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Investing is about preserving and growing wealth. It's not about getting rich. There's no right or wrong way to go about investing. Neither get in or get out as an investing strategy. Become a student of the market. History doesn't repeat, but it definitely rhymes. There is no truth to be found in financial assets. I would encourage people to learn about and apply base rates as they think about the world of investing. Look at your portfolio as little as possible. Well, it would be that you own a business. You own a business. Paul basically believes that you should look at your portfolio like you just put everything on that day. There probably is no perfect way to save and invest. Realize that it's okay to be wrong in this business. Simpler the better. When we started Excess Returns, we wanted to come up with a way to boil down the best advice from the experts we have interviewed into one simple question. That led us to create a standard closing question that we asked all of our guests. Based on your experience in markets, if you could teach one lesson to your average investor, what would it be? Over the history of the podcast, we have asked that question to over 200 guests, ranging from great investors to academic experts to options and macro traders. In this episode, we share the answers from our most popular guests, all in one episode. So without further ado, here are our most popular guests sharing their most important lesson. I don't know if I'm in a position to teach anybody anything. Look, I think what the main thing about investing, there's, there's no right or wrong way to go about investing. Right. There's many, many different ways. And you have to find the way that sort of fits your, your personality, fits your, your weakness. The tough part, I think when you start when you're young is you don't really know where your weaknesses are. You, you find out your weakness by doing it. And, and obviously what you need to try to do is avoid putting yourself in positions where your weakness are found out. And you know, one of the best ways to do this, I find, and I do this, and I recommend it to young people that I meet, is actually to keep a diary. And not just to keep a diary, but to reread your diary so that you can put yourself back into the, you know, the mindset you were in, the decisions you took, why you took them. And so, so I'm not sure it's a great piece of advice, but it worked for me. The answer is find a portfolio you can live with, manage it passively through time, and don't think you have an edge because you probably don't. I think it's a lesson that increasingly is getting lost. And I think it's sum up these days of YouTube celebrities telling you can get rich again. I was just watching a PBS documentary on crypto and how people want to hit the jackpot. I think that going for ten baggers, hundred baggers, again, think of how much we go after those. That's not the name of investing is about preserving and growing wealth. Would I like to grow wealth at 50% a year? Yes. Would I like to have a hundred bagger in my portfolio? Yes. But I shouldn't be actively looking for those things because if I look for those things, I'm going to miss the core tenets of investing. So I know it's tough to follow when people around you are getting rich effortlessly. The guy who bought bitcoin at a hundred and sold it at 5,000, you say, I'm working so hard to get a 15% return a year. And there he made 50 times what he made. I think that's why looking at other people getting, you know, letting envy drive what you should be doing as an investor can be extremely dangerous. So keep your focus on preserving and growing wealth, which means you need the income to create the wealth. So if you're a doctor, go back to being a doctor. Don't spend your lunchtime looking at what stocks are doing, what your portfolio is doing. Read up some medical stuff. If you're an engineer, be an engineer first. Live the rest of your lives. Don't let investing become the center of your universe because you need the income from whatever you do to create the wealth which you can then preserve and grow. But in a world where markets and I think that know, watching CNBC all day is a recipe for a terrible investing philosophy, you know, so spend less time kind of tracking markets on a minute by minute basis, reading everything that's happening. Go back to living the rest of your lives and let investing do what it's supposed to do, which is take the wealth you accumulate from the rest of your life and preserving and growing that. I'm often asked, as many strategists are, particularly when there's more weakness in the market or it's a volatile week. Okay, Liz Ann, what are you telling your Schwab investors? Are you telling them to get in or get out? And I have a love hate relationship with that question. I hate it because I think it's a stupid question, but I love it because I get to explain why I think it's a stupid question. And the real gist of it is neither get in nor get out as an investing strategy. Not even close. It's just gambling on two moments in time, and there's no one that has ever been successful doing that over and over again. And that ties into the second part of this, which is we think it's what we know that matters, meaning what's going to happen? What's going to happen in the future? What's the market going to do? Whether we're trying to do that on our own or trying to figure out which Yahoo on TV or which strategist is going to have the best market call, it's not what we know that matters, meaning about the future. It's what we do along the way that matters. So those are my on the soapbox views that I think should matter to investors. But we get in the throes of I need to know what the future holds, and then I can make great investment decisions. Well, it's the unknowable, so don't invest based on it. You know, Matt Levine, who's just such a great writer for, you know, for Bloomberg Money Stuff, he said that financial literacy should be boiled down to one question, you know, that people should understand. And that question, he wrote, is if somebody comes to you and offers you an investment that has a 20% return with virtually no risk, what should you do? A, jump on it because it's going to be gone in a minute, you know, if somebody else is going to do it, B, you know, research it, and if, and if it is as presented, do it, or C, assume the guy is either lying or doesn't understand the situation and save yourself the time and walk away. And, you know, I think that people really have a hard time choosing C, you know, but I think that C, I think that this question kind of embodies, like, all of the bad things that you can do in investing. Like, if you don't see, you know, like if you don't see that as an individual investor, that it is an excellent working assumption to, to run the other way when you hear that or when you think that, you know, I think I, I, I, I think that's like the one lesson that I think it would be so valuable for people to have. And I can't take credit for it. It's a Matt Levine thing. But yeah, I just, I just feel like that encompasses, like, everything it encompasses that risk matters. It encompasses market efficiency. You know, it, it encompasses like, all of the important, not all, but it encompasses so many of the important things that we should know. As investors, I think that I would encourage people to learn about and apply base rates as they think about the world of investing. By the way, it's not just valuable for investing, but really business or your life. Actually it's good for your life. And again, a base rate, you know, the, the, the basic setup is the natural way to think about the world or solve your problems is to gather a bunch of information and combine it with your own inputs and experience and project into the future. And that's, that's what we all do. Left our own devices using base rate says I'm going to think about what I'm facing now or my problem as an instance of a larger reference class. I'm going to basically ask what happened when other people or organizations were in this position before. And it's a very unnatural way to think because you have to leave aside, you know, sort of your own information gathering and your own experience. We all tend to place a lot of value on that. And you have to find an appeal to the base rate which may not be at your fingertips and often it's not. So you have to go out and make a little effort to find it. But once you do, I think it reshapes how you think a lot about the world and I think makes you more grounded in terms of how you think about how things are likely to unfold. So to me, if that would be the one idea is to say let's think about base rates. You know, you mentioned before jokingly that we're in that sort of season where people do forecasts. You know, that's a great example where base rates would be very helpful. And you, you sort of made the joke 10% with some standard deviation. But that's actually the right way to think about it. That's, that's actually the right answer and that was, that's informed by, by base rates. So you're, you, you got to the right place and the right way to think about it using that actual technique. So to me that would be the one bit of advice I would give. And if I could go back to my 20 year old self, that's certainly what I would teach. And by the way, I would just say that it's remarkable how underutilized this concept is, notwithstanding its demonstrable power. Look at your portfolio as little as possible. Probably, probably 20 of your other people have said the same thing. But that just means it's true, particularly for what you call the average in investor. I think there have actually been studies on this, but just intuitively you Know whoever looks at it more loses. I don't know what the right frequency. I can't imagine someone not checking once a year. How's it going? But perceive vol, perceive risk when you look frequently. I, by the way, I think the answer is a little different for professionals. I have to look at how we're doing each day. It's just a little weird if one of my clients calls and goes, oh, big event happened today, how you guys doing? And I go, I don't know, that's, that's just a little odd. But, but I'm a hypocrite. I, I, I look at it all day. When, when I'm in the office, I look at it all day. When I'm out of the office, I'm actually much better. I, I can check it on my phone, but I just, I, I just do it a lot less. But I will tell you myself and if anyone should be aware of these biases, I'm up there with people who should be. I don't know if I'm going to tell you I'm not that good at it, which is embarrassing. But if we have a day where we've been up, we've been down, we've been up, we've been down, and we ended up flat, I feel like it's been a bad day. The downs hurt me more than the ups made me feel good. The formal term for that is prospect theory and it applies intraday. My perception of how crazy the world is is probably larger than it, than it really is. So to the extent people, you know, once a year make sure your money wasn't embezzled or something, that's probably a good idea. But short, much more than that. No one, no one will probably get to that. But if you're looking daily, look weekly. If you're looking weekly, look monthly. If you're looking monthly, go further out the spectrum. Certainly the individual investor and most professionals, including me, don't have a lot of short term predictive power and their instincts are probably to do the wrong thing to sell at the bottom and buy at at the top. So look less would be my one, one liner. Well, it would be that you own a business, you own a business. And, and this idea that you own a trading sardine instead of a business leads to so much bad behavior. And, and really you guys raised it the best. You know, when Jack was talking about selling those winners, you know it if you just think of that, that I own this wonderful portfolio of businesses and I want to pass them on to my Kids or my grandkids. I think it, it keeps you out of owning stuff because you think it has a quick double and it keeps you out of selling stuff simply because it doubled. And, and I think that everybody would do better, you know, if they could think. And, and, you know, I had. My. My first girlfriend was from Maine and her father was. Worked at Bath Iron Works. And he showed me his portfolio and it was such a wonderful portfolio. It was about eight stocks that he had bought over the years very thoughtfully and carefully, and it had just built into this real source of wealth. And I would guess that he had outperformed the market. But even if he had just simply tracked the market over this long period of time, but he did it with deep conviction because he saw each holding as a business. He didn't see it as a stock market, he didn't see it as a piece of paper. And I think that really thinking about that and thinking about what it is to be an owner of a business, I think that would really improve a lot of people's returns over a long period of time. I mean, a. Be invested. I mean, be invested, right? I mean, and say to my daughter, you know, who's 18, like, you got to be invested and you've got to spend. You know, we all tend to late in life, go, oh, I've got to start looking at this, right? No, you need to be investing. And for anyone in the U.S. open a Roth, like as soon as you got, as soon as you've got any money, open a Roth, right? So, yeah, you know that, that's where those are the sort of things that I, I would be, I would be looking at. Become a student of the market. Think. Be willing to think independently and understand that this is a, we have a whole industry that is just designed to be a cheerleader, right? And sometimes you need to look, you know, not at the cheerleaders, which, you know, we're all males. We all tend to do too much, right? Is, is to. Is to look at the guy in the corner or the girl in the corner of the room who's doing something that's different. Think independently. Be kind to yourself. You're only human. It's okay to be human. Don't think of yourself as a God. Don't compare yourself as a God. Don't compare yourself to lottery winners. That's not the comparison that you want to make. So that kind of healthy sense of self forgiveness on the one hand, while at the same time having a healthy sense of being willing to continue to take action and being willing to continue to put yourself out there, if you like, on an investing standpoint or in terms of, I mean, it also applies in learning in public. So take your lumps, be forgiving, don't let them push you into inaction and continue to learn and update your models of the world. And it's by the act of forgiving ourselves for mistakes in the past to continue to be brave and to find. And if something that we haven't covered actually is that we've talked about kind of quote risk averse approaches to the world and the question is, how do you be risk averse? How do you take care of the downside? How do you make sure that you're not on a path, one of those, you know, slicing yourself into a thousand people, one of the paths that takes you to a big fat zero. But at the same time continue to put yourself out there, continue to find ways to benefit from the upside that the markets and life can offer you without risking everything. And that kind of, I think part of that is being forgiving to yourself. So I think that to be the man in the arena, whether it's in, in your investing, to be the person taking action, to be taking positive action, to be exposing yourself to the upside, you need to accept and understand that you will make mistakes, you need to forgive yourself the mistakes and you need to make sure that the mistakes don't wipe you out. So you continue to play in the game if you like. That's. I don't know if that's a composite point or one point, but I think that's what I kind of want to end with. Don't chase performance. It's endemic, it's innate in the human psyche. The notion of something's hurt me, get me out of here, something's been good for me, given me profit, given me great joy. I want more of that. This is all very much human nature. It's a horrible way to invest. The notion of buying when you're at peak fear goes totally against human nature. It's a great rule of thumb. And a lot of it all is just different manifestations of don't chase performance. Even the quant community chases performance. Put together a bunch of factors in a multi factor portfolio based on using the factors that had the best historical track record. Well, that doesn't mean they will have a good future track record. And so it's a form of backdoor form of performance chasing in a group that thinks they don't chase performance. Paul basically believes that you should look at your portfolio like you just put everything on that day. You know, don't get too complacent always, oh, I've got this position. I've, I'm well ahead. I don't have to worry about it. You know, it's not the thing. Question is, if you just put this position on it today, would you be comfortable with it or would you be comfortable with, with it where your risk point is? You know, so having that mentality of not getting complacent and viewing every position, not how is it since you put it on, but how is it, how does it look today? You know, would I want this position at this price with my risk point today? So that's what I, I would say is, you know, one main lesson I can remember from, from Paul Tutor. Oh, just remember the portfolio is secondary to your life like that. That I honestly think we often really lose perspective around that. And I just continually emphasize part of why you hear me railing against behavior of the Federal Reserve, et cetera. You know, we behave as if everything is about financial outcomes, as if the market tells us truth. There is no truth to be found in financial markets. There is no truth to be found in financial assets. There is no truth to be found in your relative success in terms of your wealth or anything else. Truth is to be found in the smile of your child, the greeting that your wife gives you when you come home, et cetera. Enjoy life and try to be a better person every single day. In that context, an etf, a mutual is not good or bad because it went up in the last 12 months. Stocks going down. You should be willing to take your risk profile up like just like we have done consistently every time. This is Mark, it is amazing to me how many really intelligent investors market goes down 10% to get scared. You shouldn't get scared. You should actually be, you know, nothing for the most part, nothing for not every stock. But if the market is down 10%, it's usually good buying opportunity. The odds are in your favor. And so we see investors time and time again selling at the bottom. Right. You know, coming in after the market's already rallied 30%. Right. And I just think that is one of the, that is a recipe for value destruction at the individual or for a portfolio, you know, for an institutional portfolio manager as well. If you are consistent or a hedge fund, if you're consistently like all in at the peak and you know, have very little exposure at the bottom, then you just replay that over time. You're going to destroy a lot of value for yourself or for your clients. And again, like I said, we've created a lot of value over time. Basically doing the exact opposite of that. There's a quote we've been using lately. Despite all the amount of time we spend talking about the future and forecasting and things people should think about, I think the quote is for most investors, it's better to be Rip van Winkle than Nostradamus. No? Meaning, you know, what does everyone on CNBC do all day? They like predicting what's going to happen with Google earnings or the price of wheat or what the Fed's going to do. And is gold a good part of your portfolio? Like all these things everyone stresses about, but in reality, like coming up with a portfolio, particularly with public markets, like, I want that sucker to be on autopilot. I don't ever want to think about my public market investments ever. Like, let that thing whir in the background, Little Robot MEB 2000 and just be done with it. And also like, I see my cash account as like my investment account as a cash account, but it just kind of like hums in the background. And that's why some of these platforms, like Betterment I think are pretty great. Vanguard has one too. But essentially this concept of like, put it in there, invest as much as you can where you're happy and comfortable with it and let it just happen in the background and forget about it and spend zero time, particularly in public markets and macro. Going back to, by the way, it's startups. One of the biggest benefits of startups is investing is it's the most optimistic thing in the world. You spend all day like, oh my God, these amazing ideas, these life changing technologies, these impassioned founders. And then you turn on cnbc. It's just like, you know, this is like bombarded with negativity and wars and pandemics. Just like barf. Like, it's just, it's so tough. So to me spend less time on the like negativity and forecasting and future prediction business, which is impossible. And more on like, hey, I'm gonna save, put it over here. And it doesn't matter what you own. I mean it does, but, but it matters more that you save and invest in the first place. This concept, this ownership mentality I think is, is important. So, so be Rip. Rip van Winkle. I like to sleep. I like to take naps. So here's, here's what I tell everybody. And I wrote a book about this 20 years ago or something. It was called Navig this. Imagine this, this is 25 years ago I wrote a book that was called Navigate the Noise. Get the subtitle. Investing in the New Age of Media and hype. That was 25 years ago. Okay, so more, more appropriate today than it was 25 years ago. And what the book basically argued is that building wealth is not difficult. It's actually very easy. So why don't people do it? And the answer is that there's always a siren song of something new, better, sexier, something, and to continue on the Greek mythology there. And then people go and they crash on the rocks, right? And, and so why don't we know that certain things are critical? Like we know that diversification helps you build wealth. People don't want to do it because now there's the Mag 7 something new better. You know, we know that compounding dividends is a fantastic way to build wealth through time. People don't do it because who wants dividends? Oh, so boring, right? Why do we want dividends? You know, things like that. So I think, you know, there's, there are, I, I, my, my advice to individual investors has always been to keep to the straight and narrow, right? If you want to have a little, a little puddle of money over here, that's your more speculative play money, that's fine. I get that. I mean we all do that. That's fine. I have mine. I'm not going to share with you the stuff that I blow up in like everybody else, but that's fine, right? But the bulk of your wealth building should stick to the straight and narrow and you know, just keep it simple, think about the rules. And, and I, I just think people don't do that. They, they always think there's a get rich quick. And I, I, there's never a get rich quick just doesn't work. I think that there's a certain degree where life is complex enough that there's a value in simplicity, there's a value in having a set plan that kind of regardless of your emotion, being able to take the emotion out of it is something that is so incredibly important. I think being a student of history is something that serves everybody well. And there's maybe in the show notes we could add some book recommendations of people are interested because, you know, what we, what we learn is that, you know, history doesn't repeat, but it definitely rhymes. We have been here in some ways before, even as unprecedented as it might feel. Um, and I, I think that you staying disciplined about your goal and plan and not getting drawn into the emotion of the narrative at the Time is something that remains incredibly important and technicals allow you to do that. I would say it's patience, you know, patience. I know, like when I was learning investing and off my 20s and 30s, I was much more jittery about things like, you know, company reports, a bad quarter, stock starts falling, you know, I get, get really antsy if you want to get out of it, you know, and, and I think if you could, if there's one thing I could pass on, it would be, it would be that just, you know, when you buy something, be a little, be more careful about what you buy. Be sure you think that you won't own it for a long time and then let it, leave it alone. You know, be willing to suffer through some ups and downs and not everything's going to work out, so you're going to have to buy, you know, more than one thing. But if you bought, you know, 10 stocks, give them a chance, be patient. And part of that, you know, that embeds a lot of other things too. When you say you have to be a patient like that because it means you have to tune out a lot of things. You have to, you have to tune out the, I mean, a good part of financial media and Wall street is geared towards making you do things. I mean, they want transactions, they want you to move that money around. That's how they make their money. They take a little bit off those movements. They want to say the latest fund or this or that or. And the resist that is a big part of it. And that, you know, being patient, big part of being patient, being able to tune out all that. And not so easy. But that would be, if I could tell the average investor one thing, that would definitely be it. Diversification. It's that simple. Diversification is the ticket to building durable wealth over time. And when I emphasize, I emphasize that diversification, I don't mean stocks and bonds are not diversification. It's better than holding an all stock portfolio, better than holding one stock. But true diversification means diversifying your asset class exposures and diversifying your strategy exposure, your alpha strategy exposures, right? In order to generate that consistent return. And that I think a lot of people have really, over the last 40 years have, have, have become immune to what diversification or desensitized to what diversification really means, because they've only seen assets work in one way. But talk to people who invested in the 70s and the 60s and talk to them about how they survived those dynamics without facing huge painful drawdowns, particularly in real terms in their wealth. And the way that they did that was by holding a lot of different assets. Gold, commodities, inflation index bonds. I mean, they didn't exist then, but the effective exposure of inflation index bonds, real assets in various kinds, that's how they survived that period during a period when stocks and bonds didn't do well. And that's what you have to face. What does a high interest rate environment look like with elevated inflation? It's something you've never seen before and so open your mind to the diversification possibilities that are out there. I think there probably is no perfect way to save and invest. There's no top 10 list you can read or there's no book you can read that's going to like completely change your life and make it easier for you to, to figure it out. I think you just have to kind of pick a strategy and then stick with it come hell or high water. Because I think one of the hardest parts is these days we can always see how other people are saving and investing and this person is investing in this. And I think it's probably never been a better time to be an individual investor in terms of the strategies and products in tools we have available. I mean, if you think about some of the strategies that are now offered in a tax efficient ETF that were only available to rich individuals or institutions or hedge funds back in the day, and individuals can now use these same strategies for pennies on the dollar in terms of costs, that's a great thing. The problem is there's so many choices these days for what you can invest in that it makes it much harder for people to stick with the strategy. So I think for most people the good strategy you can stick with is vastly superior to the great strategy that you can't stick with. It's just really hard for people to find that one strategy and stick with it. Think that's, that's kind of the lesson I'd impart on a lot of people is just if you find a strategy that works for you, don't worry what everyone else is doing and just stick with your own strategy and call it a day. Yeah, I mean it would be diversify, right? It would be humble about what you know and what you can know and don't be over reliant on what you observed in the past. The past is 1, 1 sample draw from an infinite variety of potential sample draws that we might get in the future in terms of combinations of inflation, growth, geopolitical risk, supply, demand dynamics, technological shocks, et cetera. And the future is probably going to look quite a bit different from the past. And so the best way to prepare for the unknown is to diversify. So. So I think that would be my, my core message. I think the biggest thing, maybe it's not nothing new, but it's just true to me that, you know, as a professional asset manager for many years, the reality is, I think we, we impact just a small core part of incremental mature. I mean, probably less than 10% of the total result is going to be due to our decision. If we add value, we're talking 10% or less that we add truthfully. Because the reality is you take in a pot of assets and the vast majority of it is already spoken for. It has to be this much diversified. It has to be here, here, and here. And then you're really only playing with the last little bit of it as your bet overlay on top of it. And I guess my. I really kind of believe that, that we're just adding a little bit on the end. The worst sin you can do as an asset manager is lose track of the fact you're trying so hard to put your footprint of outperformance on it that you blow the other 90%. And that is, you know, you get too bearish, whatever, or too bullish and, you know, get it too aggressive or too conservative, probably more you can get yourself too bearish and you miss out on, on the way most of us make most of our money. That is, we're just there. You're just, yeah, you're just along for the ride because again, the markets go up 10% a year over time. We're, we, we might add 1 1% to that, maybe if we're good or whatever. Lucky or whatever. But we don't want to lose track. The fact that it's, it's the biggest part, just the market itself, not us, that makes that. The only other thing I'd say is, is that you realize that it's okay to be wrong in this business. It really is if you're not. Whoa. Ever. Which I. The only way I can think you can't be wrong is, is that you're basically a closet index, that you sell yourself as an active manager, but you. A closet index, you. Because the way you're never wrong is you never take a bath. You're always just indexed. And if that's the case, you won't ever own it before, but you really won't ever add any value for the client as well. And so the only way to add value is to Take risk. And that means whenever you take risk on a regular basis, you're going to be wrong sometimes. And I think that's okay, that's okay to realize. It's okay to tell your clients. I guess those are the things I'd, I'd say. And most of those are learned from humbling experiences myself. All of yours. Simpler the better. Honestly. If you can do it with two funds, do it with two funds. I mean, you don't need any more than a balanced index fund and a tax deferred portfolio. And then in your taxable portfolio if you're going to have stock in their total stock market, Total International, and something for a reserve fund of some sort. But I mean, the absolute simpler you make it, the better it is for you, the better it is for your family, the cheaper it is, the less taxing it is, and the more time you have to spend doing the things that you enjoy doing, which is not this, you know, hate to say it, but this is a necessity. I don't know if I, you know, I could have been an airline pilot, but I decided to do this instead. I'm glad I did. Was a really good exercise. But at some point in my life, I'm going to not want to have to think about any of this anymore. I don't know when that is. Like I said in my 70s, I want to rewrite some books and all of that. Maybe It'd be my 80s, I don't know. But there's gotta be more enjoyable things to do than this. I think the average investor should look at humility, right? I mean, should say, let's take the set of things I think I can do and try to figure out which of those are actually impossible. And that once I have a better sense of self knowledge, I'll be better able to focus in on this sort of universe of things where they are both things I can figure out and things that are possible to know rather than focusing on things which I think like future growth rates are clearly impossible. Well, you know, he had tremendous life lessons, you know, about working with people that you love, working a job that you love, and if you give both of those, you know, right, life is pretty good. But as an investor, and this may be the hardest one to swallow right now because of all the politics involved. But I mean, this is a guy that, you know, when he bought his first share of stock at 11 years old in 1942, the war in the Pacific wasn't going that well. It could have gone either way. But you're talking About a guy and his dad was a big, you know, a big God bless America guy and tremendous influence on his life. But I think if you're going to invest, you got to believe in your country, you got to believe in the spirit of democratic capitalism. You got to believe that no matter how many body blows, and we've taken some body blows in the last 60 years, we, you know, you could go back and look, just Google news events for each year for the last 60 years, and your jaw will drop thinking about what it's been like to be an investor in markets, you know, presidential assassinations, Cuban missiles, race riots, you know, National Guard on street corners, by the way, tanks underneath, you know, traffic lights. You know, we've been through that, we've been through a lot, but somehow or another we always get out on the other side. And somehow or another that sticks with me. And I think once again, the world doesn't come to an end as long as the spirit of democratic capitalism can thrive. And it has good days, bad days, good years, bad years, good administrations, bad administrations, whatever the case may be. But if you believe and that spirit of democratic capitalism can survive, can thrive, can proceed, then everything else is going to work out fine. Then the rest of it's easy. Just go find some good companies and ride the surf. You know, just ride the surf. That's all you need. Yeah, I think, I think I would say get out of your own way. He didn't put it exactly that way, but he could have. It's the mongerism, like get out of your own way. But it comes out of his emphasis on, on the psychology of investing, of trying to avoid the natural propensity to make mistakes, trying to assure that you have commanded a set of important ideas to minimize your accident rate, your error rate. And it's really your. Maybe it's the quote that you singled out Justin about being, being able to not make yourself the mistake. So a lot of us just keep doing the same old things. We're our own problem. And so try to, trying to get out of your own way. I guess the first thing that comes to mind is there is no universal playbook for investing. If there was, everyone would be following the same thing. So there's no one or 10 right ways to invest. And there's probably a lot of wrong ways to invest, but there's also a lot of, a lot of reasonable ways to invest. And the most important thing, in my opinion, is getting to the place where you're comfortable doing what works for you, even if that's you know, something that would be subpar in a spreadsheet. 40% cash, 60% equities, whatever it is, whatever you have to do to get to the place that you can stick to the strategy through thick and thin. And when I say stick to the strategy, the strategy doesn't have to be buy and hold, but you have to have some sort of philosophy that governs you. Right? And if, because if you don't have that, then you're just, then you're just flopping like a fish out of water. So some people get there quicker than others, some people never get there. But I think that would be the most important thing, is just to find whatever jives with your personality is the most important to appreciate that every investment decision you make is made in the upper left hand corner. And really what you're doing in that moment is choosing. You're making a decision based on the outcome you imagine. And I think of that in terms of the probabilities that you assign to ending up in the comfort zone or ending up in the stress center. And what you see is that investors always make the investment where they imagine that they're going to make lots of money and end up in the comfort zone. And they always steer clear of those investments that they are sure will put them in the stress center. What they don't appreciate is that our imagination of the future is entirely a reflection of our own level of confidence. And so anytime we, we assign high probabilities to a particular outcome, whether it's in the stress center or the comfort zone, all we're doing is expressing our own level of confidence, not the potential of the outcome. So if you're, if you, you've got better than even odds, you're kidding yourself. And so for investors, you always need to plan for what you can imagine, but at the same time be prepared for what you can't. And that's really important today, given the potential for the companies that you invest in to pivot back and forth between being beneficiaries and being victims. The most important thing to being a successful investor is booking your gains. That's it. Booking your gains also secondarily is also containing your losses. But you cannot make money unless you actually make money. And you do so by booking gains. Never be afraid of it. You can always go back and buy it again tomorrow. You know, my default answer for this is always something tracking error related. But we've already touched on tracking error. So I'm going to, I'm going to do something controversial. I'm going to disagree with Buffett. This is, I should admit too, this is the first time I've ever said this before. So you guys let me know if it lands or if it just seems like career suicide. Buffett has that line. Diversification is what is it? Insurance against ignorance or protection against ignorance? I think he's wrong. I think education, research and study, that's protection against ignorance. Diversification is protection against bad luck. And everyone has bad luck at some point in their career. And that's really the reason that diversification matters. And I think one of the reasons that people are kind of uncomfortable with it because it almost means implicitly admitting that you could be wrong. And I think that's one of the reasons it's so hard for so many people who don't get deep into the data to recognize. Yeah, you know, a diversified portfolio is a messy one, but it's a pretty good idea if you're looking ahead. So we talked a lot about dealer positioning already. I think that's the biggest takeaway, right. That's part of why people kind of follow me and are interested in kind of what we're, we're talking about. But at the end of the day, like I mentioned, that's one part of one critically important thing, the only thing, which is supply and demand. I think so many people just lose sight of that simple little thing. How many buyers are there and how many sellers are there. We obfuscate this by thinking about second order factors like fundamentals. Fundamentals matter. The cash from the corporation is part of that supply and demand. But we lose sight of how many buyers versus sellers are there. Ultimately, you should never ever lose sight of it. And I guess my corollary to that, and what I'll leave you with outside of that is liquidity. That word is everything. Liquidity can mean the thing that spurs demand and that creates enough liquidity to keep it going. It can also mean the removal of it. Right? Is there isn't enough demand or there's not enough money to go around. But it's also important to think about when you're trading or your positioning, how liquid you are and how liquid the things you're investing. Ultimately, it doesn't matter how much demand there is today or tomorrow for something that won't ultimately have liquidity at some point, doesn't matter what its earnings are if it doesn't have access to markets. That's true in the option space as well. That's true in derivatives and everywhere. When you invest in something or you put a trade on, you better Believe liquidity, you better have in a position of strong liquidity, particularly in a period like this. There's a reason the name the, the word long term is in Long term Capital Management. I can't stress this enough. Long Term Capital Management blew out because they were short puts that were long dated against things that are short. They were short illiquid things versus things that were liquid. If you position yourself in a place of illiquidity, particularly, particularly this period of lack of liquidity in a leptocurtic market with fat tails, which is what we're in right now, you will ultimately lose. And no matter how good the bet looks, no matter how, you know, cheap something may seem, you will be in a position of lack of buyers versus sellers. And when you get to that point of a lack of, you know, buyers versus sellers and you're on the wrong side of that, you will lose a lot of money. So never lose sight of supply and demand, always understand your liquidity point and always think of it in terms of, of, of the amount of money that is available at any given moment to, to, to fund supply and demand. So yeah, I've thought about this a lot actually since our last call because I, I figured you were going to ask me this and, and the one to boil it all down to one thing. It's to understand that markets are a political utility and that, you know, there's this old story. The, you know, traveler comes in this old west town and he sees these guys playing poker and he sees that the dealer is obviously cheating and he talks to one of the players later, says well what are you, what are you doing? You know, the guy's cheating and the guy says, yeah, I know, but it's the only game in town, right? The stock market, the public market. It's not the only game in town that we should be trying to connect our investments with the real, not the casino, not the stories that are told to us. We can play with it, right? And I think you can. As you're invested in market, if you're going to be an investor, you're looking just to harvest the political utility nature of markets. You're just trying to harvest the beta. But if you're trying to find alpha, you're trying to make an investment, you want to make money, you find something that's real, that's close to you and where you're not being told a story. That's the advice I've got. You know what it's actually like? It's like the old Peter lynch, you Married Peter lynch, right where he always said, you know, what do we do at Magellan? Oh, we, you know, we really invest in real and real companies. And I don't know, maybe that was possible for Peter lynch, you know, back in, I don't know, 1978, I don't know, maybe that was possible for him. Is not possible today. Not in public markets. You want something real, you want to invest. Invest in your own company, your own self, you know, invest in something that you can understand and that doesn't exist in public markets today. I'm not saying get out. You use them for their political utility nature. You harvest the beta, you stick it in a drawer and you forget about it. But you want to be an investor, you want to do research, you want to try to make alpha. It's got to be in something real. It's got to be something close to you. I don't think you can find that in public markets today. I think you need to write down what you're doing at the time that you do it, because it takes, if you're a fundamental investor, it takes years, really, to work out whether the decision that you made actually resulted in the outcome that you thought. And the only way that you learn is by looking at outcomes against decisions. And it's so easy to forget why you did something. And really the worst case scenario, as funnily, as funny as this sounds, but the worst case scenario is when you get the stock goes up, but for a reason that you didn't identify. So you got lucky. But then you start conflating that luck with some skill. And I think that you need to be intellectually honest with why you did something. And you need to recognize those things. You need to recognize the ones that won't. But you were wrong. Recognize the ones where you lost money, but you were right. And you need to try to work more towards the process and getting that right than relying on the outcome and deciding that you were right. So that's my advice. I've always said this, write it down. Because I've got stuff now that I wrote down in 2008. I can go back and look at it, and I think that's garbage, but at least it's there and it's written down. And I can see that there's been some evolution. I would Never advocate for 100% exposure, 100% allocation to, you know, an S&P 500 index fund, because I, I know that the brain just doesn't work that way. The brain, you know, wants to take some risk. So if you are at a point where, I mean, for some people who, who don't, who aren't very educated, they are not interested in investing, you know, maybe that makes sense to be more heavily allocated toward an index. But if you are someone who is thinking about, you know, markets and stocks and investing, I would not force yourself to just set it and forget it with passive investing. Because listen, that's just sort of, you know, we do everything we can to manage our behavioral biases. But I'm also a firm believer that sometimes, you know, you need to have an outlet for things like risk taking behavior. Maybe it's outside of the financial markets, you discover those things and that's great. I study all the math, I know how all the odds work and I heavily index invest, but I play craps at a casino and I know about how the house edge works and all those things. But I find that to be a great outlet for financial risk taking behavior because the downside is somewhat limited as opposed to me allocating a huge chunk of my 401k to some leveraged single stock ETF or something, so, so index. But don't deprive yourself of taking your risk if you think that there is an opportunity in there to get some alpha. I would say that I think a lot of people try to find alpha in security selection and I think there's a lot more alpha to be created over time in portfolio structure. And it can both be offensively through ideas like return stacking, but also defensively in terms of how you create a resilient portfolio. We're only going to live one path of market history. We never want to realize catastrophic losses. So Rod just spoke very eloquently about building a resilient portfolio diversified across economic regimes. The way I've always thought about it is there's really just more than one dimension of diversification. We often think about what I call the what dimension, as in what what are we investing in? And I think that's a crucially important dimension of asset allocation. But I think we should also think about how those investment decisions are being made and when they're being made. Right. If you got your asset allocation correct, but you put all your equities into deep value stocks over the last decade, you know, you've sort of lagged behind equity markets. So your how decision wasn't necessarily well diversified. Similarly, that when, when you rebalance is sort of an opportunity diversification. If you happen to have private equity in your portfolio, for example, and you just allocated once in 2013, you may it might have been a good vintage, it may not have been. Similarly, when you rebalance, your portfolio has a huge amount of impact. So for me, creating portfolios with true resiliency is not just thinking about the economic diversification that Rodrigo pointed out, though that is crucially important. It's also thinking through these other axes. Oh, I mean, that's a layup, you know, for stock investors. Buy dividend yielding stocks, put them away. You know, obviously good, good companies are better than that, dividend growers are better than that. And you're going to get a lot of, a lot of sleep. You know, I think to make money in the markets by picking tops is, is a, is tricky because then you've got to pick the bottom. Fortunately for me, that's one of the things I'm supposed to do. And so it gives me, gives me something to do. If I just told people all the time, you know, just, just don't, you know, I got nothing to tell you but buy stocks. That's, you know, people want to hear. Well, yeah, but are we about to see like a 50% implosion? And nobody wants to kind of live, live through that. But I think I'm in the Warren Buffett camp viewing stocks as long run investors. Having said that, I see Warren Buffett's got more cash in his portfolio than he's had in a very long time. So that kind of has me a little bit concerned. So I, I do kind of pay attention to that on a short term basis, I think, you know, being somewhat skeptical about the consensus when, when, when everybody's so convinced that things are going to go wrong. Ask yourself, you know, try to think about what, what might, might go right. And again, look, look around you, you know, what do you see? Do you, you see doom and gloom or do you see some, some optimistic things going on out there? Valuation doesn't work under, you know, one, two, three years, you know, three years and beyond. You typically start to see valuation have a material influence on financial markets. But generally speaking, you know, something can remain over undervalued for, you know, several years before it really starts to get influenced again by some of those positioning dynamics. And you know, I think it's like that with econometric models as well. I mean, I've seen so many of these charts where, you know, the author finds this one time series and overlays it with another time series. And you know, the one time series that leads the other time series by 12 to 18 months is already in place B. And it implies that, you know, the time series, you know, B has to go to place B over some, you know, duration. And they say, oh well, I'm bullish or bearish as a function of that. Well, doesn't imply that there needs to be 18 months of time to pass between us getting from point A to point B. Right. And I think that's the one thing that I think it's kind of lost when we see these pretty charts, we see, you know, pretty valuation setups or if it pretty anything in financial markets, which is it takes time for those things to be realized, understood, appreciated and priced in, you know, often several months, several quarters, if not a few years. You know, the older I get, I feel like the, the more I realize, the less I know about all of this stuff. And so it's this weird sort of journey in finance and economics where, you know, you typically think that like the, the old guys are the ones that know everything. And I, the more I, I find myself becoming an old guy, the more I just sort of have realized how little I know about all this stuff because it's so freaking complex. And so, you know, I would say that one of the mistakes I made when I was younger was just pigeonholing myself, whether it be inside of like certain, you know, political cliques or whether it's even like certain strategies where you can find yourself in a attracted to like a very specific niche type of strategy. And what you'll find is that you could go through really long periods of time where that strategy doesn't perform well at all. And so to me, being super open minded, not only on the political side, but on the economic and finance side and especially on the investing side is really important. Just because you have to be positioned in a way so that you can kind of navigate all environments. And that's, I think to a larger degree it's, it's why I've become very attracted to like all weather portfolios because I kind of know that I don't know what's going to happen in the future. And I want to, to a certain degree, at least with a big chunk of my assets, I want to diversify so much that I've always got components of my portfolio that are weathering any type of environment. So yeah, being, being open minded to me is like a superpower. Well, I think the most important thing is a rules based process. You know, let's sit down and come up with some rules and follow those rules and try not to deviate from them. And like I said earlier, the amount of risk that you take is going to be somewhat influenced, influence your ability to stick with your rules. There's nothing more important than a rules based approach. Even if it's going to be buy and hold or 60, 40, you know how you're going to do it. How are you going to rebalance? I think, you know, over time that's going to serve you better. Get away from the emotional responses as much as possible and you know, selling at the wrong time, buying at the wrong time. But yeah, I think there's nothing more important than following a good set of rules that you need. Probably you're going to take some time and coming up with what those rules should be. You know, you're gonna have to talk to some people and do some research. But yeah, that's got to be rules based. In my mind. I think the best lesson I could share with the average investor is to, is to buy good businesses as opposed to buy cheap businesses. Buy cheap businesses has been popularized. For a long period of time, buy good businesses was undervalued. Now I think it's become fairly valued or maybe overvalued. But in the event that buy cheap businesses becomes more important than buy good businesses, I would always err on the side of buy good businesses as opposed to cheap businesses. Even though that's been popularized. I mean, I was at a dinner recently in Omaha with some investors and they were talking to me about some cheap chemical companies. And I was it the, I was a chemicals analyst for three, for more than, for five years I was the chemicals analyst at tcw. So I'd spent some time in that industry and it reminded me, you know, I, I, I was fortunate to be aware of how bad I should say that industry can be. And so I wasn't moved by the argument at the dinner that geez, XYZ company is really inexpensive and has prospects for a turnaround. I wasn't moved by that because that company really is in a very, very difficult position with an over levered balance sheet and in deep trouble because of the acquisition and the leverage that that company has taken on. And it looks cheap, it looks very cheap, but it's cheap for a reason. It's, it's got a very difficult position that it's in and, and it's got a balance sheet that is, is, is inappropriately sized for where they are. So I'd err on the side of quality, think long term. You know, it's, it's, it's, it goes back to the compounding question. It's, it's, you know, I mean Just do the basic math. Like, like, like I was reading about a hedge fund the other day and it was guys who were thinking in college, I save a thousand dollars this, this semester and I invest it. How much could it be worth in 40 years, right? And so if you're working and you're 25 years old or 30 years old and have a job and just think of those terms, putting a little bit away, saving a little bit. It's, it's interesting. It's something they said at Harvard Business School. They said you have to, from day one, find a way to save a little bit and start accumulating wealth because it will be working for you on the side. And, and, and I've, I've done that in a very, very weird way, right? I've got, because I started in a different place, my jobs have been very different, the businesses that I've ended up pursuing. But, but I, I think that's, at some point you're going to be 55 or 65 or retire. And, and at that point, you know, you're not gonna have the flexibility to move the next job that you want to move. Even if you're 55 today, it's a lot harder to move than if you're 35. So, so think long term, be patient. You know, trust that people who are running companies are trying to build value over time. Policymakers in general, you know, big, maybe quotation marks or something, are trying to find ways for the economy to grow over time, for, for there to be more wealth accumulation. So long term, you know, try to be very optimistic and, and, and, and have a long term plan that you can execute. Don't get ahead of yourself. If you do a good job of blocking and tackling in the initial housekeeping, if you do a good job of those things, you'll be better than 90% of all investors because they don't do a good job of that stuff. They, they jump it and go straight to the complexity. The most exciting stuff, the stuff everyone else is talking about, if you just do a good job of the basics, you'll be better than most. And then also to get to the actual base rate statistics first, one of the questions you guys brought up was that most people put their money in equities because they compound at 10, 11% a year for hundreds of years or whatever. That's a base rate statistic. And then you can adjust that the way I do for true wealth. You can say after fees that I'm going to pay the taxes, I'm going to Pay the transaction costs. I'm going to pay and get to a net. Net net number. If you do that for all asset classes, you know, it'll look quite a bit different than some of the, you know, convenient portfolios that are out there available for people. So find out what the actual base rate statistics are for things. I consider that, you know, good housekeeping and getting the blocking and tackling correct. And you already be ahead of the game. Cause I'll tell you, there's a lot, there's a lot of valuable information in getting the basics right that most people just overlook. You have to avoid the cemetery. You have to avoid the. Really, like in, you know, investing is, is there's, there's two parts of this. A lot of people focus on the one big win that will set them up for life, right? So let's say you go, this is a dumb example, but let's say you get a job in Nvidia and you get stock options and now you're worth 20 million bucks, right? So that one decision sets you up for life. Most people are focused on the positive aspect of that. You also have to be focused on the negative aspect of that. You have to avoid the catastrophic losses, right? Because that can set you back years if you have a catastrophic loss. So that would really be my piece of advice. I think I'd go back to my core principles. Make sure everything you're doing is based on evidence, not Jim Cramer's or anybody else's opinions. And make sure that your portfolio is highly diversified, you're not taking more risks then you have the ability, willingness, and need to take to. Remember that all risk assets go through long periods of poor performance. So that's a reason why we diversify and never engage in resulting. Don't judge the quality of your decision by the outcome. Judge it by the quality of your process. And if your process is good, it's likely you just had a period of bad luck and you need to stick with your process. That one's actually pretty easy. I would just say know what you own, even if it's like delegated through an investment advisor. Like, I think it's always a bad idea when the client's just like, oh, you're the investment guy, deal with it. I think fundamentally you have to know what you own, period. And then the second one is, do whatever you can to keep the fees and the taxes to a minimum. If you just do those two things, know what you actually own and why. I should probably add that. And then keep your fees and taxes to A minimum. It's all good. And as far as investment philosophy, it's also simple. Buy cheap stuff, buy strong stuff and follow trends like, you know, I could do it in one sentence. So investing is frankly pretty simple. It's just people always, you know, they don't follow the basic rules for some reason. It's, it's crazy to me. But in theory, it's easy, right? Doesn't have to be over complicated a lot of times. Simple is obviously, you know, can be better. No, no, no, no, Exactly. Simple is beautiful. And, and that's why, that's why there is beauty in like vanguard in the sense that least people can understand what they know. The fees are very low, the taxes are very low through the ETF wrapper. So it's, it, frankly, it abides my, by my basic guidance there because it's because they can check those two boxes, which is probably the most important boxes. It's the law of compounding. I mean, I think it's so valuable and I think that people need to stick with that. And in general, you know, just buy and hold, I think wins out over time. And, and I think that if you can hedge your portfolio when it's smart, that adds the compounding, right? Because. And that could be, I think a lot of times the edge that people either need or helps them kind of mentally because again, it's hard to just sort of say, I'm gonna buy and hold through a 20% decline in the market. And so if you can keep your sort of emotions in check and have like a real plan, it seems corny and hard to do. But once you get that plan down, it does make everything, I think, a lot easier. It's tough for me. I hate giving advice because I don't want, I don't listen to any myself and I don't really think I have any. But I always like to watch what people do, not what they say. And that's why I was happy to be on here to talk about what we do, because that's how I view the world. The one piece of advice I give or I would think about is that stop thinking about your savings as investments. That's where I think the industry's lied to all of us is everybody thinks I'm going to put this money away and I'm going to get rich off of it so then I can retire to a beach somewhere. These are your savings you need there to be when they need the most and to outpace inflation. As soon as you start thinking about a way to get Risk, you're going to take imprudent risks and you're likely going to lose most of them or they can be underwater for decades. So the only way to get rich is in your business, your job, whatever you want to do. But your savings need to be as robust as possible, so they'll be there when you need them most. I'd say that to be flexible and also to enjoy life for sure. So I do and kind of this whole 4% rule debate I do tend to get associated with 4% is high. And therefore you've got to be more conservative about your approach to retirement. But being flexible, being able to go with the flow, I mean people at the end of the day might be okay if they don't have much more than a Social Security benefit. And it just makes sure you're not overly saving or not accounting for the fact that spending, spending may decline with age. And so to strike the right balance between enjoying the present but also being responsible about protecting the future as well and to not get too carried away in either direction. I think for most people, they think they can do things they can't. So trying to make one month market calls over your career won't destroy value. So I think you, you take a pocket of your money and you put it in a low fee, long only product and you don't touch it and make that your North Star. Because you know, over five, 10 or 15 or 20 years, it depends how old you are, how much, how rich you are, that like that money accrues. I've heard a lot of people on Wall street say I don't even trouble my 401k, it's a diminimous part of my compensation. That's dumb. Like you want to think about saving things in 5, 10, 20. Like thinking long term and staying fully invested are probably the two things that I think people don't totally appreciate. Be humble and be patient. That's cheating already. There are some two things there and, and, and you know, like so, so that points to diversification, strategic thinking and, and, and trying to be more systematic, humble and patient. I would say the most important thing would be just to do your own work, you know, doesn't mean that you can't use other people's work. But I think you need to verify that other person's work and kind of what we talked about before. I mean the key to this to stock picking is doing independent research to form that independent conviction. So you can just know what to do before other people, you know, and even when I was A private full time investor. Yeah, I had big, big wins, but just that independent research and conviction and just having a pulse on that business, you know, it was the large losses I never took that kept me in the game as much as the big wins. And so you're not able to do that unless you really dive in yourself. And I also think that's like the best resume for a younger stock picker or somebody who wants to get into it. Like, you know, go find, find a couple of businesses that you really like, talk to the management teams, do the work, form conviction, be the ax in that name. You know that business better than anybody else. You know, get loud about it on X, I don't care. I know I did back in the day, I don't anymore. But you know, staple your name to it, you know, make people know that you were the one that found that thing early after and then it goes up a thousand percent. That's your resume. You know, you'll have employers, investors, whatever knocking down your, your door. If you have a history of finding winners in the, in the stock market, know what you know and know what you don't know, and if you, you know, make your money doing some kind of certain function or specialty in the world, go and do that. It's unlikely that you're a professional stock picker that could pick single name stocks. Well, the time you've heard about the story of any stock by the taxi driver, the story's probably already over. So you know, be diversified in what you do. Doesn't give you index per se, but be diversified what you do and then don't place all your eggs in a single basket. And then finally try to control your ego, which is against your nature, but try to control that. It's very hard to, especially when you're in a group of people go, and you know, not all of them, be careful about that. Steve Cohen talking about training rollers, I said, you know, well, but how do you get down? He said, well what do you do when there's a position you have on and you just undecided, you're not sure if it's just a short term move against you or you're wrong. And he says if he's ever in a situation where he's not sure, first thing he does is cut it in half. And if he's still insuring a while later, he cuts it half again. He says, you know what, before too long you don't have a problem anymore. And, and it's a great piece of advice, really a stupendous piece of advice, in my opinion, because a lot of people become frozen. They can't decide, you know, hey, I get out here, I'm going to sell right at the bottom and then the market's going to reverse and, or I hold on, it's just going to keep on going. And they, they think like there's just a choice of holding everything or selling everything. And they have a problem realizing that you have a continuum of choices. You could hold anything between 0 and 100%. You don't have to have a 0, 100. And the decision between 0 and 100 is very difficult. But so one thing to that, a piece of advice where you're uncertain, you know, get out of something. Get out of something. Just, just get out of something. And, and, and then reevaluate it. So that's a, that's a, as a good general principle is not to do everything at one time, you know, and it works for scaling into positions, scaling out of positions when you're undecided, it's breaking, breaking trades into components as opposed to just doing everything 100% one way or the other. That's a really critical piece of advice. I wish it was a really simple thing. I think it's a simple idea, but it requires more work than I would love. But that is, whenever you're investing in something, make sure you understand why you should get paid for owning this asset, for performing this activity. Understand why it not only makes sense for you as the investor, but whoever is going to be funding that investment on the other side, why it makes sense for them to be giving you the return you need. I would say there's, you know, there's a lot of errors people can make as investors, but one of the crucial ones that people make time and time again is forgetting about the fact that if you're going to sustainably get a return, it needs to make sense to give you that return. In terms of the person on the other side and where you can't answer that question. Well, you're not investing, you're speculating. So I would say, you know, for the retail investors who are buying, you know, one week call options on amc, the reality is you're not investing. The person on the other side has no reason to want to give you a high return. Right. The person on the other side, for one thing, is a market maker and the market maker is the casino. The casino is only there to try to make money off of your activity. But the simple truth is whenever you're buying a call option you're not doing anything useful. You only get the upside. And if you only get the upside, the person on the other side only gets the downside. There's no reason for them to want to give you a good return in the long run. So I think investors could avoid a lot of errors if they thought not just about, ooh, did this make sense for me? But does this make sense for me and the guy on the other side? If it doesn't make sense for the guy on the other side, this is not going to be a sustainable strategy. Get enough mastery over data analysis to be able to do some myth busting and treat everything that you see out there with a pinch of salt and, and really try to validate things. And also like if anything ever seems obvious in investing, probably not true, like if anything, but so such a clear cut distinction that it's like, obviously I should be all in, definitely not the case. And in fact like that feeling should give you worries. So a deep, deep skepticism is probably the biggest lesson I can, I can impart and that's from doing a lot of analyses and trying to replicate a lot of things and seeing, you know, how stories take a lot of skeletons in the closet to, to make compelling and, and juicy. So compelling and juicy. It's that quote about the crystal ball and learning to eat shards of glass. If that's how you want to live. Right? Yeah, a good one. Warren, what about you? You can impart one piece of wisdom. What would it be, I mean, to the average investor which would, would be like your guy in the street maybe? I, I think if you do this, if you don't do this like with, with a hundred percent full time job and you need to have the right skills and you need to have the right tools, meaning that you better be able to manipulate data, you better be able to understand the data and spend a lot of time even in the gray areas that, that you just really probably should hand the keys over to somebody else who's better able to do that stuff because it, it's not an easy game. I see so many people who, I had a, a guy one time, I'm gonna not describe too much about him, but he had made a lot of money in another industry, a lot of money. He was very successful and he actually asked me to run his money in his expectations were to beat the market by like the hurdle rate was 15% above the S&P 500 every year or something like that. And he had just started out and I had a pretty serious conversation with him. That this is an unrealistic goal and why. And so that's kind of the thing I see more most often with, I would say the average investor is just a lack of an appreciation for how hard this game is and that there's a lot of really, really, really smart people grinding at this stuff every single day. And so if you're not, if you don't love it, if you don't love it, if you don't like kind of eat it and sleep it, then best to let somebody else to do it. I think a lot of people get caught up in sticking to, like, hey, I've got my one philosophy. I, I'm a, I'm a low PE investor or I'm a, I like to invest in fast growth companies or I like to find the highest quality and that's what I want to invest in. I would say what you want to be is you want to be flexible as an investor. And you know, I, I live in Los Angeles now, but I, I grew up in the Boston area and I'm a Boston sports fan. I'm a fan of the New England Patriots. And our longtime coach, Bill Belichick, he had a way, if, if I was going to use a sports analogy, there were a lot of football coaches that, their focus is, you know, their, their belief is I want to have a power run game or I want to have a passing game. And that's the, the offensive philosophy I believe in. His approach was I want to be flexible enough to run my offense based upon what the defense gives me. So if the, if it, if this week calls for power run game, I want to be able to do that. If next week calls for a passing game, I want to be able to do that. And I'd say that kind of flexibility, that's, that's how I would think about being an investor. You don't want to just say, I only buy the lowest pes, because that might not make sense if you could pay up a little bit for a great business, that's what you want to do. You also don't want to say I only buy the fastest growing businesses because you might pay too high a multiple for those companies someday, like I think you're doing now. So I'd say you want to be flexible and incorporate the pe, the value and the quality, excuse me, the pe, the growth rate and the quality into any investment decision you're making. And so that's what we try to do. We try to be flexible enough to incorporate all those things into our investment decision making. Thank you for tuning in to this episode. If you found this discussion interesting and valuable, please subscribe on your favorite audio platform or on YouTube. You can also follow all the podcasts in the Excess Returns network@excessreturnspod.com if you have any feedback or questions, you can contact us@excess returnspodmail.com no information on this podcast should be construed as investment advice. Securities discussed in the podcast may be holdings of the firms of the hosts or their clients.