#413 – Bill Ackman: Investing, Financial Battles, Harvard, DEI, X & Free Speech
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The following is a conversation with bill augment, a legendary activist investor who has been part of some of the biggest and at times controversial trades in history. Also, he is fearlessly vocal on ex, have get a twitter and uses the platform to fight for ideas he believes in. For example, he was a central figure in the resignation of the president of harvard university, claudine gay.

The saga of which we discuss in this episode, and now a quick few second mention, sponsor check them out in the description is the best way to support this podcast. We're got element for delicious, lectured tes policy genius for insurance, a one for overall delicious health, asleep for nap and Better help for mental health. Choose wise in my friends also, if you want to work with our amazing team or just want to get in touch with me, gotto lex freeman outcome, flash contact.

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I think I saw a social media post from tim Kennedy saying, when you're alone, the guys apple IT also, he's insane on the anyway, he was an opposing. I think I instagram that when you're alone, the only correct temperature to exist is fifty degrees, fifty eight degrees, something like this. Basically, he likes a freezing.

And I can somewhat agree, especially on the surface of the bed, cold bed, warm blanket, that's just the best way to taking up. I need to go to see him. Trained to just with him was really fun, but he goes pretty intense.

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In you're election on the basics of finance investing, you are mentioned a book, intelligent invest by a bedroom in gram as being formed of in your life. What key lesson do you take away in that book that informs your own investing? Sure actually .

was the first impression book I read. And as such, I was kind of the inspiration from my career and a lot of my life. So important book bearing mine.

This is sort after the great depression, people always confidence in nesting in markets where were two. And then he read this book is for like the average men. And basically he says that you have to understand the difference between Price and value, right? Prices what you pay.

Value is what you get. And so the stock market is here to serve you, right? And it's a bit like the neighbor comes by every day and makes you off for your house, makes you a stupid off for you, ignorant, makes you great offer.

You can take IT and that's the stock market. And the key is to figure out what something's worth and you have to kind of wait. He talked about the difference between the stock market in the short term of a voting machine that represents specular interests, supply and demand of people in the short term.

But in the long term at the stock markets, away machine, you're much more accurate. It's gona tell you what something's worth. And so if you can define what somethings is worth, then you can really take advantage of the market because it's really here to to help you. And that's kind of the message book.

In that same way, there's a kind of difference to speculation and investing.

Yeah speculation is just a bit like buying trading crypto, right your strong words .

well short term trading .

crypto o maybe the long run there's in transit value. Uh the you know it's a many investors you know in a bubble going into the you know the crash um are really just pure speculators. They didn't know what things are worth.

I just knew they were going up, right? That speculation um and investing is, you know doing your homework, uh, taking down understanding of business, understanding the competitive dynamics of an industry, understanding what management is going to do, understanding what Price you're going to pay, know the value of anything I would say other than love, let's say, is the present value of the cash you can take out of IT over its life. Now some people think about love that way, but it's not it's not the right way, way to think about love, but it's, yes, so investing is about basically building A A model of what this business is gonna ce over its lifetime.

So how do you get to that? This idea of called value investing. How do you get to the value of a thing, even like philosophical value of anything, really? But we're going to just talk about the things that are on the stock market.

是 companies the value of a security， the uh is the present value, the cash you can take out of IT over its life. So you think you got a bond, your bond pays a five percent coupon interest rate. You get that say every year or twice a year, split half, and it's very predictable.

And if it's A U. S. Government, when you know you gonna get IT, it's that's a pretty easy thing to value.

A stock is an interest in a business. It's like winning a piece of a company and a business a profitable one is like a band. And that IT generates these coupons.

Are these earnings or cash low new every year? The difference with, uh, stock a bond is that the bond is a contract. You know what you're onna get as long as they don't go bankrupt in default, what the stock have to make predictions about the business.

You know how many widgets are going sell this year? I'm going to sell next year ah what what do the cost going to be? How much of the money that they generate do they need to reinvest in the business to keep the business going and that's more complicated.

Um but you know what we do? We try to find businesses where with a very hard to be confidence, we know what those cash alles are going to be for a very long time and the very few businesses that you can have really high degree of certain bundle. And as a result, you know many investments are speculations cause is really very difficult to predict the future. So we what we do for living, what I do for living is find those rare companies that you can kind of predict what you're onna look like over a very long time.

So what are the factors that indicate company is something is going to be something is going to make a lot of money, going to have a lot of value and is going to be reliable over a long period of time? And what is your process of figuring out what are your company is or isn't that?

So every consumer has a view on different brands and different companies. And you what we look for all of these non disruptive businesses, a business where you can can close your eyes, stock market shots for a decade. And you know that ten years from now, this can be a more valuable, more profile company.

So we own a business called universal music group. Uh it's in the business of helping artists become global artists, recorded music business ah and is in the business of you know owning rights to show the music publishing rights of songwriters. And you know I think music is forever. Music is a many thousand year old, uh, you part of the human experience and I think that will be you know thousands of years from now. And so that's a prety good backdrop to invest in a company.

And the company basically owns a third of the global recorded music know the most dominant sort of market share in the business to the best at taking an artist to eighteen years old, has got a great voice and has started get a presence on a youtube, instagram and helping that artists become a superstar. And that's a unique towns and and the result is the best artist in the world want to come work for them but they also have this incredible library of you know the beetles, rolling stone, youtube. exactly.

So and then if you think about um what music has become used to be about records and cds and you know eight track tapes for those of whom and I was about a new format and that's how they drive sales. And it's become a business which is like the podcast business by streaming. And you can streaming a lot more predictor than than selling records, right? You can sort of say, okay, how many people have smart phones? How many people going to have smart phones next year? There's a kind of global penetration or time of smart phones if you pay called ten thousand eleven box a month for a subset or last for a family plan.

And you can kind build a model what the world looks like and predict, you know, the growth of the streaming business. You predict what kind of market are universal is going to have over time. And you you can get to a precise view of value, you can get to an approximation.

And the key is to buy at a Price that represents a big discount to that approximation. And that gets back to benn. Benn was about what he called the invented this concept of marginal of safety, right?

You want to buy a company at a Price that if you're wrong about what you think it's worth and IT turns out to be where thirty percent less you paid a deep enough discount to your estimate that you're still okay. It's about investing. A big part of investing is not losing money. If you can avoid losing money and then have a few great hits, you can do very, very well over time.

Well, music is interesting as, yes, music been around for a very long time, but the way to make money from music has been evolving. Like you and streaming, there's a big transition initiated, but I guess snap ster than quite a spotify of how you make money on music with apple and all of this.

And the question is, how well are companies like emg able to adjust transformations? One I could ask about the future, which is artificial intelligence being able to generate music, for example, which said there have been a lot of amazing advancements with so you have to also think about that, like when you close your eyes, all the things you think about are you imagine the possible ways that the the future is completely different from the the present and how well this company will be able to like serve the way of that. And they've had .

to serve a lot of ways. And actually, the music business peaked the last time, and like the late ninety two thousand time frame. And that really innovation nps to digital of music almost killed the industry. And universal really made an effort to save the industry and actually made an early deal with spotify that enabled you know the the industry to really recover.

And so by virtue of their mark position in the credibility, they're willingness to kind of adopt new technologies, they've kept their position now, of course, had this huge advantage because I think the beetles are forever. I think you too is forever. I think rolling stones are forever.

So they head of a nice base of of assets that were important, and I think we'll forever be and forever S S A long time. But you know the but again, there's enormous they're all kinds of recent every business. This is one that I think is a very high degree persistence.

And I can't envisions a world where beyond streaming, in a sense. Now you may have a neural link chip in your head that instead of a phone, but the music can come in a digito you to form A T, you gonna to have an infinite library that you can walk around in your pocket or in your brain. It's not going to matter that much of the form factor, you know the device changes not really that important whether it's spotify or apple or amazon ah that are the so called the D S P S or the or the providers. Uh, I think the values really can resided in the in the content owners and that's really the artist and the label and actually .

think A I is not going to be the primary creator of music. I think we're going to actually face the reality that it's not that music has been around for, I thought, thousands of years, but musicians and music has been around like we actually care who's the musician that created IT. Just I want to know that who's the artist, human artist, that created a piece .

of our I Green. And I think if you think about IT is other lots of other technologies uh and computers that have been used to generate music over time. But no one wants to no one falls in love with a computer generated track, right um and telescoped know know credible music. But it's also about the artist and our story and her physical presence and you know the. The live experience, I don't think you're going to sit there and what is going to put computer up on stage and then and it's going to play and people can get excited around IT. So I think A I is really going to be a tool to make artists Better orders um and and uh you know but I think uh you like a synthesizer, right uh really created the opportunity for you one man have an orchestra um maybe a bit of a threat to a precaucioned ist um but maybe not maybe IT draw even more demand for for .

life experience unless that computer has human like sentience, which I believe is a real possibility. But then it's really from a business perspective no different than a human IT has an identity that basically fame and influence and there would be a robot, Taylor swift and IT .

doesn't not able asset, I would think right now and then .

they'll don't.

That's a different discussion.

The world is not going to ask your permission to become what is becoming so, but you can still make money on IT person. Will there be a capital system and y'll be some laws under which a, which I believe A I systems will have rights that are came to human rights, and we're going have to contend with what that means.

Well, the sort of name and lightness rights and that have to be protected now, can a name be attributed to A A tesla robot? I don't know.

I think so. I think it's quite obvious. okay? There's a more.

more potential artists for us to represent.

Universe is right?

Let's a one example. Another example could be the restaurant industry, right? If you can look at businesses like a mcDonald write IT to whatever the companies like a nineteen fifty vintage business, and here we are seven, five years later, and you can kind of predict what is can look like over time and the man is going to adjust over time to consumer taste. And but I think the hamburger and fries is truly forever.

The beetles, the rolling stones, the hamburger and fries are forever. I was eating at tripoli last night as I was preparing .

these notes. Thank you.

Yeah, but IT is one of my favorite places to eat. You said, IT is a place that you eat. You obviously also invest in IT ah what do you get a to bullet?

I'd tend to get a .

double chicken boller breeder.

I like the bread, but then double chicken walk. Let is black .

means and i'm more of staker. But the record, what's the actual process you go through? Like literally like the process of figuring out what the value of a company is like. How do you do the research? Is IT reading documents as a talking to people as a hudi dut .

about so portly? What attracted us initially is the stock Price dropped by about fifty percent. Uh great company, great concept.

Um athletes love, consumers love IT, healthy, sustainable, a fresh food made in funny eyes and great Stevens, the founder, amazing job. But ultimately be the companies lacking some of the systems and had a food safety issue. Consumers got sick, almost killed the rent.

But the reality of the fast food, quick service industry is almost every fast food company has had a food safety issue over time, and the vast majority have survived. And and we had looked such a great concept, but they you know their approach was not but was far my a deal. But but we start with usually reading the esc vision.

So companies file a ten k and any report, they file these quarterly reports called ten q they have a proxy state which describes kind of the governance, the board structure. Um conference call transcripts are publicly available. It's kind of very helpful to go back five years and kind of learn the story.

You know, here's our management describes their business. Here's what they say they're going to do and you can fall along to see what they do. Uh, it's like a historical record of you know of how component and uh, truthful they are.

You have a very useful device and then of course, looking at competitors and thinking about who what could dislodge this company. Um no. And then we'll talk to if it's an industry we don't know well, we know the restaurant really well, music industry, we will talk to people.

The industry we'll try to understand, you know the difference for publishing and recorded music will look at the competitors. Um we will talk to will read books. I read a book about the music industry or couple books about the industry.

Um so it's it's a bit like a big research project uh and these so called expert networks. Now you can get pretty much anyone on the phone um and i'll talk to you about an aspect of the industry that you don't understand, want to learn more about, try to get a sense. The public filings of companies generally give you a lot of information, but not everything you want to know. And you can learn more by talking to experts about some of the industry dynamics, the personalities you want to get a sense of management. Uh, i'd like watching you know, podcast of the c here, where to do a podcast or youtube interview, you get a sense of the people.

So in the case, tripoli, for example, by the way, I could talk about to poli all day. I just love you. I love you. I wish there was a sponsor. Ah, I mention that this.

you don't make promises .

you can't keep. Bill, brian.

ico S A fantastic CEO. He's not been one doll. IT doesn't think it's a companies is best interest.

All I want is fruit ple. Come, I think you and so you look at a company like to polite and then you see there's a difficult moment in history, like you said, that there is a food safety issue. And then you say, okay, well, I see a path where we can fix this. And therefore, even of the Price is low, we can get IT to where the Price goes up to its value.

So the kind of business were looking for is short of the kind of business everyone should be looking for, right? A great business got a long term trajectory of growth out into the force, you know, even beyond the foreseeable distance. Right there was the kind of business is you want to generate a lot of cash, you want businesses you can usually understand, you want businesses with.

These are of huge barrier entry works, difficult for others to compete. You want companies that don't have a constantly race capital. And these are some of the great business of the world.

But people have figured out that those are the great businesses. So the problem is those companies tend to have very high stock crisis, and the value is generally built into the Price you have to pay for the business. So we we can earn the kind of returns we want to earn for investors by paying a really high Price.

Price matters. A, you can buy the best business in the world. And if you overpay, you're not going to earn particularly attractive returns. So we get involved in cases where a great business has kind of met a big mistake or or you have companies kind of lost its way, but it's recoverable and that we buy from shareholders who are disappointed with loss confidence, selling at a low Price relative to what's worth, if fixed. And then we try to be helpful in fixing the company.

he said. The barriers to entry, you said a lot of really interesting qualities of companies very quickly in a sequence of statements they took like less than ten seconds to say, but some of them were passing, all of them were fascine. So we said barriers to entry, how do you know if there's a type of mode protecting of the the competitors from stepping up to the plate?

The most difficult analysis to do as an investor is that it's kind of figure out out how wide is the mote, how you know how much at risk is the business to disruption. In word, I would say, a period, the greatest period of disrupt ability in history, right? Technology, a couple of nineteen nine roles.

Can you leave whatever university or maybe they didn't go in the first place? Ah they can raise millions dollars. They can get access to infinite band with storage.

They can contract with the engineers in low cost markets around the world. They could build a virtual company and they can disrupt businesses that seem super established over time. And then on top of that, you have major companies with multitrillion dollar market caps working to find profits wherever they can.

And so that's a dangerous world in a way to be investor. And so you want to you have to find businesses that it's hard to foresee a world in which they get disrupted in the beauty of the restaurant business. And we've actually our best track records and restaurants.

We've never lost money. We've only made a fortune interestingly, investing restaurants a big part of its a really simple business. And if you get reportedly right and you're at one hundred stores, it's not so hard to envision getting to two hundred stores and then getting to five hundred stores right.

And the key is maintained, the brand image growing intelligently, having the right systems. Uh, you know now when you go from hundred stores to thirty five hundred stores, you have to know what you're doing. There's a lot of complexity, right? You know if you think about your local restaurant, the families working in the business, there's they're watched in the cash register and you can probably open another restaurant.

There were crossed town, but there are very few restaurant Operators. I know more than a few restaurants and Operate them successfully. And in the quick service business is about systems and building a model that a stranger who doesn't know the restaurant, and you can come in and enter the business and build a successful 啊 successful franchise。 Now police is not a franchise company.

They actually own all their own stores. But many the most successful restaurant companies are franchise mouse, like a burger king and mcDonald's tim fortins. All these various brands, puppies, and there is about systems, but the same systems apply, whether you own all the stores and found by big CoOperation, or whether the owners, the restaurants are, are sort of franchisees in your local entrepreneurs.

So if the restaurant has scaled to a certain number, that means they figured out at some kind of system networks, yes, very difficult. Develop that the system. So that's a mote.

a mode is you get to a certain scale and you do IT successfully and the brands and is now in in the understood by the consumer. And what's interesting about poti is what they're achieved is difficult, right? They're not buying frozen hamburgers getting shipped in.

They're buying fresh, sustainably sourced ingredients that preparing food in the store that was the first right? The quality the product is credible is the highest quality food you can get for. You can get our serious dinner under twenty box and eat really helpfully and very high quality ingredients.

And that's just not available where else. And it's very hard to replicate and to build those relationships with. Farmers around the country. It's lot easier to make a deal with one of the big you know massive food producers buy your port from them h then to buy from whole bunch of farmers around the country. And so it's that is a big mode protocol, very difficult to replicate.

And by the way, another company think you have mistake is, is malls.

No, we own a comical restaurant. Friends restaurant parents owned a number of books service companies, one of which is .

working very well. It's been to mean for a while, but of working is great to when these whatever. But I usually to go mcDonalds, i'll just eat burger patties. I don't know if you knew you could do this, but a burger party and burger can can do this. McDonald is actually weight cheaper, the party and is cheap.

It's like a dollar of fifty or two dollars for property and about to one of fifty calories is just me and despite like the criticism means out there that's pretty happy to this healthy stuff. And so when I do when I go, the healthy is I feels when I do, carnivore IT doesn't sound healthy, but if I eat only meat, I feel really good. I lose weight. I have all this energies is crazy. And when i'm crawling.

the easiest way to get me is that.

So there's a sad meme of me just sitting alone in the car when i'm traveling, just eating beef fatties, i'm down, but I love you and you got to do what what you love, what makes you happy and that's .

what makes me what maybe more burger's future in IT. What about flame world? What's with this ride? burgers. You're going to get to grilled burgers .

is like facebook trashed. I didn't know I don't know the details of how they're made. sure.

I don't .

have you a great. We'll see. I'm making so many deals today is wonderful. okay. You were talking about most in this kind of remind me of parent company.

sure. We're making was speak position for us.

So it's interesting that you're think that maybe alphabet fits some of these characteristics. It's tRicky to know with everything that's happening in an A I in interviewing on the precise soon, it's interesting that you think that there's a mode. And it's also interesting to analyze because the consumer is just a fan of technology.

Why is google so around like you've been? It's not just a search engine is doing out all the basics of the business of search really well, but they're doing all these other stuff. So what what's your analysis of alphabet? Why he is so .

positive about IT? sure. So it's a business we've admired as a firm for you know whatever fifteen years um but rarely got to a Price that we felt we could own IT because again, the expectations were so high and Price really matters really the sort of A I scare I would call IT you know microsoft comes out with ChatGPT. They do with amazing demonstration, people like the most incredible product.

And google, which had been working on A I even earlier, obviously microsoft ico soft behind an A I I was really their ChatGPT deal that gave A A market presence um and that google does this fairly disastrous demonstration of barred and the worlds on my god google phone behind an A I A I the future stockett's rushed gal gets to a Price around fifteen times earnings, uh, which for a business of this quality is an extremely string low Price. And our view on google, one way to think about IT, when a business becomes a verb, that's usually pretty good sign about the mode around the business. So you d open your computer and you open your search.

And very high percent of the world starts with a google, you know, page in one line. When you type in your your search, you know the google advertising search. Youtube franchise is one of the most dominant franchise in the world.

Very difficult to disrupt, uh, extremely profitable. The world is moving from offline advertising to online advertising in that trend, I think, continues. why? Because you can actually see what your ads work least to say about advertising.

You know a spend a fortune and you just don't know which fifty percent of its works, but you just started spend the money because, you know, ultimately that's going to bring in the customer. And now with online advertising, you can see with granularity which dollars i'm spending. You know when people click on the search, german end up buying something and I pay.

It's a very high return on an investment for the advertiser, and they really dominate that business. Now A I of courses at risk, if have all the sudden people start searching or asking questions ChatGPT. And don't start with the goole search bar, that's a rest to the company.

And so are you based on work we had done and talk to the industry experts, is that google anything had by virtue of the the investment they've made in the time the energy that people put into a we felt their A R capabilities were, if anything, potentially greater than microsoft ChatGPT and that the market had overreacted. And I because google, you know, as a big company, uh, global business regulators scrutinised IT incredibly carefully. They couldn't take some the same liberties to start black opening eye did in releasing a product.

And I think google took a more cautious approach in releasing anuti version of barred in terms of its capabilities. And that left the mark the world to believe that they were behind. And we also make concluded if their side ahead and you paying nothing for that potential business and they're going and they also have huge adventures by you think all the data google has, like the search data, um all the various new applications, you know email and otherwise.

The kind of the google sweet of the products is an incredible data set. So they have more, more training data that pretty much any company in the world, they have incredible engineers, they have enormous financial resources. Ah so that was kind of a bt and um and we still think it's probably the cheapest of the big seven companies in terms of Price are paying for the business relative to its current earnings.

IT also is a business that has a lot of potential for efficiency. Know sometimes when you have this enormously profitable dominant company, all of the technology companies in the post march twenty world a grew enormous ly in terms of their teams and they probably over hired. And so we've seen some you know the facebooks of the world and now even google start a little more efficient in terms of there Operation.

So we pt a low multiple for their the business. Um one way to think about the way the business is the Price you pay for the earnings. Alternately, what's the yield if you flip over the Price over the earnings, that gives you kind of the yield of the business.

Fifteen multiples is about a almost a seven hf percent yield. And that earnings yield ld is growing over time as the business grows as compared to uh, what what you can earn landing your money to the government. You have four percent that's a very attractive going and yield.

And then there's all kinds of we call optionality in all the various businesses and investments they're made that are losing money, got a cloud business that's growing very rapidly, but they're n investing basically hundred percent of the profits from that business and growth. You're in that earnings number. You're not seeing any earnings from the cloud business and know there are one of the top third player. So very interesting, generally well managed a company with incredible assets and resources and dominance and has no did come on a cash. So pretty good story.

Is there something fundamentally different about A I that makes all this more complicated, which is the sort of the exponential possibilities of the kinds of products and impact that A I could create when you're looking at matter microsoft, alphabet, google all these companies is x ai or maybe startups like is is is there some more risk contribution ed by the possibility y's via absolutely.

it's a great question. Um you know business investing is about finding companies that can be disrupted. A I is the ultimate disruptive asset uh or technology. And if that's what makes investing creaturs is that you a business that's enormously profile manager gets, if you will, fat and happy and that a new technology emerges that just takes away all their profitability.

And a is is incredibly powful tool, which is why every business is saying, how can I use A I in my business to make us more profitable, more for grow faster and also disrupt or protect yourselves from the you, the incomings. It's it's a bit like about that talks about a great business like a castle surrounded about this really wide mode, but you have all these barbarians trying to get in and still the princess and um IT happens. You know kotex, for example, was an amazing, incredibly dominant company until IT disapearance polarity, this incredible technology. And that's why we have tended to stay away from companies that are technology companies because technology companies, generally, the world is such a dynamic place at someone that was working on a Better version. And you know, codec was caught up in the analog film world, and then the world changed.

Well, google is pretty fat and happy until tragedy I came on, yeah. How would you rate their ability to wake up, lose weight and be less happy, aggressively rediscover their search for happiness?

I think you seen a lot of that in the last year. Uh, and uh, I would say some combination of embarrassment and pride are huge motivator for everyone from sergi brin know to the management, the company and .

m into the picture and all of deep mind teams and the unification of teams. And like all the shakeup s there's interesting to watch OK. I love you.

I love you when everybody freaks out, like you said, partly embarrassment and partly that competitive drive that drive engineers is great. I can't wait to see what different business, a lot of improvement in the product, see where IT goes. Imagine management, how do you analyze the governance structure and the individual humans that are the managers of a company?

So as I like to say, incentives drive all human behavior um and that certainly applies in the business world. So understanding the people and what drives them and what the actual financial and other incentives of a business, very important part of the analysis from investing in a company. And you can learn lot, and I mentioned before one great way to learn about a businesses.

Go back a decade and read everything that management is written about the business and see what they have done over time, see what they're conference calls are actually relatively recent. Uh, when I started in the business, they weren't conference call transcribe. Now you have know a written record of everything management is said in response to questions from anti at conferences and otherwise.

And so just you learn lot about people by listening to what they say, how they answer questions and ultimately the track record for doing what they say are going to do. Do they undergo mise and over deliver. Do they over promise and under w deliver? Um do they say what they're going to do? Do they admit mistakes?

Do they build great teams to people want to come work for them, able to retain their talent? Um you know and then part of the IT is do they how much are they running in the business for the benefit the business? How much are they running the business for the benefit of themselves? Um and you know that kind of analysis you do oh.

we are talking about C O, C O, what management mean and how .

deep does IT go? So this very senior management matters enormous. Ly, we use the triple at the example. Steve's great entrepreneur business got to a scale he really couldn't run IT.

We recruit a guy in brian, helped the company recruit a guy in brian nickle, uh, and he was considered the best person in the quick service industry. He came in and completely rebuild the company. Actually, we move the company was moved to california.

And sometimes one way to redo the culture for company is just to move IT geographically. And then you can go to rebuild the business. But a great leader has great followership over the course of their career, have a team the'd built that will come follow them into the next opportunity.

Uh, but the key is not really the top of person matters enormously. And then is who they recruit. You know, you recruit and a plus leader and they're going to recruit other a tie.

People grow a big leader. You're not going to work true any great time. And beneath them .

you mentioned, warn buffett, you said you admire him as an investor. Would you find most interesting in powerful about his approach? What what aspects of his approach investing do you also practice? sure.

So most of i've learned the investment business. I learned from more n market. He's been my great professor of this business. I my first book I read in the business was the best gram intelligent investor but early quickly you get to learn about warn buffett and I started by reading the the bircher halfway and reports and then I eventually got the buffer t partnership letters you can see um which are amazing read to go back to the nineteen midd one thousand nine hundred and fifties and read what he wrote to his limited partners when he first started out and just fall that trajectory over a long create time so what's remarkable about him is one duration, right?

He still added ninety three uh two you know takes a very long term view, but a big thing that you learn from him investing requires is incredible disaster onate um unemotional quality. You have to be extremely economically rational. H which is not A A basic not something you learn in the jungle.

No, I don't think it's something. Know if you think about the the um you know surviving the jungle, um you know the line shows up, you know and everyone starts running. You run with them that does not work well in markets.

In fact, you generally have to do the opposite when the lemmings are running over the Cliff. That's the time we are facing of the direction and are running of the direction. I hear you're stepping in. You're buying stocks are really low Prices. Your buff has been great at that.

And greater teaching about what he calls temperament, which is the sort of emotional kind of or unemotional quality that you need to be able to dispassionate look at the world and say, okay, is this a real risk or people overreacting? Um people tend to get excited about investments when stocks are going up and they get depressed when they are going down. And I think that's just inherently human. You have to reverse that. You have to get excited when things get cheaper and you ve got to get concern when things .

get IT more expensive. You've been a part of some big battles, some big losses, big winds, been a roll costs. So in terms of temperament, psychologically hide you, not let that break you. How do you maintain a calm deme and avoid running with the lemmings?

I think it's something you kind of learn over time. A A key success factor is you want to have enough money in the bank that you're gona survive. You know, regardless of what's going on with volatility and markets, you know people who when you should not borrow money.

So if you've borrow money, your own stocks on margin markets are going down and you have your livelihood at risk. It's very difficile irrational. So key is getting yourself to a place we are financially secure.

You're not going to lose your house, right? That's a kind of a key thing. And then also doing your home work and stock Prices. Stocks can trade any Price in the short term.

And if you know what the businesses worth and you understand the management you know extremely well, it's not nearly as IT doesn't bother you when a stock Price goes down or has much less impact on you because you know you again, as mister gram said, you know the short term of the voting machine, you have a bunch of lamming vote. One direction that's concerning. But if it's a great business that's not a lot of debt and people going just listen to more music next year than this year, you know you're going to do well. So it's a bit some combination of being personally secure and also just knowing what you own. And over time, you build kalsi, I would say so psychologic .

just as a human being speaking, the lions and guzzlers at all this kind stuff is there. Some is IT as simple as just being financially secure. Is there some just human qualities that you have to be born with slash develop.

I think so I think i'm a pretty emotional person. I would say I feel pretty strong emotions, but not in investing. I'm remarkably immune to kind of voluntier ity and that's a big advances. And IT took some time for me developed that.

So you want to born all that? I think, no. So being emotional, do you want to respond to volatility?

Yeah and you just it's a bit again, I you can run a lot from other people's experience. It's one of the a few businesses where you can learn an enormous amount by reading about other periods in history. You know watch following buffs career the mistakes he made.

You're investing a lot of capital. Everyone of your mistakes can be big, right? So we've made big mistakes. The good news is that the vast majority of things we've done have worked out really well. And so that also gives you you know confidence over time.

But because we make very few investments and we want eight things today or seven companies of that matter um if we get one wrong, it's going to be big news. And so the other nature our business have to be comfortable with is a lot of public scrutiny Y A lot of public criticism. And that requires some experienced I think we'll talk .

about some of that financially secure or something I believe also recommend for even just to everyday investors. Is there some general advice from the things you've been talking about that applies to .

everyday investors? sure. So never invest money. You can afford to lose where I would if you'd lost this this money. And you know, you lose your house.

So having being in a place where, uh, you're investing money that you don't care about the Price in the short term money for your retirement and you take a really long term of you, I think that's key. A never investing. We borrow money against your securities.

You know the the markets offer you the opportunity to leverage your investment. And in most worlds you'll be OK except you know there's a financial crisis or you know a nuclear device gets added, got forbidden somewhere in the world, or there's a unexpected war, or someone kills a leader unexpectedly. Things happen that can change across the history, and markets react very negatively to those kinds of events.

And you can know the greatest business in the world training four hundred dollars to share, and next mm could be fifty. So as long as don't borrow against securities, you own really high quality businesses and it's not money that you need in the short term. Uh, then you can you can actually be thoughtful about IT. And that is a huge manage. The vast majority investors that seems tend to be the ones that panic and the downturns get over related in when markets are doing well.

So be able to think long term and be sufficiently financially secure such that you can afford to think long term.

That buffer t is the ultimate long term thinker and just the decisions he makes, the consistency of decisions he's made over time in fitting into that sort of long term framework. IT is a very, very education, and let's put IT that way for the learning about this business.

So you mentioned aid companies, but what do you think about mutual funds, that for everyday investors, that diversity across a larger number of companies, I think they're .

a very few mutual funds are the thousands, thousands of mutual funds. They're very few that earn there are keep in terms of the fees they charge. They tend to be too diversified um and you know too short term and you're often much Better off just buying next fun and many then perform.

They look if you look carefully, their portfolio are not so different from the underlying index itself and you tend to pay much hard phy. Uh, now all of that being said, there some very talented mutual fund managers get well down off at fidelities had a great record over a long create time in the family. Peter lynch, ron barren, another great long term growth dock investor. So there's some great neutral funds, but I put them in the handful versus the thousands. And if you're in you know the thousands, I i'd rather like someone bought just an index on basically .

yeah index on but what what would be the leap for an everyday investor to go to investing in the small nerva al companies like two, three, four, five companies I even .

recommend for individual investors to invest in you know a dozen companies. You don't get that much more benefit of diversity going from a dozen to twenty five or even fifty. Most of the benefits education come in the first you know called ten or twelve.

Uh and if you're investing in businesses that don't have a lot of dead their businesses that you can understand yourself, you understand you actually individual investors that are much Better job analyzing tesla, then the e personal professional investors are analysts, the vast majority them. So if it's a business, you understand you if you bought a testa, you understand the product and its appeal to consumers. A good place to start when you're analyzing a company.

And so I would invest in things. You can understand that kind of a key, 有 like your port line， you understand why they are successful. You can you go there every week and you can monitor, you know, is anything changing in how these new kind of house chicken alphabet that that a good upgrade, the basic chicken, the drink offerings improving, the stories clean.

I think you should invest in companies. You really understand simple businesses where you can predict with a high degree of confidence what's gona look like over time. And if you do that, and i'm not particular concentrated fashion and you don't borrow money against your security, you're probably do much Better than you .

are typical mutual fund and consumers that love of thing are actually good analysts of that thing. Or I guess, a good starting point.

There's watch more information available today. When I was first investing you literally we had people faxing us documents from the c filings and washing dc. Now everything's about online. Conference call transcripts are free. No A I you have unlimited uh in data and in the all kinds of message guards and redit forums and things where people are know, sharing advice and everyone has their own you by virtue of their career experience, they'll know about an industry or a business and that gives them I would take advantage of your own competitive vantages.

I'm just afraid to find investment to poli. I'll be like analyzing every little change of menu from a financial perspective .

and just be very critical expect experience.

I yeah I mean, I I should also say that I am somebody that emotionally dose response of volatility, which is why I ve never about index funds. And I just I just noticed myself psychologically being affected by the option knows of the market. I wanted turn now because if i'm all tuned in, IT has a negative impact of my life.

Yeah, that's really important.

Can you explain what activist investing is? You've been talking about investing and then looking at companies when they're struggling, stepping in and reconfiguring things within that company and helping IT become great. So that's part of IT. But this is suma. What's the idea of activist investing?

I think recently in the last couple of days are red article saying that more than fifty percent of the capital in the world today in investment in stock markets passive index money, that's the most passive form, right? So if you think about a index fund, a machine buys a fix set of security in certain proportion. Uh there's no human judgment at all and there's no real person behind IT in a way um they never take steps to improve a business.

They just quietly on security. What we do is we invest our capital in a handful things. We get to know them really, really well because you're going to put twenty percent of your assets in something you need to know IT really well.

But once you become a big holder and if you've got a some thoughts and how to make a business more valuable, you can do more than just be a passed investor. So our strategy is built upon a finding great companies in some cases, that have lost their way and then helping them succeed. And we can do that with ideas from outside the bedroom.

Sometimes we take a seat at on a board or or more than one um and we work with the best management teams in the to help these businesses succeed. So when I first one in his business, no one know who we were, and we didn't have that much money. And so to influence what was to ask a big company, uh, we had to make a fair bit more noise, right? So we would buy stake.

We announce publicly, we attempted to engage with management, the first activists and us. We made a person where was wednesday, couldn't get the CEO to ever return. Michael didn't terminal.

So we actually in that case, uh, our idea was when his own to come to called tim this coffee on a chain and you could buy one is four, basically five billion dollars, and they owned hundred percent more tons, which itself was worth more than five billion. You could literally buy when these separate important things for negative. That seems like a pretty opportunity even though business wasn't doing that well.

Uh, so we bought the stake called the C E O, couldn't get a beating nothing. So we hired actually blackstone, which was at that time had investment bank, and we hire them to do what's called a fairness opinion of what when these would be worth if they followed our advice and they agreed to do IT paid my c fort. And then we're melt in a letter with a copy, the fairs, in opinion, saying money would basically be where eighty percent more if they did what we said.

And six weeks later, they did what we said. That's activism, at least on an early form of activism. With that kind of under our belt, we have more credibility.

And now we started to take things stakes and companies uh the meat would pay attention to the media became kind of an important partner and um you know some combination of shame, embarrassment and opportunity, uh, motivated management teams to do the right thing. And then you know beyond that, uh in a certain steps you can take of management or calls strint and the shareholder on your side. But it's a bit like running for office.

You've got ta get all the constituent to support you and your ideas. And if they support you in your ideas, you can overthrow, if you will, the board of a company are you bring a new town and then take over the management of a business. And that's the most extreme form of activism.

So that's kind of the early days and what we did and a lot of the early things that we did were um call IT, we call out of like investment banking activities where we'd go in and recommend something a good investment bank would have recommended. And if they do IT, we make a bunch of money. And then we moved on to the next one.

And then we realized an investment to company called general growth was the first time we took a board seat on the company and there was some financial restructuring and also an opportunity improve the Operations of the business, said in the board of the company, and that was one of the best means we ever made. And we said, okay, we can do more than just be and outside the board room investor and we can get involved in helping select the right management teams and helping guide the right management teams. And then we've done that of her years.

And then that would say the last seven years we haven't had to be an activist. An activist is gently, someone who's outside dying on the door, trying to get in. We're sort of built enough credibility that they open the door this hey bill, what ideas you have? So welcome.

Would you like to join the board? We're treated differently today that we were on the beginning and that a um is this would say some people might just call being an engaged owner that by the way, that's the way investing was done in the Andrea neck gp moran days you know hundred fifty years ago. You have these iconic business leaders that would know in twenty percent of U S.

Deal and when things would go wrong, they they replace the board in the management, fix them. And over time, we went to a world where mutual funds were created, like in the thousand hundred and twenty thirties, index funds with band guard and others, and that all these controlling shareholders would have gave their stock to society or the children in multiple generations, and there were no longer kind of controlling ownership of businesses, are very few. And that LED to under performance and the opportunity for for activists or time and what activist has done, and I think we've helps lead this movement, is IT restored kind of the bounds of power between the owners of the business and the management of the company.

And that's been a very good thing for the performance of the of the U. S. Stock market, actually.

So the owners, meaning the shareholder, yes. And so there's a more direct channel communication with with that with investing between the shareholders and people running in the company. yes.

So activists generally never own more than five ten percent of a business, so they don't have control. So the way they get influence is they have to convince the other you. They have to get to the sort of majority of the other shareholder to support them. And if they can get that kind of support, they can behave almost like a controlling shareholder, and that's outworks.

So the running of companies, uh, actually to build action is more democratic.

Now IT is, IT is, but do you need some thought leaders? So activists are kind of thought leaders because they can spend the time and the money. We retail industrial that owns thousand chairs doesn't have the, the the resources of the time they got a daytime b or as an activist daydream is finding the handful of things where .

their opportunities so on average, is a good to have such an engaged, powerful, influential investor helping controlled, directed direction of the company.

IT depends what that investor is, but generally think it's a good thing. Uh, and that's why you know one of the problems of being see of the company today and having a very for shareholder debase is the kind of short term, long term baLance and you have investors will have all different interests in terms of what they wanted achieve and when they wanted achieved.

And uh, C E O of a new company has not have a new C E O of an old company, let's say, hasn't had a chance to develop the credibility to make the kind of longer term decisions and can be stuck in a cycle of being judged ged on a quarterly basis and a business, the best businesses are forever. Assets and decisions we make now have impact three, four, five years from now in order to make. And sometimes there are decisions we make that have the effect of of reducing the earnings of a company in the short term because in the long term, it's going to make the business much more valuable.

Um but it's sometimes it's hard to have that kind of credibility when you're a new c of a company. So when you have a major owner, uh, that's respected by other shareholders sitting on the board saying, hey, the see who is doing the right thing in making this expensive investment new factory, we're spending more money on R N D because we're developing something that's going to pay off over time. That large owner on the board, uh, can help by the time necessary for management to behave in a longer term way. And I think good for all the shelters.

That's a good story, but can not get bad. Can you have A A CEO who is a visionary and seized the long term future of a company? Investor commitment, have very selfish interest in just making more money in the short term, and therefore destroy and and manipulate the opinions of the shareholder and other people on the board, in order to think the company may be increased, increased the Price, but destroy the possibility of long term .

value IT could see radically happen. But again, the the activists, in your example, john has known a lot stock the shareholder basis today. The bigger shareholders are these index funds that are.

Over, right, the black rock man guard state street, their otherness stakes are just at this point, only growing because of the inflows of capital they have from shareholders. So they have to think or they should think very long term. And there are going to be very skeptical of someone coming in with a short term idea that drives the stock Price up, you know, in the next six months. But in pairs, the companies, the long term ability to compete and basically that ownership group um prevents this kind of activity from what happening.

So people are generally skeptical. Short term activist investors, yes.

in the very few. I don't really know any short term act with investors, not ones with credibility.

You mention general growth. I read somewhere called arguably one of the best hetch fund trades of all time. So um I guess I went from sixty million dollars to over three billion.

IT was a good one, right? But IT wasn't a trade I wouldn't scribe as a trade. Trade is something you buy and you flip. This is something where we made the investment initially in november of two thousand eight, and we still own a company. We spin off of general growth and is now fifteen years later.

So can can you describe what want to make that decision to actually increase the value the company?

So this was, at the time of the financial crisis, a circular november two thousand. eight. What real state always been a kind of sector that i've been interested.

And I began my queer in the real state business, working for my dad, actually ranging mortgagees for real. Take felps site. I have kind of deep, deep ties and interest in the business.

And general growth was the second largest shopping more company in the country. Simon properties. Many people heard of general growth, the number two, they on some of the best malls in the country.

And at that time, people thought of shopping malls as these non disruptive things. Again, we talk about disruption. We also have been disrupted in many ways.

A and general gross stock, the general growth, the company the CFO in particular was very agressive in the way that he borrows money. He borrowed money from a kind of wall street uh h not long term uh, mortgage es, but generally related short term mortgage es pretty gressier. As the value went up, he'd borrow more and more against the assets.

And that helped the short term results of the business. The problem was during the financial crisis, the the market for which called cbs commercial organs back security basically shut. And the company, because its debt was relatively short term, had a lot of big maturities coming up, that they had no ability refinance.

And the market that on, my god, the lenders are going to for close and the share who are going get wipe comes gonna bankrupt. I get wiped out. Stock went from sixty three dollars a share, just thirty four cents.

So and there was a family, the books down, family owned, I think, about twenty five percent of the company. And they had a five billion dollar, five billion of stocks that was were twenty five million or something by the time we bought a stake in the business. And what interested me was um I thought the assets were worth substantially more than the liability.

The company twenty seven teen, a dead and had one hundred million dollar value of the equity, down from my twenty billion. okay. And one that, you know, sort of interesting place to start with, a stock down ninety nine percent.

But the fundamental drivers, the all business are occupancy. How occupy in the malls. Occupancy was up year on year between two seven, in a way.

Interestingly, net Operating income, which is kind of a measure of cash low from the malls, that was up year on year. So kind of the underlying fundamentals, we're doing fine. The only problem they had is they had billions of dollars of debt that they had to repay, they couldn't repay.

And if you kind of examine the bankrupcy code, um it's precisely designed for a situation like this. Where is kind of this resting place you can go to kind of restructure your business. Now the problem was that every other company that had gone, the heroles got wiped out.

And so the market seeing every previous example, the sherlock get wiped out, assumptions of talks going to go to zero. That's not what the banker code says. The bank code says is that the value gets a portioned based on value.

And if you could prove to a judge that there was the assets worth more than the liabilities, then the shareholders actually get to keep their investment in the company. And that was the bet we made. And so we stepped into the market.

We bought twenty five percent company in the open market for we had to pay up and started at thirty four cents. I think there were three hundred million chairs, so we had one hundred million dollars. Ue, by the time we were done, we paid an average of, we paid sixty million for twenty five percent business, about two and forty for the equity of the company.

And then we had to get on the board to convince the director of the writing, do the board was in complete panic, didn't what to do, spending a ton of money on advisers. And, you know, I was a shareholder, activists, you know, four years into pursing square, and no one had any idea what we are doing. I thought we were crazy every day, every day we go into the market, we'd buy this penny stock and we'd file what's call the thirteen day at every one percent increase in our stake.

And people just thought we were crazy. We're buying stock in the companies going to go bankrupt. Bill, you going to lose all your money. run. Kay and I said we wait, you know, back to code, says that there was more asy than liabilities.

We should be fine and the key moment you're looking for fun moments is there's a woman, a medi books bound was from the books bound family and uh her cousin john was chairman of board C. E. O. The company and I said, as he called me, after we disclose are taking the company, she's like, Billy act and really glad to see you here and I met her like, I don't think IT was a date, but I kind of matter in a social context when I was like twenty five or something and he said, i'm really good to see you here and anything I can do to help you call me I said, sure.

I keep trying to get on the board of the company they wouldn't invite us on, couldn't really run a proxy contest, not what the company going bankrupt and their advisers actually were goldman sacks like, you don't want the fox in the henhouse, and they are listen to their advisors. So I called meti up and I said, mati, I need to get on the board of the company to help. And he says, you know, I will call my cousin, get IT done like calls back a few hours later, you'll be going to the board. I don't know what you said .

when SHE was convincing the .

XO invited on the board of the company. And the board is talking about at the old equity of general growth. Old equity is what you talk about.

The shareholder are getting wiped out as if no, no, no, this board represents the current equity of the company, and i'm a major shareholder. John's a major for shareholder. There's plenty of acid value here.

The company should be able to restructure for the benefit shareholders, and we're LED a restructure for the benefit rehoboth, ders and IT took, let's say, eight months and the company emerged from chapter eleven. We made an incremental investment in to the company and the shareholder kept the vast majority their investment. All the creditors got their face one of their investment park place acute crude interest.

And IT was a great outcome. All the employees kept jobs. The mall stayed open. There was no liquidation. The bankrupcy system worked the way IT should.

Uh, and I was in court and all the time, and the first meeting with the judge, the judges like, look, this would never have happened or IT not for a financial crisis and once the judge said that I knew we were gonna be fine because company really not done anything fundamentally wrong maybe a little to aggress on how the bar money and stock one from thirty four cents and thirty one dollars a year and actually fun little anecdote. Um we met a lot of people, lot of money, who focus into IT got a lot nice. Thank you.

Notes would you get on occasion and this business, believe not. And then one day I get a voice meal. This is when there was something called sml, probably few years out later.

And it's a guy with a very thick jamaican accent, leaving a message for bill act men. So I return on my calls. Call the go back is a high bill acmd, just returning your call is a call, mr.

action. Uh, thank you so much for calling me. I said, oh, how can I help? Says, I wanted to thank you.

I said, what do you mean? So I saw you on sea. Bc, you know, a couple years ago, and you were talking about this general growth and the stock.

I, where was the stock at the time? He said sixty cents or something like this, and I bought a lot of stock. And like, well, how much did you invest?

H, I invest all of my money, the company, and he was at york city tax driver, and invested like fifty thousand dollars or something like this at sixty answer share. And he was still holding anyone into retirement. And he made, you know, fifty times as money. And those at the moment, so you feel pretty good about investing.

will give you confidence to that once a penny stock. And i'm sure you are getting a lot of nacion people saying that this is crazy.

It's the same thing. You just do the work like we got a lot of push back from our investors actually because we had never invested in a bankrupt before. It's a field called distressed investing and they're dedicated distressed investors and we weren't considered one of them.

So bill, what are you doing? You don't know anything about distress investing. You don't know anything about bankability investing. Um but I can read you learned and I learned and it's sometimes it's very helpful not to be a practitioner, an expert in something because you get used to the conventional wisdom and so we just you know abstractly read the step back and look at the facts and and IT was just a really interesting set up for one of the best business we remain.

How hard is IT to learn some of the legal aspects of this? Like you make bankrupt code like I imagine is a very dance language and dance ideas and the loopholes and all that kind stuff like if you're just stepping in and you've never done distress investing, how hard is IT to figure .

out it's not one. Thought that hard. Okay, I literally read a book on distress investing can bend branch or something, something on distressed.

So you are able to pick up the intuition from that, just all the the basic skills involved, the basic facts to know all that kind of stuff.

Most of the world's knowledge has already been written somewhere. You just got to read the write books. And also had great lords.

No, built up some great relationships. We we work with solve in chroma and the law. Their nto shanker I met earlier in my clear person square, is actually my second act in the hetch fund distance.

And I started a fun call, the gotham partner twenty twenty six. One of my early investments was a comfortable rockfalls center properties that was heading for bankrupcy. And the lawyer on the other side, representing golden sex, was a good shanker. So he was like an obvious phone call because had yet another real state bank psy in that one did. We did very well, but I missed the dig opportunity. And I I suffered severe psychological torture every time I walk by rocky, because we've a made we knew more about that property, anyone else, but I knew less about deal making and didn't have the resources and I was twenty eight years old or twenty seven um and they had a Better layer than we did and they outsmart us on that one in a way so I said, okay, i'm going to go hard. This got the next .

time so okay, we will probably talk about rocket fellow center and some failures. But first he said, fox in the hen house, yes, something that the board and the chairman were worried about. Why would they call you're fox? So you you keep saying activist investing is not worry about it's always good.

Sure, mostly good. But you know that expression applied in this context. Now there are still worried about that.

sure. And so there's a million questions here. First of what is the process of getting on the board look like?

So a boy can always admit a member at any time in their discretion for a us. company. In fact, maybe there's some jurisdiction where you need to share all of them, but in most cases of work, can vote on any director that they want.

If the board doesn't invite you to the party, you have to apply to be a member in effect. And that process is called basically this process of a ultimately running A A slate for a meeting where you propose a number every any shareholder can propose to be on the board of a company. They want one share of stock in the business.

But and getting your name in the companies, you know, the materials has sent to shareholders, those rules were written away. They were very unfavorable and very difficult to get the door. Those rules have been changed very recently.

Uh, the company now has to include a candidate, really all the candidates in the materials they sent to shareholders, to the shareholder. K, the best ones when we applied or we applied when we ran proxy contest in the past, that was not the case. And we have to spend a lot of money, mostly mAiling fees and all kinds of other legal and other expenses to to let everyone know you're running like running a political campaign. And then you got to run around beat with the big shareholder in a fly around the country, explain your case to them, and then there's a shoulder meeting. And if you get a majority about .

to get on what this proxy contest slash bad idea battle comes when they .

don't want you. And a lot of that has to do with, I would take pride noral human kind of stuff, know a lot of times a board of another performing company doesn't want to admit that they've underperformed. And boards of directors twenty years ago, when with the started person square were pretty cushy jobs, sit on a board, the company, and you play golf of the C.

E. O. You know, at nice golf courses, you make a few hundred thousand dollars a year to go to four meetings.

Uh, IT was kind of a rubber stamp world where boards, at the end of the day, uh, they, the CEO, really ran the show once shareholders could actually dislodge board members and they could lose their seats. And that's really the rise of shoulder activities. Board started taking their responsibility is much more seriously because directors are typically, you know there many cases were retired CEO.

This is kind of how they're making a living in the later part of their career. They are sit on four boards. They collect a million, million half dollars a year and directors fees.

If they get thrown off the board by the shareholders, that's embarrassing, obviously. And IT affects their ability to get on other boards. So again, incentives, as I said earlier, driver in behavior of the incentives directors, they want to preserve their board seats.

So if you have a director now, the directors on board serving various roles, the most vulnerable ones are ones who, for example, chair of compensation committee, and if they put in a bad plan of the overpaid management, other subject to attack by shareholder. But these contests are are not a similar to political contest. Where is mudslinging? Puts out false information about you, you have to respond.

And they're spending the shareholder money. So they have sort of unlimited resources and you're spending you or and your investors money know when you're small, firm finite resources so they can outspend you, they can sue you. They can try to you know trigger the the mechanics in such a way um that you're gona lose. There's some unfortunate stuff that happened in the past, miniature stuff also some .

stuff that's public like in the press and all this kind of stuff.

Course be Young articles about yano now the dirty days where they would go through your traction, you know, make sure that you know you're not sleeping around and you know things like this that's okay. I i'm subject I can survive extreme scrutiny because i've been through this for a long time.

So you're saying the fat and happy hands um can get very a wolf like when the foxes to break in how extended .

forever hands and but .

but you've just cares. The charismatic fox just explain to me why the fox is good for everybody in the hand house at the end of day is actually very .

good on a board to have someone know if you there are many examples over time and handful high profile ones with the board fought to the nail to keep the actives off the board and then wants the activists come on the board and they said, you know, the guys, not too bad, after all the shelter was voted them on. It's got some decent ideas and let's all work together to have this workout.

And so there very few cases were after the contest when they bother with sometimes you have to replace entire board. We've done that. Um but some most cases, you get a couple of seats on the board and it's just know you, anna, build a board comprised of diverse point of view and that's how you get to the truth.

what was the most dramatic but for the board and that you have been a part of a the .

canadian pacific approximating test. So canaan pacific was like considered the most iconic company in canada. IT literally built the country because the the rail that had built over the over canada is what united the various provinces into a country.

And um and then over time, the business pretty business. They built a ton of hotels. They earned a lot of real estate and he became this massive conclusion.

But IT was horribly mismanaged for decades. By the time we got involved, IT was by far the worst from road road in north america. They had the lowest profit margins.

They had the lowest growth rate. Um the every quarter amount when we make excuses generally about the weather as to why they under perform verses. And there there is a drug competitor can be called canadian national as a real goes across the country. And can pacific would costly be complaining about the weather basically you know same country, same regions. Drugs weren't that far part um uh but he was a really important company and being on this board was like an honor thing.

And every one of the board was an icon of canada, you know the chairman of the royal bank of canada, you know, the head of the most important grain private, the health grain company, the sort of an important collection of, uh, big time canadian executives. Here we were, you know, this is probably about thirteen years ago, and you know, still maybe forty four years old from new york, not canadian physical, saying, this is the worst run round in north america. And we bought twelve percent of the road road at a really low Price.

And we brought with us to our first meeting, the greatest railroader ever I got in hr. Harris, and who had turned around canadian national, we like, okay, we've got a great asset. We ve got the greatest reward sea of all time.

He's come out of retirement. They were step in around the road road and we brought me to the first meeting and they wouldn't meet with them and and they wouldn't certain in consider hiring him. And that LED us to .

proxy contest. And this is where the the engine starts turning to to figure out how this contest can be won. So what's involved? tears.

We had to one come up with a group of directors who would be willing to step into a battle. And we didn't want a bunch of new york directors or even american directors. We want to canadians.

The problem, this was the most economic company, canada. And we wanted to hy profile people. So we talk to all the hyperfine people on canada.

Every one of them would say, bill, you're entirely right. This thing is the worst right needs to be fixed. But you know, I see john the club.

I see him at the toronto club. I can know I can't do this, but you're totally right. And, uh, we had to and that was the concern because you have to file your materials by a certain day.

You've got to put together at a slate. We needed a big slake as we knew that we had to replace basically all the directors. And then when I spoke to a guy who was one of the wealthy guys in canada who was on the board at one point time, and he said, have an idea for you.

Is this woman rebeca icc out once you give her call? And I called Rebecca, and he was the first woman to take a company public in canada. C.

E. O. And SHE was that kind of anti establishment, not afraid to take on anything kind of person.

And I called her where a great conversation. And SHE, he is in the american republic at her house. And I flew down to see her.

And he said, yeah, i'm all in. And actually, once we got her, that enables us to get others. And then we put together our slate and we had some pretty interesting dialogue with the company. They tried to embarrassed us all the time in the press.

public.

They would. At one point I wrote at emAiling lukitch come to peace on this thing, but we don't you're really forcing my hand. And we're going to have to rent the largest hall in toronto and invite all the shareholders and can be arrases sing for management.

And I I made reference to some nuclear winter. Let's not have nuclear winter. And they thought the'd embarrassed me by releasing the email.

But we only inspired us. And we rented largest hall in canada, and we put up a presentation walking through, you know, he's staying national. Here's can pacific, here's what they said, here's what they did.

And we had hundred get up, was this incredibly charismatic guy from time to see a an amazing you is like a lion, credibly deep voice, unbelievable track record, incredibly respect of guy is like getting Michael Jordan to come out of retirement in comment on the company. And he hunter was incredible. And other polio, other members of my team were super engaged.

And the board canadians are known to be nice. So one of the problems we had is shareholder would never tell management where the board that they were losing, but was not until the night before the meaning when the vote came in, they manualize, they they lost. We got ninety nine percent of about and they they offered us a deal when they begged us to take a deal.

Is that look, well, resign tonight. So we have to come to the meeting tomorrow. I T how embarrassing were that? That was kind of interesting one.

So for involved this proxy battle and the company itself, this is one of your more successful investments.

I think stocks up about ten times. And is an industrial companies a railroad? It's not like a growth, like not google. Um so it's a great story and the comes is now run. But I got him keep cruel.

And Keith, uh, IT was hundreds to and in so many ways is actually Better than hundred, is doing incredible job and work. And the sad party here is we made we did very well triple our money over several years. And then I went through a very chAllenging period because of couple bad investments.

And we had to sell our cana pacific to pay to raise capital, to pay for investors who were who were leaving. But we had another opportunity to buy back what last last couple of years. And so we were now, again, a major under the company. But had we held on original stock, IT would have been epic, if you will.

So on this one, you are right. yes. And I I read an article about you. There's many articles about, I read an article that said, bill is often right, but you approach with a scorched earth approach that can often do more, so can do damage.

I haven't read the often right article, but the good news is we are often right nice way because we're a team, a small team but but but a fortunate, very successful one know so. Are batting average as investors is extremely high. And the good news is our records totally public.

You can see everything we've ver done, but the press doesn't rely generally write about the success stories. They write about the failures. And so we've had some epic failures, you know big losses.

A good news is they've been a tiny minority of the cases. No, no one likes to lose money. It's even worse to lose other people's money. And i've done that. The good news is if you stuck with us, you have done very well, you know, over a long time .

on a small tension. Were talking about boards. Did you get a chance to see what happened with the opening eyes board? I'm talking the same element soon. Is there any insight you have? Just maybe lessons you draw from this, these kinds of advance, especially with the area technology company, is such a dramatic things happening?

Yeah, that was incredible story. The governance really matters. And the governance structure of opp, I I think leave something to be desired. You know, I think sams point was this.

And maybe musk on musty originally set up as a nonprofit and reminds me, actually, I invested in a non profit run by a former facebook founder who's going to create a facebook like entity for nonprofits to promote goodness in the world. And the problem was he couldn't hire the town he wanted because he couldn't grand stock options. He couldn't pay market salaries um and ultimately to be ended up hands up selling the business to a four profit.

So IT taught me four profit relations to problems are much Better than nonprofits. And here you had kind of a blends, right? IT was set up as a nonprofit, but I think they found the same thing. They couldn't hire the town they wanted without having a four proper subsidiary. But the non profit entity, as I understand that owns or A A big chunk of open eye and the investor is owe sort of a capped interest with their upside is capped ah and they don't have representation on the board. And I think that said, you know was a set up for a problem and that's clearly what happened here.

And there's, I guess, some kind of complexity in the governance because of this not profit and cap profit thing IT seems like there's a much of complexity and um nonstandard aspects to IT .

that perhaps also contribute .

to the problem.

Yeah the governance really matters. Boards of directors really matter um keeps the shareholders is the right to have input at least once a year on the structure of the governance of companies is is really important and private adventure backboards are also not ideal in active investor and ventures.

And there there some more complicated issues that emerged in private as the adventure stage companies where poor members have somewhat divergent incentives from you have the long term mothers of business know what you see a lot in venture boards is they were presided that web generally by venture capable investors who are big investors in the company. And IT often times it's more important to them to give the have the public perception that they are good directors so they get the next best deal right. If they get, you know, if they have a reputation for of taking on management to aggressively verbal, get out in the small community of founders and we'll miss the next google. And so that their interests are not just in that particular company, that's also one of the problems. Again, IT all conspection in something .

can explain me the difference. Venture back like v and shareholders. So this means before the company .

goes public yeah so private venture back companies, the boards tend to be very small, could be a handful of the venture investors and management. They're often very rarely independent dr lectures. It's just not ideal structure. H, I see you want independent.

It's beneficial to .

have people who have an economic interest in the business and they care only about the success of that company as opposed to someone who you if you think about the venture business, getting into the best deals is more important than any one deal. And you see cases where you know the boards go along with, in some cent cases, bad behaviour in the part of management because they want a reputation for being kind of a founder friendly, a director. That's that's kind of problematic. You don't have the same issue in public company boards.

So we talked about some some of the big ones and you track record, but he said there was a big losses. So what's what's the biggest loss of clear.

biggest loss of my career? That company called vine pharma circle s, we made an investment of business that didn't meet our core principles in the problem, the pharmaceutical dusty and are many problems that I ve learned is it's a very voltige business, right? Based on drug discovery, uh, it's based on you know predicting the kind of future revenues of a drug before IT goes off.

Patterned um lots of complexities and we thought we had founded A A form company we could own because of a very unusual founder in the way he promises business. Um we IT was a company where another activist was on the board, actors the company and kind of governing overseeing the daily decisions. And we end up making a past investment.

The company and up to this point time really didn't make past investments and the company made a series of decisions that were disastrous and then we stepped to try to solve the problem, was first time I ever joined the board, and the mess was much larger than I realized the outside. And then I was kind of stuck. And IT was very much a confident, sensitive strategy because they they built their business by acquiring pharmacy al assets, and they often issued stock when they acquired a targets.

And so once the market lost confidence in management, the stock Price got crushed and impair their ability to continue to acquire low costs. You know, drugs. And we lost four billion hours.

four billion hours.

How's that for a big watch that's up there .

square this whole conversation, both the winds in the losses and the stakes involved .

and Better way that that lost catalyzed other when I called market market losses. So very high profile, huge number, disastrous press. Then people said, okay, bills going to go out business.

So we're going na bet against everything he's doing. And we know this entire portfolio. We only on to ten things and we are sure to come to called urban life.

Um very famously, we've only really shorted two companies. The first one there's a book, the second one there's a movie. We're no longer short companies, but some people pushed up the Price of verbal life, which is when you're a short salary.

That's catastrophic. I can explain that. And then they also shorted the other stocks that beyond. And so that violent loss LED to an overall within thirty percent loss in the value of portfolio.

The violent loss was real and was Crystalized we and selling the position, taking that laws. Most of the other losses were when we call market, market losses that were temporary. But many people go out of business because, as I mention before, large move in a Price that investors are redeeming or you have leverage can put you out of business. And if if people assume if we got put out a business, we have to sell everything or cover our short position and that would make the losses even worse. So all trees are kind of ruthless.

so they can make money off the whole thing. absolutely. So they used the opportunity of value me to try to destroy you, yes, reputation, financially, and and capitalize, yes.

Make money off that, yes. Well, that's a terrifying was spot to be in. Well, what was the like going .

to that pretty grim IT was it's actually much worse than that because I heads a lot of stuff going on personally as well. So in these things tend to be correlated.

The valiant mistake came at a time where I was contempt my marriage ah and I was also know the problem with the hatch on business as when you get to a certain scale, the C E O becomes like the chief marketing officer of the business, not really an investor as opposed to a marketing guy. But when you have investors who give you a few hundred billion dollars, they want to see you, you know, once a year. But i'd love to see you for hour.

But if you got a couple hundred of those, you find yourself on a plane to middle east, to asia, flying around the country. This is presume, uh, and h that takes you away from the investment process. Have to delegate more.

That was a contributor to the violent mistake. So now we lose a tony money on violent. My x wife and I were, you're talking about separating, getting divorce.

I put them on hold. I didn't want to make decision in middle this crisis and things just kick getting worse. We are also sued when you lose a lot of money.

We didn't get to buy our investors, but we have got sued by a shareholder because when the stock Price goes down, shareholders we'd done nothing wrong rather to make a big mistake but you know so you have litigation um your investors are taking their money out. Um i'm the middle of divorce. The divorce starts to proceed.

My my x wife floyd's expectations of what my network was about three times what I actually was. And IT was going on lower in middle this and I I remember the lawyer saying, look, bill, you know, we investigate your network that at x but don't really, we only want a third, but x was three x. So what third was twenty percent and and then we had idea tigers, and actually never before public icy disclosed.

And i'll share IT with you now we had A A public company that owned about a third of our portfolio that was called our version of birch hathaway. I tried to know, learn from mister buffett over time, and I was, so to speak, permanent capital. The beauty of prompt hedge funds that people can take their money out of the quarter.

Um what buffet has is a company where people want to take the money out, they sell the stock with the money stays. So we set the similar struction october two thousand fifteen and then a year later, value happens and then a year later in the middle, the mess and we're still in the mess, you know like my kind of mid two thousand and seventeen, we ve got litigation under way. A N, A.

Another activist investor, a firm called l associates, which is run by gulls singer, took a big position in our public company that was the bulk of our capital, and they shorted all the stocks that we owned. And they went long. The short profit went long, the short that we were short, and they were making about that we'd be forced liquidation.

And then they would make money on our public company was treating at a discount what all the security were. So they bought the, they bought the public company, they shorted the securities. And then they, you know, came to see us and to try to be activists and forces to liquid date and that.

So I thought this .

was going to be, I vision an end where the divorce takes all my resources, the permanent capital vehicle ends up getting liquidated, and another activist in my industry puts me at a business. And I had met mary oxygen right around this time, and I followed completely in love with her. And I was envisioning a world where I was bankrupt.

A judge found guilty of whatever, you know, he sends me off to jail, not that judge, because he was a civil judge. But another judge sues the S. C.

The partner of justice. And I find myself in this incredible mess, and I decided I didn't want things to end that way. So I did something I never done before. I talked all but you don't borrow money, I borrow the money and I borrow red three hundred million dollars from jpMorgan in the middle this mess.

And I give jpMorgan enormous credit and seeing through IT um and also I ve been A A good time over a long party time and it's like a you know the handshake bank and they bet that I would succeed and I took that money to buy enough stock in my public company that could prevent an activist from taking over and effectively by control of our little public company and I got that done and that I knew was the moment the turning point. And um I resolve my divorce and divorces get easier to resolve and things are going badly, are able to resolve that. We set a little litigation, was buying blocks of our stock in the market I member day bought a big blocks of stock in the market and get a call from gordon singer who is pulsing her son who runs their london part of their business.

It's like, bill, was that you buy in the block? I said yes. He said fuck. So he knew, he knew that once I got that, they were not going to be able to succeed and they went away and that that was the bottom. And I I we've had an incredible run since then and there able to .

protect your reputation from the variant a failure still. I mean.

you know this is a business we can make some mistakes. IT was a big one. IT was very reputational damaging. Uh the press was a total disaster. Um but i'm not a quitter.

And actually the key moments for us, we've never taken our core investment principles and actually really written them down, something we talked about IT meetings after, you know, kind of our investment teaching ings. I had remember the team. I said, look, go find a big pizza granet and a chizzle.

And let's take those core principles. I want them like moses is ten, we're going to use them. Then we going to put IT up on the wall.

And once we produce those, we put one on everyone s desk. I said, look, if we ever again via from the core principles and that they've a baseball bat, yeah and that was the bottom. And ever since then, we've done we've had the best six years in .

history for him to refocus on the fundament that love .

helps the story.

Love helps. I'd literally made .

narrow the apps the bottom of first state with september seven, two thousand seventeen, that was very close to the bomb, actually one other element to the story. So this one on for a few months after the matter. The other element is that one day, get a cordiner, just like bill, guess what? And I want red pit is coming to the media if he wants to see my work. I like that beautiful sweet art I don't know grandpa was interested in in your work .

as a man is a difficult phone call to take .

and apparently he's really interested architecture okay um now nearly I were like, you know we would watch up all day, every day. We talked throughout the day, uh, brad pitt shows up the middle at ten o'clock. I know talk ture in the morning going to texture to see how things are going.

Don't hear back and WhatsApp you can see like whether the other person's reit or not. Ah yeah, no response. Yeah, couple hours later than the text.

No response. Six o'clock, no response. Eight o'clock, no response. Ten o'clock, no response. And you know yeah, you finally calls me ten thirty, tells me how great so I had this thing, okay, i'm going to judge, is going to find me, were going to lose to the judge. All my access will disappear, and then brad pitt can take my golf end.

Pds, your competition.

This is great. So like a moment, and that was sort of the bottom. And then know the motivational, the thing, I don't want to lose. Some activists didn't want to lose my girl too. Similar guy.

So brad pitt, and you emerge from all that, the winner on all fronts.

I'm a very fortunate guy, very fortunate.

Lucky you talked about some of the technical lass because that psycho logically is there I really doing at night by yourself that was a hard time.

hard time because I was separated my wife and my kids um I was living in you know not the greatest department, uh you know had a beautiful home until I had to go find like a place and I was I really want to be away for my kids. I I moved like ten blocks away and I wasn't seeing them and they didn't like IT.

So and a buying an apartment I didn't like in the same building as my kids, like with a different, different entrance, so I could be near them and I was home alone. I ve got to talk. That was A A bbar come the bar that not the elephant is a black lever, dude.

He was supposed to be a many but he's not as many um but I got them at six weeks old and he would keep me company and I started meditating actually uh and a friend recommended A T M. And I would mediate twenty minutes in the morning, twenty years in the evening. And I also big believer exercise and you weight lifting in a play tennis and I had been, this is not my first, you know, proximity to disaster.

I had another moment, uh, my career like, you know, two thousand two and I learned this method for dealing with these kind of moments, which is you just make a little progress every day. So today i'm going to wake up and can make progress, make progress in litigation, make progress in the portfolio, make progress with my life. And progress compounds, a bit like money compounds.

You don't see a lot of progress in the first few weeks, but like thirty days and like, oh, okay, you you can't look up at the mountain top where used to be because then you you will give up, right? But you just OK just make step by step by step up and then ninety days and you're like, okay, I was wait down there OK OK. I look, just keep making, you know, progress, progress, progress.

And progress really does compound. And and one day you wake up like, ow, it's amazing how far outcome. And if you look at a chart of purchasing square, our company, you know, you can see the abpi ode bottom, you can see where we were, you can see the drop, and you can see where we are now. And that huge drop that felt like a complete unbeliever disaster looks like a little bump on the curve. And IT IT really gives you perspective on these things you just have to power through.

And I think the key is, know I always been fortunate, like from a mental health point of view and nutrition, sleep, exercise and a little progress every day very that's IT and you know good friends and family you know I had you go take a walk with a friend every night um you know a sister loves me and parents who are supportive but they were you know they are all worried about their son their rather you know IT was a moment and also by the way, the other thing to think about is when you recover from something like this you really appreciated you know and and also the. You, as much of the the media loves, okay, when some successful person falls, you'd love writing the story of success. They love you more, the story of failure.

But when you recover from that, it's kind of like the american story, right? America, do you think of the great entrepreneurs and how many failures they had before they succeeded? You know how many rocket launches, spaces, s have exploded on the pad, right? And then you look at success. I M, that's why mosques so admired.

You mentioned an urban life. Can you take me through the saga of that? It's historic.

So we at person square um short of versus stocks and the reason for that a short selling is just inherently tretton ous. So if you buy a stock is called going long, right? You're buying something your worst case in area, you lose your whole investment.

But I stock for hundred because this zero hundred hours right per share by one year to one hundred, you sure to stop at one hundred what that means as you borrow the security from someone else. The analogy I I gave a mitted easy people understand. It's a bit like you think no silver coins are going to go down and value and the other friend has got a whole pile of these eight, eight silver, silver U.

S. dollars. And you can go down about, you say, hey, can I borrow, you know, ten of those dollars from you? He's like, sure, but what are you going to pay me to bar? I'll pay, you know, pay interest on your, on the value of doors today.

So you borrow the dollars that are worth a hundred dollars each today. You pay in interest while you're boring them. And then you go sell in the market for hundred dollars, that's what they worth.

And then they go down in Price to fifty. You go back in, you buy the silver dollars back of fifty dollars, and you get back to your friend. Your friend is fine, about ten, given the ten back, and he got interest.

In the meantime, he's happy. Made money on coin collection. You would, however, made fifty dollars times the ten coins. You made five or bucks. That's pretty good.

The problem with that is what if you sell them and they go from hundred two thousand now you have to go buy them back and you got ta pay, you know whatever, uh, ten thousand dollars to buy black coins, you know that you sold for five hundred, you can lose ninety five hundred dollars and there is no limit right, to how highest stock Price can go. Companies go to three trillion dollars in value, right? Tesla, a lot of people shorter test la, saying, oh, it's over value, is never been able to make a successful electric car.

Well, i'm sure there are people went bankrupt ing tesler. That's why we, in short, stocks. But I was presented with this actually reporter that covered the other short investment we made early in the crew or company called M, B.

A, came to mean, said bill, I found this incredible company. Got to take a look at IT. It's a total fruit and they're scams.

Poor people said that N B, I A was a very successful short IT.

Big part of IT was that we use a different kind of instrument to short of where you we reverse that sort of. We made the investment isometric in our favor, meaning put up a small money of money that works to make a fortune where short selling is you can sell something enough to buy back at a higher Price.

Urban life didn't have the what's called credit, the false wap that you could purchase, not a big enough company, didn't have enough dead outstanding to be able to implement. You had to short the stock in order to make IT as successful to bet against the company. And the more work I did in the company, the more is like, oh my god, the things, an incredible scam.

They report to sell weight loss shakes, but in reality, they're selling, you know, kind of a fake business plan. And the people that adopted lose money. And they they go after poor people.

They go after actually, in many cases, undocumented immigrants who were pitched on the american dream opportunity. And because they have few other options because they can get legal employment, they become real. Left distributors.

And it's a business where you so call multi level marketing here, multiple of market the the name for a legitimate company like this or it's a premise game where basically your sales are really only coming from people who are you convince ed the by the product by getting them to the business. That's precisely what this company is. And O, K, shorting appearance scheme seems like one will make a bunch of money, but you know too, the world will be behind us because they're harming poor people.

Know regulators will get interested in the company like this. And we thought the fc is going to shot this thing out. And we did a tour of work, and I gave this sort of epic presentation, laying out all the facts stock a completely crushed.

And we were on our way and the government actually got interested early on, launch an investigation pretty early as you see another otherwise um but then a gun in coral L I C T showed up and there's we have a little bit of a back story. But his motivations, who were not really principle driven by thinking urban life was a good company. He thought he was a good way to, uh, heard me. So he he basically thought a bunch of dog and instead he was a really great company and know or at the time through his wait around a bit, I was a credible investor, had a lot of resources and um that the began the sock so .

he was what to say. A legendary investor himself.

It's a legendary an sense yes, for sure an iconic, iconic coral icon that's very well. That's finicking ic investor.

So what is the back story between the two of you?

So um I mentioned that I had another period time were significantly at business chAllenges. This was my first fun call, gotham partners. And we had a court stop, a transaction between some private a private company we owned in a public company. It's another long story if you want.

I would love. I would love to hear as well.

But I was was really my deciding to wind up my former fund. And we owned a big stake and a company called holds reality partners, which was a company to on real state assets. IT was worth a lot more than worth trading, but IT needed an activist to really unlock the volume.

And we were fact of going out a business and didn't have the time or the resources to pursue IT. So I sold IT to coral icon, but and I sold a too many a premium to where the stock was trading. I think the stock was like sixty six.

I told them for eighty, but IT was worth about one hundred and fifty. And I said, look, and part of the deal was cars like lock to be smut insurance. No, i've make you sure you don't look bad.

And I had another deal at a higher Price without smoke. What a deal of cal lower press wishing insurance and the way this my insurance went to look. But if I sell the stock in the next three years, you know, for a higher Price, i'll give fifty percent of my profit.

That's very good deal. We made that deal. And because I was dealing with curl icon, who had a reputation for, you know, being difficult, you know, very focused on agreement, and we don't want him to be able to be cute, the agreement said.

If we sell, if he sells or otherwise transfers his shares, we came up with the definition include every version of sale. Okay, it's coral. Uh, well, he then uh, buys the stake and that makes a bit for the company.

And you plan us for him to get the company and he bids like one hundred and twenty and share and the company highs Morgan standing to sell itself and he raises bid to one twenty five in one thirty eventually get sold and remember the exact Price, let's say hundred and forty five dollars year and carls not the winning bitter and he sales of stock or he loses or transfers. He shares hundred and forty five dogs who share. So he owes actually our investors that differently one forty five and eighty five, fifty percent.

And I had, like, lawyers never like you to put like a thread example, I put a formula like out of a math book in in the documents, so there can be no confusion. There was only in eight page, really simple agreement. So the deal closes.

And he posed to pay us in two business days, or three business days, a wait, a few business days, no money comes in. I called car, my car. Congratulations on on the Howard realty.

Thanks, bill. As a god, just only remind you, I know it's been a few years, but um you know you we have disagreements. Ment, remember the smart t concerns.

So yeah I said, well, you OS are smart. Ture, this is what you mean. I didn't know my shares. I said, do you still have the shares? He is no.

As what happened to them? Well, the company did emerge for cash, and they took away my shirt, but I didn't sell them. You understand what happens. So had I cragg have to see you so sume, i'm going to sue you. So I suit him and the legal system in amErica takes context, time.

And what he would do is we suit and we won and whatever new ork supreme court uh and then he peeled and you can appeal like six months after the case, we had waited two hundred and every nine day, and then he would appeal. And then we fought the next level and then he would appeal. Appeal always been court course.

This being court. We can take the case. IT took years. Now we had is part of our agreement.

We've got nine percent interest on the money that he owed us. So I have views as my cal icon money market account with a much higher interest state. And eventually I won.

What was the just tiny?

Now, IT was material to my investors. So my first fun, I wanted IT down, but I wanted to maximum ze everything for my investors, right? These are the people back me at twenty six years old as right out of business school and no experience, and they supported me.

So i'm going to go to the end of the earth for them. Uh, and four, five million relative to our our fund at the end was maybe four hundred million. So IT was in a huge number, but IT was a big percentage of what was left after I sold all our liquid security.

So I was fighting for IT. So we ve got four, five million plus interest for eight years or something. That's a long validation talk.

So we got about double. So he hold me in nine million dollars, which to crown icon had probably a twenty billion door networks at the time. This was nothing but to me it's like, what is my investor's money?

I'm going to get IT back um and so you know, eventually one eventually he paid and then he called me, is a bill. congratulations. Now we can be friends. We can make, invest, do some investing together and my carl thought .

you you actually said.

fuck you yes i'm not that kind of person generally but um you know he made eight years to pay me, not me, even me my investor is money of the old and so I yeah so he pride in like that so we kind of hung around in the weeds, waiting for an opportunity. And then from there, you know, started pushing. We had to kind of a straight line up in the first twelve years.

We could do nothing wrong than violent or life, right? He sees an opportunity and buys the stock and figures. You gonna run me off the road.

And so that was the beginning of that. And kind of the moment a, and I think told by asy. MBC is the most watched segment in business television history.

Their interview me about the early life investment on C, M, B, C and then coral icon calls into the show. And we have kind of an interesting conversation where he calls malkin's the names and stuff. So it's IT was a moment. IT was a moment my life .

IT was in public information that he was long on our life. He didn't .

yet disclosed he had a stake. Yeah, but he was just telling me how stupid I was to be sure this company.

So for him, IT wasn't bout the fundamental of the company. He was about to just .

personal .

is part of you that regrets saying fuck you on the phone call the car I can no.

I gently just have no regrets um because i'm very happy with where I am now and I feel like you know a bit like you step on the butterfly in the forest and the world changes because every action has a reaction you know you're happy with who you are, where you are in life, every decision you you made good or bad over the course your life got you to processing. We are, I won't change anything.

He said he lost money on urban life. So what he did, the long term battle.

what he did, he he got on the board of the company and use the company's financial resources, plus his stake in the business to squeeze eze us. And a square ze and short selling is where you restrict the supply, the securities so that there's a scarcity and then you encourage people buy the stock and you drive the stock up.

And as explained before, you short those coins that ten they go to hundred, you can lose theoretically ally and unlimited amount money. And that scary. That's why we don't short stocks. That's why in short stocks before this. But this was, unfortunately, had to have the personal lesson.

So how much was for him personal versus part of sort of the game of investing?

Well, he thought he could make money doing this. He wouldn't have done that if yet. Otherwise, he thought his bully pulpit, his ability to create a short squeeze control over the company would enable him to achieve this.

Uh, and he made a billion. We lost a billion. So you think he was a financial .

decision to personal, he was a personal decision to pursue IT.

But he was a waiting for an opportunity where he can make money or expense was kind of a brilliant opportunity. Now, the irony is, well, first, while the ftc found a few interesting facts, a one, the government launched investigation, they ended up settling with the company, and the company paid two hundred and twenty million dollars in fines.

I met a professor from a couple years ago who told me that he had been hired by the government as their expert on urban life, and he got access to other data, was able to prove that their appear scheme. But the government ultimately settled with her because they were afraid they could. They could pass with those in court. They settle with him. But if you look at the stock, if we been able to stay short the entire time, we would have made a lunch money, has stock at a six billion bar market cap we shot today is probably a billion billion a half.

So you left the whatever .

cover we we covered urban life. That was the resetting moment for the firm, because I would just psychologically know the beauty of investing is you don't need to make IT back the way you lost IT, right? You can just take your loss, but losses are valuable that the government allows you to take a tax loss that can shelter other gains. And we just refocused.

Can you say one thing you really like about car like on, and one thing you really don't like a bottom?

So he's very charming guy. So in the mist of all this, a at the Howard warning, he took over to his favourite italian restaurant, really? Yeah, when in middle litigation to see if you resolve IT and you offered ten million of my favorite ity.

Uh the problem was that I wasn't my money, was my investor's money. So I couldn't tell with him on that basis a but um you know I had the chance to spend real time with them a dinner. He's funny, his charismatic got incredible stories um and you know, actually I made peace with them over time.

We had a little hugged out on C, N, B, C. Even had him to my house, believe we were not. I host today something called the finance cup, which is a tennis tournament between people and finance and europe in the us. And we had the the event of my house and one guy thought to invite car icon and we had car icon on there to present awards and again, have to say kind of like the guy. So um but was I didn't like a match during this is there because .

at least from the outside of perspective, there's a bit of a personal vengeance here. Or anger can build up, they never worry. The personal attacks between powerful investors can cloud ge a judgment. What is the right financial decision?

I think it's possible. But again, I try to be extremely economically rational. And actually the last seven years been quite peaceful. I really have not been a an activist and the old a form for many years. And the vast majority of even interactive investments historically were very polyte respectful cases.

The press, of course, focuses on the the more interesting ones, like the lab is one the best investor were made, uh, we've we ve got four of eight board seats and we've worked with management. There was a great outcome. I have ever been a story about IT and the stocks up almost ten times from the time we hired brian nickel, C E.

O. But it's not interesting because there was a no battle. Where is urban life, of course, was like an epic battle even can any pacific. So you know for a period there, most people when they meet me in persons like but you seem like a really nice guy. So but things have been pretty compute last year, ten years.

Of course, there is more than just the investing that your life is about, especially recently.

Let me just .

ask about what's going on in the world. First of what was your reaction and what is your reaction thoughts, uh, with respect to the october seventh attacks by hamson israel?

It's a sad world that we live in, that one we have terrorists into that we could have, uh, such barbaric terrorism. And yeah, just a remainder of that.

So there are several things I can ask her. First on the reviews, on the the prospect of the middle st, but also on the reaction to this war and in the states, especially on university campuses. So first time you just ask, you've said that your propels, ian, he explained with me by that.

you know, with all of my posts about israel, obviously very supportive of the country, israel, israel's right to exist, israel's right to defend itself, my arb friends, my palestinian friends, you, we're kind of think, hey, bill, where are you know, what about palestinian lives? And I was pretty early in my life. Guiding mari parrots has been important to me over the course.

My life professor, first investor in my friend, introduced me to every uh, asked me when I read at school to join this, a nonprofit called the gruesome foundation, which was of a terrible foundation that supported teddy collection. I was mayor of jersey m and are becoming the Youngest chairman of dressing foundation in my thirties and I spent some time in israel and uh the early film anthropic stuff I did ah with the dress foundation I would think was most interested in was was of the palestinian the plight of the palestinian and kind of peaceful coexistence. And so I had kind of an early of perspective and know chairman and just in foundation, I would go into you know, arb communities.

I would meet the families in their homes. You know you get a sense of the the humanity of of a people and a care about humanity. I generally take the side of people who been disadvantaged, almost all of our philanthropic work.

I has been in that capacity. So I sort of my natural perspective, but I don't take the size of terrorist ever, obviously. And the whole thing is just the tragedy that to you.

this is about how about side?

yes. I mean, the problem of course is when a mosque controls for the last almost twenty years has control gaza, including the education system they're educating you know you see these you know training videos of kindergarteners uh in doctorate them into heating jews and israel um so of course you don't like to see a palti ian celebrating some of those early videos of october seventh th know dead bodies in the back of trucks and people cheering so it's it's a really unfortunate situation.

But you know I think about a palestinian life is important as valuable as a jew's life, as a american life. And you know what do people really want? They want a place.

They want a home. They won't will see the family. They want a job, uh, that generates the resources to feed their family.

They want their kids to have a Better life and they have had a they want peace. I think these are basic human things. I'm sure the vast majority of palestinian share these views. Uh, but it's such a ebearhard situation with hatred and as I say, indoctrination and then you know going back to incentives, your terrorists generate their resources, my committing terrorism and that's how they get funding um and that was a lot of graph in other is a plutocracy, right?

The top of the terrorist permit, if you accept the numbers that are in the press, the top leaders, you know, have billions of dollars and forty billion or so was gone into gaza with the last and the west bank of the last thirty years, a number like that. And a lot of its disappeared into some combination corruption or tunnels or weapons. And the tragedy is, you know, you look at what singapore achieved in the last thirty years, right?

Do you think that's still possible if we look into the future of ten, twenty, fifty years 什么的？ Absolutely do. Not just peace.

but peace comes with prosperity. You know people are you know under the leadership of terrorists that you're not going to have prosperity and you're not going to peace and I think the israelis withdrew in two thousand five and fairly quickly homos to control the situation that that should never been allowed to happen.

Um and I think you know if you think about I have the opportunity to spend a called an hour with a handle ger few months before we passed away and we were talking about gaza, the early stage of the worries that look, this is not uh you can think about gaza as the as a test of a two state solution not looking good these were his words so the next time round in the house, any people should have their own state. But I can be a state where forty billion resources goes in and I spent on weapon and missile and rock is going into israel. And I do think a consortium of the gulf states of the saudi and others have to ultimately oversee the governance of this region. If I think if that can happen, I think you can have peace, you can have prosperity um and you fundamentally and optimistic .

so a coalition of uh governance governance matters.

You know going back to we talked .

about before and you know that that kind of approach can give the people a chance to a surge.

Look at what do I has accomplished with, you know, no matter in a desert, right? And that's become a major. It's a tourist destination. Goza could have been a tourist destination.

But take me through the saga of university presidents testifying on this topic, on the topic of protest on college campuses, protests that call for the genocide of jews, h people and the university presidents of, if you can describe IT more precisely, but they failed to denounce the calls for genocide.

So IT begins on october eighth, probably. And you know, you can do a comparing contrast with how dark Smith managed the events of october seventh in the aftermath and how harvard did, and october eighth or shortly there after you, the dark mh president, who had been in her job for precisely to the same number of months the harvard presidents had been in her job.

The first thing he did is he got the most important professors of middle of studies. He were arb and he were juice and convey them, and held a, you know, an open session, Q, N, A, for students to talk about what's going on the midwest, and began an opportunity for common understanding among the student body. And dark ma has been a relatively benee environment on this issue.

Uh, and students are able to do work. And there are aren't disrupted protests with people with bullhorns walking into classrooms interfering with you. People pay today eighty two thousand dollars a year, which itself is crazy to go to harvard.

But imagine your family borrows the money, or you borrow the money as a student, and your learning is disrupted by a constant protest. And the university does nothing know. When George floy died, harvard president wrote a very strong letter denouncing what to taking place, and, you know, calling this an important moment, american history, and took IT incredibly seriously.

Her first letter about october seventh was not that, let's put IT that way. And then her second letter was not that and that, ultimately, you know, he was sort forced by the board or pressure to make a more public statement, but IT was clear that was hard for her to come to an understanding of of this terrorist act. And then the protests erupted on campus, and they started out reasoning behind.

And then the protesters got more and more aggressive in terms of violent university rules on things like bullying, and the university do nothing. And that, obviously, for the jewish dents, the israeli students, the israel faculty, jewish faculty create an incredibly uncomfortable vironment. And the present seemed different.

And, you know, I went up to campus and I met with hundreds of students in small groups and larger groups, and they like, bill, why is? Why is present doing nothing? Was administration doing nothing? And that was really the beginning.

And that I reached out to the president, reached out to the the board of harvard. I, to look at this thing, is head in the wrong direction, and you need to fix IT. And I have some ideas love to share. And I got the hype men, as they say, you know, they just kept pushing off the opportunity to meet with the president, meet with the board and a certain point time I pushed, i'm kind of a activists when he pushed me IT reminded me of, you know, early days of activism where I couldn't get the C E O of windsor turned my call.

I going to get the C O, C E O of harvard you know to take a meeting um and then finally I spoke to the chairman of the board woman penny print gr I know knew from one of business school aboard with her and I was I described one more disapointment versac of my life and I did not seem SHE seemed a bit like, if you will deal in the headlights they they couldn't do this. They couldn't do that. The law was preventing them from doing very few things.

And that LED to my first lbs. The university and I have ended the letter sort of giving this president harvard, there would be great speech, as is your opportunity. You know, you can fix this.

This could be your legacy. And I sent IT to the failed to the president and the board members. I whose email dresses ahead.

I posted IT on twitter. I got no response, no announcement, nothing. And in fact, the open dialogue ahead with a couple of people on the board basis could get shot down after that.

And that had to let her number two. And then and then when the congress LED by least deponent a announced investigation of anti cemented on campus. And concerned about violations of law, the president was called to testify along with the other, you know, the president of my t um you know, the president of the recipe pensylvania.

We're having similar issues on campus. I reached out to the president of harvard and said, well, want the israeli government had got in, touched and offered the opportunity for me to see the hamas, if you will, go to film. And I said, you know what i'd love to show at harvard and thought that would be great idea. And so I partner with the head of hard ababa, going in right by her shy.

And we were putting the film up on campus, and I thought, you know, if the president were to see this, he would give her a lot of perspective on what happened, and you should see IT before her testimony and so I reach out to her or actually her he did and IT was all you would be out of town and couldn't see IT um and then I reach ued to her again, said look out of facilitate your attendance in in the congress you know, come see the film I fly IT down that was rejected. And then SHE testified. And I watched a good percent of ge, eighty percent of the testimony, three presidents and IT was and embarrassed to the country, embarrassed to the universities.

And they were invasive. They didn't answer questions. They were rude.

They smart. yeah. They look very, very disrespectful to to our congress. And and then, of course, there was that several minutes were finally, at least to finit with not getting answers to your questions.

And he said, you know, let me be, you know, a click. What if protesters were calling for genocide for the jews? Does that violate your rules on bullying, harassment and the three of them? This we gave the same answer.

no. IT depends on the context. And not until they actually executed on the genus, the university of the right to intervene. And the the thing that prep bother me the most was the incredible halcro y you know, a harvard know.

Each of these universities are ranked by this entity called fire, which is a nonprofit that focuses on free speech on campus. And harvard been in the bottle cortile the last five years and dropped the last before octo over seven. I i've like two hundred and fifty.

I should mention briefly that I ve interviewer this pocket the founder of fire and the current head fire. We discuss this some links um including running for the board of harvard in the whole procedure of all that is quite a fascinating investigation of free speech who for people who care about free speech absolutely not a good episode to listen to because those folks kind of fight for this idea is the difficult idea I actually to internalize what is free speech and college campuses look like harvard .

has become a place where free speeches is not tolerated on campus or at least free speech. That's not part of the accepted dialogue or the sole notion of speech codes and microprograms sions really emerged on the leak the harvard deal, uh, campuses of the world and you, the president of poverty, then present harvard explanation for why you could call for the genocide of the jew's people on campus was harvard commitment for expression.

And you know one of the more if a critical statements of all time, and you really can have IT both ways, either harder has to be a place where it's a free speech SHE basically said where a free speech absolutely place, which is why we have to low this. And harvard could not be further from that. And so that was A A big part of IT and I I was in the barber chair, if you will get a haircut and um I had a guy, my team, send me the three minute section. I said cut that line questioning and I put out of a little tweet on that and call my greatest hits of of of posts, got some one hundred and ten million views and and you know, everyone looked at this and said, what is wrong with university campuses and and their leadership and their governance, by the way, you know, the way this whole conversations been about governance. Harvard has a disastrous governance structure, which is why we have .

the problem we have. And just a linger on the testimony image, you know, smirks on this kind of self, I imagine, dare to be great. I myself kind of a soccer for a great leadership.

And those moments, imagine churchill or so on, even great speeches. People talk down on speeches like this, maybe just words, but I think speeches can define a culture and define a place, define the people that can inspire anything. Actually, the testimony before congress could have been an opportunity to redefine what harvard is, dare to be great for, dare to be a great leader.

Press of harvard had a huge opportunity because he went third, right? The first two gave the world's most disastrous answers to the question, and SHE literally just copied the answer, which itself, you know, kind of ironic in light of ultimately happened.

It's tough because you can get busy as a president, as a leader and so on. There's these meetings. So you think congress, maybe you're smoking at the ridiculous of the meeting.

You to remember that many of these are opportunities that give a speed of a lifetime like that. If there is principles, would you want to see a an institution become and embody in the next several decades? There's opportunities to do that. And you, as a great leader, also to sense when is the opportunity do that. And october cement really .

won up the .

world on all size. Honestly, like there is serious issue going on here and then the protests woke up the university. There's a serious issue going on here. It's an opportunity to speak on free speech and on genocide, both.

yes.

Do you see the criticism that you are a billionaire donor and you have missed your power in financial influence unfairly to affect the governing structure of harvard? In this case?

Person L, I did. I never threatened to use financial other resources. The only thing I did here was rote.

I wrote public letters. I spoke privately to a couple members of the board. I spoke for forty five minutes to the chairman. Now those conversations were effective or when, anywhere.

So as I could tell, I think my public letters and then some of the posts I do is ah and that that little three minute video excerpt had an impact but IT wasn't about I mean, you can criticize me for being a billionaire but I had no was with the words it's a bit like again, going back to the corporate analogy, it's not the fact that you own five percent the company that causes people to vote in your favour. It's the fact that your ideas are right. And I think I was disappointed.

After the congressional testimony, the board of harvard said that there were hundred percent behind unanimously percent behind present gay. And so clearly I was an effective and ultimate would, took her down, was a other, I would say, activists who identified issues with economic contiguity and then SHE lost the confidence of the faculty. And once that happens, it's hard to stay. And I wanted her to be fired basically or before to resign because of failures of leadership, because that would have sent a message about the importance leadership failure to stop the emergence of enticement is among campus. And know there's some news today, the protester getting worse.

Is there some tension between free speech and called campuses and disciplining students for cause of genocide?

Yes, there is certain inattention. And I think first of all um I think free speeches incorrectly important and i'm on the side i'm a luck closer to absolute is among free speech than otherwise the issue I had was the hypocras y right they were restricting other kinds of speech uh, on campus principle, conservative speech, conservative views um so IT wasn't a free speech absolutist campus and the protests were actually quite threatening to students.

And there are limits, even absolutists, free speech. And they begin where people feel you in intimidation, harassment and you know threat to bodily harm eeta. You know that kind of speech is generally ah I think pretty technical uh but as people fill that there are an imminent harm by virtue of the protest, that speech is at risk of not meeting the standards for free speech. But harvard is a private corporation, and as a private corporation, they can put on what restrictions they want. And harvard had to introduced only a few months before bullying and harassment policies.

And that's why definite focused on or does this it's not like you said, it's calling for genocide te against the juice violate your free speech policy SHE says it's calling for genocide against the juice, violate your policies on building harassment and I think everyone looked at this when they said, depends on the context and they said, look at these replaced jews with some other ethnic group students have been, who viewed the n word, for example, have been thrown off campus. We're suspended of students who have hate speech directed at A L B T Q people as LED to display action. But you know, attacking, spitting on jewish dents, or, you know, kind of roughing a map a bit a seemed like you know we're calling for the elimination didn't seem to violate the policy.

So it's you know look, I think a university should be a place where you have broad views and open viewpoints and broad discussion um but this should also be a placed where students don't feel threatened going to class whether learning is not interrupted when final exams are not interrupted by, you know, people coming in in with love protest students asked me when I was up there, what would you do if your Harry president I said and this was before I know what IT was happening on the daring campus. I said, I could. I convene everyone together.

This is harvard. We've access to the best minds in the world. Let's have a Better understanding of the history.

Let's understand the backdrop. Let's focus on solutions. Let's bring arb and jewish and israeli students together.

Let's form groups to create communication. That's how you solve this kind of problem. And none of that stuff has been done. It's not that hard.

Doing this reveals a deeper problem. Interns of ideology and the governance are harvard in maybe the culture. Harvard.

yes. So on governance, the government structure is a disaster. So the weight works today is harvard has two principal boards.

There's the board of the corporation that so called fellows of harden. It's a board of think twelve independent directors and the president. Um there's no shareholder vote there.

There's no proxy system. It's really a self perpetuating board that elects its effectively elects its own members. So there once that becomes once the baLances tips politically, one we are another you know IT can be camped that way forever.

There's no kind of rebalancing system know for us. Corporation goes off the rails. So as big the shareholders can get together and vote off the directors.

There's no ability to vote off the directors. Then there's the board of overseas just I think thirty two. directors.

And there are a few years ago, if you could put together six hundred and sures, you could run for that board and put up with bunch of candidates and about five or six get elected each year. And a group did exactly that. And IT was an oil and gas kind of disinvestment group.

Are they got the signatures a couple of i've got elected and uh harvard then changed the rules and they said, now we need thirty two hundred signature and and by the way, if if there are these distance directors on the board, we're only going allow, we're going to cap them at five. So three were elected in the oil, gas thing, not only two seats of people. And then a group of former students, kind of Younger alarms.

wonderful. My new approached me and said, look, bill, we should run for the board. And they decided this pretty light only a few weeks before the signals for you love your support took look at the platform.

I thought I looked great as to look happy to support. And I posted about them, know, did a zoo m with them, and they got thousands of signature, know, collectively, the four got, whatever, twelve thousand signature or something like this. And they missed by about ten percent, the threshold.

What did harvard do in middle the election? They made IT very, very difficult to sign up for a vote, and IT just makes them terrible. And theyve got now thousands of alarms upset that.

And again, this wasn't an election. This was just just to put the names on the slate. So the only candidates on the slate or the ones selected by the the existing members. And so it's businesses fail because of governance failures. Universities failed because of governance failure is not really the president's fault, because the job of the board is to fire, hire e and fire the president and help guide the institution, academic and others SE. So that governance an ideology.

I was like, how can this be october seventh? Event that woke me up was thirty student organza came out with a public letter and a cor eighth that literally the morning after this letter was created and said, israel is solely responsible for hamas's violent acts. Israel had not even mounted to defense at this point, and there are still terrorists running around in the south in part of israel. And like harvard students, you thirty four harvard student organization sign this letter.

And like, what is going on? No WTF, right? And that's when I went to put campus and I started talking the faculty and that's when I started hearing about actually builds its this D I ideology one I like a diversity equity inclusion obviously know with these words and and you know I see this in the corporate context they say ah and I started talking me about this oppressor or oppressed a framework which is effectively taught at on campus and represents the backdrop for many the courses that are offered in in the various some of the studies and other degree offerings.

I like I had not even heard of this and i'm pretty where a person, but I was completely unaware and and basically like, look, israel is deemed an impressor and the past students are deemed the impressed. And you take the side of the the oppressed and any acts of the oppressed to dislodge the oppressor regards this have have violent beric rok, and like, okay, this is a super dangerous ideology. And so I I wrote a like questioning post about this, my current hearing, you know, my, is this right?

Then I had someone, a friend of mine, sent me, Christopher, a roof host book, mirrors cultural revolution, which is sort of a sociological study of the origins of the D. I. Movement and critical race theory.

And I found IT actually one of the more important box i've read and also thought of, quite concerning. And really, it's sort of a ultimately idea. I comes out of a kind of a marxist, a socialist backdrop, way to look at the world. And so I think there are lot of issues with IT, but it's unfortunately advancing. I ultimately concluded, uh, racism, uh, as supposed to fighting IT, which is what I thought IT was ultimately about.

So maybe a dispute te that book a little bit. So there's a history that traced back across decades and then that infective college campuses.

So basically with roof o argues is that the black power movement sixties really failed. IT was a very violent movement and many of the protag us ended up in jail and out of that movement. A number of kind of thought leaders and the argues and others build this framework.

Kind of an approach before going to be successful can be a violent movement. Number one. And number two, we need to filtrate, if you will, the universities, and we need to become part of the faculty, and we need to teach the students. And then once we take over the universities with this ideology, then we can go into government, and then we can go into corporations, and we can change the world. So I thought, important book, and the more I dug in the, the more I felt there was credibility to this, not just the kind of the logical a backdrop, but to what I meant on campus and faculty.

Harvard fact were telling me that, you know, there is really is no such thing as free speech on campus, and that, you know, there was a survey done a year or so ago, the half faculty, and only two percent of the faculty admitted, even in an anonymous survey, admitted, to being having a conservative point of view. So we have a campus as ninety eight percent non conservative liberal progressive that's adopt at this D I construct and this and that I learned from a member of the search committee for the harvard president um that they were restricted looking at candidates, only those who met the D I offices criteria. And I shared this in one of my postings and I was accused of being racist um but and that's someone who believes in the diversity is is a very good thing for organizations and that equity affair is really important and the having an inclusive culture is critical you know for a function of organization so here I was someone who was like, okay, D I sounds good to me, at least standing small, the small, the uh I version of events, but this d ideology is really problematic.

So what's the way to fix this in the next few years? The infiltration of D I. With the upcast version of universities, and the things that have troubled you, the things you ve saw, harvard and elsewhere.

the same way this was an eye ending event for me. IT has been for a very broader range of other people. I've never gotten, I mentioned, general girl, I got a lot of nice letter from people for making money on a stock that one up a hundred times. But I literally yet hundreds of emails, letters, text, ten written letters, type letters from people, the ages of twenty five to eighty five, saying, bill, this is so important. Thanks for speaking out in this.

You are saying what, you know, so many of us believed that have been afraid to say it's bed zones of a carthy asc kind of movement, and that if you chAllenge the D, E, I construct, people accuse you being a racist, something to be already um you know i'm perhaps uh no a much less vulnerable than a university professor who can get shouted off campus cancelled. I'm sort of difficult to cancell um but that that mean you we're gonna try and you i've been the victim of a couple of interesting articles in the last few days, at least one in particular the washington post, written by what I thought was a well meaning reporter. But it's just clear that you know, i'm taken on some dig parts of at least the progressive establishment.

D I am also you know believe that biden should have step decide a long time ago and it's only getting worse. Um and i'm attacking the president. D I alete universities and you make some enemy. Mies is doing that.

But I should say I am still on my t and I, I love in mighty. And I believe in the power of great universities to a explore ideas, to inspire Young people to think, to be, to inspire Young people to lead.

Let me ask, okay, how can you explore how to think when you're only a lot shared a certain point of view, right? How can you learn about leadership when when the the governance and leadership the institution is, is broken and exposure to ideas if you're limited in the ideas that are supposed to? So I think universities at risk in the concerning thing right is if thirty four student organza that each have no thirty members are maybe more right than a thousand, that's a many foods end of the of the campus perhaps that ultimately respond now ten or so of the thirty with through the statement, once a many the members realized what they had written.

So I don't think IT seems like the statement was signed by the leadership and not nearly supported by all the various students that were, are, were members. But if the university teaches people these precepts, this is the next generation. You know, Normally if you think about, wrote my college theses and university emissions, the reason why controlling, you know, the gates of the harvard institution, the emissions of office, is important as many these people who graduate end up with, you know, the top jobs in government and and ultimately become judges.

The permeate through society. And so what what really matters, what they learn. And if if they are limited to a one side of the political le and they're not open to a broader way of abuse, and this represents some of the most leading institutions on our country, I think it's very problematic for the country long term.

Yeah, I one hundred percent agree. And I also felt .

like the leadership .

wasn't even part of the problem as much as they were almost out of touch, like unaware that this is an important moment, is an important crisis, is an important opportunity to step up as a leader and define the future of institution. So I don't even know where the source of the problem is. That could be literally government structure as we've been two things.

I think its governance structure. I also think universities are selecting then not selecting leaders yeah um you know it's not clear to me that university should necessarily be run by academics right the the dean of the university um you know the person who helps sort of the business of the university, right and then there's the academic of university and having A I would argue having a business leader run these institutions and then having aboard that involve board what that has itself diverse viewpoints and bother be permanently structured to have diverse few points um is a much Better way from a university than picking an academic at the faculty supports because no one of things i've learned about how faculty get hired at universities altadena signed off by the board.

But you the new faculty, you're chosen by each of the various departments. And once the department's tip sort of a tipping point politically where once they tip in one direction. The fact of the recruit more people like themselves.

And so the departments are more and more a progressive, if you will, with the passage of time. And they only advances candidates that, that match their they meet their political objectives. It's it's not a great way to to build an institution which allows .

for small .

d diversity laws for yeah sina university, by the way, is not just race and gender and that's also something I feel very strongly about.

Well, Lucy, engineering robotics is touched last by this city is touched. But you know, I when i'm at the computing building, stata and the new one, politics doesn't infiltrate or I haven't seen IT infiltrate quite as deeply as elsewhere.

but it's in the biology department harder because the biology is controversial now. Yes, yes, because biology and gender, you there are faculty. There's a woman at harvard was not we cancelled from fact as a member I think he was the medical um and he was near SHE made the argument that there are basically no two genders determined by biology SHE wasn't a loud stay that's another topic for another time topic. You should do a show on that one. I'll be an interesting one.

So as you said, technically cloudy again. The president of harvard resigned over plagiarism not over the thing that you are initially troubled by.

It's hard to really know, but it's not like approval fact I would take at a certain point time to lost the company of the faculty and that was ultimately the catalyst. And whether that was how much of that was the pleasures sm issue and how much of that was some of the things that proceed IT? Or was that all of these issues in their entirety? I we don't really there's no way to do IT calculus.

Can you explain the nature of this player ism for what you remember?

So antibes an and Christopher rufo one from the three big and and Chris to surface some allegations or identified some pleasure and issues that I would say the initial examples were, you know, use of the same words with proper attribution, some missing cook, you know, footnotes. And then over time with, I guess, more digging, they released, I think, ultimately something like seventy six examples of what they call plagiarism in eight of eleven of her articles. And one of the other things that came fourth here is, as president versy, he had sort of the thinness transcript academically of any previous president in a very small, relatively small body work.

And then when you couple that with the amount of plagiarism that was pervasive, and then I guess some of the other examples of the surface were not missing quotation Marks, where the authors of the work felt that their ideas have been stolen and really plagiary m as academic fraud. There's there indi one indica pleasure, missing foot. Now that could also be clerical error.

And so when I know professor accused the pleasure ism, the university does sort of a deep dive. They have these administration of boards, and you can take six months and nine months a year to evaluate you. Intent matters with this intentional theft of another person's idea.

That's academic fraud. Or was this sloppy, you know, you missed, or just humanity you miss a foot, know here there. And I think once I got to a place where people felt IT was left of someone else, the intellectual property, that's when IT became intolerable for her to stay present.

So is there a spectrum for you between a different kinds of players? M maybe play razing words and player zing ideas, and play zing novel ideas.

Course, the common understanding pleasure. Maybe look in the dictionary. It's about the theft that requires a intent to the person intentionally takes someone else's ideas or words. Now if you if you're writing a novel, right, words matter more, right? If you taken shakespeare in presenting as your own words, if you are, you know, running about ideas, ideas matter.

But you're not supposed to take someone else's words without properly acknowledge ing them whether its quotation Marks otherwise but in the context of an academic life's work before A I, everyone's going to have missing quotation Marks and foot, remember right? My own thees. You know, I would like, I would take book.

You could not take out a wider library. So i'd have index cards, and I write stuff on index cards, and I put all citing to make sure I remember decided properly. And you know, scrambling to do your theists is get in on time.

What's the chances you forget at what point what are your words versus the authors words and you forget to put quotations Marks just the humanity, you know that the human fallibility of IT. So you know, you don't get it's not academic fraud to have human fitbit, but it's academic fraud. If you take someone else's ideas that are an integral part of work.

is there party you that regrets that, at least from the perception with the president, Harry stepped down over pleasure and versus over refusing to say that the calls for genocide are .

wrong again, I think IT would have send a Better message if I fail. If a leader fails as a leader, and that's the reason for their resignation or dismissal, then he gets, if you will, call on a technical violation that had nothing to do with failed leadership.

Because I don't know what lesson that that what's lesson that teaches the board about selecting the candidate I know the future of harvard a lot of is going to pend on who they pick as the next leader um here's an interesting anette that I think is not surfaced publicly. So ganim Larry bacco was a previous president, harvard. Larry bacco was on the search to me, and they, we're looking for a new president.

And what was strange was they picked an old White eye to be president harvard when there was, you know, a call for a more diverse president. And what I learned was harvard actually ran a process, had a diverse new president of harvard, and in the do diligence on the candidate, shortly before the announcement of the new president, they found out that the and that presidential candidate had a pleasin problem, and the search had gone on long enough. They couldn't restart a search by another candidate, the big backer of the board of the search community, to be the expression, harvard is kind of an interm solution.

And then there was that much more pressure to have a more diverse candidate this time around, cause there was a big disappointment to the D I, as if you will. And I would take to the unity at large, the harvard of all places couldn't have a you know a racial diverse present an important message. Um so the strange thing is that they didn't do do diligence on president again. And that was a relatively quick process. So the whole thing, I think, is worthy of further, you know, exploration.

So this goes deeply. And just the president.

yes, for sure, when the company fails, most people are in the C. E. O.

I just to blame the board, right? The board's job is to make sure the right persons running the company and if they're fAiling, help the person if they can help the person make a change. That's not what's happened here. The board's hand was sort of forced from the outside where as they should make their own decision from the insight.

We still love harvard.

Sure it's a four hundred audio institution IT enormously helpful to me in my life. I'm sure uh my sister also went to harvard um and with the experiences learnings, friendships, relationships, I am very happy with my life. Harvard was an important part of my life.

I went over of both undergrad in business school. I learned a ton that a lot of faculty, ty, lot number, my closest friends. So I I still really keep in touch with.

I made them. So, yeah, it's a great place. But IT needs a reboot. Yeah, I I still .

have hope. I think the university is a really important institutions.

When I went to harvard, there are sixteen hundred people in my class. I think today's class about the same size, and their online education really has not sort of taking off, right? So I hurt peer till speak at an important time.

And it's like, what great institution do you know that truly great. That hasn't grown one hundred years, right? And you know the incentives in some sense of the alarms are for IT.

It's a bit like a club, if you're proud of the elitist of the club, you don't want any any new members. But the fact that the population is grown of the country is, as so know, significant license certain. Ly, I was a student in ninety four in the fact that harvard recruits people from all over the world.

It's really serving a smaller and smaller percent of the population today. And you, some were most talented and successful a entrepreneur. S, anyway, you know, it's it's a token of a success that they didn't make IT through their on the graduate years they left as a freshman where they didn't attend at all. For entrepreneurs as yes.

but it's still a place .

in very important for research, very important for advancing ideas and yes, in shaping dialogue and the next generation of supreme court justices, yes, and you know the members of government politicians. So yes, it's critically important, but it's it's not not doing the job should be doing ny.

oxford. Somebody you mention several times about this park is somebody I had a wonderful conversation with. A french with of known, looked up ter admirer has been an, i've been offend of her for a long time of for work enough hours.

A human being looks like you are fan of hers as well. What do you love about mary? What do you admire about her? A scientist, artist, human being.

I think she's the most beautiful person i've ever met. And I mean that from like the centre of her soul uh she's the most Carrying warm, considerate you know thoughtful person event and and SHE couples those remarkable qualities with brilliant, incredible creativity, beauty, elegance, Grace. I'm talking about my wife um but i'm talking incredibly dispassionate um but I mean what I say um she's the most remarkable person i've ever met and I ve met a lot of remarkable people and i'm incredibly fortunate to spend a very high percent tage of my life time with her ever since I met t her uh no six years ago so she's .

been to help to you through some of the rough moments .

you matter at the bottom ah which is not a bad place to meet someone if IT works out .

uh is there some degree of inning Young? G with two personalities you have you have described yourself as emotional so on, but he does seem me the two. You have slightly different styles about how to watch the world.

Well, interestingly, they have a lot like um you know we come from very similar places in the world and other times where we feel like we've known each other for centuries. I met her parents for the first time long time ago, almost six years ago as well. And I new parents were from eastern europe person, so I asked her father like what you know what city that her family come originally and I called my father.

And asked him, you know that what's grandpa Abraham was, but what's the name of the city? And then I put the two cities into google maps, and there are fifty two miles apart. That was pretty cool.

Um then of course, at some point we did genetic testing make sure we weren't related yeah, which we were not. But we share incredible ble commonalty on values. We attracted to the same kind of people, you know, SHE lost my friends, I love hers.

We are doing the same of things, uh, attracted to. And we like spending time the same ways and and SHE has, yes, more emotion, more elegance. SHE doesn't like battles, but she's very strong, but she's more sensitive than I am yeah .

you you are constantly in multiple battles at the same time and is often the media, social media is just fire everywhere you know.

that hasn't really been the case for a while. I've had to peace for a long time because I as I stopped being as I haven't had to be the kind of activist I was earlier in my career um I think since october seventh yes, I do feel like I been in a war.

Can you tell me the sag of the accusations against ny so I did not actually .

surface the pleasures allegations against present gay that surfaced by you know iran and maybe Christopher rufo as well or maybe Christan helped promote what iron and some anonymous person identified. But I certainly IT was appointed time with a board head, said one hundred percent behind her and unanimously. And I really felt you had to go.

So I didn't bother me at all. They had identified problems with her work. So I shared, I reposted those posts.

And then when the board SHE ultimately resigned, and he got up nine hundred thousand million a year professor, continuing in harvard, I said, look, in light of her limited academic record and these players allegations, I SHE had to go. Um I knew when I did so I assumed I was actually but paranoid about that thesis I had written. I only had one academic work, but I hadn't checked IT for pleasure.

M I thought that's that's going to happen. Actually had a um so I did not have a copy on hands. I got a copy of my thesis and I and i've remember writing IT harvard at the time was pretty the kind of gave you a lecture about making sure you have all your foot notes in quotation Marks.

I learned later that apparently that a copy of my thesis at the new republic library, and a member, the media, told me he was there online with, you know, a dozen other members of the media ball trying to get a coffee in my thesis to run IT through some A, I had the first two optical character recognition to convert the paper document into um but fortunately through a miracle I didn't have an issue. I didn't think about mary, of course, who has whatever hundred and thirty academic works. And so we were just at the end of fiction for crispbread and I was early in the morning for a vacation time and always said, hear my phone ringing in the other room or vibrating in other room multiple times.

My, I pick up the phone and sour communication guy friend magill, and is like bill, business insider has apparently identified a number instances of players. M, in aries, let me send you the email, except the email. And they had identified four paragraphs in her three or thirty page dissertation where he had cited the author, but he had used the vast majority of the words, and that those are graphs were from the author, and he should have used quotation work and then that was one case where SHE parthia correctly an author, but did not, uh, footnote that was from his working a and so we represented with this and told they're going to publish in a few hours and we're like going to get to the next day.

We're just something about to head home. And I like, no, we're publishing by new, by new and said, we download the copy or thesis, unlike the slow internet. And you know, ney checked that out and he said, you know what looks like? They're right I said, looks, you should just make your mistake and he wrote a very simple gracious yes I should have use quotation Marks and on the author I failed to set a SHE pointed out that SHE had made other times and wrote several paragraph section of proteonomic his work um and none of these were like important parts for thesis but he acknowledge mistake and he said no apologized from a mistake and I apologized to the author who I felt decide and I stand on the shoulders of you know although people came before me and looking to advances work, we sort of thought I was over.

We had home in flight, in the way home, although we didn't realize this to, we go back and following day business inside of publishing another article and said, marry oxygen admits to play joris m. Plasm, of course, the eadem c fraud. And this thing goes crazy viral.

How bill is the title is bill acme's wife, celebrity academic mary oxygen. And they use the term celebrity because there are limits to what legitimate media can go after. But celebrities, there's a lot more little way in the media what they can say. That's what they call a celebrity. First time ever she's been called a celebrity and and they basically she's admitting to academic fraud and then they said and then the next day um at five thousand thousand and P M I remember this time i'm pretty uh an email was sent to friend with kill saying, um you know we've dentists ed you know two dozen other instances of player is in work.

Fifteen and richer wikipedia entries where SHE copy definitions and um the others were mostly software hardware manuals for various devices or software SHE used in a work most of which were in footnotes where he described a nozze for a three printing of something like this and they said we're publishing you know tonight the email they sent to us was sixty nine hundred words at was twelve pages act indefer er able you couldn't read IT in an hour and we didn't have some of the documents that were referring to and i'm like narry, you know what i'm going to do that? I think that would be useful to provide context here. Ah i'm gna do a review of every IT professors dissertations every publish paper A I enabled this um and so that was I put on a tweet basically saying that and we're doing a test run now so we have to get IT right I think we would be useful exercise, provide some context, if you will and then they think goes crazy more uh and you know, mary is a very sensitive person, preemption person and someone who is a perfectionist.

And having everyone in the world thinking you committed academic fraud is a pretty damming thing. Now they did say they did a throw review of all of her work. And this is what they found in my sweet art.

That's remarkable. I did hundred and thirty works, seven, three years, which would peer reviews about blong. She's published in nature, science and all these different publications.

That's actually pretty good batting average. But you know, they can't is wrong, right? This is not academic fraud.

Okay, these are in advert mistakes. And the wikipedia entries ny actually use wikipedia dictionary. This is that the really is wikipedia.

And they also referred to the M I T handbook, which has a whole section on player ism economic handbook. And if you read IT, which I ultimately did, they make clear a few things. Number one, there's plagiarism, academic fun. And there's what they call, inadvertently, joris m, which is clerical errors. We make a mistake, and IT depends on intent.

And there's a link that you can go to, which is a section on, if you get investigated, M, I, T, what happens? What's the procedure? What's the initial stage? What's the investigative stage? What's the procedure to identify? And then very clear that academic fraud is a list patersons.

You know, research staff, a few other things, but IT does not include honest errors. Honest errors are not playing ism under mits on policies and in the handbook, they also have a big section. What they call common knowledge.

And common knowledge depends on who you're writing your thesis is for uh and so if it's a fact that is known by your audience, you're not required to quote or site. And so all those with a pedia entries were for things like sustainable design. Computer sign SHE just took a definition from a cap dia come acknowledged to her readers.

No obligation on the handbook, totally exempt on the using the same words SHE referred red to like connect whatever or some kind of three d printer SHE was the status 3d printer and SHE quote IT from the manual right away strategy of the company you consulted for the very you don't need to is not something you not stealing your ideas。 You're describing a for a device you using your work in a footnote. That's not a theft of idea, right? And so i'm like, this is crazy and so this is gotto stop. And so I reach out to, uh, the a guy I knew was on the board of business inside of the chairman and his name is gonna come public shortly. I committed at that time to keep his name confidential is now surfaced .

publicly in the press. Can I just pauses your I don't know. There's a lot of things I want to say, but you made me pretty clear. But just as a member of the community, there's also like a common sense test. I think you're more precisely like illegal and looking at, but there's just like a bullshit test and like nothing that mary did is orison in the bad meaning of the word pleasure ism right now is becoming another ism like racism or someone using an attack word. I don't care what the meaning of IT is, but there's a bad academic fraud, theft, theft of an idea.

And maybe you can say a lot of definitions in this kind of stuff, but then is just a basic bullshit test where everyone knows this is a thief and this is deadly, not a thigh, and there is nothing about anything that mary did anything in her theis or in her life. Everyone who knows her? She's a rock star, right? I just want to make a clear IT really hurt me that the internet, whatever is happening, could go after, could go after.

A great scientist. I love science, and I love celebrating great scientists. And IT just really messed up that whatever the machine we can talk about, business inside, or whatever social media, master stereo, whatever is happening, like, we need the great scientists of the world, because I like the future depends on them.

And so we need to celebrate them, protect them and let them flourish and let them do their thing and let keep them out of this. Whatever shit storm that was you in to get clips and advertisements and draw and all this, can we need to protect them? So I just want to say there no, there's nobody I know and million friends, uh, that are scientists, workspace scientists, snobby prize winners.

They all love that. They all respect marry this SHE did zero wrong. And in the rest, the conversation we can have about how broken journalist and so on.

But like is going to say that there's nothing that mary did wrong. It's not a great area or so on. I also personally don't love the claude gay.

You is a discussion about pleasing because he distracts from the fundamentals that is broken um this becomes some wear technical discussion but in cases ary did nothing wrong. Great side is great engineer at mt. And beyond. She's doing the cool thing now, so anyway.

could not have set a Better myself. Now I am i'm focusing the technical part. He wants to be precise here.

What was not even that? I mean, yes, I have said that we're going to do business in that thirty five years of my career of someone who is not every article has been a favorable one. Not every article has been an accurate one.

I never threatened to sue the media, and i've never sued the, but this is so egregious. It's not just that he did something wrong, but they accused of academic fraud. They did IT knowing they, they rink reference to M I T.

Own handbag. So they had to read all the same thing, stuff that I read in the handbag. Ah, they did that work. Then, after I know escalated this thing to the know, Henry blogged the chairman of business insider to the sea of axel springer.

I even reached out to hand graves at all thirty point time, one of the throwing the holders of the companies for K, K, R, laying out the factual errors in the article this is in that went public after they said ni committed academic raught in plateau m and said we d never, we didn't chAllenge any. The facts remain undisputed in the article so so it's basically nearly committed plasm that story one he admits to plasm SHE admits to plagiarism. SHE admitted to SHE mitted to making a few clare clare, that's only thing he admitted to and SHE graciously apologized, but he said, mary admits to pledge ism, apologized.

The pleasure. M, that's incredibly damming and bother we. We're doing an investigation because we're concerned that there might have been inappropriate to process, but the facts of the story have not been disputed by mary oxford or bill ackman, and that was totally false.

I have done IT privately. I'd done IT publicly on twitter, on x, i'd laid out, I I have a whole text stream of what's out stream of the sea of the company, and they, and they double down. They double down again. And so I don't sue people lightly. And IT was statement.

So you're .

at least for now .

moving forward with its a certainty .

we're moving forward. Uh, there's a step we can take prior to seeing them where we basically send them a letter demanding they make a series of corruptions that if they if they don't make those corrections, the next step is litigation. I hope we can avoid the next step. And i'm just making sure that we we present the demand to business and sector and also need to ask springer that it's incredibly clear how they defamed her, the factual mistakes in our stories um and what they need to do to fix that. And if we can fix that there, we can move on from this episode and hopefully void litigation.

That's where we are. I don't know, you are smarter than me. There's technical stuff, there's legal stuff, there's journalistic stuff, but just fuck you business insider for doing this. I don't know. I don't know much in this world, but journalists aren't supposed to do that.

Look at we're going to surface all the stuff. Ultimately, the email was not a never saying there was pleasured in our work. The email came from a reporter in Kathy law, and the headline was, your wife committed plages m shouldn't SHE be fired from MIT, just like you caused clothing gay to be fired from harvard. He was a political agenda.

SHE doesn't like me, okay? And he was trying to hurt me. And they couldn't find pleasure in my faces and you being the subject of short being a short seller.

The urb life battle went on for years. They try to do everything to destroy my reputation. So they really gone to my crash. They're all that work. So um anything they could possibly find what you know, i've always lived a very clean life OK, thankfully.

And if you're going to be an activity short to tell you Better because they're going to find out dir on you if IT exists. And so they're like, how can we really hurt the bill but way? And I nearly had left mt years earlier.

Yes, when the reporter found out he was no longer remember the M I T. faculty. They were enraged, didn't believe they made us.

Like you prove to us you should no longer on the event, in fact, because they wanted to get her fired in. By the way, malays is one of the the important factors in determining whether some, whether definitions taken place. And this was a mAlice driven.

This was not about news and the unfortunate about journalism, business sense, automate or fortune. This, this story was published and republished by thousands of media organza around the world. IT was the number one trending thing on twitter for like two days.

Uh, every newspaper, every was on the front page of every really newspaper, you know, with on the front page of the financial times OK. So this and she's building a business and you know if you're see you of a science company and you commit economic fraud, that's incredibly damaging. But I ultimately convince ed her that this was good.

I said sweeter, you're amazing. You're incredible. You're incredibly counted, but you're mostly known in the design world. Now everyone in the universe, okay, is hordinary oxygen okay? We're to get this thing cleared up.

You're going to be doing an event in in six months where you're going na tell the world, you're going to go out a steff mode. You going to tell the world, but all the incredible things that you building and your designing and you're creating and you're gone. It's onna be like the iphone launch because everyone's going to be paying attention and they going to going to want to see your work. And you know, that's how I tried to cheer up, but I think it's .

true IT is true, but it's then you're doing here. Your job is a good partner of seeing the Silvia learning of all this. How was just from observing your hotted a slow stay strong through all the psychologically because at least I know she's pushing ahead with the work.

He's fully me to have and work. She's built an amazing team. Just heard thirty scientists, roboticists people who biologists, plant specialists, material scientists, engineers, really incredible crew. She's built a thirteen, six thousand and graphic lab in york city.

That to one of the kind is still other working out of IT is still under construction, whether working out of IT um and he's gone to do amazing things but um as I said, he's an extremely sensitive to person. She's a perfectionist I imagine thinking that the entire world thinks you committed academic front. And so that was very hard for her.

She's a very positive person. But I saw her, and I would say her darkest emotional period for sure, to do much Better now. But you can kill someone.

You can kill someone by destroyed the reputation. People, people commit suicide. People go into these deep, dark depression.

Well, my worry, primarily when I saw what business insight was doing, is that they might dim the light of a, of a truly special scientists and create.

it's not going to happen.

But I also worry about others like mary Young aries that are that this sends a signal to that might scare them. And you know, journalism couldn't scare spiring Young scientists.

The problem is the defamation law in the U. S. Is so favorable to the publisher, to the media and so unfavorable uh to the victim. And the incentives are all wrong.

You know the when you went from a paper version of journalism to digital and you could track many people click uh and it's a medium that advertising drives the economics and if you can show an advertising more clicks, you can make more money, right? So a journalist is incentivised to write a story that will generate more clicks. How do you write a story? That gentleman, more clicks.

You get a billionaire guy, okay? And then you go after his wife and you make a sensational story, and you give them no time to respond, right? You know, look at the timing here.

Like on the first story, you know, they gave us three hours. On the second one the following day, five, nineteen, P. M. The email comes in not to her firm, but to my communications person who tracks us down by five thirty attempts later.

And they publish their story ninety two minutes after in a sentence we're onna surface all these documents in our demand read the email they sent, whether you could even disciple er IT you know it's a there was no and by the way, there is a reason why academic institutions, when the professors accused to plagiarize, why they have these very careful processes with multiple stages, and they take, they can take a year or more, because IT depends on intent. Was this intentional in order to be a crime? And academic, you ve got to prove that they intentionally stole.

Look, in some cases it's obvious, in some cases it's very subtle and they take the stuff super seriously. But they basically accused me of academic crime. And then ninety two minutes later, they said he committed an academy crime.

And that should be a crime and that should be punishable with litigation and there should be a real cost. And we're going to make sure there's a real cost reputation's and others SE to business insider and to act springer because ultimately, you ve got a loop to the controlling owner. They're responsible.

I'll just say that you in this regard are inspired ing to me for for for facing basically an institution that whole purpose is to do to write articles. See, you're like going into the fire.

My kid school, the epithet of the school or the saying is go forth unafraid. I think it's a good bit of and again, and I think words can't harm me, you know the the power of x and and we do all elon, enormous thanks for this is now. So for example, the washing post were a story about me a couple days ago.

And I didn't. I didn't. The story was a fair story. So within a few hours the story being written, I, we going to put out a response to the story and sent in two million, two hundred thousand people, and IT gets read and reread.

I've been checked, but in police, five million people saw my response. Now those are the people on acts is not everyone in the world. There's still there's a disconnection between the x world in the offline world.

Um but you know reputation in my business is the basically you have and as they say, you can can take a lifetime to build reputation and take five minutes to have a disappeared in the media plays a very important role and they can destroy people. At least we now have some ability to fight back. We have a platform, we can surface our views.

The typical old days are they read incredibly damning article and you point out factual errors, and then, like two months later, they bury a little correction on page, whatever. By then the person was fired, or where their life was destroyed. For the reputation damaged, you was with warn buffer, talking about media and something. He, a business he really loves.

He says you what bill? He said, a thief with a digger, the only person causing more harm than a thigh with a digger is a journalist with a pen. And those were very powerful words.

So you think x formally known as twitter, is a kind of neutralizing force to that to the power of centralized journalists, to .

constitutions. And I think it's a really important one. And it's really when I opening for me ah to see how stories get covered in mainstream media and then you ask what I do when x is I follow people on multiple size of issue and you can or I post on a topic and I get to hear the other side and I read the replies and and you know the truth is something that people have had a lot of question about, particularly in the last uh now I would say five years you have beginning with a new trump s talking about fake news and a lot of what trump said about thickness is true.

You know the world, a big part of the world, hated trump and did everything they could to describe him, destroy him and you know he did a lot of things perhaps deserving being being directed used by by very imperfect, in some cases harmful uh leader um but you know everything from preelection you know the the hunter of biden laptop story near post that um you know then twitter uh you know uh made difficult for people to uh to share and to read um you know coin you know the the the jay about shores of the world, questioning the government's response, questioning you know long term lockdowns questioned and keeping kids at a school, questions about masks about vaccines which are still not definitely answered. No counterbaLance to the power of the government when the government can shut down, avenge free speech um and where the mainstream media is kind of total line in many tends to the government's actions with having a independently own powerful platform is very important uh for truth ah for free speech, for hearing the other side of the story, for counterbalancing the power of the government idan is getting you know a lot of pushback. Uh you the space axis and testers, the world are experiencing a lot of government, your questions and investigations and you know even the president united states came out and settled up his worthy needs to be investigated.

I'm getting my own version of that in terms of some negative media articles. I don't know what's next but yeah, you stick your necks out in today's world and you you go against the establishment or at least the existing uh, administration. Uh you can find yourself a in a very chAllenge place and that discourages people from sharing stuff. And that's why anonymous speech is important. What you find on twitter.

you mentioned trump. I have to talk you about politics amongst all the other battles. You've also been a part of that one. Maybe you can correct me this, but even a big support of very democratic candidates over the years. Um but you did say a lot of nice things about our trump uh, in two thousand sixteen.

I believe so I interview by Andrew sorkin a week after trump on the election yes, and I made my case why I thought you could be a good president.

yes. So what was the case back then? To which degree that or not to be true, to which degree did not, which I was a good president, which we was not good pressure.

I think what I said at the time was united states is actually a huge business. And IT reminds me a bit of the type of activist investments were taken on over time where this really, really great businesses kind of lost its way. And with the right leadership, we can fix IT.

And if you think about the business united states today, right, you got thirty two trillion dollars, the dead overleveraged. And though it's highly leveraged and the leverages only increasing, we're losing money. I eat revenues are uncovering expenses.

The cost or dead is going up as interest rates have gone up and the dead has to be rolled over. We have enormous administrative bloat uh in the uh uh the country uh the the regulation regime is incredibly complicated and burden sum and impeding growth. Um our relations with our competitor nations and our friendly nations are our fourth my deal and those conditions were present in two thousand and twenty.

Well, they're just I would say worse now and I said, look at the great thing that we have a business man as president and in my lifetime is really the first business man as opposed to me, maybe pushed to some degree with a business person but I thought, okay, I was one of the C E O to be C E. O america. And now we have trump looking, got some personal qualities that seem less ideal, but it's going to present united states.

It's going to rise the occasion. This is gonna as legacy. And he knows that to make deals and it's got a is going to recruit some great people into his administration, I hoped uh and you know, growth can solve lot of our problems.

So if we can get rid of a bunch regulations that are holding back the country, which you can have a president obama was A I would say not a probe business president. He did not love the business community. He did not love successful people. Um and having a president who just changed the tone on on being approved as president, I thought would be good to the country and that's basically what I said and I would say prompted a lot of good things and a lot of people you can get criticized acknowledged that um but you know I think the the countries the economy accelerated dramatically and that by the way, you know the the capital system helps the people the bottom best when the system as well and the economy as well you know the black employment rate was the lowest in history when trump was president and that's true for other minority groups so he was good for the economy um and he you know uh he recognized uh some of the chAllenges and issues and threats of china early.

Uh he kind of woke up nato uh now again the way he did all this stuff you can object to um but you know nato actually started spending more money on defense in the early part of trans presidency because of his threats, which turned out to be a good thing in light of you know the ultimately to russia, ukraine war. And I think if you analyze trump objectively based on policies, he did a lot of good for the country. Um I think what's bad is, uh, he did some harm as well, uh, you know, the I do think civility disappeared in amErica with trump's president a lot of that, his personal style and how important civility, I do think it's important.

I do think who was attacked uh very gressier ly by the left, by the media ah that made in paranoid and probably interfere with the ability to be successful the russian collusion investigation overhang. Um and when someone's attacked, they're not going to be at their best, particularly they're paranoid. I think there's some degree of that, but i've giving kind of the best of defensive prom you know just uh you look at how he managed his team right very few people made IT through the prominent straw without getting fired or quitting uh and yeah who say they are the greatest person the world when he had them and their told of this extra when he fired them.

It's not inspiring way to be a leader to attract really talented people. I think the events surrounding the election um you know I think january six he could done a lot more to stop A A riot I don't considered IT an interaction, but a riot that takes place in our capital and where police officers were killed or die commit suicide because for failure to as they thought to do their job, he stepped in way too late to stop that he could stop IT early you know, many of his words, I think, inspired people in some of them with mal intent to go in there and cause harm and literally to shut down on the government. There are some evil people, unfortunately there.

So he'd been a very imperfect president and also I think contributed to the no extreme amount divisiveness in our country. So I was ultimately disappointed um by you know the note of optimism and I again I always uh you know support the president. I trust the people ultimately to select our next leader.

It's a bit like to wants to be a millionaire you know, when you go to the crowd and the crowd says thing, you got to trust the crowd um but un, who wants to be a millionaire? It's a landslide on one direction, you know, which we should letter to pick here. We had an incredibly close election, which itself the problem.

So, you know, my dream, and when I know, tried a little bit play politics in the last little period to support some alternatives to trump so that we have a president. I use the, you know, example. Imagine you woke up in the morning it's election day, whatever IT is this november forth whatever twenty twenty four and you still having figured to vote for because the candidates are so peeling that um you know know which ever to pull because it's a tough call that's the choice we should be making. Americans IT shouldn't be um remember this party and only going to vote this way. Remember that party going to vote the other way and I hate the other side and that's where have been enforcing for .

too long or you might be torn because both candidates are not good. yeah. So you want to I i'd love the future where i'm torn because the choices are so amazing.

The problem is the party system is so screwed up and the parties are self interested. And there another governance problem, right? An incentive problem.

Now, Michael porter, who was one of my professors hard in school, wrote brilliant peace on the more computer al system and all the incentives and market dynamics and what called a competitive analysis. Uh, and it's a must read. I should dig IT up, send that around an ex. But IT explains how the, you know, the parties and the incentives of these sort of self sustaining entities that, you know, where the people involved are not incentivised to do with best for the country is a problem.

You've been a support of dean Philips, yes. For the twenty twenty four U S. Presidential race, yes, what do you like about .

in I think he is a honest, smart, motivated, capable, proven guy as a business leader and I think in uh six almost you know with in his three terms in congress, he ran when prom was elected.

He said, kids cried, daughters cried, inspired him to run for office, ran in a republican district the minnesota for last sixty years I was elected in the landslide has been reelected twice, move up the ranks in the congress um you know respected by his follow members of congress advanced important legislation during COVID on senior roles on various foreign icy committees. Rest, you know considered I think the second most bipartisan member of the congress i'd love have a bipartisan president sAiling way to get kind of go forward. But we did ormers sly benefit if we had a president that chose policies on the basis of what's best for the country, as opposed to what his party wanted.

When I like about him is his financial independent on a billionaire. But he doesn't need the job. The party hate him now because he chAllenged the king, right? And so, uh but he was going to give up his political career because what he thought was best for the country tried to get other people to run who were higher profile, have more name recognition, an non wood.

No one wants to chAllenge biden, you know, if they want to be have a chance to explain office to run in the future, but he's very principled. I think you'd be a great president um but he needs his shot is michigan but he needs to raise money in order to is only got a couple weeks. It's gotta on T V there that's expensive. Uh, so uh, you will see to .

just increase name or resignation that also, if you mentioned his Young .

yeah fifty five. What is a Young five?

You just seem play hockey. yeah. I mean, I guess fifty five, no matter what, is a pretty Young age.

and I can do more pulps today that I cut as a kid. So that's a standard here .

at the top of your tennis game .

to talk my task for sure.

Maybe there's someone that would disagree with that.

And by the way, the other thing to point out here is, and I have been pointing this out as of others, the biden is, I think is done. I mean, it's embarrassing. It's embarrassing for the country having him as as a presidential candidate, let alone the president of the country.

It's crazy and it's just going to get worse and worse. And he should you know, the worst of his legacy is his ego that prevent him from stepping aside. And that's IT.

It's is eager and IT is so wrong and so bad and so embarrassing. Uh, you know, you talk to people. I was in europe.

I was in london few days ago and people like bill, how can this guy be a president? It's a bit like you again. I go back to my business analogy.

Gy, being A C, E, O was like a full context port. Being president, united states is like some combination of wrestling, marathon running, you know, try being a try athlete. I know you gotta be a serious physical shape and at the top your game to represent this country.

And he is a far cry from that and is just getting worse. And it's embarrassing. And and he's got he cannot be.

And by the way, every day he waits, he's handing the election to trump because it's harder and harder for an alternative candidate to surface of. Dean is the only candidate left. On the democratic side that can still win delegates. He's on the ballot in forty two states. And the best way for biden to step IDE is for dee to show well and mick.

and so you think there is a path with the delegates and all that kind of stuff.

hundred percent. So if you if what has to happen is new hampshire, he went from zero to twenty percent of the vote, and ten weeks with no name commission. I have to look about elan help. We did a spaces for him.

We had three hundred and fifty thousand people on the spaces, some origin forty thousand live or something and then the the rest after um and then he was on the ground and new hampshire and new hampshire one of the states where you don't need to be registered to a party to vote for the candidates who would like and he got twenty percent and that's with a lot of independence and democrat voting for. Hailey um having who who I like and how I supported um does not look like she's going to make IT uh tromp is really kind of running the table. And so vote for highly as an independent michigan maybe thrown away your vote.

I think IT increases the likelihood that dean can get those independent votes. If he he could theoretically again, he needs, he eats money he could beat by in micron bin student very poorly in micron as polls are terrible. The muslim community is not happy with him um and he really spent no time there and so if she's embarrassed in michigan could be careless for him withdraw wing then dean will get funding if he wins michigan or shows well in michigan and people say he's viable he's the only choice we have hill attract from the center he attract from people republican to warm forer trump which term a big percent enisa could be sixty percent or more may could be seventy percent won't r and also from um the democrats so I think is a really interesting candidate um but .

we gotta get word out. Yeah I think I really like, I really like and I think the next to the united states, it's gna have to meet and speak regularly with elenchi, put in yahoo with world leaders and have some of the most historic conversations, agreements, negotiations. And I just don't see biden doing that. No, and not for a any reason. But sadly, think about .

IT this way when binding in present. Now he saw his recent in prompted press conference, which he did after the special prosecutor, you know, report, basically saying the guy was way past as prime and then he confused the president, mexico and the president of egypt. So they're very careful when they roll them out.

And he scripted and he's always reading for a lectern. Imagine the care they have in exposing him and when they expose of its terrible OK imagine how bad of this for real um so not good no bad, really bad for america. And i'm upset with him and upset with his family and upset with his wife. This is the time where the people closest to you have to put the arms around you and say, you know, dad, you know, honey, know you ve done your thing ah this is gonna be your legacy and it's not going to be a good one.

Great leaders should also know when to step down.

Yeah, that one of the best test of a leader is succession planning. This is a massive failure of succession .

planning outside of politics. Let me look to the future. First, in terms of the financial world, what are you looking forward to in the next couple of years? You have a new fund. What are you thinking about in terms of investment, your own and the entire economy and maybe even the the economy of the world?

sure. So the esc doesn't allow doesn't like us to talk about new funds that we're launching that we filed with the sec. sure.

Um but I would say I do. Um and by the way, if anyone's ever interested in, they should always read the prospective carefully, including the risk factors. That's very, very important.

But i'd like the idea of democratizing access to good investors. Uh, and I think that's an interesting trend that we want to be part of. That trend in terms of financial market is generally the economy, you know a lot of is going to depend upon the next leader, the country.

So we're going to right back there um know the leadership new states is important for U. S. Economy, important for the global economy, is important for global peace.

And we've gone through a really difficult period and it's time we need brick. But you know, look, I think the next states is incredible resilient country. We have some incredible motes among them.

We have the atlantic and the psychic, and we have a peaceful neighbors to the north and the south. We're enormously rich country. Uh, capitalism still works effectively here.

Uh, I get optimistic about the world when I talk to my friends who wear either venture capitalists or my hobby of backing these Young entrepreneurs. Talk to a founder of a startup if you want to go to optimize back the world. So I think technology is gonna ve us.

I think AI, of course, says it's frightening terminator like scenarios. But don't going to take the the opposite view that this is gonna a huge enabler er uh of a productivity scientific discovery, drug discovery and can make us healthier, happier and Better. So I do think you know the the internet revolution was, you know how a lot of good, some obviously sm bad.

I think the AI revolutions going to be similar but we're at this other really interesting juncture uh in the world uh you know with uh technology and we're gonna to use IT to uh for our good uh on the media front, I am happy about x and I think uh you want to be be successful here. Uh, I think advertisers will realized is a really good platform. The best way to reach um me, I want to sell something to me.

I've actually bought stuff mazan X, I remember the last time I responded to the direct response. Advertising know in terms of my business, have an incredible team. It's tiny.

You were one of the smallest firms relative to the assets we manage. A bit like you know that the navy seals, you know not the U. S.

army. We live only forty people at person square. So it's A A tight team I think will do great things. I think we're early on.

You know my ambitions, investment wise, i've always wanted to i've I always said i'd like to have a records good as warn profits, the problems each year he adds on another year. He's now in his ninety, thirty years. So i've got thirty six more years to just get where is.

And I think he's going add a lot, a lot more years. I'm excited about seeing. But nery is gonna produce. Um she's building an incredible company. They trying to solve a lot of problems with respect to products and buildings and their impact on the environment.

Her vision is, how do we design products that by virtue of the products existence, the world is a Better place. Today you make, you know her, her world is a world world. The existence of the new car actually is Better for the environment.

And if the new car hadn't existent and think about that in every product. Ale, that's what she's working on. I want to give way too much, but you're going to see some early examples of what he is working on. So again, I get excited about the future um and uh and crisis are sort of a terrible thing to waste, and we've had a number of these here.

I think this disaster in the midst least my prediction is the next few months, this war will largely be over in terms of getting great of us, I think I can envision a world in which saudi arabia, a, some of the other goal states come together, take over the governance and reconstruction of of of gaza. Security guarantees are put in place. The Abraham a accords continue to grow.

A deals made terrorists are astonished um that this october seven experience on the harvard pen IT columbia, unfortunately, other campuses is a wake up call for universities generally. Um you know people see the problems with D E, I, but understand the importance of diversity and in an inclusion, but not as a political movement, but as a way um that we return to a merit craft world where someone's background is relevant and understanding their contribution. Um but is not we don't have race quotes and things that were made illegal years ago actually being implemented a in organza on campus. So I think there's we can go through a corrective face. And i'm an optimist and I hope .

hope we get there. You have hope for the entire of IT, even for harvard.

I even for harper generally hard to break four .

hundred year old things. Well, I share your hope and um you are a fascine mind, a brilliant mind, persistent as you like to say, and fearless the fearless part is truly inspiring. And this was an incredible conversation.

Thank you. Thank you for your target, bill. Thank you.

Thanks for listening to this conversation with bill. Support the spot guests. Please check out our sponsors in the description.

And now let me leave you some words from jonathon s. swift. A wise person should have money in their head, but not in their heart. Thank you for listening and hope to see you next time.