge your bet. Not guaranteed, but the house cut advantage is only like 1% anyway. Yeah. So if you can cut that in half or even get it back to even or slightly better than 1% by card counting, sort of card counting.

That's kind of that edginess there. He also did this amazing thing that I wrote about briefly in the introduction of the book where he and Claude Shannon, this legendary genius from MIT and Bell Labs, they together developed the first wearable computer, I gather. And so it was about the size of a cigarette pack. And so...

I think Ed would go sit next to the roulette wheel in a casino and he would activate this computer with the big toe in his shoe. And as a result, he could track the speed of the rotor wheel and the ball. And so I think there are 38 pockets, if I remember rightly, something like that. And so he said he was just slightly increasing the odds of knowing where the ball would land. And so basically he turns this computer

game of total chance into a game of skill where he had an advantage through that extra knowledge. And so there's something, there's something sort of really transferable about that lesson, right? Just the idea that you always want to be giving yourself a little edge through a little extra information or knowledge. And so one of the things that Templeton did, Templeton during, um, you know,

during the Great Depression. And his father at one point wrote to him and said he'd lost so much money in property that he said, I can't even afford to contribute $1 to your education. And so Templeton ends up supporting himself through Yale, partly through poker winnings, and then went on a Rhodes Scholarship to Oxford and, and,

While he was at Oxford, at a time when nobody really traveled much from the US, I mean, nobody had a passport even, and it wasn't like air travel was easy. He went to something like 30 countries, if I remember rightly. So he was going to Germany first.

before the Berlin Olympics and was seeing what the rise of Nazism was like. And he was going to, you know, the Middle East, to Egypt, and what would become Israel, all of these places. So he was giving himself an informational advantage as someone who just understood that there were other countries and other economic systems. And so he...

He went to Japan very, very early. Or Shanghai. And so I think always you're just trying to give yourself this little informational edge. And so you think of Munger referred to Buffett as a continuous learning machine.

And so they're just like constantly reading and updating their mental models. But then at the same time, simultaneously, I think of them as continuous unlearning machines because they're also looking at their best loved ideas and saying, well, no, actually, you know, think of someone like Buffett, right? Who got this amazing idea from his great teacher, Ben Graham, who's one of the great geniuses of the last century. He learned, well, I should buy things with a margin of safety. I should buy things really cheap.

And then so he ends up buying, you know, what he would call fair companies, fair businesses at wonderful prices. And then Munger comes along and says, no, no, no, you should buy wonderful businesses at fair prices. And so Buffett actually had the flexibility, the intellectual humility to say, well, no, I'm going to take this really good idea.

that I've got from my teacher who I worshipped, and I'm going to jettison it, and I'm going to adopt this other idea, this other way that's better. That's an extraordinary thing to be able to do. I mean, I think there are so few of us who can actually do that and just say, no, the thing that I've done that served me so well all these years,

There's a better way. And that's precisely what led Buffett to make, you know, well over $100 billion on Apple, because he was able to buy a wonderful business at a fair price.

Right. By the way, there's 38 black and white slots in the roulette, and then two, one green and one double green. So that's a .05 house advantage, one half of 1%. Not much. You just get something to go. They're counting on you sitting there for hours on end, rolling and rolling and rolling. Yeah. That's certainly the case with blackjack and all those. The house advantage is not that much. Okay, next question.

So one of my columns for Scientific American, I called the biography bias. This was after the Walter Isaacson biography of Steve Jobs came out. You know, I sold millions of copies. Everybody's reading this thing. What what's the magic secret here behind Steve Jobs? You know, and the biography bias is that, well, but he's a winner.

Right. So after the fact, you go, well, let's see, you should go to an elite liberal arts college, drop out early, move back to your parents' house, do a startup in your parents' garage with your buddy. And then before you know it, you'll have investors and then you get to be Apple computer. And you got to be an asshole, too, by the way, to your employees. Right. OK. So, you know, after the fact, you kind of look through what are the things this guy did or what was he like? What was his personality or how did he treat other people?

The danger of that is, you know, how many people in the 70s dropped out of college, moved back to their parents, did a startup, and they just went out of business.

We don't know. No one writes biographies of them. It's a huge problem. I mean, it's something I thought about a lot as I was writing this book, because one of the things you really want to avoid is writing about someone as some kind of hero who's beaten the market by a mile and has proven incredibly smart. And then just as your book comes out, they blow up. And so one of the things that I did is I just decided, well, let me choose people who in some ways are emblematic

of an idea that I think is very valuable. So even if they turn out to be a scumbag who, you know, actually was disgraced or, and actually, thank God, I mean, so far I've avoided this. Like I haven't had some massive humiliating disaster, thank God. But I was very consciously protecting myself from,

this by saying, okay, so what's the principle? What's the idea that's helpful that this person illustrates? So to give you an example, I wrote about this partnership, Kay Zakaria and Nick Sleep, who are these legendary British investors, now legendary, but before the book came out, nobody had ever heard of them. I mean, they were so quiet and so obscure, never gave interviews, but they had this spectacular record.

And they really were just obsessed with Zen and the art of motorcycle maintenance and this idea of living a life based

based on what Robert Persick would call the metaphysics of quality. So they would just say, okay, so if we just infuse everything we do with an obsession with quality, what would that look like? How would we treat our partners? What would that mean for our fee structure? What would that mean for the way we treat each other? What would that mean for the kind of information we ingest and the sort of perishable information that we avoid because it's just ephemeral and superficial and meaningless? And so...

That's a really beautiful idea in some ways that if you base your life around this idea of quality, maybe that's profoundly powerful. And they became a really beautiful kind of test case for this. I mean, Nick, at one point, he wrote in one of his shareholder letters that their firm, Nomad, their partnership was a metaphysical and almost spiritual experiment.

where they were trying to explore what this idea of quality would mean. And so they would have things happen where someone would come into the office. I think it was an heir to the Tetra Pak fortune. And they said, you know, yeah, we'd like to invest an enormous amount of money in your fund. And obviously, you'll get great fees for this. But we'd also like to see all of your research so that we can see your stock research so we can see what you've figured out.

And Zach said, I just watched Nick sitting there with his arms crossing and his legs crossing, getting more and more irritated. And after 15 minutes, he just showed them to the door because he just decided, no, I'm not working with people like that. And then at one point, the fund got to $100 million in assets, which is tiny. And they closed it to new investors because they didn't care about gathering assets. They just cared about beating the market.

And so this idea that they were just going to be guided by quality became kind of all-consuming. And so even the way they treated each other, they treated each other so generously. So at one point when they were starting the company,

Nick said to Zach, well, so we should be 50-50. We'll just own the company 50-50, even though Nick was sort of the alpha male who'd been much more successful up to that point. And Zach said, no, no, I want you to own 51% and I'll own 49% so that if we ever have a disagreement, you'll make the ultimate decision. And Nick said to me, when someone hands you a loaded revolver like that,

and says, here, shoot me if you like. What are you going to do? You have to treat them morally and decently and kindly. So he said the whole relationship was based on kindness. So I look at that sort of thing, and I think that's really interesting. Is there a different way of doing capitalism that is kinder and more decent and more honorable that doesn't require you to be a son of a bitch and doesn't require you to have sharp elbows and doesn't require you to screw people?

that might actually work even better. And I talked to Charlie Munger about this as well. I said to Charlie at one point, I was talking to him about Manish Pabrai, this friend of mine who I mentioned before, who's an amazing philanthropist and brilliant investor, brilliant mind. And

And Charlie said to me, Monish is just so smart and so mathematical that he knows it's better for him to be ethical in business. And he said, Monish and I don't deserve any credit for how ethical we are. We know we're going to get richer because we're ethical and people trust us. And so that kind of idea, that's part of what I decided to do is just if I focus on ideas that are interesting and thought provoking and I find characters interesting,

who illustrate the idea in a provocative way.

That's much better than my saying, Monish is going to do unbelievably over the next 20 years. Because Monish runs a really concentrated portfolio where sometimes he would have most of his money in two or three stocks. And the last thing I wanted was for Monish to fly his fund into a mountain. And for me, having written the first chapter of my book all about Monish and his brilliance, it would be hugely embarrassing if he flew his fund into a mountain. But what that chapter really is about is,

is the idea that you don't have to have any original ideas at all. That Monish's view is you should just be a shameless cloner and just reverse engineer what people who are wiser and smarter than you have figured out already. And so it's all about the ideas. That was another thing I was going to ask you. In addition to all the fundamentals about companies they invest in and they read their annual reports and all that,

do they ever take into account what other people think that the market is going to do? So they're trying to mind read

In other words, it doesn't really matter what the company is doing. It matters what everybody else out there in the market thinks that the company is going to do. So I'm gambling on what they think. So it's almost like a herd mentality. Like, again, my favorite example is when, you know, Elon goes on Rogan and smokes up whatever a blunt, I guess it's called a cigar with marijuana in it. And, you know, and the next day is stock plummets by, you know, 10% or something.

And, you know, nothing changed the company. It was just because people thought, you know, something's going to happen with the stock. So I'm going to sell now. And then so you're trying to mind read the market itself instead of the company.

Yeah, there's a famous line from Warren Buffett's teacher, Ben Graham, who was so brilliant that before he left Columbia, and he went to Columbia very young, I think he went when he was 16, and he would have gone when he was 15, except they lost his paperwork. But he was offered positions in three different departments as a professor at Columbia before he graduated. I mean, brilliant, brilliant guy. And he famously said that in the short term, the market is a voting machine.

But in the long term, it's a weighing machine. And so in the long term, what you care about is a business's intrinsic value and whether the intrinsic value is growing. And sooner or later, if you buy it cheap, the gap between what the market thinks it's worth and its actual intrinsic value is going to close. And so you can make money by buying stuff cheap and then just sitting on it for ages.

But in the short term, it's a voting machine. And so there it really is moved by sentiment. And so there are people who are just watching that sentiment and betting, like your tennis partner, betting on what's going to happen later in the day. But I think it's a stressful way to live. It's a, you know...

But I mean, there's so many ways to climb the mountain. There's an extraordinary guy I've written about a lot over the years, Bill Miller, who I write about briefly in the book. Bill famously beat the market for 15 years running, which is utterly impossible. And then he kind of blew up during the financial crisis. And then since then, he's built an unbelievable fortune again, is now a multibillionaire again. And

Bill, at one point, became the largest single shareholder, individual shareholder of Amazon, not called Bezos. And so he quietly built a fortune in Amazon. And then he's built another fortune in Bitcoin.

And when I talk to people about Bitcoin, I can't tell you how much it divided the kind of value investing community that I specialize in exploring. And so people like Munger and Buffett regarded it as rat poison, right? I think Charlie called it rat poison squared. I mean, they just regarded it as a total social ill thing.

Whereas Bill, who studied philosophy at Johns Hopkins, and I think has given $75 million personally as a gift to Johns Hopkins' philosophy department, he was obsessed with people like Vick and Sine and William James, who would say, well...

What is, you know, Wittgenstein famously looked at that picture of a triangle and was like, well, what is this? Right. Is it? And so Bill would look at companies like Amazon or at assets like Bitcoin and would say, well, what is it? And so he would look at it very philosophically. And so he was able to look at Bitcoin and say, well, look, there's a limited supply. And if every millionaire in the world wanted one Bitcoin, there wouldn't be enough to go around.

And the demand is going to increase. And...

He just, as one person told me, Bill is a specialist in explosive upside. And so he didn't really mind if it went to zero and he lost everything, but he bought it cheap enough. He bought it initially at $200 a coin and then averaged at about $500 a coin. It recently hit $100,000 a coin. So there was explosive asymmetric upside if it turned out to be good because there was such limited supply and the demand could grow.

And so this other investor, Chris Davis, who I mentioned before, who's on the board of Berkshire, was at all of the original meetings that Bill went to that led him to buy Bitcoin. And Chris didn't buy it. And Chris, who was more of a traditional value investor, said, well, I can't see that it has any intrinsic value. And Bill said, since when was investing about intrinsic value? I thought it was about making money. And so Bill looked at it and didn't really care.

whether Bitcoin had any value or any utility. He just thought, well, it's going to go up.

And so, you know, when I mentioned that to someone like Jim Grant, who edits Grant's interest rate observer I had on my podcast, he just sort of rolled his eyes like he regarded that as kind of, you know, so tawdry that you would just buy something just because it was going to grow up because it was going to go up. But Bill doesn't care. Bill's like a great agnostic. He just so I think part of it is that you have to find.

way to invest that suits your own weirdness, right? You've got to... So for someone like Charlie Munger, when I said to him, is there anything that you could learn about Bitcoin that would make you change your mind about it? He just didn't even engage in the question. He basically just talked about it as a social ill and said it can undermine the economy and the dollar and the financial system. And it's just...

socially putrid. Why would you want to do that? And I'm proud not to own it. So he was looking at the market really in moral terms, almost. He loved investing in companies like Costco, because Costco

He thought Costco had done more good than basically any charity in the country. He's like, "Look, their margins are 14% or 15%. They sell stuff really cheap to people. It's really high quality. They treat their employees well. They're long-term. They're honest. They're honorable." So for him, the market was all about investing in high-quality, long-term businesses that were good for society and that were sort of honorable forms of capitalism. For Bill Miller, it was like,

How do you make money? And then Bill makes all that money and then gives away a fortune. Someone told me recently that his daughter's school, a friend's daughter, goes to some school that Bill was an undergraduate at. And he said Bill had given $140 million to that school recently. My friend John Mackey, the founder of Whole Foods,

You probably know John. He calls it conscious capitalism. Yeah. So you want to invest not just in your customers and your company, but also your stakeholders, which is your employees, the neighborhood that your stores are in, you know, the food shelters and, you know, whatever, just help everybody. And that, yeah. So his thing is that capitalism has gotten a bad name. It's sort of the, the J R Ewing member from Dallas, you know, the, the capitalism is nothing but, you know, just people trying to get rich.

And, you know, if that's really all it was, you could see why people resent, you know, the 1% and all that or these health care CEOs, if you use a current example. But so that's what John's trying to do. I think that's good. I think there's probably a lot of people doing it. Maybe we just need a new branding of it. Yeah.

It's partly what I'm trying to do in the book is to shine a spotlight on people who I think are admirable. They are admirable, yeah. I mean, they're all flawed in the same way that you and I and everyone we know is flawed. I mean, these aren't perfect people. But the people I wrote about in the book, I've interviewed so many great investors, and I very consciously didn't write about some of them because I just thought, you know,

What can I learn from this scumbag who, you know, has a real gift for making billions of dollars, but it's kind of a hateful individual. And I'm not trying to be judgmental about it, but I just I I just don't want to spend months because I'm so slow as well. I mean, I spent five years working on this book. I don't want to. I mean, I literally spent six months working on that chapter about Nick and Zach. I don't want to rent space in my brain.

to hateful people who, I mean, I think you can learn a great deal from studying hateful people and people who've been very successful in certain ways, despite being appalling in some ways.

But I don't want to rent space in my brain to those people. And so I was very consciously looking at people like Nick Sleep and Kay Sakaria as a model for how to do capitalism better. And one thing they did is literally they closed their hedge fund when they were 45, I think 45, and they decided they would spend the second half of their lives giving the money back to society.

And I saw Nick recently in England and he said very proudly to me that his friend, Zach, his partner had given away almost his entire fortune and that he'd done it anonymously. And I thought there was something really beautiful about that, that they, they basically decided very early on there, there is a figure X above which everything will get swept back to society. And, and,

Zach doesn't have kids. He's married, but doesn't have kids. And so his figure was not very high. His ex was not high. And Nick has three daughters. And so I think his figure was slightly higher. But, you know, they basically they're using all of their intelligence to figure out how do we create the maximum benefit for society? And so I sort of figure that.

If I can focus on people like that and I can illustrate the principles that they embody, it's almost like a stealth spiritual and philosophical project. So there's something, I do have this kind of proselytizing streak, but there's also, I mean, part of what it is, is I'm actually trying to figure out myself how to live.

And so I'm not writing about these people just so that I can kind of build my brand or have a bestseller or whatever. Like I have access to these unbelievable minds who become a filter for thinking about how to live. And so when I'm talking to people like Nick and Zach about behaving honestly and honorably or treating each other with kindness, I'm trying to figure out like, is it naive to

For me to try to be honest and have integrity or will it actually help me because I'll draw better people into my life and they're less likely to screw me and the relationships will be better. So I'm wrestling with these things. And I, you know, I had a period where I was an editor at Time magazine.

I was editing the European, Middle Eastern and African editions of Time. And I got laid off during the financial crisis. And so there was a part of me that was like, wait, is it all just Darwinian? And it's all just dog eat dog. And it's all just meaningless. And I just lost a political battle because I didn't spend enough time, you know, in New York, smarming up to my bosses and stuff.

Or is there greater meaning to this and I'm supposed to learn from my mistakes and I'm going to do something better with my life? I don't know. So I was really wrestling with these questions of how to live. And so I would go to someone like Bill Miller, who, as I mentioned, lost a fortune during the global financial crisis, having had that 15-year run of beating the market and then blew up during the financial crisis.

And I said to him, you know, I feel like kind of so bruised and so ashamed and sort of crushed by this experience. Like, how did you know for you having gone through this experience of like 100 people losing their jobs because of a mistake that you made analytically during the financial crisis and losing lots of money for your shareholders? How do you deal with it emotionally?

And he would talk me through how he dealt with it. And, and, you know, remarkably candidly would talk about putting on 40 pounds during that period, even though he was a very unemotional guy about his investments and came from a very modest background and wasn't up, you know, he said, look, I'm, I'm fine with losing my money. That's totally fine. He was the son of a taxi driver. He's like, I, I've lived with no money before. I'm fine going back to that. But he said, um,

losing money for my shareholders and 100 people losing their jobs because of a mistake I made. Like it was torture. And when I asked him about putting on 40 pounds, he said, well, look,

I wasn't going to go and eat salmon and broccoli and drink Perrier every night. You know, it's like a man can only take so much pain. And so he was eating Chinese food and stuff like that. But he very consciously was drawing on Stoic philosophy and was saying, well, look, I can't control my reputation. People out there are pillorying me and saying what an idiot I am.

But I can control my own behavior, my own ability, my own willingness to learn from my mistakes, my willingness to be open about the mistakes that I made, my ability to persevere. And so when I saw him having this incredible rebound over the last decade, I mean, stunning rebound.

And it sort of filled me with delight because I saw this guy who I used to admire because he was one of the most brilliant people intellectually I've ever met. And I started to realize, well, no, actually...

He has such perseverance and this kind of indomitability that he picked himself up. And so I'm really thinking about these questions of like, how do you deal with failure? How do you deal with public setbacks? How do you deal with shame? How do you deal with your own mistakes? I wanted to ask you about that because I had Bill Miller in my notes here. Because my friend Leonard Mladenow, the mathematician and science writer, wrote a book called The Drunkard's Walk.

How Randomness Rules Our Lives. It's a little bit like Tlaib's Fooled by Randomness. Yeah, which is a great book. And so Len actually uses Bill Miller as an example of this, where the CNNmoney.com declared him to be the greatest money manager of our time because he beat the S&P 500 stock index 15 years in a row.

But then Len does the calculation. There's over 6,000 fund managers in the U.S. And so if you do a simple coin flip calculation of the odds that someone in that cohort of 6,000 fund managers would beat the S&P 500 15 years in a row, it turns out to be 0.75 or three out of four.

As Len says, the CNN Money headline should have read, expected 15-year run finally occurs. Bill Miller, lucky beneficiary. Now, is that true? I mean, 6,000 hedge fund managers, surely there's a bell curve of some are better at it than others.

But if I took, let's say, what you would consider to be the top 100 now and said, which of these is going to be the S&P 500 the next 15 years in a row? Or which index funds are going to be more likely to do that than not? Could you pick that out based on some criteria or is it really random? There's a huge amount of luck.

in the game of investing as there is in life, which makes it unbelievably complex and difficult to tell who was really good until so far into their career that it would be quite hard to pick them because often the circumstances have changed. Maybe they got divorced and they're depressed, or maybe they took on too many assets, or maybe they don't have the energy level that they used to have. So

It's very, very complicated. This is very nuanced. And I mean, there was there's a wonderful story where Howard Marks once said to me that he had had lunch with Charlie Munger. And as he got up from the table after their lunch, Charlie said to him, anyone who thinks investing is easy is stupid.

And what Charlie used to say is, well, why should making a vast fortune playing this game be easy? It's really complicated. It's really difficult. But there are some extraordinary people, some extraordinary thinkers with an uncommon talent.

who you would rather bet on than other people who are more irrational, more emotional, lazier, less intense. And I think you see it in every profession, right? I mean,

You're much better prepared for an interview than most interviewers. I'm much better prepared when I interview people. I do a crazy amount of research. The odds of the interview going well are much higher if you or I interview them than if someone comes in who hasn't bothered to read the book and hasn't bothered to prepare questions. So I think there are things where you stack the odds in your favor for a happy outcome. But there's so much randomness and so much uncertainty there.

But it's not enough, right? I mean, Howard Marks said to me at one point that he sees people come to him in their 40s and 50s who got unlucky in their career and they got laid off at the wrong time or they lost lots of money or whatever. And he's like, they're just as talented. And he's like, it's heartbreaking.

And so he said the role of luck in his career has been huge, but it's not enough. He's also had to be really smart and work really hard. But I once went on a podcast and I talked about how smart Howard was, and he wrote to me afterwards and he said, yeah, but even having a high IQ, that's a matter of luck, isn't it? What do I do to deserve a high IQ? That's right. So one of the things that I think is really helpful here, Howard...

Howard feels like his appreciation of his own good fortune and the role of luck in his life is in some way something that makes him happier because he goes around and thinks, what a lucky guy I am.

And so instead of thinking, oh, I'm superior and I'm so brilliant, he's he's really he's very consciously thinking about how he won, you know, what Buffett would call the ovarian lottery. I mean, just to start investing in the postwar period. What an incredible stroke of fortune. Well, yeah. When you were born, what decade? So that I think it may have been Malcolm Gladwell who pointed this out had had

Steve Jobs, or no, I think he used Bill Gates. Had Bill Gates been born 10 years earlier or 10 years later, he would have missed that window when computers needed software. Yeah, yeah. I think it was in Outliers, probably, he pointed that out. I think it was, there's so much luck. I think if I had been, I mean, I'm 56. I think if I had become an editor a few years earlier,

I would have climbed much higher in the magazine business before the business started to fall apart. And so there were people two, three, four years ahead of me who could get to the very top, whereas I got sort of a notch or two below the top. But actually, then I was really lucky that I got flushed out of the magazine business at 40.

When I was young enough to be able to rebuild. And so I then went and I ghost wrote books for famous people. And then I, you know, and then I started writing my own books. And I just was really lucky that I actually, that things fell apart when they did. So it's not enough just to be lucky. You have to take advantage of the luck. I mean, one of the things that happened is I think I was so desperate not to fail. And I had two young kids and a wife and I had to support them.

And so I wasn't going to just lie down and be defeated. So there had to be a degree of sort of indomitable perseverance. There had to be some luck, you know, just for it to happen at the right age. I mean, there were so many things that had to happen. And so I find I get more and more humbled

by how many things had to go right for us to have a happy and successful life. And it kind of fills you with a sense of awe. This is it.

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And not only is intelligence highly heritable, so is personality. And, you know, the big five personality traits, like how conscientious you are, how open is to experience and risk taking you are. And so that's at least half, if not more heritable. You didn't choose that. I mean, if you wake up in the morning, you're just feeling full of of ambition. And I want to get out there and make my mark. And I have all this energy.

It's not like you just chose to be that way. I mean, you still have to do it. There's volition involved, but some people don't feel that way when they get up in the morning. They just don't care that much about, like, I want to make a lot of money or I want to be the top 1% person in this field. Not everybody feels that way. And it's so mysterious when you look at your own kids or your family members and you try to figure out why they are a certain way. I mean, I remember at one point recently,

My daughter, who's 23, Madeline, who's remarkably talented and very driven and ambitious in many ways, said to me,

I look at you and mom, and much as I love you and much as I admire you, I don't want to live the way you guys live. You work so hard, and it's kind of crazy. And she said about me, you know, you always look worried and stressed and anxious about your work. And I'm like, no, no, I love my work. I really enjoy it. She's like, yeah, but it always looks like it's a battle for you. I feel that way when I look at some of these CEOs. Like, who would want to work 80 hours a week for 30 years so you could be the top guy? I don't want to do that.

But then what's crazy is here I am thinking, God, I'm setting such a great example by working so hard. And in some way, it's possible it's having the exact opposite effect.

And then it's making her think, well, what an imbalance and awful, you know, she was trying to tell me earlier today that I need to go exercise. Chill out and have some fun. Yeah. I don't know. So I mean, I study a lot of Tibetan Buddhism and one, you know, they talk about dependent origination and the fact that so many everything is sort of interconnected. This affects this affects this affects this.

And again, you just have this sense of the infinitely complex causes of everything. What's it called? Dependent origination. Huh.

And so, yeah, nothing. They have this idea. I mean, I'll not be able to do this justice, but there's this beautiful idea that nothing really has independent, intrinsic, stable, permanent existence, that everything, you know, we're constantly in flux, right? Our body is in flux. The conditions around us are in flux.

We're affected by everything around us. It's all sort of the butterfly effect, right? You change one thing and it has an enormous effect on everything else. And so you start to realize, you know, it's sort of like, was it Shakespeare said, no man is an island? You know, you're not just this thing where it's me and my hero. John Donne.

Was it John Donne? Yeah, you're right. It's not just me, this heroically intelligent man who works against all odds to succeed. It's like, no, no, you had a mother who did this and a father who did this. And I mean, I was sent to Eaton, which is one of the best schools in the world. And one of the reasons why I was sent to Eaton, which totally changed my life, was because

My father went to Westminster, which was a famous English school. And it was kind of this glorious period in his life. He was a scholar there, and he got a closed scholarship to Christchurch College, Oxford. And he was very proud. And so when my brother was born, who's two or three years older than me, in England, you would put down your kid at birth to get into a high school, into one of those posh high schools. And so my father and mother went to Westminster, England,

and had an interview with, I think, the Bursar in those days. And they were very excited that their son could go. And at the end of the interview, the Bursar said, of course, there is a quota. In other words, there's only a limited number of Jews we'll allow in the school.

My father was so hurt and offended that this place that had been kind of the glorious part of his life might not accept his little boy because they were Jewish and they had enough Jews. Then my mother wrote to a housemaster at Eton without telling my father, and Eton was an even posher school.

And this housemaster even said, yeah, sure, come meet me. And so my parents went to meet him. And my mother said, you know, we are Jewish. Is that okay? And he said, yes, I think we've had a Jew before in this house. And so there was no problem. And so just you think of the randomness.

Of me ending up in the school that changed everything. And then the best teacher I ever had is a guy called Rafe Townsend, who was the chaplain of Lincoln College, Oxford, and was a very brilliant scholar and then became Roman Catholic. And so he came to Eaton.

as an English teacher. And he changed my life in many ways, because he taught me about Ford, Maddox Ford and Joseph Conrad. And then I wrote an article about their relationship. And I sent it off blind to five magazines, which you're not allowed to do. But I didn't know that I was only 20 years old. And The Spectator published it, which was the best English magazine at the time. And so many random things had to happen that led to

to where I am now. And I mean, that's just, I'm just giving you sort of three totally random examples. My whole life is full of that. I think all of our lives are. I completely agree. I think it's a huge problem in social science and psychology, predicting it, predicting human behavior based on genes and environment can only get you so far as just the randomness. You went left instead of right. You had this teacher instead of that teacher. And there's just millions of those things, even in the womb.

You know, like twins, identical twins in the womb. It appears there's some differences between being on the top versus the bottom in the womb or even in the bedroom. You know, you've got the upper bunk and I got the lower bunk. And this happened and that happened. You know, I just think that's a lot more powerful than we can possibly do anything about because how do you control for randomness like that if you're trying to make predictions in a social science model? Well, you can't.

I think it gets back to this question of whether you can subtly tilt the odds in your favor. In a very uncertain world where anything can happen, there are things that subtly tilt the odds in your favor. So think of something like Munger's approach of just saying, I'm going to systematically reduce standard stupidity. So I'm going to, in any situation, I'm going to say, what's the dumb move in this situation?

Because I'm solving the problem backwards and it's often easier to figure out what not to do than what to do. And so you say, okay, well, let me figure out how to have a terrible life instead of figuring out how to have a happy life. So if I'm disloyal and unkind and selfish and angry and violent and, you know, never defer gratification and, you know,

you know, dishonest and late for everyone and unreliable, I'm pretty likely to stack the odds in my favor to have a lousy life. And so even in a world that's infinitely complex where anything can happen, I still think there are things that you can do to tilt the odds in your favor. And the same thing goes for habit formation, right? If you say, as someone like Tom Gaynor, the CEO of Markel said to me, he said, I want to find habits that are directionally correct

And I'm just going to try to be a little bit better every day. So he started off, he once started running. He started, and he's kind of a tubby middle-aged guy like me. And he said, he said he started running five minutes a day. And then he ran like seven minutes and 10 minutes and 12, you know. And so it was a really nice kind of emblematic experience.

view of what he does in life, where he just finds things that give you a very subtle incremental advantage. And so one of the things that I realized as I was writing this chapter about high performance habits is that what a lot of these guys do is they

what someone described to me as dogged incremental progress over time. And so you just find a bunch of little habits that seem like nothing in the short term, but over time they add up unbelievably. And then as one of these guys, Sir David Brailsford, the coach of the British cycling team, talked about the aggregation of marginal gains. And so you find a bunch of things that give you a very marginal gain.

But once you aggregate them and you do it over time, over decades, it becomes immensely powerful. So you think of meditation, right? Or you think of exercise or you think of eating salad or whatever. I, you know, my heart sinks even as I mentioned the idea of eating salad and doing exercise. But I'm pretty good at meditating because it just involves sitting and being, you know, still, which I'm pretty good at.

Take habits like that. And over time, they're unbelievably powerful. I've become friends with Dan Goldman, who wrote the Emotional Intelligence book. And I was on a call with him this morning. And he's in his mid to late 70s. And he's been meditating for the best part of six decades. I just look at him and I'm like, what a beautiful experiment, you know, like to see someone who's present and joyful and free in that way.

And so that's a real, that's a beautiful example of dogged incremental progress over time. And so, yes, we live in an unbelievably uncertain world. And yet there's stuff that we can do that's going to subtly tilt the odds in our favor. Like the power of cumulative interest. Almost everybody underestimates. Like, let's say in 50 years, you invest 10 bucks a week or something for 50 years, accumulating.

you know, how much will you have? People could kind of do the calculation and maybe they double it just to make sure, but it's still way under what it actually would be. So as a, as a principle, this is what Kevin Kelly calls the, a pro-topia. Forget utopia. Let's just make tomorrow 1% better than today. Yeah. And just keep doing that cumulatively. And 50 years we'll have, you know, smartphones and electric cars or whatever. I mean, it's just how it works.

And, yeah, so thinking back on that, you know, sort of application to social science problems, one of these books that I was reading recently opens with this story about randomness, opens the story of this poor black kid.

Raised in a fatherless home, crappiest neighborhood, horrible schools. And it just it goes on for pages about what a horrible background this poor black kid had. Turns out it's LeBron James. Oh, OK. But, you know, as a principal, we wouldn't want to say, well, then it doesn't really matter that we don't have good schools in the Chicago area or whatever. You know that the government really we just want to tilt the.

slightly more in favor of people. Maybe you can be raised by a single parent and be just fine. Yeah, but on average.

over 100 million people. It's better to be married than not. It's better to have higher quality education than not. It's better to have better food than not. Not that you can't succeed, but that tilting the odds a little bit. I think it's also really important to understand some of these principles. I think that's one thing that just arming yourself with knowledge

so that you understand how things work and that there are certain powerful principles, like even like living within your means and socking money away and deferring gratification. I mean, deferring gratification turns out to be... Huge. Yeah, kind of superpower. The marshmallow test. Yeah, in so many areas of life, it's a kind of superpower. And so to understand that principle...

It's hugely powerful. I, you know, I spent a lot of time studying Kabbalah as well as Tibetan Buddhism. And there was a great Kabbalah teacher who I was listening to, to him give a lecture on a, on a Saturday morning a few weeks ago in New York. And he said, what we're talking about is, um,

giving strength to your big desire rather than the small desire. And so there are all of these times in life where there's always like this small desire, right? Let me have an extra donut. Let me have a fourth piece of toast or ninth piece of toast in my case. You know, let me lose my temper in this moment or whatever. And then there's the bigger desire, which is, you know, help me become a better person or loving person, kind of person, you know, someone who can help other people in society who can give back to society. Because like,

built something valuable. And so I think even just understanding that principle of, okay, so there's a small desire, you know, the desire for me, me, me, for more, for now, for instant gratification, and then there's this bigger desire. And the more I can tilt my behavior towards the bigger desire, the happier I'm going to be. So I think some of it is just understanding the rules of the game. Yeah. Yeah.

All right. Before we wrap up here, happier is the third word in your book title since you just mentioned that. You know, you kind of hear this from people, well, money can't buy you happiness. And then there was that Easterly paradox about anything over $75,000 a year or whatever it was maybe 10 years ago doesn't make people any happier. Now that's been challenged by new data showing actually people are happier making more money and richer countries, you know, the people are happier in richer countries.

It's not that it's the money per se. It's a proxy for other things, right? So money is a proxy for, you know, better food, better neighborhoods, better roads. In the case of a country, better law enforcement, better democracy, you know, more stable economy, more jobs, lower unemployment, lower inflation. You know, so talk a little bit about, you know, what these guys that are making hundreds of millions or billions of dollars are.

They're not doing it for just the money. The money represents something else. So talk about that a little bit. I wrote about this in the epilogue of the book because in some ways, I've been in this strange position, right, where I've interviewed so many people who've hit the jackpot financially. And so it becomes a really interesting group to explore to say, well, what does the money give them and what doesn't it give them?

And one of the things that's striking to me is just how many of them have super dysfunctional lives. Right. I mean, when Charlie Munger read the book, Manish Pabrai went to his house and he recorded a video where he said, Charlie, what do you think of the book? And Charlie was like, yeah, I love the book. Great book. Fantastic. And Manish said, were there any insights that you found particularly interesting? And Charlie said, yeah, I thought it was very interesting what William wrote about how many of us ended up divorced or separated.

And he said, it makes total sense because we were so absorbed by what we did that we neglected our spouses. And so that's really interesting, right? That you start to see that these people are very successful in certain ways. Like they're very successful financially. They're very successful in terms of their reputation and their professional importance and their ability to give back to society. But in many ways, it's a really...

it's a really inadequate and kind of stunted way to go about life for many of them, right? Like I can't tell you how many of these people have kids who don't talk to them or partners who were mad at them or lawsuits. I mean, and I write about the more successful, more decent group within this bunch of legendary investors. I'm not just writing about the ones who made billions screwing everyone.

And still they have very dysfunctional lives. So for me, I started to think, okay, so if I'm trying to learn about what actually constitutes a really happy and successful abundant life, what are the components of that? And so it's clear to me that

What the money does for them that's incredibly valuable is it allows them to live in alignment with who they are in this very deep sense that they don't have to work for people they dislike. They don't have to do jobs they dislike. They can express their opinions. They can...

live in a very independent, spirited way. And I see that again and again. I remember Bill Ackman once interviewing him and he said, look, what the money gives me is the ability to say what I want, do what I want and live the way I want.

And now he's in politics and moving things around there. Yeah, and Bill is not someone I write about a great deal. I mean, in some ways, I think there's a lot to learn about Bill. He's a brilliant guy, but he's not my icon of how to...

how to live. But I think that observation that what it's given, and I'm not trying to say this to be critical of him, but I don't write about him at great length, but I think he's remarkable and incredibly smart. But I think, I think he's structured his life to live in a way that's true to who he is. And so I think one of the things that for people like you and me or our listeners to ask themselves is, so, you know, what actually is a really successful and abundant life to me? And I,

That's independent of money. I mean, you need a certain amount, but you don't need billions. I mean, for me, one of the most critical things is just I never want to be working for someone I dislike ever again. And so I don't really want to be doing work that I find tedious ever again. And so for a long time, I didn't really have any choice. There were things I had to do.

even though I didn't find them that interesting. Or there were people I worked for who I sort of thought were assholes, but, you know, the opportunities I was given were great. So it didn't, you know, it was worth it.

But partly because over the years I've saved and lived within my means and I've invested, you know, it's not like I've become super rich or anything, but I've got to a point where I'm like, no, I'm just not doing that. I'm not working for anyone who I don't. I mean, I'm very conscious about it. I do not work with people I dislike. So that's very important to me.

Similarly, there are things like I've done a lot of editing over the years of other people's work. So I've ghostwritten a lot. And it's a very it's very interesting. You get deeply inside their mind and inside their life. But at some point, I'm like sick of doing that. I'm not doing that anymore. Like, why do I want to make some some other person who can't write look really fantastic?

I would not like that at all. I mean, I've ghostwritten a couple of books that were number one New York Times bestsellers. And I think they did a lot of good to people. And I had relationships with the authors that had a big impact on my life. It's a very valuable thing to do. But at this stage of my life, at 56, I don't really want to do it.

So it's really independence and autonomy that the money, and maybe you would say it this way. I have enough, you know, that line about, you know, I have something Jeff Bezos doesn't have. What's that? Enough. Yeah. So, but for that, of course, I don't buy yachts and airplanes and stuff. So I don't really need that much. Just a new bicycle every three years and I'm happy. Yeah.

But the principle there is living within your means. If you have enough, you don't have to think about the money. And this is another line. I forget who came up with this. The biggest problem about being poor is you're always worried about money every month. Where am I going to get enough to make the rent? Yeah, it's also it's not just about living within your means. It's also having the self-awareness to know what's really important to you.

And that's critically important. So you have to understand your own weirdness and idiosyncrasy. So for me, I mean, if you look behind me, my shelf looks like it's falling down. There are so many books on there. And it's kind of ramshackle. And it's like, there are a lot of books by, I mean, if I just look on the top shelf, there are a lot of books by Proust. And next to them, there are a lot of books by Emma Gilchrist. And there aren't that many investing books there. And then there's a shelf behind me to the left that's all books in Hebrew and Aramaic.

And then there's a book behind me on my right that's like full of books about Tibetan Buddhism. And like for me, a rich life involves me being able to read that stuff and think about it and try to draw lessons from all of these different areas. That's really important to me.

And so I think, you know, in a way, it's understanding your own weirdness and then structuring a life so that it allows you to live in alignment with what matters to you. But the other thing that I figured out that's hugely important, that again, none of this stuff is rocket science. You know, these are things that we all kind of know already, but we need to be reminded of. The other thing, it's hugely important to have peace of mind. And so I think you have to...

You have to think about where am I investing my time and energy? Like, am I just investing my time and energy and building my brand, building my wealth, building my influence? Or am I also investing in things that are going to give me greater peace of mind? Am I also investing in my relationships, which is hugely important? I mean, I mean, you know, when I look at the happiest investors, you

They tend to be people who have very rich relationships, right? I mean, I remember Tom Gaynor saying to me at one point, look, one of my great advantages in life is that I'm nice. And it's true. There are so many people who wish Tom Gaynor well. And I had an extraordinary thing a couple of years ago where I was interviewing someone at a private event for an investment firm where I'm a senior advisor. And it's the middle of COVID. And I said to Tom Gaynor,

um, is there any way I could interview you at this event? And I said, you know, there's nothing in it for him. I mean, he has 20,000 employees and, you know, he does, he's running a fortune 400 company. He doesn't need to come talk at a private event to 35 people for an investment fund that he doesn't work for. And, um,

And he's like, yeah, absolutely. And I and I said, you know, we can do it virtually if you want. He's like, no, no, I'll come. There'll be better energy if I'm there. So he gets on a train for six hours from Virginia to come to New York to do this thing for an hour with me.

And then leaves and goes back the next day. And he's like, no, no, it was like being on a, it was like being at a spa, being on the train. I could read and it was lovely. It was a great relaxation for me. It's just incredibly kind. And so you see someone like Tom and you, you think, okay, so here's a guy who's understood what I would call dementia fact, you know, in my book, like I, you know, he's a mensch. He's really kind. He's really decent. Everyone wishes him well.

And so he's surrounded by people who, if you understand Robert Cialdini, right, and the idea of reciprocation, all these people want to treat Tom well because he's kind and he's decent. Yeah. And so I think also when I'm thinking about how to structure a really happy and abundant life, I'm like, okay, so I've got to invest in my relationships.

I've got to invest in my peace of mind, my health. I've got to live in a way that's true to who I am. And I need enough money so that I have autonomy. And so I can walk away from things that I don't want to do. And then the other thing I would say that's critical is you've got to build in some sharing. So when I see the happiest investors, they're giving back in extraordinary ways. And so I think because they're very pragmatic investors,

They're not super self-righteous about it. They understand that it works. You know, you actually have a better and happier life if you've structured into it, giving back to others. You know, there's a sort of short circuit if all you're doing is stuffing your own pockets with as much money as possible. And so I look at someone like Manish Pabrai, who I write about in the first chapter, and he's done this extraordinary thing where because he has this ability to sit alone quietly in a room

And figure out what a mispriced bet is. He's made an enormous amount of money and he's used it to lift literally thousands of kids out of poverty in India. These very highly intelligent kids who he gives a couple of years of free coaching to take the exam to the Indian Institutes of Technology, which is the Indian equivalent of MIT. And so he's got thousands of these kids into college.

IIT. And then he decided, well, I could do the same thing with medical school. So he's taking these really poor kids with very high IQs and he's given them free training to get into medical school. So he's just totally transforming thousands of lives. And so Manish, who I've become friends with over the years, and I traveled to India with at the start of the book to see these schools, he

He goes every year to India to visit students from this foundation. It's called Dakshana, which means gift in Sanskrit. So he goes to visit students who are scholars in the year before they graduate because he wants to see what their life is like before he helps to lift them out of poverty by giving them these opportunities.

And he went a few months ago to this place on the border, I think, with Bangladesh that was totally flooded and just a disaster. There was a family living, if I remember rightly from our discussion, there was a family living on, I think, $50 a month. And, you know, they were raising chickens and goats on the hill near their house on the mountainside. And their kid had just got a scholarship.

to IIT and was, you know, going to go do this four-year engineering course. And at the end of this four years in engineering, he's just going to have his life totally transformed. And for Moniz, that's just one of the happiest experiences on earth. Like he said, the best days of his year are the days when he gets to go see these kids in their homes. And there was one kid who I met, a guy called Ashok Talapatra,

who I met in India, who had come 63rd out of, I think, nearly half a million people in the entrance exam to IIT. And when he graduated from IIT, Bombay, or Mumbai, I guess it is, they had Google hired him.

And they sent him to London and then they sent him to Mountain View. And now he's living in Zurich. And he immediately like bought a house for his parents and moved them out of the slum. And, you know, when I talked to Monish and his daughter, Monsoon, about visiting Ashok,

And I mean, Ashok's family, they literally had a pink shower curtain, plastic shower curtain as their front door. Oh, no. And they had a roof that was just totally leaking during the monsoon. I mean, just, you know, rain flooding in. And Ashok's father was a tailor who was making, I think, $100 a month. And I said to Ashok, where do you get your intelligence from? He said, my father is a brilliant mathematician. And so here's a guy who,

who only has got into this track of being at Google and climbing at Google fast because Monish's ability to make money kind of lifted him out of poverty and gave him an opportunity. And so that tells you a great deal about what makes for a happy life. Like it's not the fact that Monish was able at one point to buy a pair of shoes for $6,000. That's nice. I mean, he had a Ferrari at one point because he made a huge amount of money off Ferrari stock.

But that's not really what makes him happy. I mean, it's nice. I'm not dismissing the benefits of those toys and baubles. But, you know, his daughter, Monsoon, told me at one point, I have a tattoo of the Dakshana Foundation's logo. I don't have a tattoo of Pabrai Phan's logo.

Like she's really proud of what the family has done in lifting people out of poverty. So I say it's not in any sort of self-righteous sort of preachy kind of way. It's much more about just if you want to understand the principles that make for a happy life, you kind of start to say, OK, so how what's my Daksana going to be like? What when I look back at the end of my life?

who will I actually have lifted up along the way? And if I don't do that, what kind of a stunted life am I going to have led? Like it's not enough otherwise. All right, last subject here and we'll wrap it up.

Why don't more people know these principles? This isn't quantum physics. It's not that hard. I mean, just basic stuff like cumulative interest or you put $1,000 a year into an index fund for 50 years and you can retire. I mean, it's really not that hard, and yet you have stories like Mike Tyson just fought Jake Paul for $20 million. Why does he need to do this?

He made $500 million in his career. He lost it all. How is that possible? Right. And then I saw, you know, shark tank. Another one of my favorite shows had Alex Rodriguez, the great Yankees player who now runs a fund and a company for athletes to help them not lose all their money, you know, and it's really not that difficult, but,

people just don't know this. I mean, we should have like in middle school and high school, like classes, here's how the stock market works. Here's what index funds and here's what stocks and here's the bonds and this and that. And here's what you could do starting when you're 20 or whatever and the cumulative interest and whatnot. And yet we don't have much of that. It seems like

people, and what was that last survey, like 60 or 70% of Americans have, you know, if they missed a month of work, they would not have enough money to pay their bills. Or if they retired, they have like $400 or something. He says, how is this possible? What can we do about that? Well, one of the things that Monish said to me, this became the first chapter of the book. Monish talks about what he calls cloning, which is, uh,

a sort of vulgar term for replication or modeling. And so what he would do is he would go around the world looking at ideas that work, practices, principles that work. And he would say, look, I'm going to, if anytime I see someone doing something intelligent at another company or in their life, I'm going to reverse engineer it and I'm going to clone it.

And he said, there's something in human nature that makes this incredibly difficult. We resist it. We feel like in some way it's tawdry and that it's sort of beneath us to be so derivative and unoriginal. And he said, if no one else is going to do it, the Indian guy will do it. I'm going to do it. And so I think this is a really it's a really important principle to see. OK, I'm going to go through.

I'm going to go through life and I'm going to study what works and then I'm going to force myself to replicate it, but I'm going to replicate it in a way that's true to who I am. Right. Like I, you know, money is much smarter than I am. Um, he's much less emotional than I am. Um, he, he can play this game of finding this price bets in a way that, that I'm not equipped to do, but I can understand the principles. Like I can understand the principle of cloning. And I, I clone in so many areas of my life now because of money. And,

And so what it comes down to, I think, is something that Charlie Munger said. And Charlie was Monash's great mentor. Charlie famously said, take a simple idea and take it seriously. And this has become hugely important to me. It's often in life not about finding the most complex esoteric idea.

Right. As Charlie would often say, investing is simple, not easy. Right. The execution is difficult, but the actual principles are very, very simple. And so you have to actually take the time to study this stuff and figure out what works. But then you need the discipline to say, I'm going to do this thing that seems kind of boring and it seems a little too obvious. And I think one of the great temptations of

for highly intelligent people who fancy themselves very cerebral is they look for complicated answers, right? So if you think about what it was like going to fancy schools like Eaton and Oxford and Columbia, wherever many of our listeners went to these fancy schools, we were rewarded for solving difficult problems. Our teachers told us we were smart. Our parents told us we were smart.

And in investing and in life, often it's really simple stuff. It's like exercise, meditate, treat people kindly, be more loving, live within your means. You know, this stuff is really boring and it requires deferred gratification. So I think you need to have this orientation mentally to say,

Let me be one of the people who tries to study these principles of worldly wisdom. Let me go and figure out what people like Charlie Munger did that was so smart that tilted the odds in their favor. And let me take that simple idea and take it seriously. And so it's really a very conscious decision. And so what I was doing in the book is I was very consciously for my own sake.

going to these people and trying to figure out what have they figured out? What, you know, they're such good pragmatic filters for what works in life. You know, Munger said, I observe what works and doesn't and why. So I can save years and years of stupidity and mistakes by just studying Munger. I mean, one of the things, one of the things that Munger talks about, for example,

is just how stupid self-pity is. Munger had some terrible things happen in his life. I mean, he lost his first child to leukemia. He lost an eye in a botched operation. His first marriage ended in divorce. He had financial difficulties early on. I mean, terrible things happened. And he said, I'm not going to compound the problem by falling into self-pity. And likewise, he famously said, you know,

don't indulge in envy. He said, envy is the dumbest of the seven deadly sins because it's not even fun. It's not even fun, yeah. Yeah, so just for me to know

You know, I was feeling sorry for myself yesterday. I was having a really difficult day and I was just exhausted after a really long, arduous trip. And just to know, don't fall into self-pity. It's just stupid. It's just stupid. Well, a lot of you guys read the Stoic philosophy. That's what that is. Stoicism is very, very helpful. I mean, there's a reason why so many of the great investors have studied Stoicism. So again, it's like you study Stoicism and you think, okay, so there

There are certain things I can control. Let me try to control those and let me let go of the rest. That's a very powerful principle once you apply it. Because, like, you know, I thought about this during COVID, right? Like, I couldn't control everything.

A lot of different things, you know, mutations of the virus and stuff like that. But I could control exercising. I could control social distancing. I could control meditation. I could control having a good diet. So these are very simple principles, but we resist them because they seem almost too boring to be true and valid.

So that would be the advice I would offer is just to really internalize this, you know, internalize, go through a book like mine or like Porcello's Almanac, or ideally both, and find a few ideas that really resonate.

And then and then like really deeply internalize them, like make them a part of your operating system. So so it's not it's not just an idle flirtation. If you decide that you're going to compound good habits and money and kindness and all of these things, you know, take the idea of compounding and make it like a core principle. Likewise, with avoiding stupidity, make it a really core principle.

There it is. Richer, wiser, happier. Check it out. It's a great read. It's available on audio, by the way, which is how I listen to it, like I often do. So well done. William, thank you so much. Thank you for your time. Very generous. We went almost two hours. Very good. Yeah, it's been a total pleasure.