← Infinite Loops
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- [00:01]
A
Well, hello everyone, and happy holidays. We're taking a short break from new episodes this week so you can all focus on finishing off that wonderful Christmas dinner. We'll be back next Thursday with something new. And in the meantime, here's a golden oldie from the archive. Enjoy. Well, hello, everyone. It's Jim o' Shaughnessy with a Another Infinite Loops. I am actually doing this introduction after having an amazing, wide ranging conversation with Guy Spier, the famous value investor who is the author of the Education of a Value Investor, My Transformative Quest for Wealth, Wisdom and Enlightenment. He's an amazing man. We launched right into our conversation, which you're about to hear. We spend very little time talking about the nuts and bolts of investing, but we do spend an inordinate amount of time talking about maybe the more important aspects of whether you can be a success at investing or not. And that is the inner aspects of how we all deal with and interact with life. So please enjoy my conversation with Guy Spier.
- [01:23]
B
So nice to meet. I feel kind of like extremely, extremely honored that you're interested in talking to me. I don't think I'm that great.
- [01:29]
A
Oh, I think you're amazing.
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B
I'm blown away by the incredible interactions that you have on Twitter. I mean, you have just an amazing, amazing network and amazing conversations, and it's a real privilege to just watch them in a certain way is already just great, actually.
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A
Thank you. That's very kind.
- [01:50]
B
I'm curious. So, New York City, where are you right now?
- [01:53]
A
I am in Greenwich, Connecticut right now. I have an apartment in Union Square and spend about 40% of my time there and about 60% out here in Greenwich.
- [02:05]
B
Help me out. Place me. I'm the kind of person, I'm sure I'm not the only one that, you know, who. The only place I could imagine living in Manhattan is the Upper west side, period. And I'm not extreme. Upper west side. The Upper west side is for whom? Below 72nd street is no man's land. I can go down to 66th Street. Below 66th street doesn't work for me. Proximity to Lincoln center is good. Almost all of the restaurants that I like are on the east side. I lived once for three months on the east side while my apartment on the west side was being renovated. I nearly died a thousand deaths. I couldn't stand it. And then you say, oh, I'm in Union Square. And I think, how does he do it?
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A
Well, I was on the board of Lincoln center because I was the chairman of the Chamber of Music Society. Of Lincoln Center. So I was up there all the time. Love the Upper west side. But the reason we chose downtown is sort of twofold. The more important reason is my wife is quite an accomplished street photographer.
- [03:06]
B
Oh, wow.
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A
Actually has a book published by Aperture, Melissa o'. Shaughnessy. The environment down there is really, really target rich for a street photographer because as you know, NYU is scattered among the streets down there. And the second was more of the fact that we live in Greenwich 60% of the time. We thought, let's have a more authentically city like experience. And so that's why we ended up down there.
- [03:36]
B
I get that.
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A
Yeah, we love a lot of the restaurants down there too. Got a lot of friends, many who live in Gramercy park, so it's an easy walk from our apartment.
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B
I used to be a big fan of the Gramercy Tavern.
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A
Oh, totally.
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B
Yeah. And there was a restaurant down on Bond street that was called Il Buco, which I just loved.
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A
Love Il Buco. Love it.
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B
Yeah. Is it still there?
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A
I think it's gone now.
- [03:59]
B
I was a big fan of that. So it's not like I wasn't downtown. And I totally get that. And actually it's a wonderful yin and yang. I mean, I don't really know Greenwich, but I want to imagine that there's lots of green and it's very bucolic and it's lovely. And what the train rides an hour between the two.
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A
Not even on an express train. It's a 45 minute express.
- [04:20]
B
The quality of life that one can get in the New York City area is really quite extraordinary when you set yourself up in that kind of way. What happened to me, I don't think it's as effective actually as what you've got. We were in the Upper west side, didn't want to move away from there, but had a weekend place in Tuxedo park, which was total weirdness. And actually my wife didn't take to it. And I was just trying to live a dream. And so the social setup there with all those mansions is really, really weird. We owned a house there, not one of the larger mansions, but a very, very nice cottage. So we'd go up there on weekends. I did not understand what I would have needed to do to have our children be placed in the kinds of schools that we'd be happy for them to go to. So I'd not played the right game. And the school that we wanted was called the Heschel School. And when I realized what I needed to do, we actually would have Moved perhaps to Park Slope, something like that, in Brooklyn. But what happened to me is I just said if I'm not going to be in Manhattan, I might as well not be in the United States. Look, we had young children. Our oldest was four years old, I believe. And I said to myself, if I could move to Perfection, where would it be? Omahaviona meets in my book. So Zurich wasn't the only choice. But I had my heart set on Zurich and my wife was okay with it. But now our eldest daughter is at Barnard and our son's got applications. He's almost only applying to institutions within New York City because he wants to be close to his girlfriend. I mean, I've spent more time in New York City this year probably than many other years. I'm not yet anywhere close to having to pay taxes. But if I up the time, I'll become a US taxpayer again, which will be funny.
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A
Yeah. And you don't want to become a US Taxpayer with a New York City residence.
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B
Yeah, that's right. It's true. A penny drop for me. So you know that here there's no capital gains tax.
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A
I do.
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B
So you get envious. But it's not as good as I thought it was. And I don't know why it took me so long to figure it out. So what you do have is you have a wealth tax. And the problem with the wealth tax is it's levied no matter what happens on the level of wealth of that year. And so you are not able to time when you pay your taxes. And if you think about it, if you plan on holding an investment for more than 10 years, the wealth tax, call it 1%, it's less than 1%, but after a 10 year period with the compounding of the 1%, that's kind of pretty brutal actually. So it's not as good as I thought it was here in Switzerland, but I still love it here.
- [06:53]
A
I love Switzerland. Beautiful, beautiful country. I had a funny experience when I was in Switzerland. I was lamenting the fact that our driver, of course spoke perfect English. And as we were driving through various parts, he switched to Italian, then German, then French. And I lamented, my God, I wish I knew how to speak at least one other language. And he laughed and he goes, you can get on a plane in the US, fly for six hours and still be speaking English. He said, here, I can't drive for 40 minutes and still be speaking the same language.
- [07:31]
B
Correct. Actually, the truth of the matter is all over the United States you can speak Spanish and pretty Much half the population will understand you. Language of business in the United States is English. We can get into if you like. But look, if you live in Switzerland, you're going to pick up languages far more easily. Somebody who grew up in the US shouldn't feel bad for the fact that it's. I noticed we're spending a lot of time in London right now. I notice how my facility at German, which is not my mother tongue, gradually declines if I spend a lot of time in London because I'm just not using it and I'm kind of going into a monolingual mode. I would tell you, even within Switzerland there are distinctions. So if you live in Beau, your French is likely to be a lot better because there's a lot of French heard in Beau, the capital. Here in Zurich, you have a lot of languages in comparison to somewhere in the United States, but you hear far less French. You hear quite a bit more Italian here in Zurich. And one of the most incredible cities for languages, interestingly enough, is Baseline, because Basel is right there, right next to Germany, right next to France, and there are families, check this out. There are families who are French speaking, whose German is a second language, but who live in Basel and they're registered and they're sort of citizens of Basel, even though Basel is a German speaking town. So that's an incredibly multilingual place. So you even have subtle variations within Switzerland if you like. But don't feel bad, it's the nature of the place.
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A
I agree.
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B
You'd be multilingual if you came to Switzerland. Give yourself two years, you'll suddenly start picking up German. You just would. Yeah, it's just there. Yeah. Sicher. So your wife is Melissa o'? Shaughnessy.
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A
Correct.
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B
I'm a terrible photographer.
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A
So am I.
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B
But I wish I was a good photographer. I'm really good at buying camera equipment. I can do that really well. I was insulted when I read an article which called Leica cameras just jewelry for men.
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A
And I was like, that's quite true.
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B
What it is, because I'm the kind of guy who lusts after the Q3. There's a sensible voice in my mind says, you're not going to take better photographs. You get that damn camera. And my eldest daughter give her any lousy camera and she captures things that. It's just so frustrating. Sucks.
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A
I agree.
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B
I mean, I was a huge fan of Henri Cartier Bresson at the time, particularly street photography is something that is just so wonderful. But it's a real skill.
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A
Totally. And just watching her progress from when she started to now. But it was 10 years. She had 10 years of practice.
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B
It's one hell of a thing to practice that.
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A
It's especially good to be in New York, though, because nobody cares. Nobody cares about if you're taking somebody's picture.
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B
It's kind of expected really, isn't it, that you're in New York.
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A
Yeah, it really is. We travel a lot and we've noted in other places, weirdly, Paris people don't really like to have their photo taken in Paris. My wife tells me, at least that's.
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B
Interesting because there's a yin and the yang between Paris and New York for me. You know, I lived in Paris after undergraduate. I lived in Paris for like a year and a half and fell in love with the city. And beautiful city, well understood, made the smart move that my future was far better if I went and applied to business school in the US And I was thinking of applying to something called the Ecole National d', Administration, which had a non French program. But I used to compare New York to Paris and I'd say Paris is like a very, very beautiful young lady who's gorgeous on the outside, very nice to look at, but when you try and scratch between the surface, you may find that there's not much there. And then New York City is like a grumpy old man. It may not look so nice, but boy, is there so much beneath the surface. And if you want to enter into a conversation, but it comes out. For me, both New York and Paris are kind of like street theater type places. In New York, the life of the street is walking the sidewalk. You're not going to see it. And in Paris you got to sit down somewhere to watch it go by.
- [11:51]
A
Exactly. I love that comparison. It's quite true. I love Paris. It's a beautiful city. But I definitely agree. I'm kind of always happy when I get back to New York.
- [12:01]
B
And that's when I knew when I needed to leave New York was when I was no longer happy to come back to New York. I didn't feel a sense of excitement. I felt a sense of tiredness. And it might be because we were parents with young children, but I no longer felt New York was a city of endless possibilities for me. And one of the great quotes about New York is that if you go to New York, you better be prepared to get lucky. I used to have a book of these New York quotes. Another one was once you cross the bridge into Manhattan, you've crossed the last bridge. You need to Cross.
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A
Oh, I like that one. That's good.
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B
And that's when I knew I had to leave, basically. But, boy, were we happy. So we were in there in August to put our daughter into. She wanted us to be there as she started at Barnard, we stay at the Phillips Club, which is. It's a less expensive version of having your own apartment there. We were really happy there. And something I do tell people, actually, and I do think it's true, I think that my personality fully formed in Manhattan. It was incomplete until I got to Manhattan. And in a way, I was able to leave because I know that there's a part of me that will always be a New Yorker, if you like. It may be the core of my identity. And I relate to people through my identity as New York often. So what I'm doing with you right now, in a way, is I'm relating to you as a fellow New Yorker.
- [13:25]
A
Yeah, no, it feels that way as well. I grew up in the Midwest, in Minneapolis St. Paul, and I moved here when I was 31 because I'd always wanted to live in New York ever since I was a little kid. And when I would have siblings or other relatives visiting me, I would say, you either feed on New York's energy or it feeds on you.
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B
What proportion of your time did you feed off its energy? And what proportion of your time was it the other way around?
- [13:53]
A
Like, 90, 10, 90%? I fed off its energy. Still do 10%. Sometimes when I'm there for long periods of time at my apartment, I'm just like, okay, gotta go back, get some green, walk among the trees.
- [14:09]
B
I know that many of my friends don't believe it about me, but I believe that I'm an introvert. And the reason why I believe that is that I like libraries. I like places where it's quiet. I like restaurants where there's not a loud noise around, where I can have conversations. I love these Jeffersonian meals where I can hear the conversation. I get very tired in noisy environments. And what happens in New York when you live there is that the noise declines. I mean, you still have the noise in the street, but you spend far less time in the street because you're either in the office, the apartment. So you're kind of like, that's the transition. But I remember that the first six months I was in New York, it really grated on me. I'm not sure if I could have ever been as much a New Yorker as perhaps you are. There's another thing that I used to say about New York, which I really do believe it was true for me. I used to say that New York is like being a user or abuser of cocaine. So there was a certain period of my life in my early 30s where I hung with a crowd that were regular users of that stuff. And I used to joke with friends, I'd say, oh, I'm exploring the dark underbelly of New York nightlife. And by the way, Jim, there were a whole slew of friends that I had during that period that I'd only see in around this kind of like dark underbelly of New York light life. And the minute I pulled out of that world, I don't even know if they exist anymore. It was like they were all people who kind of existed. And some of these people are like huge personalities. But a friend of mine who used to hang with them and we were kind of like dry. We weren't interested in doing that. We just enjoyed the nightclubs and the colorful life and all of that. She used to call them vampires. They'd disappear off to the bathroom. They would all say, I know this is unhealthy, but it is enormous amount of fun. I plan to stop, but just not yet. And I used to say that that was my relationship to New York. It's enormous amount of fun. I know it's not good for me. I plan to leave, but just not yet. Then after 16 years, eventually I was like, okay, we're doing this. We got a container and we put everything into the container, including our two cars. All our belongings were in a container. And they went all the way from New York to Zurich, including a Honda Odyssey, the Mamma mobile that we had at the time for our three children, which couldn't be serviced properly here because we were like, it's a Honda. I mean, doesn't Honda get sold everywhere? It turned out that this Honda had special wheels, special tires, non replaceable, something that were only manufactured for the United States. So we had this kind of like odd lot model. I don't remember how we got rid of it eventually. It was kind of a total nightmare. But.
- [16:57]
A
On the cocaine thing, when I was growing up, cocaine was the absolute drug of Choice in the 70s. So I'm 63. So when I was a teenager in the 70s, all of my friends used cocaine. I did not. And all of them were very perplexed by this. They were like, Jim, you have the ideal cocaine personality, why don't you use it? And I said, that is exactly why, because I know that if I ever tried it, I would Love it. And bad things would happen.
- [17:32]
B
I need to tell you my story. So this crowd of people, so I'm running with them and exploring the dark underbelly of New York nightlife. And one of these people invites me onto. He's chartered a yacht in the Caribbean. And so now we're on this yacht in the Caribbean and there's enormous consumption of cocaine. And I'm saying, no, I just don't want to do it. And then we get to Saint Barts, this French island.
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A
Love Saint Barts.
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B
And we get onto the island and I just need proper coffee. And that was before good Starbucks coffee and before Santambros and Via Quadrona on the Upper east side. I have four espressos in a row on the beach. And one of these guys turns to me, says, dude, you're no different to us, except your drug of choice is caffeine. And our drug of choices. I was like, yeah, this thing is legal. Yeah, I'm doing this one, thank you very much. But then eventually, just to close that loop in New York City, I decided I was going to try cocaine and I wasn't going to do it around those people because that was dangerous. And I had a friend. There's a classic New York story. I have a. He's a dear friend still. And I call him and I say, you know, I think I want to try this. Can you tell me about it? And he grew up in a household where his father was a psychiatrist of the 60s beat generation. His parents had done all the drugs. And this friend of mine, he was the kind of son who would like walk in on his parents in the living room, say, you know, you really. People have to stop doing all these drugs. I'm sick of it. Anyway, I say to him, peter, do you think I should try it? And he says, well, it's a delightful drug, guy. I don't see anything wrong with it. So I end up doing a mini bump with a friend that I trusted. One third of a line. The rush and the high that it gave me was extraordinary. It made me feel like there's a day that I had skiing where I was super fit, super healthy, 18 years old, skiing in waist high powder. And I was able to ski really well. And it was just a glorious, glorious day. It made me think of that day and I thought, my God, here I am in my living room and I'm having this experience of incredible. Here's to your point of the extraordinary danger. The next day I'm on Madison Avenue. I know I was on Madison around 64th or 65th street, probably walking to then my favorite coffee shop, via Quadrono. And my brain conjures up an image of a silver platter with piles of white powder. Because what happened to me immediately after I tried is I actually got nauseous after I got the rush and the high, got nauseous because I hate taking drugs. I don't take anything for a headache. I kind of, like, don't like licking my own blood. That's when I realized how freaking scary it is. Because that one short experience with that drug, my brain was already trying to find ways to get me to do it again. And that's when I knew, wow, that is just unbelievably scary. I scared my parents when I told them. And my friend will never forgive me, because my parents, like, you did what? You tried cocaine? I said, well, my friend said, it's a delightful drug. And they're like, who is this guy?
- [20:46]
A
I love it. Have you read Michael Pollan's how to change your mind?
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B
Yes. I had a guy who's a risk manager at a major bank here in Switzerland come into my office and try to convince me that I need to do psychedelics.
- [21:02]
A
So I did. I read the book. I grew up buying all of the propaganda. Never touched a psychedelic ever, because, remember, Nixon made his whole war on drugs because he was in political trouble, and that was that. And somebody pointed me to Michael Pollan's book, and I read it, and I was flabbergasted. So I did try psilocybin twice, and it was amazing. But the interesting thing was I had no desire. After the first experience with psilocybin, I had zero desire. Oh, I want to go do more psilocybin. So I found in my very limited experimentation with these drugs. Now, also, they were the purest pharmaceutical type because of the person who assisted with it. And he had told me, listen, these psychedelics, most of them. And he was careful to note fentanyl, don't go near that stuff, because that's trouble. But anyway, he was very much, these are really not addicting substances, at least in my personal experience, which is very limited. Two times I had no desire. No desire. I need more mushrooms. I need more psilocybin. I know a lot of the guys out in California, microdose. I have a lot of friends who microdose psychedelics. I've never tried that. Listen, I'm very lucky in that I love Bach. And so when I'm working, when I'm reading, I just have Bach on all day. Long. I don't want to be compromised in any way in terms of an external drug. But I was interested.
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B
I've not done that, although I've had people and I've read the Michael Pollan stuff, conversations I've had. I mean, one, I remember at the TED conference a couple of years ago with a friend who's a coach and I've done plenty of psychotherapy and I'm a huge fan of psychotherapy. And she looked at me and she said, you don't understand. Because I gave her a very skeptical view. She said, one trip. One trip, she said, changed her life. And she said that was the only trip she needed. And in her case, what she experienced was. She said, look, I experienced death. And she said, I know that you think that you know what death experience is. You don't know what it's like to do it under psilocybin. And having had that experience, I'm a different person now. I don't need to do it again.
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A
That was my experience as well. I did not go into the first experience thinking that I would experience death, but I would phrase it a little bit differently. One of the first things that I said when I came out of the psilocybin, I looked at the shaman and said, I'm not afraid to die anymore. Apparently that was the first thing I said. I don't really recall saying it, but the second thing I'll share was I'm a huge music fan. So I was in a Bhutan like location and I was hearing they have all the Buddhist monasteries right next to each other. If you've never been to Bhutan, I highly recommend it. It's an amazing country and the Bhutanese people are amazing. Anyway, so I was hearing all of the. That type of chanting, but then I heard the purest, most beautiful singing I'd ever heard in my life. I literally started to cry and I just sat transfixed and what seemed like 20 minutes, I said to myself in the trip, oh my God, this is the cherifims and seraphims. I'm not a religious person. And so when I came out of the thing and was discussing the experience with the shaman, he said, well, what was your favorite part? And I said, you must, you must give me a copy of that singing was Angelic that you played when I was in the trip. And he looked at me and he goes, I didn't play any vocals.
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B
Wow.
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A
So I would highly recommend it. I'm a big supporter because of here in the us I support a group called MAPS that basically was the driving force to get major universities like Johns Hopkins to do tests with MDMA and psilocybin for vets with severe post traumatic stress syndrome. And the reports are amazing.
- [25:43]
B
Where I got to. So I did 10 years of Jungian therapy, and at some point I did maybe five or six sessions of emdr, which is supposed to help with trauma, where it's kind of left, right stimulation. And what I learned about EMDR is that the protocol that you use is extremely important. So preparation and accompaniment through an EMDR session, where I've gotten to, and I'm curious to see how you push me or how you come back at me, is that I'm really happy that the research is being done on protocols around psychedelics. What has been explained to me by somebody who's in my office the other day who's used one of these is that the accompaniment and the preparation and setting, the intention for what you're going to do when you're in this altered state is really, really important. And so I kind of say to myself, if I'm going to do it ever, I want to do it with clear intention and with protocols and with shamans, as you put them. I think that I'm an aware person. I think that I reflect. We use therapy, therapists, coaches, all of those kinds of things. I almost feel like I'm not that experimental with my own life. And I would happily undergo it as a protocol if somebody came to me and said, you need to do this because you're exhibiting abcd. But I still don't want to just go and experiment with it, even with a professional who knows what they're doing. You seem to have done it and you're better for it. And maybe I'd be better off if I'd done it.
- [27:18]
A
I feel much better off for having done it. But I completely concur with your assessment that set and setting is vitally important to doing psychedelics. So while I am in favor of all of the research and believe that it should be legal, it should be legal only in a supervised setting. I'm ambivalent. You know, the US likes to professionalize everything. So there are some proposals that it has to be an MD or a psychiatrist, or at the very least a psychologist. I'm more open to shamans because the diligence that they use studying these compounds is at least, if you're going to a good one, is quite extensive. I do not believe that we are in a place where we should just legalize them and let anyone take them anywhere, because they're very powerful compounds. And the setting of the attention is very important.
- [28:21]
B
Yes, I'm a libertarian at heart, but I really don't understand why we as a society have such problems with things that are potentially dangerous, that don't count as medicine. So we say, clearly, basically you get licensed as a doctor because once you're licensed to the doctor, you actually have the right to, quote, assault somebody by sticking a knife in them or sticking a syringe in them or doing all sorts of things to them. We restrict the right to do that. We don't give barbers the right to chop legs off. And I don't see with all sorts of substances, all of the recreational drugs, we can have a debate over who is licensed to hand them out, whether it's a psychiatrist, whether it's a doctor, whether it's a shaman, but just to have some licensing procedure. Sorry, I'm going to go into guns. Difficult to talk about guns in the United States, but I learned so much here in Switzerland, so very high gun ownership in Switzerland. But you have to be a member of a, or an association. If something happens, some accident, the investigation will look into the gun club that you're a member of. So the gun club has an enormous responsibility and they're not just going to let anybody have a gun. What I don't understand, and I know I'm wading into such a toxic subject in the United States, is that the actual, whichever amendment it is, says the right to bear arms as a member of a militia.
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A
Exactly. Second Amendment.
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B
Why is it so hard to say? That means in today's language, gun club and every gun club needs to be registered, can make its own rules and procedures. But if we start noticing that certain gun clubs have got a lot of accidents around them because we'll be able to trace every person who discharges a firearm to a particular gun club, then it's a way of regulating it anyway.
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A
That's a brilliant suggestion because you're absolutely right. It's a toxic conversation in the US it has gotten down to just ideologues shouting at one another. There is no actual conversation about how we could even incrementally like this, improve the situation. That is brilliant to me because you're right, it is in accordance with the wording of the Second Amendment.
- [30:41]
B
And what you're saying. You're saying, we know that you guys who oppose any restriction on guns, we know that you guys aren't the problem. We love the fact that you have guns. We want to stop the people who shouldn't have guns, by the way, you want to stop them too. So you're not going to let them into your clubs. And by the way, somebody says, Abu, you're restricting my right. We say to them, okay, form a gun club or here's a gun club you can join. And so sooner or later, which gun club you get into will be the one. And yeah, you can form your own gun club as well. You're under evaluation. One of the things that happens, I just tell you I've learned so much living in Switzerland and I just put it into your mind. I don't unfortunately think it will ever change is that we grew up, I grew up in the uk, in the United States, this idea of learning to debate, learning to be quick witted. So when you see two politicians on television, you'll have either side and they'll debate each other and all of that jazz. And I can switch on late night television in Switzerland and watch two politicians talking. And check this, Jim, they're competing with each other to see who can better stake out the middle ground. So the competition is. No, no viewers, you think this guy staked out the middle ground? Well, let me show you how I stake out the middle ground even better and how I take into account both sides of this debate and that you, both sides of this debate, need to trust me, not my opponent, to cover that middle ground. And it's fascinating. It's just the way everybody thinks.
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A
Devoutly to be wished.
- [32:14]
B
Thank you for listening to me because I'm kind of doing a psychotherapy session here. In American politics and British politics there is such incredible sort of lacks of knowledge. So I studied some politics at university and we did comparative politics and we also studied European political systems. But this idea that the UK with its Westminster, mother of all parliaments, has the last and best answer to what it is to be a democracy. It kind of looks ridiculous from the perspective of Switzerland. Really, really does look ridiculous. I've now been a Swiss citizen for a couple of years. I voted. Now the only country I've ever voted in is Switzerland. I've voted in, I don't know, five or six different referenda on the most diverse of topics. And I've had to really study and understand what my position is on a particular issue. I'll just tell you one thing which is hilarious is that one of the votes we had to do was to whether to reduce the voting age from 18 to 16. And under the influence of my daughter who just turned 16, I believe I very enthusiastically voted yes. And then in Conversations with various friends afterwards, I actually regretted it. They came along, they just said, look, representation comes with responsibility. You get the right to vote, sure, but is she going to be put in prison? If she commits a crime, does she require to pay taxes? The tax is the big one, you know, if you want to pay taxes as a 16 year old, sure, you get the right to vote, but if you're not paying taxes, then don't vote. But, sorry, I don't know why I'm doing politics. You look at the Brexit vote in the UK and you think, how stupid was that vote? And here that wouldn't happen. And I just wish. And I'll just stop with this because I'm on a bit of a diatribe and I'm meandering a little bit, but the mindset in Switzerland is we've figured out a way to solve our problems and we're doing our best to do that. But our desire to teach the rest of the world anything about the way we run our country stops at our borders. If you want to come and live in our country, you need to learn our rules. The minute a Swiss person goes beyond the borders of Switzerland, there's no proselytization, there's no preaching, there's no cultural export. The UK and the United States do it by breathing. And there's this element of, well, when the rest of the world wakes up, they'll be like us. And it's very difficult for the United States to realize that, actually, no, they don't want to be like the US because you think, why not? It's such an amazing place. I actually love that about the us But I do wish that Switzerland was able to project its values or I wish that I could somehow get the rest of the world, come and study Switzerland. Because there's so much to learn in the rest of the world from the way Switzerland does stuff.
- [34:54]
A
I agree entirely. Oldest democracy in the world, Switzerland, I think. I don't know if there's any older democracies and very sensible. I love that idea of debate that actually tries to get to an answer as opposed to destroy your opponent. The challenge that I see with the United States is that we truly are so many cultures pushed together and because essentially we're a nation of immigrants, which I think is a very good thing because it demonstrates agency. There's a fun book. It's not a good book, let me hasten to say that. It's a fun book, though. It's called the Hypomanic why America is different than Other countries. And his thesis in the book is, well, look at who makes up America. For the most part, these are people who woke up, decided, you know what? I'm going to leave my family, the country that I've known all of my life, all of the social conditioning that I've ever had, and I'm going to get on a ship and I'm going to go to an uncertain future. So he's like, of course they're risk takers.
- [36:06]
B
Isn't it awesome? Isn't it just amazing?
- [36:08]
A
It really is.
- [36:10]
B
And I tell you a story about me in this case. So I am wandering around Oxford University, a pretty mediocre student in economics for one reason or another. I see an advert to go to Harvard Summer School, and I go to Harvard Summer School. And for the first couple of weeks, I stayed. We have some family in Cambridge, Mass. Then I move into one of the dorms, spent eight weeks there. I did one course. Normally you would do two courses. I did one course and I didn't do it for credit. And I spent most of my time hanging out on the lawns talking to various people. But I didn't really do any work. I came back to Oxford for my final year and I flipped into being a 4.0, whatever you call it, GPA student.
- [36:56]
A
And you also graduated first in your class.
- [37:00]
B
All of that jazz. I was blown away. Thank you for reading up on me. Something happened, something was unleashed in me in the United States. That four weeks did something to me and I was forever changed. And I'm forever grateful, forever grateful for whatever the hell it was. The only reason why I can happily live in Europe, live in Switzerland, old Europe, is because whatever that did, I carry with me forever, it dramatically and remarkably transformed my prospects. And, yeah, the degree result was nice. We'd have to do like three or four psychotherapy sessions together, Jim, to figure it out. But something changed in me, something profound and incredible. And the United States is the last great hope of mankind. And it's the capital of my world. Most of the capital that I run is in the United States. I would fear terribly for the future if the United States wasn't basically healthy. I think that. Will the center hold. I don't know whose quote that is from.
- [37:59]
A
It's Yates, I think.
- [38:01]
B
But there's this fear in the United States often, especially people who are prosperous, that this most incredible experiment of mankind, last great hope of mankind, is another quote from somewhere that it's going to tear itself apart. And I've kind of made a choice that I don't want to live in a world of worrying that Chicken Little. The sky is falling on my head the whole time, and I can't rule out the risk that it is going to fall apart, but I'm actually confident that it won't. And it is a miraculous place. And what I say to my friends is they're kind of worried about what's going on right now. And I say, if the United States can get through the Civil War, then this is nothing.
- [38:41]
A
Totally agree. I would never short the United States of America because unlike other countries, we had the great good fortune of being founded during the age of reason and Enlightenment. And we had a remarkable set of founders. I always say to people, I think more about the United States as a country that was formed around ideas as opposed to geography. And I think that that's one of the things that you felt when it changed your you as a person. Because one of the things that I love about the United States is the fact that, for example, all of our military officers swear their allegiance not to some political figure, but to the Constitution of the United States of America. I find that exhilarating. I love history. And so there are times where United States armed force officers may in fact refuse a direct order, even from the President of the United States, because they say it is unconstitutional and they will not carry it out. Now, is that officer placing him or herself at great risk? Yes, indeed they are, because they will be charged, There will be a trial. There have been trials, and some have been found not guilty. Many have been found guilty. But this idea that there is no human maximum leader, there is no human politburo, but rather your allegiance. My allegiance as an American is to the Constitution of the United States of America, which I absolutely love.
- [40:37]
B
It's an amazing idea.
- [40:39]
A
It really is.
- [40:40]
B
And what's fascinating is that if I think of the UK and the United States, two countries divided by a common language.
- [40:46]
A
Common language. I love that quote.
- [40:48]
B
It's great. I don't know whose it is.
- [40:51]
A
I don't either, but I've used it many times.
- [40:54]
B
Two amazing cultures and commonality in so many different ways. There's this profound distinction because at the end of the day, if you pull away the layers, certainly you have anti monarchists in the uk, but you get a fundamental trust in that institution of the Royal Family. And you will get people who argue vehemently for the idea that when you get to the very core, to have a human to whom or a line of humans to whom you pledge allegiance is more stable and better for the propagation of values and institutions through time than the Constitution. And I have British friends who would be deeply mistrustful. They would come to you and they'd say, how can you pledge allegiance to this inanimate object? That cannot change with the times. It's interesting because I used to be an anti monarchist and now I'm spending quite a bit of time in the uk. My parents are in the uk. We actually have a home in the uk. I've kind of made my peace with the Royal Family and I've made my peace with the institution of the Royal Family. I used to be the guy who used to just rip it out and put something else in its place. I actually realized that for that country it would be extremely damaging. It would actually be the end of the country.
- [42:09]
A
That is a nuanced opinion. I totally understand where you're coming from. I have a classic American's attitude toward any monarchy of any kind. I have a lot of British friends and what's interesting is the majority of them are pro monarchy. Which when we first had the conversation around it kind of shocked me, honestly.
- [42:31]
B
Even the people who don't benefit.
- [42:33]
A
Exactly. And so I gave it a long think after listening to them. They made points very similar to the point you just made. And they would say, look, continuity and forever. Yes, there were different ruling families. Yes, yes. But the monarchy itself has been around a long time. We signed the Magna Carta to give us rights over the all powerful absolute monarch. We have evolved the monarchy in significant ways. And the argument that I find most compelling, even though again, not a big fan of monarchies.
- [43:12]
B
Not for yourself. The Brits can have it, but not for you. Exactly.
- [43:16]
A
The Brits can have it. I love it. But the idea of the separation of the ceremonial aspects of a country, that Europe separates Prime Minister from President in many, many countries, that makes some sense to me. It makes some sense to me. That was always a bit of a cock up, in my opinion, where we ended up with our president who is a political creature, also being the head of state.
- [43:45]
B
I don't understand Israeli politics particularly well, but there is a head of state who's the President. But yeah, you don't have a Prime minister role in the us. What I would tell you just a fun take on the British royal family. Maybe if you and I were business school case writers, we'd write a case on this. I think that Harvard Business School needs to write a case on the Royal Family. And I would tell you that I think there's an enormous amount that One can learn from observing and understanding how the royal family of the United Kingdom and probably other royal families run themselves. And there's huge lessons for business. So I joked to my friends, you put me on the coins of the realm and there'd be no stopping me, you know? And there's something else. The Royal Family, and they call it the business, they call it the firm. I think the insiders realize that they need to set themselves up. I mean, Warren Buffett talks about buying a business that any fool can run, because sooner or later, one will. Well, the Royal Family has been thinking about that for many more generations, far longer time than Warren Buffett has at Berkshire Hathaway. There's real lessons to learn there. And so I just think that the Royal Family is extraordinarily good at branding themselves. Royal families through time have been good at branding themselves. And there's lessons for branding luxury goods, but there's also lessons for personal marketing. I think that I started to feel better about a lot of the pomp and circumstance around the Royal Family when I realized that what they're doing is actually widening their moat. They're increasing the value of their business for future generations. So they're doing all sorts of things. Like when they're handing out medals and prizes and knighthoods and all sorts of things. I mean, in any business, they're just handing out recognition. They're doing something really smart. They've realized that they don't have to give the damn guy a castle. They can just call him a sir, and so they can hand out a royal coat of arms or something. And so there are many things that you can actually do yourself in your business and in your life. And so just emulate them, actually. And emulate them not because the individual holding the office is so smart, but they've learned things over so many generations. I think that that's kind of an interesting and fun take.
- [45:50]
A
I think that is a great take. What I find interesting, again, as I chat with my British friends, one of the downsides of the monarchy is that it still perpetuates, even in an ostensibly democratic and meritocracy that like a Tony Blair tried to bring back to the UK And Margaret Thatcher, obviously, the interior designer who did our home is British.
- [46:18]
B
Which is beautiful, by the way.
- [46:19]
A
Thank you.
- [46:20]
B
I'm loving the wood paneling.
- [46:22]
A
Oh, thank you. Thank you. As is her husband. And we were chatting about whether they would ever return to London. He's a creative director, so they lived all around the world because he would get a slot at A big agency, Singapore, Dubai, then New York. And I asked her, would you ever go back to London and do interior design there? And she looked at me and she just started laughing. And I went, why are you laughing?
- [46:50]
B
And.
- [46:51]
A
And she goes, jim, you don't understand. She's from northern England. She said my accent would preclude me from doing any work. For she jokes, poshes like you. And I had a really hard time believing that. And she goes, oh, no, no, no, no. One of the things that we love. And by the way, before she moved to America, she confided because she and her husband had become very good friends of my wife and me. Anyway, they confided in us one time before they came to America. They were dreading it because they thought they hated Americans. And then she goes, I realized after living here that I'd never properly understood America in any way. I was basing it all off things that were not interactive media, American tourists, et cetera. And she said, and one of the things that I have come to absolutely adore about this country is you really are in many respects, a meritocracy. You don't care where I come from. You don't care what my accent is. That's another great quote. An Englishman or woman only has to open their mouth for another English man or woman to instantly hate them and.
- [48:06]
B
Judge them and place them. And.
- [48:09]
A
Exactly.
- [48:10]
B
My story with the UK is that we immigrated to the UK when I was 11 years old. My father's originally Israeli, my mother originally South African. And so I feel like I have the experience now of most of that time. A higher proportion was spent outside the UK than in the uk. But I, as well as my family have been going up a learning curve about what living in the UK means and what the class system means. And I've had some learnings very recently that I want to share with you and maybe even we can share with your friend, directly or indirectly. So I had the perception, and I could. Again, this feels like a psychotherapy session, Jim. I had the perception that there are these inner circles in these kind of the class system. And once you get into the inner circle, the champagne flows and everything's beautiful and delicate, and you kind of wafted into these roles that outsiders are excluded from, and you get all the nice invitations to the right parties and you get the right friends, all of those things. And now I realize that actually the more rarefied the circles you find yourself in, the more hyper competitive it is. And the competition, social competition and other kinds of competition are enormous. And the rules are subtle. And one of the things that those groups do, this is a human trait, is that because you want to reduce the competition. If I get into the right rarefied circles, I'm going to be competing with an invitation to Buckingham palace because I'll be able to brand myself. And there I was with the Queen or whatever, the King now. And I want to reduce the competition. So how do I do that? I try to convince people who are not as close to the inner circle as I am that they shouldn't even compete and they shouldn't even try. And so what you get is a phenomenon of this friend of yours saying, I wouldn't even be able to open my mouth and they would have judged me. That's kind of what they want her to think. And I'll give you a more extreme example of it. And so I went to Oxford University, but I was not the traditional kind of person at the time that would go to Oxford. So there I am sitting in a taxi in London and he's got a cockney accent and he's asked, I don't know, remember why. Conversation struck up. And it turns out I'm at Oxford or I've gone to Oxford and I. Because I've been to the us, I Percoli, say, well, you got a son. Maybe he should go to Oxford. And he gives this chip on the shoulder. I'm not from that kind of. I wouldn't go to Marson's not going to. That's exactly what they want you to think. And he thinks that it's excluded to him. But actually you can compete with your northern accent, you can compete with your cockney accent and being a taxi driver. Those circles are not actually closed, they're actually open. And it's hyper competitive in the inside. And they want you to believe it because they want to reduce the competition. But you can get in if you want to. So I've been going up an extreme learning curve there, and I now have a very, very different perception of it. And the class system is not walls. It's just people competing for stuff that is scarce. And if they can convince you through any means, whether it's your accent, whether it's where you're from in the country or anything else, that you're not going to be a competitor with them, then they're happier. I still haven't worked through all of this, so I'm not making it as clear as I perhaps ought to, but I don't see anymore the class system, which it is there. I don't see it anymore as being this kind of wall of rejection. And I have experienced enormous amounts of rejection in the uk Circumstances where it was very painful for me. And what I thought was a closed wall was actually permeable. But I hadn't learned the rules, and I'm now busy. I don't know if any member of my family will stay in the uk, But I'm busy trying to teach those rules to as many people as I can in my family, in my circle. And I would just tell you that it's not so black and white. And if you go to New York City is a great example. So there we were applying for our daughter to the Heschel School, and we thought, we're a great family. My wife's Mexican. I've got this background. My daughter speaks at that point, Spanish and English. We're great candidates for this school. In retrospect, I need to be making donations to the right places and showing up to the right cocktail parties. And they really didn't care how interesting we were, because that was just like your entry ticket to even being considered was to be doing those things. I didn't know the rules. So is it that different from the.
- [52:48]
A
UK that is so interesting to me because I talk about understanding the game rules of different segments of society, of different segments of investing. There are game rules. You do yourself a major disservice if you don't, A, understand that, and then B, try to learn what those rules are so that you can play the game more effectively. I love that idea.
- [53:16]
B
And realize this. In many cases, the rules are clearly laid out, and it's the nature. I mean, I think New York City is very unusual. I think if you go out to the western part of the United States, New York States, it's the nature of the United States and open society that you make the rules available for the people who want to read them. It's not very fair. It's not very nice to. For the rules to be unwritten, because how the hell is an outsider supposed to learn those rules? They won't even tell you there are rules. So they're not written down. And they won't even tell you the only way you learn them is by osmosis, by a friend. Often it's a friend who looks kindly on me and says, you know what? I can see you're interested in this stuff. Let me tell you how to actually play the game. That knowledge is golden.
- [54:00]
A
So when you were at Oxford, though, I must assume you're a very bright person. Did you learn them explicitly or implicitly.
- [54:09]
B
At the time that I was at Oxford, first of all, I spent a lot of time not understanding many, many rules. So there was a kind of a civil war going on at Oxford because colleges like my college, half of the college was from these fancy public schools and half of the college was from the state sector. And I was kind of like in this weird group that I'd gone to an independent school which was not the state sector and was not. So I was kind of in the middle of that. Neither fish nor fowl didn't fit into either of the two groups. This experience with this taxi driver, London cabbie was so hard for me. My accent changed at Oxford, by the way. This all started around accent imperceptibly. This taxi driver is considering to meet me to be as if I'm one of those Oxford toffs. And I'm trying to tell him, no, I'm not. I'm not one of those Oxford toffs. I am different and I'm like underclass, like you, type of deal. And he's not having any of that, by the way. And the fact of the matter is, I have learned some of the rules because obviously I've been there and they've come off by osmosis, but there's so many rules that I haven't learned. And so it's complicated. So now, just to give you the sense, I was confronted with so many people who'd been to Eton, and at the time, Eton was a significant proportion of the students at the school. Now when you've been to Eton, you show up at university like Oxford, and you got friends across all the colleges, you're hanging out with each other, you're introducing each other. It's a whole different experience. I go to Oxford, I don't know anybody. You've got this semi unionized group of people who are all taking care of each other, sharing with each other which club to be a part of. Now, second generation, one generation on they. My son is a student at Eton very, very hard from a school like Eton to go to a university like Oxford because they kind of actively discriminate against students from those kinds of schools. They're trying to reduce that phenomenon. But my son is not like those guys that he's not from this British class system. He's an outsider, he's an immigrant. You shouldn't discriminate against him, all of those good things. And I'm at this stage of learning, I'm 40 years into the British experience, if you like or Trying to understand the British experience. I'm at a much greater level of subtlety than I was 20 or 30 years ago. And maybe in another 20 or 30 years it'll be even more subtle.
- [56:31]
A
I find that absolutely fascinating because the same is true, more or less, of the Ivy institutions which have been much in the news in the United States, whereby I got into Yale because my father was an alum.
- [56:49]
B
No, because you were a genius, Jim.
- [56:53]
A
That's what I like to try to tell myself. But however, the reality of the situation was that I got into Yale because I was a legacy.
- [57:04]
B
Don't be hard on yourself. You don't know that. They made a great choice.
- [57:10]
A
But I didn't go to Yale. That's the difference. I was a bit of a radical back then, and I made it my goal to try to get into a uni where my family, where my dad hadn't been or my mom, my grandfather was very successful and had done a lot for the University of Notre Dame. And so I remember a time when I was a senior in high school and we had Father Ted Hesburgh, who was then president of Notre Dame, at our house for dinner. And I went in and we shook hands. He's a wonderful man. And he goes, so you're starting at Notre Dame next year, right, Jim? And I went, no, Father Ted, I'm not. And he looked at me like he was literally shocked. And he goes, why not? And I said, father Ted, because you are asking me that question. And he got this huge smile on his face and he said, good for you. I ended up getting accepted to University of California.
- [58:13]
B
They're trying to get you to go to Yale. You're like, nah, Notre Dame, nah. You were a maverick.
- [58:20]
A
I was.
- [58:21]
B
And you were independent minded. And good for you. Very, very good for you.
- [58:26]
A
I wouldn't trade my experience with anything. Sensitivity to initial conditions. When I was a little boy, I fell in love with New York, for example, I was eight. It was my first time in New York City, 1968. New York City in 1968 was not a very safe place for most people who don't know New York's full history. It had fallen on very bad times. You remember the Ford to New York? Drop dead. When they were going broke. We were going to live in Ireland for a summer and we had a one night stopover in New York City, 1968. I'm eight. I, without asking permission, without telling anyone in my family, put on my little white windbreaker and went on a long explore of New York for several Hours. Well, I got back to the hotel and of course the lobby is filled with police. My mother is weeping on the couch because she thinks some horrible thing has happened to me. And now I treat this like a memory of mine. Obviously, it's not a memory of mine. My mom told me this story so often that I think of it as a memory of mine. She said, jim, you saw me got this huge smile on your face, ran over, hugged me and said, mommy, I am going to live here someday.
- [59:51]
B
How old were you at the time? Eight. Eight, Wow.
- [59:55]
A
I was apparently gone for hours. It was in mid. We were staying at the Waldorf, so it was midtown. Apparently I was gone for several hours and without permission in 1968. And I understand, of course, now my parents were slightly worked up, but literally my love of New York never stopped. And I ended up moving here when I was 31.
- [60:20]
B
Took you that long in your 20s? My God it did.
- [60:24]
A
And I was very close to my mother, who unfortunately had lupus, which at the time was a disease that we didn't know too much about. And she had some really rough times in the early 70s. Unfortunately, my eldest sister died of lupus when I was a kid as well.
- [60:43]
B
Sorry to hear that.
- [60:44]
A
Thank you. I didn't want to leave the Twin Cities when my mom was still alive.
- [60:49]
B
That's beautiful.
- [60:51]
A
I was very lucky. She was a lovely, lovely woman.
- [60:54]
B
I don't know why we got onto universities. Oh, we were talking about Oxford and then we went from Yale, skipped over Notre Dame and went to, I guess it's ucla.
- [61:03]
A
Well, it would have been Cal Berkeley, but I ended up starting at the University of California, San Diego. Much nicer climate. La Jolla is far more beautiful. But then I did an inter campus transfer down to San Diego after two years. Decided I was probably much more of an east coast guy. So I had gotten grades good enough that I transferred to the School of Foreign Service at Georgetown and loved it there, but met and fell in love with my wife of 42 years. As a matter of fact, today, for those listening or watching, today is December 14th. I asked my wife to marry me 42 years ago on this day.
- [61:50]
B
Congratulations.
- [61:51]
A
Thank you. Now we have three children, five wonderful grandchildren. So the only reason I managed to meet my lovely wife was because she had been at Georgetown. I love these little connections. I was at a party of a friend and he was saying, well, how do you like Georgetown? I said, I love it. I love school, Foreign service. I finally have a fit there. I think it's great. He goes, well, you should go talk to Missy Walker over there because she was at Georgetown, and I did. And the first question she asked me, because Georgetown, they tease it a bit for being very preppy. So the first question she asked me was, does it bother you when everyone says, what does your daddy do? And I immediately was smitten. And so started dating her, fell in love. And so I finished at the University of Minnesota as state school.
- [62:47]
B
Wow. Two things. First of all, you need to know, Jim, I have not been married 42 years. Congratulations. They say that the first 42 years are the hardest. It's plain sailing from here.
- [63:04]
A
Finally.
- [63:08]
B
My wife and I celebrated 20 years this autumn.
- [63:11]
A
Oh, congratulations.
- [63:12]
B
Yeah. Would you like to see the scars?
- [63:19]
A
I think we'll leave the scars off. Although it toughens you up and makes you usually better.
- [63:25]
B
Nobody's going to write a book saying how to Survive your first 10 years of difficult marriage after you thought it was going to be a breeze. Think of how many books there are on how to get married, what flowers to pick, what readings, nothing for after that. So few. Because it's just like wooden cell, but it's like this great big gaping hole because that's actually what you need. I would tell you, my wife and I, we were just lucky. And New York City, actually, because it's got incredible, the world's best, probably concentration of psychotherapists, marital therapists, you name it. We really started learning about how to be married to each other in New York City. And if it wasn't for some of those therapists, we would not be married. But I have a whole bunch of thoughts there, where I wanted to go. So we can dive down that route if you want to. But there's a phrase when you talk about skipping over Yale, skipping over Notre Dame, ucsd, but then University of Minnesota State School. Is this beautiful? I don't know if you read any Joseph Campbell.
- [64:25]
A
Love Joseph Campbell.
- [64:26]
B
Yeah. Who doesn't? Of course you do. And this is what I tell so many people. This is kind of like from his talks at the place in California. He used to give lectures at this.
- [64:37]
A
Kind of like retreat place, Esalen Institute.
- [64:40]
B
Esalen, yes. And it's a beautiful, beautiful book. And somewhere in one of those talks, he says, you enter the forest in the darkest place where there is no path. And the reason why there is no path is that if you saw a path, it wouldn't be yours. And we all have to beat our own path if we want to live. Well, you say when you ended your life or you ended your university education in Minnesota. What I hear is you've beaten your own path, and you started beating your own path at an early age. When I've taken decisions that is like, oh, wow, I'm taking this decision. It's a big move. I wonder if it's the right move. And then I feel like the universe responds to me sometimes. The way I describe is God smiles at me and I get indications from the universe that I've made a good decision. And it's something very exciting because you realize that you're sort of like following your destiny. And I'm just wondering if you've experienced.
- [65:38]
A
That all my life. For those who are listening and not watching, you would have seen me nodding in agreement as Guy was talking about that. I also passionately believe in writing out your life, scripting your life, if you will. My grandfather taught me a thing he called premeditating. And it's actually quite simple, but it's profoundly useful. What you do when you premeditate something is that you want to do something, you want to achieve something or be a certain type of person. You can write it out. So I want to become an author. And then what you do is you go down several different paths. Here's what happens if I get this. If I get this goal, and then what happens good if I get the goal. But here's the important one, what happens bad if I get this goal, and then you do it for the other side. I don't get the goal, what's good, what's bad. And it's a bit of a decision tree, but it's the thinking about which is very unnatural. It's very unnatural to think about. I achieve what I think I want, that there could be anything bad happening out of that. And that's the part of the exercise that's so powerful to me because it gives you clarity, number one. It helps you understand whether you really want that thing or not. And it's a very powerful mechanism to better understanding your own desires. Why do you have that desire, all of that? And it gives you much greater clarity if, for example, after premeditating, the decision is taken, yes, I'm going to go for this. I'm going to try to get this done. You are doing so with a far greater awareness, at least I have from doing this all my adult life, of, okay, but there are some things that it makes you cognizant of, things you might want to watch out for, that you might not have thought about otherwise in our profession. I loved trying to figure out the stock market from a Very, very early age. And for me, I would listen to my dad argue with my uncle about the prospects of IBM, for example, just to take a name. And it was very curious to me that the entire conversation was around whoever the CEO was. It was all very anthropomorphic, if you will. I immediately kind of thought, well, wouldn't it be better to like, look at just the numbers? Wouldn't that be probably a better calibrated way of approaching whether you want to invest in that particular stock or not? And so that's what led to what works on Wall street and the various books, because I was really just consumed the idea of the market, to me, it's kind of like the Olympics of business. That's the way I saw it. And what I loved about it was, like you, I have many, many interests. And what better occupation could I have to indulge those many, many interests? And yet I, like you, definitely have felt that way all my adult life. I think I might even start asking that question on this podcast, because there's a lot of insight there, which is, what's the question? The question would be, did you at any point in a big decision, feel like the universe was aligned with you on that? And if so, how did you know? Was it synchronicities? Was it serendipity? Was it a feeling? Was it some objective standard? That's very interesting to me.
- [69:40]
B
It's obvious, actually. So one of the experiences sitting at this famous launch with Warren Buffett, not far from where you have an apartment, or far closer to you than me in Smith and Wilensky, is the realization that I would not want to be living Warren Buffett's life. Because this is a guy who genuinely enjoys researching and analyzing and investing and understanding companies and businesses. But if he gets a book about behavioral psychology or the history of Rome, he'll send it to his friend Charlie, God bless him, before he even decides to read it, because he's not all that interested. So he has a very, very narrow focus. And I realized for me, that's not a plus. It's just not a plus. I don't want to have a narrow focus. If you could tell me that I could have 10 times more money and speak one language less, I don't want to do it. I like fact that I can experience what the world feels like in different languages. For example, as you were talking about writing stuff down and write scripting, I think is what you'd called it, what came up for me was, it's not Keith Farazi. I don't think, but it's this concept of fear mapping is again, one of the kind of planning tools. And another thing that came up for me is a book whose author I don't remember, called Write It Down, Make It Happen. And then I want to tell you a story about this. And maybe it's even been transformational for me. We arrive in Zurich 2009. Any move is difficult. And I'm saying to myself, wow, this is really hard. Maybe it's not going to stick. Maybe we'll end up in New York within a year, back in New York. So there's some things I really want to have gotten done with my family, with my young family, before we potentially leave. And I kind of wrote some things down, like go skiing in Davos, visit the Technorama in Winterthur, visit the Kunsthaus, the art museum, just various things. Go for a walk by the lake, and I just put it away in a drawer and forgot about it. And about a year later, I came across this list. And what astounded me was how many of the things on the list had been accomplished. And I have no doubt, even though I can't explain it, that the simple act of writing down something that you would like to make happen and never looking at it again, even forgetting that you even wrote it down, makes a difference. I have a document now that I update every now and then, maybe every six months. And something I started doing was because so many of the things got done, I started keeping a list of successes. And the list just keeps growing longer and longer. And it's kind of like a business plan for life. What I didn't do with your scripting and looking not just at, well, what happens if I don't get it? Which is super important, what happens if I do get it and do I really want it and what am I going to do with it? Is if you're investing and you plan on being successful and you get successful, you're going to end up with more money than you know what to do with. And time is going to become the constricting factor. And I don't think that my peer group, the people I talk to on a regular basis, are in a sense, the right peer group for me. Because the endless pursuit of yet more money when you've got more than you can spend is asinine. The only reason why it makes sense for Warren Buffett is that he stopped, he paused, he looked around, knew he had more money than he could spend. A bit like the musicians on the deck of the Titanic in that famous movie. They looked around, they're like, oh, my God, we're going down. What should we do? Well, we'll play music. So Warren went back to playing his music. It so happens that his music makes him even more wealthy. But I'm not sure that spending the rest of my life just thinking about making money is a good use of my time. So I'm stuck.
- [73:36]
A
I could not agree with that more fully. I think we are incredibly simpatico. So we sold o' Shaughnessy Asset Management to Franklin Templeton. I started another company, not to make money, but to pursue things that obviously it needs to make money because I'm a good capitalist. But that wasn't the primary motivation. The primary motivation was I have all these other interests that I can finally indulge. So it's very indulgent of me, to be really frank, that I've decided, okay, well, let's do it through a company. So we did o' Shaughnessy Ventures, but o' Shaughnessy Ventures gives fellowships. It does movies, it does books. It does all the things that I am passionate about and love. I want to come back to your list, though, because there is something magical happening when you write out what you want to accomplish. Listeners, viewers, if there's some good scientific research around this, I would love to see it. But I have found personally, and hearing your story, Guy, I've had this similar conversation privately with many very, very successful people, and the majority of them have the same tale. They wrote it out. I'm a journal keeper, so I have journals going back to when I was 18 years old, which is very helpful because there's nothing like being called a liar in your own handwriting to make you understand that memory is very fungible and that our minds might think they're doing us a favor by overwriting memories to make the memory consistent with what we believe now. Anyway, I found this four page long list that I wrote out when I was 28 years old. And there were like 98 things on it that I wanted to accomplish. And, Guy, I'd completely forgotten about it. And 95% of them I had accomplished.
- [75:40]
B
Wow.
- [75:41]
A
And one of them was really weird because I was such a music fan. I had written, now remember, I'm 28 years old, a punk kid, and I'd written, I want to be the chair or the lead of a major arts organization. And then I had the privilege of being the chairman of the Chamber Orchestra of Lincoln Center. I work a lot with younger people, and I urge all of them, oh, God, write it down. And Write it down with your own hand. That's another part that I find very, very important.
- [76:14]
B
And it's strange because I believe that I have a scientific mindset. I'm an empirical guy. I believe what I want to do is trace. When I say God smiling at me, I'm using God in a poetic sense, not in an empirical sense. What is the mechanism by which that happens? It's a fascinating mystery.
- [76:34]
A
Very fascinating. And it has been something that has consumed my attention for years. I would love to be able to figure out. Because as you know, I'm very empirically oriented as well. I sometimes hesitate because this stuff can sound very woo and it's really not. And I would love to figure that part out.
- [76:57]
B
If you come to the medical profession, science based medicine, there's many things that are on the fringes of medicine that don't make it into the canon of medicine because you cannot prove it to a sufficient degree of certainty. And the people around it, you get all sorts of people there. But many of those things are effective. Whether it's getting a massage or whatever the hell it is. The person who feels better because they went to the chiropractor and there's something there.
- [77:28]
A
There definitely is.
- [77:30]
B
I was talking to a group of math students yesterday at the University of Zurich. It was hilarious because I put on a slide that said, here's all the mathematics I don't understand. One of the things that I wanted to do is I wanted to shock them into realizing how little mathematics they actually need to be successful in finance. And I kind of like more or less convinced them that I could add and subtract and maybe multiply a few things, but I didn't need to understand what a Fourier transform is, for example. But then I took them into this transformational experience for me, which was I'm in San Francisco and I call up this Swiss friend for some reason who's a great friend in New York City and her name's Diana Vice. Help my marriage. Amazing woman. And she says, oh, you're going to hang out with friends. There's Tony Robbins. Unleash the power within seminar. You should go and do it. It will change your life. And I'm like, I'm not going to do that. I'm going to go hang out with my friends. I'm going to do some seminar. But somehow the words will change your life. You know, when the student is ready, the teacher appears. And so those words resonate. And the next thing I know, I find myself at this crazy Anthony Robbins seminar at some Conference hotel somewhere near to the airport in southern San Francisco. And I'm jumping up and down and doing all this crazy stuff. But why am I saying this? I guess I'm saying it because there's this outside of the canon of what is sensible behavior for humans, there's people like Anthony Robbins and others talking about the, quote, technology of success, the Da Vinci Code, for example. But there's something there. That's my point. And I know that it's not scientifically provable.
- [79:13]
A
Exactly. And I think that, again, we are very similar in our outlooks because there is something there. I have a young friend named George Mack. One of the things he says is he has these razors that he publishes. And one of them is how to increase your luck. When I listen to you say that you went to the Tony Robbins, his way of increasing your luck is among a variety of options. Choose the one where there is going to be many more opportunities to get lucky, as he puts it. And he's not using it in the sexual sense, obviously. And so when you heard change your life, you chose that option because you were like, okay, I'm going to go see what's on offer.
- [80:01]
B
I'm blown away because that is a distinction that I had never thought of. I might have learned something amazing with the group of friends I was going to hang out with, but the probability of something interesting happen out of the Anthony Robbins seminar was far greater. And I tell you another example of that. I'm blown away. A member of my family is feeling all down on his luck and low in mood. But he sent off 30 applications and hasn't received a positive response from any of them. I asked him, how many have you sent off? He said, about 30. He said proudly, I said, 30, is that it? I said, why don't you do 300? Why don't you do 3,000? And I told him, you've already done the work, you've already written the COVID letter, you've already put your resume together, you've already thought about it, the extra work to take it from 30. He didn't figure it. It's interesting because he should have just run and do it. And I think I have to say it eight more times until he finally goes and do it. But that's a simple way of doing that.
- [80:58]
A
Totally agree. When I wrote my first book, Invest like the Best, I decided when I was out on a walk that if I wanted to start o' Shaughnessy Capital Management, which was the first company, I found it when I was 28, I would have to have credentials. I would have to have some imperator that, hey, this guy really is worth listening to. And so I thought, what better way to do that than write a book? And so I went home and. And told my lovely wife that this is what I was going to do. And she smiled and she said, you do know, Jim, that to write a book, you're gonna need a publisher. I went, well, of course. And she goes, well, how are you gonna accomplish that? I said, I'm gonna go to the bookstore. I'm sure there's a book with all of the addresses of every publisher. And that's exactly what I did, guy. I sent 300 query letters to every publisher, and all but two came back negative, but two came back positive.
- [81:59]
B
And that's all you need.
- [82:01]
A
That's all you need.
- [82:02]
B
What I was telling this family member was that the response rate on pretty much anything you send out is never going to be more than 3% and might be 1%, and in your case, it was even less than 1%. The person who responds, because you have to have it arrive on the person's desk on a day when they're feeling lonely and unhappy, and maybe they've had a fight with their wife, and somehow something in what you've sent them makes them feel good, and so they feel like they want to get in touch with you. And the first job I got in finance, the summer job in London, was at an Austrian bank called Credit Unstaalt Credit Institute. I'd sent off. I hadn't done the 300. I didn't know that yet. I'd done about 40. I got two back. And the guy who offered me a job after he'd invited me for an interview, I realize now, very, very professional, very lovely guy, taught me an awful lot. But he was actually a closet gay, and he wanted to take me out. And on the very, very last night of my internship, he offered that if I wanted to, I could go back to his place. I didn't swing that way, so it wasn't an option. But I realize now, years later, that the reason why I got that opportunity was that the guy kind of liked the look of me. And you know what? I'm totally fine with that. He would've liked that as an extra possibility, but given the choice between two interns, he liked the look of the one and not the other. Then he picked me, and I'm grateful for that. So you never know what comes into that opportunity, but as long as you.
- [83:31]
A
Take it, totally, totally agree. It's like the wonderfully Taoist. It's also told as a Buddhist story, but I always heard it as the Taoist farmer. And basically it's a shaggy dog, so I won't do the full story, but he's a farmer and he only has his son to help him with the farm. And one day the only horse they have which they use for multiple purposes, runs away and everyone in the village comes to him to give their condolences. Oh, we're so sorry for you. What a loss. Such a tragedy. And his response is, we'll see. And the next day the horse returns with a wild horse that he befriended when he was off on his great wander. And everyone in the village rushes to say, you're so lucky you've got this new horse. You now have two instead of one. His response, we'll see. And then it carries all the way to his son breaking a leg when he was trying to tame the wild horse. Everyone thinks this is tragic. And the next day the Chinese army comes through and takes every able bodied young male into the army to face almost a certain death. The point is, we'll see. I love the idea that don't get obsessed for the reason that you got the opportunity. Like in your case because somebody found you quite attractive and picked you.
- [85:01]
B
I'm proud to say I was a good looking boy at the time.
- [85:04]
A
Well, you're still a good looking guy, but the point is, lovely, you got the opportunity. Take the opportunity, don't worry. Alan Watts, who I like, says that worry is an endlessly peeled onion. And we can sometimes think, well, you know, I didn't get. I always look for things to root for as opposed to against. It's our natural human os to say, oh, I'm against that, I'm against that. It's the old joke in the song. I can't remember who it was, but I think it was Groucho Marx. Whatever you're for, I'm a get it.
- [85:41]
B
Well, you get more of what you focus on is something I learned from Anthony Robbins. Whatever you focus on, there you get. So be really pay attention to what you focus on. And that's kind of one of his technologies of success. I made a note here that I now I just cannot remember, but it was really valuable at the time. Talking about writing things down. There's a protocol that I learned listening to Huberman's podcast. He's an amazing guy, but there's a protocol for dealing with trauma involved with writing where you have to write in a very specific way. I don't know if the way you're nodding makes me. Tell me that you know more about it than I do. Maybe you want to tell me what I'm trying to talk about.
- [86:18]
A
I certainly would not conclude that I know more about you. I do know about the procedure though, with dealing with trauma. It can be very helpful and it's to go ahead.
- [86:28]
B
Yeah, no, sorry. I don't know why I'm trying to finish your sentences when you actually know more than me. I'll just let you finish your sentence. How's that?
- [86:36]
A
No. First off, there is where you are in error, sir. I do not know more than you.
- [86:42]
B
The important thing is who thought that a writing practice can be more than just keeping a diary or taking notes. And it turns out that in order to get the benefits, and Huberman's very empirically based, and so there are demonstrable benefits in terms of heart rate reduction, disease reduction, measurable diseases. If one sits down and takes traumatic events and processes them. It's a certain way of writing about the traumatic event. The detail we'll have to find out from him again. It just blows me away that this comes out of the specific kind of writing that I've never done. You're more likely to see me doing that than see me doing psychedelic drugs. Non invasive. It's like feels better.
- [87:29]
A
I suspect that there is a multimodal approach. So, for example, I'm very intrigued by mind body issues. Dr. John Sarno, who was a doctor at NYU's rehabilitation unit here in Manhattan, has written several books about it. And I'm absolutely fascinated by them and by the way they plague. Especially Western capitalist democracies where the moment one hears that something potentially is psychogenic, at least in part, particularly in America. What do you mean? You're telling me it's all in my mind? That's absurd. I've got the MRI to prove that my back is bad, et cetera, et cetera. And anyway, I experienced some of these blind body issues in my late 30s and solved them after seeing every, by the way. I first went to the orthopods and then they were no good. So then I went to the chiropractor. I was open to anything because I had a frozen neck and I couldn't move my neck further than this and nothing helped. I was put in traction by the orthopedic guys. I went to the chiropractor. That didn't help. I got acupuncture. That didn't help. And so one of our family traditions was every weekend we would take our kids to a bookstore. And the rule was you could spend as long as you wanted for the children and you could select as many books as you wanted, but you had to commit to reading them if you were going to buy them. And so my kids were at a stage where they were kind of agonizing over which particular volume they wanted to buy. And so I wandered off into the medical section and there was this tiny, tiny section about psychogenic placebo effect, if you will. And I found Dr. Sarno's book. And so I read it and I actually did a podcast on it with a MD who's furthering his work and a therapist who specializes in mind body disorders. So I found the book. I'm like, oh, well, you know what? Nothing else worked. I'm going to try this. So I read the book and literally, guy, I was so offended that I threw the book physically across the room and said, what a pile of horseshit. And my wife picked up the book and started reading the back and some of the introductory material. And she goes, you might want to read this again. And so I did. And I read it seven times. In fact, by the seventh time, I saw myself on every page of that book. And here's the important part. The next morning after that seventh reading, I woke up and all of my neck movement had been restored. And I'm like, okay, I got to see if I can figure this out, because how great would it be? Because one of Sarno's key provisos is if you do not believe that this talk therapy, or this, he would call it, educational informational theory works, you won't get better. And so he excluded from his group anyone who, when put to the question just, do you think that just attending Dr. Sarno's lectures and learning about why mind body problems exist could help you? And anyone who answered no was excluded because he found that they couldn't be cured because they didn't believe it. Anyway, being quantitatively oriented, I started trying to look for, I wonder if there is a group of modalities where you could cure somebody who has one of these mind body disorders, even if they don't believe that such a therapy could be productive. So I'm still on that one.
- [91:28]
B
I just want to give you the skeptics view because it's fun to do so. A skeptic view would be as follows. The problem that we have regularly is that we don't take the full sample size. And so the fascinating, the hilarious thing is. So a friend of mine was posting about how XYZ person took the vaccine and they died, or this happened or that happened. And I just asked him the question, have you sampled all the people who didn't take the vaccine? Because a lot of them died as well and he suddenly realized he was missing half the sample. So you cannot exclude the possibility that this thing was going to heal in and of itself, whatever it was. And it just so happened that it healed at the time that you started believing that the book, something like that. I don't know if it's the case, but you want to be able to exclude that. And it may be possible that it's very, very hard to exclude that. But I'll give you another example of that from a lovely book that I recently read by a British journalist called Christina Patterson. Outside the Skies Blue short story. She grew up with a sister who turned out to be schizophrenic. Just a very brilliant and genius sister to have who taught herself Russian and was writing a history at a young age of the Romanov family and then ends up schizophrenic. And it's a very, very difficult life for her and her sister and very painful to see her sister go through that. And somewhere she became convinced that she could not allow herself to succeed because she felt so guilty that her life was so easy in comparison to her sister who had such a difficult life and ended up dying because of the wrong medication or something. The writer Christina Patterson, I'm just telling part of the book is suffering all sorts of career setbacks and is suffering from physical disabilities. Like at one point she couldn't walk because she had such extraordinary pain in her knees. Long story short, I believe two or three years of Jungian psychotherapy cures her of everything. And now she's an extremely successful journalist. She doesn't have any aches and pains. She couldn't get married. She couldn't find the right partner in life to get married to. And she suffered from things like cancer and awful things. And now she's happily married and she tried everything, including God. She joined a kind of like a version of this Southern Baptist type thing, sort of like happy clappy church for a while. But what worked was something that was just in the mind and the right kind of accessing it in the right way and dealing with this sort of subtle self sabotage that was going on, which is really, really scary actually. And I ask myself, that's an extreme example or a very powerful example. So here's a fun question. This is so arrogant. I'm going to ask it. So Jim do you think there's any area of your life where you might be self sabotaging or where you might be getting in your own way?
- [94:25]
A
Oh, almost certainly. As I've gotten older and learned more and more, one of the things that I really have come to understand from when I was younger is the fragility of all humans, myself included, and to become more empathetic because of that. I was not a naturally empathetic person. And as I went through life and as I had experiences and read and experienced different things, I became acutely aware of these things affecting me as well. I'm running human OS just like everyone else and so why should I be excluded? I try to think probabilistically. So I won't say 100%, but I'll say I have confidence, a 95% degree of confidence that absolutely. Because I'm a human being, of course I have things where I self sabotage myself. I think that's part of the process of being a human.
- [95:27]
B
By the way, as I think of her and it came up for me because of your neck issue and the healing the way it happened. And now I want to read that book and see. Maybe there's something I get healed from just from the reading the book. Because, well, believe me, I'm going to believe from chapter one. I want to believe. But there's this interesting resistance. It's one of the many amazing things about the United States and it's not just New York, although it's concentrated in New York, is the, well, it's the self help movement, but it's also the therapy movement and the openness to those kinds of ideas. And I used to love visiting the self help section of the local Barnes and Noble when it was still open. And in the UK is just less of that. One of the questions I ask myself is if she'd have gotten to that Jungian therapist 20 years earlier, how much greater would that have been? And it just doesn't get done as much. In the UK they kind of think that if you're visiting with a therapist, there must be something wrong with you and sooner or later you'll get fixed and then you don't have to go anymore type of deal. Whereas I'm like, more therapy, the better man. I love this because this is therapy in a way as well. I agree it's mutually entertaining therapy, but for anybody listening, in actual therapy, you don't get to talk to Jim o', Shaughnessy, but you get to be super self indulgent. You don't actually have to show interest in the other person. You just talk about yourself. That's why you pay.
- [96:51]
A
I think broadly that Americans are more open to that than Brits. You know, you have the tall poppy syndrome over there with the Brits and the stiff upper lip. And I guess we had the Puritan inheritance here in the us. But I agree with you completely on openness to. And of course love Carl Jung. Have read most of his stuff. It's tough sledding.
- [97:17]
B
I have not read enough of it. I really ought to. And another guy that I haven't read any of and I'm really curious. And if you're a German language author. I'm in a German language environment. I'm doing a university course in German. My German's fine. I want to read it in the original, but it's way harder for me to read it in the original than to read it in English. But I refuse to do it. So I haven't yet read it. Another guy that I'm curious if you've read any of is Friedrich Nietzsche.
- [97:42]
A
Oh, absolutely.
- [97:44]
B
So I'm kind of envious of Nietzsche based on what I've read about him, because they say that his writing style is incredible and that he was not a genius in a way that maybe John von Neumann was, and that's about it. And maybe they say Isaac Newton was a big genius. Every time his philosophies get described, it's kind of like not doing them justice. Reading his books. It's an experience.
- [98:11]
A
Of course, the problem with him is he needed to be rehabilitated after the Nazis decided that they would embrace some of the ideas of the Ubermensch, the Obermann. And if you read what he has to say, it is not what the Nazi party was trying to sell at all.
- [98:30]
B
A guy that smart tends not to be racist. They're way too knowledgeable for that. And he's been misdescribed in a certain way.
- [98:38]
A
Completely agree. That's a key insight. A guy that smart. Listen, I think a lot of the things that people are working themselves up over, like racism and sexism and whatnot. The most intelligent people that I've ever had the pleasure of being able to chat with, interact with. Your insight is bang on. It doesn't make any sense to them to be racist or sexist or any of those isms. They're so far beyond that.
- [99:12]
B
You had me at your bang on. I was like, oh my God, he thinks I'm right. I tell you something, I was on a conference call with three lawyers or two Accountants and two lawyers and this one team of lawyers. I noticed that. I thought, my God, I like those guys. And I realized that every time I talked, they nodded. And I realized it didn't matter what I said, they were nodding. It's incredible. You know what, Jim? You are bang on. You just bang on. Why does that work?
- [99:49]
A
Have you read any of the works of neuro linguistic programming?
- [99:54]
B
I don't remember the names, but a very significant part of Anthony Robbins spiel is nlp and I do his seminars and I'm exposed to it a little bit. And so I learned that I don't say, oh my God, I've got a terrible cold. I hate this. I feel so bad. I needed to convert that to I can't wait till I get better. When I get better, it's going to feel so much better and it's going to happen. So all of those good things. Yeah.
- [100:18]
A
Framing is very, very important. I like to give the example of when they invented insurance, what we now call life insurance. It was originally sold as death insurance. Guy. How many sales do you think they made when they called it death insurance? Very, very few.
- [100:39]
B
All the people who hated their spouses, I imagine.
- [100:42]
A
Yes. Right.
- [100:45]
B
I'm going to take a segue or a right turn or whatever you call it. I'm going to take a jump because I realize that there's somewhere that I want to go with you that we haven't yet been. And you've brought it up a couple of times. You were chairman of the Chamber Music Ensemble of New York. And I'm just curious, is it just Bach that you like? Is it just instrumental? Do you listen to vocal music? I'm just curious what resonates with you in the musical world because you clearly love music. I want to know where it goes.
- [101:11]
A
So I have very diverse musical tastes. I love Mozart, I love the Romantics. So it's not just baroque that I like, Teleman and Bach and Vivaldi, et cetera, but I also like all sorts of electronic music. I love techno music, for example. And one of the things that I did when you still had to buy CDs, I would go to Tower Records. I did this not every time, but I would make certain that maybe once or twice a year I would go into Tower and literally pick CDs at random to see what I'm missing. And that's how I discovered techno, for example, back when it was called European new beat. Then rap, for example. I like certain forms of rap. Some of it gets a little heavy for me, but I kind of think of them as the poets of today in many respects. I discovered that also randomly by selecting that I love vocals and I think maybe the only form of music that I don't like key in with too deeply and even then there's exceptions, but would be pop country, which is very popular in America. And I love jazz. I love jazz.
- [102:36]
B
Very, very musical mind playing instruments.
- [102:39]
A
Sadly, I do not. I started guitar lessons when I was a teenager. I sucked, so I thought I could maybe better invest my time. But, yeah, I had pretty universal music.
- [102:56]
B
I had a lovely conversation yesterday with a friend that I made at high school, one of a very small number of friends I've kept from high school. He's extremely musically gifted and was also very gifted at mathematics and ended up being a natural scientist at Cambridge University in the uk. And then he's a computer programmer now. Very good computer programmer. But his true love is music. So many of my musical tastes developed through being with him in various different places and through sharing. Being in the same boarding house as him at school, I learned to play a little bit of guitar and I don't really play the piano. He shared with me a playlist yesterday, his playlist, and I was reintroduced to all the music he's listened to. It was just so much fun. But I want to go to just stay with classical for a second. So opera.
- [103:50]
A
I enjoy certain operas, to be honest. I've been to the Metropolitan, I've been to the opera in Vienna, I've been to the opera all around the world. I definitely take them in. It doesn't resonate nearly as much, the full opera experience. Like when I'm sitting through an entire opera, it gets to a point where I'm like, okay, I'm good.
- [104:15]
B
The reason why it came up for me is. And don't ask me exactly how this happened. My father's a big Wagner fan and I was talking to this friend yesterday and we were introduced to Wagner at school. And to sit in a Wagner opera, the Ring Cycle especially, is kind of like psychotherapy. And you get enveloped by the music and you got these archetypes that are wandering around the stage. And I don't know, it just seemed like a relevant thing to bring up to you. I was curious to see if that touched you at all or if it gripped you. And I guess I'm trying to find out if you're a Wagner fan or not really, is what I'm asking.
- [104:53]
A
I'm not a big Wagner fan. Obviously. There are certain Wagner pieces, There are parts of that Opera that I find quite extraordinary and transcendent, actually, I'm not one that would get very excited. Come on, honey, we're going to do the whole ring.
- [105:09]
B
I'm kind of bummed, actually. I'm a little crossboiled. I thought I might have found a fellow Wagner fan, but my wife, who professes not to like the opera, and I don't drag her there too often, and I guess I do love the opera and I don't necessarily have to go. I mean, the music is beautiful. And I'm playing this Italian opera, Verdi, and she's kind of singing along and she's moving her hand, and I realized that somehow this opera's gotten under her skin, which just made me so excited to discover what was fascinating for me. This friend, Martin Seeger, is very musically gifted and has far broader musical tastes and explores far more. He started talking about a guy called Shostakovich, who I've only listened to one piece, and he was telling me about how he's kind of stuck. I was telling him how I was stuck on Mahler's Symphony no. 1. I had this plan to listen to 2 to 9, but I kind of can't get past 2, and 2's supposed to be the big one. There's this amazing story about this guy who started the Institutional Investor, who left it to just become an expert in conducting Mahler's Symphony Number Two. So my friend Martin is telling you about some Shostakovich symphony that he can't get off as well. It's like number five. He's not going to six or seven or eight yet because he's stuck on number five. The musical world is kind of a whole universe, even if you just stay in classical music.
- [106:34]
A
Totally agree. And I think that part of that comes from what I mentioned earlier, the music of the spheres, hearing the. What I interpreted as the cherifims and seraphims. I think that if you believe Pythagoras, music is math. It just transports one so magically. Maybe it's the mathematical underpinnings, but on the math thing, you'd mentioned earlier that you didn't really need to know much math. I used to say to people who would ask me about investing, I would say, well, I'll tell you, once the math gets any higher than algebra, it's pretty certain you're going to lose your money.
- [107:14]
B
That's a great one. Actually, one of the things that I was sharing with the group yesterday was I kind of shared with them compound interest. Obviously, one of the great ones to Share. First of all, I started, and this is a horrible thing that I'm about to say, I probably shouldn't say it, but I realized that there's a whole part of humanity that doesn't really understand addition and subtraction, even if they've been through high school or they don't understand the magnitudes of numbers. They don't really feel what is the difference between a thousand and a million and ten thousand. But then there are the people who totally understand compounding but don't act on it. And we're kind of like in the room I was sort of saying, you guys here all understand compounding, but how many of you actually going to act on it? And I kind of put up a chart of my returns and I also put up a chart of what returns can look like. And I said, in a certain way, my whole life has just been working on compounding, taking this one thing and saying, if I can just get this one thing to work for me, but how many of you guys are going to do it? And I gave them examples of people that I know who are extremely gifted mathematically but never made the connection between their mathematical insights and acting on them in the real world. And I wanted to tell them, don't you guys be like that at the same time. Interestingly enough, if you want to get rich, you want to act on the insights that compounding gives you. You don't want to act on the kinds of insights that Black Scholes gave Myron Scholes and Bob Merton. That's what's going to kill you. So you've got to pick the right ones.
- [108:43]
A
I guess we could not be more simpatico, the shenanigans that you can get up to with math, especially when you're presenting it to people who don't have a basic understanding of math. So for example, value at risk, if you want to really trigger me, start talking about how you can give the bar of an overall portfolio to a specific number or percentage. And yet you'll recall that back during and of course portfolio insurance at all predated. But this whole concept of value at risk drove me to just the point of. Because not only did it mislead badly when you take somebody who doesn't know, compounding is a great example as well. If you sit and you have any level of authority or credentials to be giving them advice on investing or finance and you maintain that you can show them a single number that will show them the worst case scenario for their portfolio, to me that's just the math doesn't actually work. And then you're pointing at a single number and saying, see, you're good to go, you're fine.
- [110:04]
B
It's a shocking thing really, because the mathematicians really ought to know better. And it's funny, I think, that majority of people who are doing it are not doing it deliberately. Charlie Munger says that to a man with a hammer, everything pretty much looks like a nail. When you talk about value at risk, the heroic assumption that is made very early on in the model and then is just cast away as if it's not relevant is that risk can be measured through volatility. These mathematicians, they said, oh, okay, so risk, we need a measure of risk. So now we're going to just make the heroic assumption that a measure of the risk inside this security is a function of its past volatility. That's it. I guess it's not as heroic as I'm trying to make it out to be that you can make the case as to why that would be, but it's not a very good case because you're assuming that all of the investors see everything that is relevant about the security, whole bunch of things, and then the mathematician will dazzle the non mathematicians with these models and with these numbers and they won't say, look, there's a heroic assumption in here. But you know what my wife would do if you do that? She'd turn it back on you. I'm going to do something that might be mean to you, but you probably had too many interactions with your wife and other people. She'd say, that's really interesting. You're getting all hot under the collar. Forget about these VAR people and all these other people. What's going on with you that you're getting all hot under the collar? Why are you losing your composure? There's obviously something that you're not getting and some work that you need to do. That's what my wife would say and.
- [111:39]
A
She'D probably be right.
- [111:41]
B
Yeah, exactly. It was only recently where I got to this. Whenever I'm getting hot under the collar, raising my voice, getting impatient, getting upset, it's this thing and I'm sure, yes, it's my wife circumstances. Yes, those are annoying. Yes. There's something in the external world that is triggering this, that is a part of the issue, that is part of the dance, but I can't change that. And so what I need to do is get really curious and try and work out on my piece of it. So what is your piece in that? Why is that so upsetting to you.
- [112:18]
A
Well, Professor Jung, I would have to think about that one for a while.
- [112:25]
B
That is a very, very good Viennese accent. My God, you did that extraordinarily well. I like that a lot.
- [112:32]
A
I thank you.
- [112:34]
B
And of course, what's wrong with what I just did is I just did a massive projection. I tried to get you to own your piece. Who the hell am I to tell you to own your piece in it? I've got my own piece in it. All I can do with that is when my wife says, nod my head in a submissive fashion, say, yep, I've got homework to do. I call it homework.
- [112:57]
A
I think that's a good thing to call it actually, to be fair to.
- [113:00]
B
You, because it's more fun to be unfair. But to be fair to you, the reason why you're getting hot under the collar is because it's duplicitous and you feel like these smart people who can figure out what avar is should know better than to mislead people with these things. And in a way it's self referential in that if you come with common sense that is outside of the logic of the reasoning of the VAR people and they're just going to say, oh yeah, this is just another guy who does not understand my fancy mathematics and finance, but you're safe and you're good to go. And it's kind of like a shtick in a certain way. It's selling snake oil, except it's wrapped in this pseudoscientific finance theory where to get into the club of finance theory, you have to be a really freaking good mathematician. And that's finance stuff. You know what they're studying in the Masters of Finance at the University of Zurich? You ready for this, Jim? I know you know all about this. You want to know what they're studying? They're studying Brownian motion. So you need to be able to do the complex modeling or not even like hard maths of Brownian motion. There's a distinction in finance between. I'm just going to say the words if you're a mathematician, believe me, I don't understand what it means, but I know it's distinction, but between continuous time finance and discrete time finance. And it's got important implications for the mathematics. And we know that that's kind of irrelevant. The person who invited me to this class, she and her husband are great friends of mine. And I've discovered it's a weird thing, one of the nice things about living in a smaller city than New York city is that you can make friends with people like the professors at the university. It's a smaller world, it's easier to mix with them. But at the university I've got one good friend who's a physicist physics professor and I've got three good friends who are maths professors. What's going on there? And I love pure maths and I love learning about pure maths and I kind of fear to give these out because there's good and bad about them. So there's two wonderful YouTube channels. One is three blue, one brown is just incredible, incredible. The guy behind that explains all sorts of incredible mathematics in very simple and visual ways. And the other one is Numberphile, which is extremely popular math channel. It's just so much fun to watch that stuff. Way better than watching TikTok. And there's hour long lectures, two hour long videos, 20 minute videos explaining Euler's unity, explaining the Riemann hypothesis, doing a visualization of the Riemann hypothesis. I mean, you can go on and on and on. The bad news about it is that it gives you the illusion of understanding complex mathematics and higher pure mathematics, when actually I don't understand any. It's just kind of like very, very esoteric entertainment.
- [115:48]
A
I'm getting the hook from one of my producers. Can you believe that we've been talking to each other for two and a half hours?
- [115:55]
B
No, because it's been so much fun. But I don't know if you noticed, I've been messaging with my team because they're like, are you still on the call? And I'm like, yeah, it's so good, I don't want to leave. And they're like, we got things to talk to you about. And actually I tell you that my wife needs to be picked up, I can still make it, I'm not problematic. But I was writing on the WhatsApp chat saying, no, no, no, leave me alone. I'm having so much fun here.
- [116:17]
A
As am I. So what I'm going to do is invite you for a second session because this was magical, honestly. And people might be very disappointed that we talked about markets very, very little. But I would argue that we actually talked about them quite a bit.
- [116:35]
B
I don't know what to expect. It's in so much of the right literature, the right kind of approach to the market is the inner journey. So we've been talking about the inner journey and if the inner journey and if you're not aligned on the inside, you're not going to do very well with the markets and Many other things I would argue we've been talking about. As you've put implicitly, we're talking about the stuff that's really important.
- [116:58]
A
Exactly. But I would love to have you back and continue our conversation. Before we go, we do have a question that we ask all of our guests, and that is this. We are going to set you up as the emperor of the world. You can't kill anyone and you can't put anyone in a re education camp, but we are going to hand you a magical microphone, and you can speak two things into it that will essentially incept the entire world's population to wake up whenever their next morning is and say, honey, I've just had these wonderful two ideas, and I'm going to act on both of them. What two things are you going to incept in the world's population?
- [117:43]
B
The one that came to my mind as you were talking, which is, obviously, you want to go to the great religious traditions because there's an enormous amount of evolved wisdom there that's been evolved over many, many generations. So my first response is, I'm not going to try and freelance here. I'm going to go and consult with great sources. The one that comes up is the golden rule. When you wake up the next morning, treat your neighbor as yourself. And I would want to expand on that. And this comes from a moral philosopher whose name has gone out of my head. I had to study him at university. And it's this ovarian lottery idea.
- [118:19]
A
I think it's Rawls. The Rawls.
- [118:22]
B
Yeah, that's right. Thank you so much. Amazing guy.
- [118:24]
A
You're welcome.
- [118:25]
B
You need to be in the world in such a way that you might have been any other of the creatures of the world and act in such a way that if you were any one of the other creatures of the world, you'd be fine with the rules that you're establishing for the way you're acting, which is kind of like the only moral rule. And I hope you don't mind me expanding on this. My son, he's sort of, I'm smart and therefore I own my intelligence type of deal. And I kind of said, well, do you really own your intelligence? What if you'd come back not born with this set of genes, not born in this family in a certain way? It gives you this perspective of, well, it's okay that I get taxed. It's okay that I'm obligated to support people who are less fortunate because I could have come back as those people. I might be in Their shoes. So the golden rule, treat your neighbor as yourself. The other constraint that I have is that I'm talking to the whole planet. There are a whole bunch of zero sum things which don't work. You can't tell the whole planet as it comes to investing. The whole planet's going to have a certain rate of return. The power of compounding only works on a different scale because at some point you become too big if you have excess returns. I can't go there for the whole planet. I think that it's something around treating your neighbor as yourself. Making sure that every single human, including every single terrorist, which I'm thinking a lot about right now, thinks about that perspective that they get, that perspectives change. If you're isis, would you like to come back as a Yazidi woman and really think about that? Because you might be a Yazidi woman. Is it really right to have the obligation to rape the people that you conquer? Maybe you want to think about it differently. I guess the other one that I've only come to recently is realize that we're on this spaceship called Earth. And it's just one spaceship. If there was an asteroid coming towards us, we'd want to take it out. And we should be less concerned about nuclear power and the occasion nuclear accident, because that's not systemic. When we do things that are systemic, we need to be super fearful and super careful and super scared and super conservative. And the human species now on the planet is systemic. Living on Mars is fun for Elon Musk, but it's a pipe dream. We're not going to get there in any span of time we want to think of. The only possibility for me is that we might get. According to Ray Kartzweil, we might be able to simulate ourselves onto computers that will be able to upload ourselves onto computers that are on Mars. Once something happens to planet Earth, but we're actually on one spaceship, how do we need to think about that? I guess I'm going there.
- [120:59]
A
I actually love that. The thing I would add is that when you speculate about the Fermi paradox or all of the above, Mars travel, et cetera, who's to say that there aren't other advanced civilizations light years away from us, but that their journey went inward, not outward?
- [121:21]
B
They stopped producing stuff for the rest of us to see because they learned to miniaturize themselves and they're all living on the pin of an atom.
- [121:28]
A
Exactly.
- [121:29]
B
But you know what the Great Filter is? This is a really scary thought.
- [121:33]
A
I do. Nick Bostrom Yeah. I, in my optimistic phases, hope that we're on the bright side of the great filter.
- [121:43]
B
I suspect we aren't the subject for the next podcast. It's so kind of you to want to invite me back. Gladly, gladly. I would enjoy it. I mean, this has been so enjoyable. This is like what I live for.
- [121:54]
A
Actually, for me as well.
- [121:56]
B
I mean, this is energizing for me. The only thing that would make it better would be to be sitting in your beautiful wood paneled room and to be doing it in real life with either tea or coffee or chocolates.
- [122:08]
A
And let's make that a plan then next time you're in New York, we'll do one live here.
- [122:14]
B
And I would love that.
- [122:16]
A
It's a date.