How I Invest with David Weisburd – Episode 253

Guest: Bill Brown
Title: How Great CIOs Think
Date: December 2, 2025

Overview

This episode features Bill Brown, an experienced Chief Investment Officer with a track record at major family offices, including the Stern family and today's Terrace Tower Group. Host David Weisburd dives deeply into how top CIOs make idiosyncratic investment decisions, cultivate an edge, avoid common traps, and build unique, resilient portfolios. Key topics include learning from legendary investors, the anatomy of “big trades” (like the Big Short), diversification beyond legacy assets, and building adaptable investment teams and mindsets.

Key Discussion Points & Insights

1. Foundational Lessons from the Stern Family

• Focus on What Matters
  • Bill learned from Leonard Stern to “not confuse activity with progress.” Leonard kept an unscheduled, ruthlessly focused approach; if a conversation wasn’t valuable, he’d walk away.

    “If he wasn’t interested in what you were talking about, he would just sort of say, thank you very much and walk away. It was very cut and dried.” (Bill, 01:10)

  • The “shorter letter” philosophy: clarity and brevity aren’t shortcuts but signs of deep thought.
• Democratizing Ideas
  • Leonard avoided ivory-tower management; instead, he actively sought insights from every level and across the organization.

    “Some of the best ideas come from the lowest levels or across the organization.” (Bill, 02:30)

2. Embracing Asymmetry and Idiosyncratic Bets

• Batting Average vs. Slugging Average
  • Bill borrows analogies from sports and business (Ichiro vs. Aaron Judge; running up the score in business).
  • High “hit rate” isn’t the goal—breakout trades or investments are what matter.

    "You can make money either way. You got to kind of know who you are...there are these big hits.” (Bill, 04:09)

3. The Anatomy of the Big Short (2006–2009)

• Seeing the Opportunity Early
  • Bill describes how the Stern office moved early to short the subprime market using credit default swaps (CDS), inspired by a Jim Grant newsletter and direct meetings with market insiders like Greg Lippmann.
    • Detailed review of how housing loans were being misrated, and the trade setup.
• Managing Emotional and Operational Risks
  • Weathering months of losses while “being early,” facing pressure to post collateral, and skeptics warning they’d never get paid out.

    “We probably made triple digit millions of profit over a course of two or three years. The only shame of it was we probably should have done more." (Bill, 10:36) “There were a few months where we were losing money...and that felt really bad. But we, we sized it in an amount...that he was willing to lose.” (Bill, 11:46)

• Dealing with Uncertainty as a Generalist
  • Success was less about technical mastery, more about asking the simple “I don’t get it” questions, staying opportunistic, and being “in the right rooms.”

    “We’re not trying to be the smartest guy in the room, we’re just trying to be in the right rooms.” (Bill, 14:32)

4. Pattern Recognition and Learning Across “Herds”

• Cross-Pollination of Ideas
  • Bill and David stress the value of moving ideas between communities (Silicon Valley, family offices, institutions). Breakthroughs often come from importing common sense from one “herd” to another.
• Crypto Example
  • Bill invested with two very different types of crypto investors—cross-confirming conviction via conflicting backgrounds.

    "We like when there's different people liking something...that's a pattern we look for." (Bill, 17:43)

  • Differentiates between hype-driven narratives and durable venture frameworks.

    “One of the trades this guy did was truly a thousand to one...But it was money you were prepared to lose and you don’t mark to market.” (Bill, 19:39)

5. Guarding Against “Fake Busy” and Maximizing Focus

• Avoiding “Fizzy” (Fake Busy)
  • Bill avoids back-to-back meetings and instead creates blocks for deep work—citing creativity research by John Cleese and Cal Newport’s “Deep Work.”

    "You can’t be creative if you’re running around...You need to find this sort of quiet space." (Bill, 21:18)

• Energy Management > Time Management
  • David emphasizes focusing one’s best energy, not just time, on high-impact work.

    “I don’t believe in time management. I believe in energy management.” (David, 24:08)

6. Where Investing Edge Comes From

• Hanging Out in the Right Places
  • Attributing Seth Klarman, Bill stresses “location, location, location” and being “vaguely right, than precisely wrong.”

    “If you get the zip code right, you’ll often do really well.” (Bill, 26:06)

  • Investing is not a “game of perfect”—repeat exposure to high-upside environments wins out over obsessive precision.

7. Tactics for Taking Profits and Managing Power Laws

• Trim, Don’t Sell All
  • Bill prefers selling half after a big run-up, maintaining exposure to potential “power law” wins.

    “We often will sell some, sell half ... we set a price target and a return profile and we're not afraid to trim, but we're also not afraid to add.” (Bill, 28:56)

• Staying in the Game
  • David and Bill highlight the importance of surviving volatility to access future opportunities.

    “If you don’t have that at bat, if you ruin yourself...your expected value is zero. Rule number one is stay in the game.” (David, 30:48)

8. Building Diversified Family Office Portfolios

• Terrace Tower Group Strategy
  • Origin story: co-founder of Westfield, desire to diversify away from retail/office real estate.
  • Building an in-house, global, outward-facing investment team, rather than relying on banks or consultants.
  • Transition from pure real estate to a 50/50 split with non-real estate (equity, private credit, venture, strategic directs).

    “Everything we do is very bespoke, very opportunistic.” (Bill, 38:23)

• Overcoming Inertia
  • The shift required years of gradual proof, board-level approvals for each new asset class, but built conviction step by step.

9. Career and Life Lessons

• “Touch It Once” and Focus on What You Can Control
  • Advice from Bill’s mother: minimize switching costs, finish tasks as you start them.
  • Focus on the intersection of things that matter and things you can control.

    “If everyone went around asking themselves every day, is this something I can control or impact? Is this something that matters? And if it does both, then do it.” (Bill, 44:17)

• Embracing the “Impossible”
  • Draws inspiration from Terrace Tower’s founder, who struck out “impossible” from the dictionary.

10. Finding and Operationalizing the “Impossible”

• Messaging, Adoption, and Persistence
  • Both Bill and David relate the “adoption curve” mental model: persistence, storytelling, meeting evangelists, and waiting for the market to catch up.

    “We’re trying to meet as many of those people, evangelists as possible...most people only have one of those in their life. The idea is that we could do it many, many times.” (Bill, 46:28)

• Late Bloomers and Second Acts
  • Cites obituaries as reminders that transformative acts can happen at any age.

Notable Quotes & Memorable Moments

• On Ruthless Prioritization:
  • “If I had more time, I’d have written a shorter letter.” (Bill, 01:55)
• On Investing Edge:
  • “We’re not that smart. We’re just hanging out in the right places.” (Bill, 25:52)
• On Power Law Thinking:
  • “These 5 to 1, 10 to 1, 100 to 1 power laws are happening every day constantly and you just have to be open minded to find them.” (Bill, 34:23)
• On Making ‘Impossible’ Happen:
  • “He scratched out the word impossible because he obviously was on this journey...again, I kind of have this thing, whether it’s from my investment banking days...you just don’t give up.” (Bill, 44:54)
• On Energy Management:
  • “I don’t believe in time management. I believe in energy management...” (David, 24:14)

Timestamps for Key Segments

| Timestamp | Topic | |---|---| | 00:12–02:16 | Lessons from Leonard Stern: ruthless focus, not confusing activity for progress | | 03:20–04:49 | Hit rates, slugging average, idiosyncratic bets (baseball & Bezos analogies) | | 05:36–13:30 | The Big Short: identification, execution, risks, and payout | | 15:18–18:52 | Pattern recognition; cross-herd investing; early crypto venture bets | | 20:38–22:41 | Avoiding “fizzy”/fake busy; reflections on creativity and deep work | | 24:08–25:29 | Energy management focus (David’s productivity philosophy) | | 26:02–28:27 | Finding the right “zip code,” being vaguely right, “game of perfect” | | 28:56–34:43 | Profit-taking discipline, avoiding binary outcomes, thinking in power laws | | 34:48–39:57 | Terrace Tower Group strategy: diversification & in-house investment team | | 43:42–45:42 | Career advice: “touch it once,” control vs. matter, embracing impossible | | 46:27–48:06 | Operationalizing impossible, evangelists, and the persistence to create new categories |

Final Thoughts

Bill Brown’s investing philosophy combines humility, cross-disciplinary curiosity, ruthless prioritization, and repeat exposure to game-changing outcomes. His stories and maxims are eminently practical for anyone managing wealth or seeking extraordinary returns—and demonstrate that the playbook for great CIOs is as much about mindset as it is about methods.