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- [00:00]
A
Hello, everyone, and welcome to Investing by the Books, a podcast by Red Eye. I'm your host, Eddie Palmigan, and today we're excited to have Ethan Everett on the show. Ethan works as an investment analyst in the US and is also the author of the Investment Philosophers. In his new book, we meet 13 philosophers such as Sren, Kierkegaard, Voltaire, and also Bruce Lee, and the book comes timely for me. I've been wanting to learn more about philosophy, and I think Ethan does a great job connecting philosophical ideas to investing, but also explaining how finance and markets have influenced the thinking of these philosophers. The Investment Philosophers was published by Columbia University Press in October 2025, and we're delighted to have his author on the show today. Here comes our conversation with Ethan Lebritt. Hi, Ethan, and welcome to Investing by the Books podcast.
- [00:57]
B
Thank you so much for having me. I'll. I'm a big fan of the podcast, and knowing the authors that have already been on in the past, it really is humbling to have the experience to be on here. So I'm excited to talk and looking forward to a great show.
- [01:12]
A
Same here. It's great to have you on. Where are we reaching you today?
- [01:16]
B
You are reaching me in Scottsdale, Arizona. I'm a native New Yorker, but I moved out here a little over a year ago and it's been really nice right now. The weather is fantastic. Definitely a little bit of a slower pace than New York. Unfortunately, I still have allegiances to New York. For instance, I'm a Jets fan, which is probably one of the worst parts of my life. I don't recommend anyone being a Jets fan, but anyway, Arizona is fantastic. It's been great to be out here.
- [01:43]
A
What made you move?
- [01:46]
B
So I was given got a role at a company called Galvin, Gostad and Stein LLC doing investment research, which had a lot of autonomy and was really intellectually interesting insofar as I have a really wide mandate in terms of the investments that I can research. So that's been really great. I was given this opportunity, and despite, you know, having never lived out west, I said, what the heck, let's. Let's do this thing. And it's probably one of the best decisions I think I've ever made.
- [02:17]
A
Congratulations on that. And I think we will speak more about your. Your current role and your investment style. But to begin, I'm curious to hear more about how your passion for investing began.
- [02:29]
B
So, you know, for me, it really started from my love for chess. The reason I say that is because I had the type of Mind that growing up, I was always looking to solve a puzzle. And for me, one of the most interesting puzzles was sports and reading sports statistics in the newspapers. And then I found chess, and I played that competitively. And I was constantly fascinated with what was, you know, kind of going on on the board. Things were so dynamic. And that kind of led into my middle school math class and my teacher introducing us to the stock market game, which, which was basically a paper portfolio competition. And I was so mesmerized by the prices moving up and down. I didn't understand what was driving things. It was such a dynamic environment, and the rules weren't explicit like they were in chess. And that really, really fascinated me. So that was kind of my first exposure. And I would say, you know, ever since then, I've been trying to figure out markets, so to say. And, and, you know, the joke is you never figure them out. And the reality is they're always changing. And if you think you figured markets out, they're going to humble you. So, you know, it's. I like to say it's beyond chess because, listen, chess just with its. Chess is a steady board in a steady rule set. And the amount of possible positions is something like, I don't know, it's like a 10 with 40 zeros after it or something. It's, it's not, it's like, not infinite, but it's, it's huge. But now take that and make the rules not explicit. The pieces are constantly changing the globe. The macroeconomic environment is the board, and that's not stagnant. Again, so that's really kind of how I found my way and my passion for investing. And ever since, I've been trying to study markets and interact with markets in ways that have kind of made me better understand them. But again, the truth is, the more I know, the more I know I don't know. So that's just how it is in this game.
- [04:47]
A
I think most of our listeners can relate to what you're saying about trying to figure this out and having that curiosity. What practical steps did you take from being 12 and in that math class to becoming an investor?
- [05:02]
B
Well, it's funny, you, you asked that. I think about, like, the first person I really watched, and it was probably Jim Cramer. I, you know, I told you in, in middle school, I had that math class, and I remember going home every weekday and watching Jim Cramer's Mad Money on cnbc. Then I, I also began reading, whether it be things like the. The Intelligent Investor, also creating my own portfolio with My bar mitzvah money. Again, these were all steps that I took. I. There was a point, I remember where I was in high school, where I think my parents told me, you need to be able to talk about something else besides stocks. It was like I was just so fascinated by it. I majored in finance at Bucknell University. I wanted to make sure that I went to a school that had a very strong finance program, but also had a really strong liberal arts program. And that's where I really got to study philosophy at Bucknell to further pursue things. I am a CFA charter holder. I've gotten that body of knowledge. I went to business school. I like to think that my law school experience has also kind of made things more clear for me in terms of the legal aspects of investing.
- [06:25]
A
But.
- [06:25]
B
But, you know, kind of. These are all things I've done to make me a better investor. On top of all the philosophical kind of ventures. I've gone on to use those mental models to become a better investor, which I'm excited to talk about today. But there's all sorts of things I've done to improve myself as an investor, and those are just some of them.
- [06:48]
A
It's clear that philosophy is very close to your heart. Was there a specific moment or time when you, so to say, discovered philosophy?
- [06:57]
B
I think for me, my discovery of philosophy coincides with potentially my kind of feeling like I wasn't getting the full answers to things or I wasn't getting enough. When I was a student in Jewish day school, I vividly remember that there were certain questions I would kind of ask that I wouldn't. Basically, a teacher would say back, oh, well, we can't discuss that. And in order to kind of look into those questions, I vividly remember finding Brooks Menoza on Wikipedia. And that kind of opened the door for me. He was talking about a lot of the things that they weren't willing to talk about in my kind of traditional Jewish day school. And I'm not upset with them for that. It's okay. But it was just interesting. I kind of found somebody who was actually excommunicated from the Jewish community in Amsterdam in the 1600s. You know, Spinoza. And it just. It was so funny because I don't want to say that I identified with him, right? Like, I wasn't a heretic. I mean, I was going to Jewish high school. But, like, it was philosophy, for me, was a way. It was kind of an escape to kind of a wider perspective of thinking. So, yeah, that's. That's probably where it started. And then Nietzsche was next. I was kind of attracted to these thinkers that were considered really controversial at first, and that kind of opened the door. And then it was really in undergraduate school at Bucknell that I really got to kind of explore more and more philosophers.
- [08:37]
A
And now your book, the Investment Philosophers, is just being published. How. How did the book come about?
- [08:45]
B
So it's interesting. I am always the type of person that when something doesn't exist, and I think I have the capability to kind of fill that void, I take that on. And for me, I wanted that book that went through all sorts of different philosophers in a straightforward way, because, again, the reason most of these philosophers haven't been connected to investing from the get go is because they're so enigmatic, they're so difficult to penetrate. And so I wanted to lay these philosophers out and then make connections to all sorts of different aspects of investing. But I think that when I wrote, and I say this in the beginning of the book, I wanted to be clear that my connections aren't necessarily the right connections. My connections are the ones that I made. But I wanted to encourage other people to make new connections between philosophers and different investing ideas. Even just on some of these podcast interviews, I've had people say, oh, well, could you apply this idea of Nietzsche's to investing in this way and risk management in this way? And I say, oh, my God, that's a great idea. I wish I should have written about that. But, like, that's the point of this. I'm trying to inspire people to. To make their own connections.
- [10:06]
A
You've done the investing community a great favor of compiling this book.
- [10:11]
B
Well, it's hard. You know, you say that, but it's so hard. What is it with Newton? You know, if I've seen further than others, it's because I stood on the shoulders of giants. For me, I got to stand on the shoulders of 13 intellectual giants. And listen, at the end of the day, I also got to give a lot of credit because in addition to. To mentioning a lot of philosophers, there's a lot of investors I mention, you know, practitioners. And those are also people who I, you know, see myself as getting to stand on their shoulders.
- [10:45]
A
So these 13 giants are 13 philosophers that you depict in the book. How did you select these ones?
- [10:52]
B
So I had an interesting criteria. I wanted to first make sure that I was doing something additive. I didn't want to just rehash connections that people had already made. So I wanted to make novel connections. I wanted to do it with thinkers who could really be connected in a strong way to investing. And what I mean by that is I wanted to not only have a philosopher whose ideas had interesting connections to us and our view of investing, but I was really interested also in picking philosophers whose lives in some way were affected or molded by investing or markets historically. Because I think again, and this is kind of like, it's something that's reiterated throughout the book, nobody exists in a vacuum. And I thought it was really important to kind of explore the reflexive relationship between some of these philosophers and investing, because at the end of the day, it's not like I'm just picking their ideas up from some vacuum. And just, it's important to know, how did that idea of theirs come about? Was their idea shaped because something happened to their father financially when they were a teenager? Which is, which is an example, that actually is an example with Pascal. So a lot of things are shaped from investing, and then you can then take those ideas and apply them to modern day investing. But I think that reflexive relationship is really important to keep track of.
- [12:35]
A
And we, of course, encourage everyone to buy the book to read about all the philosophical ideas and how they came about. I'd like to discuss a few of my favorites. And the first person there that you already mentioned is Baruch Spinoza. So. So who was he and when did he live?
- [12:52]
B
Yeah, so Spinoza is fascinating. This is a guy. He's born into the Jewish community in Amsterdam in 1632. And just to give a little bit of historical background, this is actually right before and leading up to the tulip bubble in Amsterdam. But what we're going to talk about is something else that was really important in Amsterdam, which was when what many consider to be the largest on a market cap basis, the largest company of all time, which is the Dutch East India Company, you know, founded just after the year 1600, this was such a big company, at the end of the day, they literally had their own army. And this was the backdrop for Spinoza's growing up. What do I mean by that? This was the first example of a modern securities market. Literally the first modern securities market, most scholars will agree, was basically the very market that the Dutch East India Company established for the facilitating of trading in their own shares. Imagine a stock market where there's literally only one thing you can trade that is the beginnings of modern stock markets. And Spinoza is growing up kind of in that shadow. So one of the reasons I chose Spinoza, to get back to your question is because he kind of coincides with the birth of modern securities markets. In addition to him being fascinating in terms of his ideas there, I would talk about him. No matter what he's like, he is my favorite philosopher. I feel like an intellectual kinship with him, and I always have. But the reason I thought he was such a great place to start the book, and I chose him to start the book, is because he really coincides with this birth of modern securities markets.
- [14:45]
A
And for those listeners who haven't heard our 71st episode, we did speak about the book, the world's first stock exchange, where we covered the birth of the market together with the financial historian Lodovic Petram. But what else can we learn from Spinoza as investors?
- [15:04]
B
Great. So let's get into the meat of Spinoza. So I like to. It's funny, I like to think about Spinoza as sort of a very early Daniel Cannon in terms of behavioral investing. He had a lot of elements to his philosophy about things, ethics, about theology. But the thing that is most relevant, I believe, to investing is his idea of what drives people and what drives organizations and ultimately what drives markets. And for Spinoza, he looks at something. It's this force that he feels is driving everything, and he calls it conatus. And he believes that there's this underlying drive for everything to continue existing as it is. Like essentially, you know, kind of this evolutionary drive where people try to maintain themselves. This is kind of something like Nietzsche might call the will to power, this idea that we're constantly trying to keep going and maintain ourselves, if not get bigger. He thinks, though, that that fundamental drive can be corrupted. He thinks that oftentimes we have irrational emotions that cause that striving kind of be out of whack in some way. And he believes that by reflecting upon our irrational emotions, we can, you know, we. We can improve ourselves drastically. I think that again, this idea of introspection on irrational emotions in order to better adapt ourselves to the situations we encounter, that's the crux of Spinoza's behavioral philosophy. And that's the real part that I focus on in the chapter that I wrote on Spinoza.
- [17:10]
A
Do you have a practical example when you have used these ideas in investing?
- [17:16]
B
So it's funny because oftentimes, for me, it has to do. It happens in postmortems. I look back and realize I should have done something to stop irrational emotions from taking hold. But one way I can say that I do proactively use it is I oftentimes will. I will force myself to try to see things go going wrong so that my emotions don't get in the way of me not being able to see the full picture. And I do. And one of those ways is by doing something I call and I didn't create this, called the pre mortem, where I assume with one of an, with an investment that I love, that it goes wrong. How it's two years from now, imagine it goes wrong. How did it go wrong? What's the most likely way it went wrong? Which almost forces you to. To kind of think in ways that you were potentially not going to think, because oftentimes our emotions stop us from going down that path. So I think that because what Spinoza is saying ultimately is he's not saying we can stop having irrational emotions, but he's saying that by adjusting to them and by kind of gaming them through practical strategies, we can be better. We can use reason to kind of rise above these irrational emotions. And it's not that these irrational emotions will ever go away. Just like, listen, in the stock market, we're always going to have irrational urges. We're never going to be 100% rational. But we can use processes to try to make ourselves better. And I bring up this thing like a pre mortem as an example of a way to. That we can try to make ourselves more rational. So I think again, listen, I'm taking Spinoza and I'm saying, okay, how can I best control, not control, but how can I best keep a fence around my own irrationality and stop it from making me unsuccessful?
- [19:27]
A
And you mentioned before that some practitioners are also in your book, can you mention a practitioner that actually was connected or used Baruch Spinoza's ideas or thoughts?
- [19:40]
B
So, and then. So to start with, at the end of the day, Benjamin Graham loved to quote Spinoza at the beginning of his lessons. He was a classic student. And ultimately, before he ever got into investing, loved to reference different philosophers. And it's actually been said at Columbia Business School by multiple of his students that he would begin each class with a Spinoza quote. And that Spinoza quote that he liked so much was this idea of seeing things from the aspect of eternity. He said that if you want to be successful on Wall street, one of the best ways to view Wall street is through this aspect of eternity. What does he mean by that? He means he's trying to show a way of being able to overcome the vicissitudes of everyday markets and being able to zoom out and see things kind of in their eternal state. It almost kind of akin to seeing its intrinsic value in a steady state. So it fascinated me that Spinoza was brought up by Benjamin Graham at the beginning of all these investing courses of his. So he's somebody who felt that way. And again, just to bring it back, the connection between, you know, what Graham is saying and what I was talking about with irrational emotions, ultimately, when we're zooming out, right, and seeing things from this perspective of eternity, what we're really doing is we're trying to overcome those individual, in the moment, irrational emotions. We're trying to zoom out to a place where we can see those irrational emotions for what they are. Right. And so I think that's what Graham is trying to say, and that's what I'm also trying to say in my book, is that at the end of the day, how do we go about zooming out in a way that can give us the most educated, the most advantageous perspective on markets? Now, the hardest thing about this is we can try and zoom out all we want, but we're still a part of markets no matter what. We can never like, like we like again, even with Spinoza, right. We want to take a view from the aspect of attorney, like, that's fantastic. But there's a difficulty because we're still in embedded in markets, right. I can't extract myself. So that's something that I think is really interesting that people should kind of think about. No matter how much you may try to extract yourself and see things from the aspect of eternity, you still have to deal with the fact that on an everyday basis, you're part of the markets, you're making trades, you have a 401k plan. It might be. It's probably called something else, something similar.
- [22:39]
A
Exactly. It's kind of the same thing. Speaking about zooming out, one of our returning guests for the podcast is Steven Penman. He's a distinguished accounting professor. And in episode 74, quite recently, we spoke to him and I asked him for advice what to read. And then you also think about, okay, reading is a way to zoom out, get away from the markets and take that perspective. And one of the authors that he recommended was an Enlightenment author, and that was David Hume. And fittingly enough, chapter three of your book features him. So who was David Hume and when did he live?
- [23:16]
B
Well, you know, he's a really interesting guy because I don't think he's necessarily appreciated for the subtlety to his thought that he had. He's an. An 18th century Scottish philosopher. He's actually an attorney and he's well known as the skeptic, the guy who questions everything. And I Don't think that's necessarily a fair reputation. He's very well known for this problem of induction, which is basically this idea that, like, just because you see, you've seen a million white swans and you never seen any other color of a swan, it doesn't mean that all swans are white. If you see one black swan, that can totally blow up the thesis. And I, that's actually, by the way, where the term black swan comes from. They, they originally in the Western world thought there were only white swans. But, but, but, but that type of kind of thing that he wrote about, people said, oh, well, he's like an extreme skeptic. And the interesting thing for me is if you really go down into his writings, he doesn't only preach skepticism in an extreme form. He actually preaches what I, what he calls a mitigated skepticism. And that is skepticism tempered by common sense. There's a lot packed into that common sense. But I think that what gets lost on people is people think, oh, David Hume, he's the skeptic, but really his philosopher is about tempered skepticism. And I'm happy to dive in to how that ends up playing out. But he again, was a very, very interesting guy. He had to watch kind of what he said at that time. Again, when you're a skeptic in Scotland at that time, there are the powers that be. But yeah, he was a very, very interesting historical figure. And I like to tell the story that at first when he heard about modern securities markets, he said he thought they were stupid. He said if they were at the bottom of the ocean, who would care? And then when he gets paid, I think it's about 10 years later for one of his books, and he ends up investing his money in the stock market, which I thought was really, really interesting. I thought that was him kind of potentially taking his skepticism and tempering it with common sense. I think it was, it was a good example because a lot of. Listen, I can't tell you how many times I start off as a skeptic with an investment idea or a trend and then end up having to change course of and adapt to it. I think I absolutely didn't real. Listen, it's not to say that there aren't bubbles in certain parts of AI, but I did not appreciate the transformative power of large language models. But I. But the solution wasn't to double down and say, no, no, you're right, there's no, they're not. They're, they're overblown. They're not actually going to cause anything productive. The answer was to rethink it. Look from a common sense perspective and adjust. And I think that, if anything, is what Hume represents.
- [26:45]
A
How did Hume's investments turn out?
- [26:48]
B
You know, that's a great question. I don't. I assume he did. Okay, this, these, these would be. It's funny. And I did a lot of my, my, my. I did all of my own research. This is one I'll have to get back to you on. I don't. They didn't have Vanguard index funds back then.
- [27:05]
A
So do you know if it changed how, how he was thinking and his philosophies,
- [27:13]
B
how he changed his. So I think that he saw in. Based on his writing. I think he saw this, the speculative aspects of Wall street, like, you know, kind of in the, in. He imagined Wall street as kind of just back and forth of trading of these interests, these abstract interests, but he didn't see the productive capacities of it. I think that his thinking changed insofar as, at the end of the day now, like a stock or a bond, it actually is used for some productive capacity insofar as, you know, raising capital. I don't think he really thought of those things. I think he kind of just saw it as a game, which, by the way, like, to some extent it is. Right. You know, and anybody who's read Adam Smith's not, not the old Adam Smith, the, the new Adam Smith, Jerry Goodman, the Money Game, you know, it is, it is a game in some ways. But I think his, his thinking changed insofar as he understood, oh, wait, this can actually have some productive capacities, that capital markets can actually help businesses.
- [28:28]
A
The third philosopher that I would like to bring up is quite close to here in Sweden. It's Sarenkirkegaard, who lived in Copenhagen, where I was last week. We met him in chapter 10 of your book. And this was one of my favorites.
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B
Did you see any of his statues?
- [28:41]
A
I didn't. I looked, but I was there. Pretty short.
- [28:44]
B
It's so, you know, it's so fun. I love talking about Kieran Gar, because this guy was a laughingstock. I mean, and I'm, I don't, I'm really not exaggerating it. Anybody who wants to go look. I mean, he. They drew caricatures of him in newspapers of him looking like this, this really ugly guy. They would talk about how stupid his writing is. I mean, even he acknowledges, he talks about. This is Kierkegaard. He says, I can get only a couple of people to read halfway through my book. I I don't even think I can get one to read all the way through one full book. And it's like this guy wrote so much, but fascinating guy. But what is Kierkegaard? What is his importance to investing? Kierkegaard is important insofar as he talks about us creating our own meaning in things. And it's not just about going after the money. He talks a lot about how he's living in copenhagen in the 1800s and he sees these young men that are obsessed with wealth in and of itself, with wealth as an object. And he's. He, he doesn't like this. He, he says, you know, if you're just checking, chasing this money, this token abstraction, and there's nothing beneath that, it's not going to be a meaningful endeavor. He says, you're going to look back when you're at the end of your life and you're going to be in despair because you're going to realize you didn't go after something worthy. But he says that if you do go after something worthy, even that has a lot of meaning to you. Even if you don't succeed, you can look back on it and have these meaningful experiences that you can kind of hang your hat on. He talked. Why is this so interesting in his regard is because he has so his father, he comes from a pretty wealthy family. His father dies and he inherits quite a bit of money. And he could, he had enough money. He could do any business venture he wanted, but he wanted to write. And as I alluded to earlier, his writing ventures were significant money losers. The, the publisher. He even talked about how from the get go the Danish speaking market was so small to the point that he was, him writing in the language he was writing in. It was not meant for. It was not going to be a very profitable endeavor. But at the same time he gives this example about how in ancient Greece people used to pay for the right to be judges because it was a noble pursuit, a noble job to have. And he said, what if people had to pay to be writers because the writing that they were doing was such a noble pursuit? And that's kind of how he saw his writing pursuits as this noble thing. It's very interesting. I think he does write about, in some ways about how one day people will appreciate him. And he was spot on. I think it's funny because I think there's a lot of people who write one day everybody will appreciate me. And most of them do not get appreciated. He, he was correct. He actually got statues. They are Literally, there are literally entire literary departments dedicated to understanding what he was saying. But again, I, I think he's, he's a great thinker to study in the context of investment because things haven't changed that much. There are so many people on Wall street and all they go after is the ones and zeros for the people that ultimately have investing as something meaningful to them. There's something that they're, they're, they're driving towards some, you know, the, the drive to figure out the enigma that is the market or the drive to make money because you have some philanthropy you want to build and you want to invest that money so it's sustainable, whatever it may be. Having that meaning is so important. Important. And just obsessing over wealth as an object is as fallacious now as it was in the time of Kierkegaard.
- [32:56]
A
And how do you interpret this paying to do what you love when it comes to investing?
- [33:03]
B
You know, it's funny because I find myself thinking about there are multiple resources in areas where I don't invest. Right. Like right now, I don't, in distressed credit is not something I, that's part of my job. But I've always had an affinity for distressed credit and found it fascinating. And I'll even pay for memberships to periodicals to read about these things. Even though at the end of the day it's not going to have an impact on the stocks that I'm picking for my job at work. And you know, I, I, I look at what, why am I doing this? The reason is because it's the love of the game, you know. And so for me, it, it, you know, you see it that way. I think that the son of the famous oil magnate Itcha Hunt was asked about his father's interest in investing. And he said, well, I don't think my father really cared about money itself that much. It was kind of just how he kept score. Score. And I think that for me, that that's, that, that's all. Listen, I, you have to have a certain amount of money to, to, you know, sustain yourself. But be, you know, beyond that, I, I really think that oftentimes money is a way of, of keeping score. And I think that again, there are times for me that I, as I alluded to that I want to, you know, go study something. Not because it's going to lead to any direct profit. Listen, I studied law for a long time and that was not necessarily going to lead to money in every single way and shape and form. Some of the things that I learned are going to have nothing to do with investing. But if they're interesting for their own sake, that's okay.
- [35:01]
A
And also maybe one day those indirect efforts will prove quite valuable.
- [35:08]
B
You never know. It's funny, you really, really never know. And sometimes, for whatever reason, something might hit, something might connect, you may find yourself encountering something where all of a sudden that skill does, or that skill or paradigm does come into play or does become relevant, and you're the only one who has it.
- [35:29]
A
We alluded to some investing experiences of yours, and in the book you also have some examples of investments you have done or lessons. But I'm still curious to know more about your personal investing philosophy.
- [35:43]
B
So for me it's interesting because there are many different stages to my evolution as an investor. And I think it begins with me not knowing how much I don't know. I think that I was kind of of the mindset that, oh, a good business, a good company equals a good stock. And I kind of started with that. And the funny thing is I wasn't so far off. But obviously there are many more subtleties to investing in that. And as I kind of studied finance in college and managed my own portfolio portfolio throughout high school, I learned about the fact that my grandfather was actually in Benjamin Graham's class at Columbia Business School. And that drew me to value investing and wanting to know everything I could about it. Whether it was reading the Intelligent Investor security analysis and then kind of venturing into the Seth Klarman and margin of safety world. The, the problem for me was, and not to compare myself to Buffett in any way, but I kind of had this problem where I went down this rabbit hole of these cigar butt investments that oftentimes ended up being value traps. And I think I kind of came full circle to realize that the way that I had it to begin with was actually potentially more correct than what I had been kind of doing during college. I ended up realizing, okay, it is much more complicated than just good company equals good investment. But that's a great starting point. And I think at that point I kind of grappled with the what identity do I want to have as an investor? Am I growth and my value? Who am I? Just because I'm a quality investor, does that make me a growth investor? Oh, could you be a growth at a reasonable price investor? And all these questions about investor identity brought me to this place where I said, why do I have to categorize myself? What I have to say on myself? Why do I have to do something that limits My expression. And that kind of got me to thinking about, you know, Bruce Lee, who I talk about in this book about having the style of no styles. I thought that people oftentimes would say, okay, you're either value or your growth. And even within value, you're this, your special situations, your deep value. And, you know, all of those dichotomies didn't really work for me because I saw, okay, if you're a value investor, growth is a component of value. Value is affected by the growth rate of many different things, things within a company's financial statements. So for me, I wanted to kind of become this intellectual chameleon, this person who was able to use all sorts of different perspectives and paradigms when appropriate. And I think that's what this kind of book does. It kind of talks about different paradigms that can be used at different times. And I think oftentimes need a different paradigm to effectively see what other people can't. And that's the real, you know, crux of my investing now. I am trying to see something in a way that most other people are not seeing the way I am, which I believe eventually they will be able to see in the way I am because of some sort of catalyst for like, what? Let's. I'll give, you know, I've been so abstract. Let's talk about practicality. Right. Well, right now let's talk about Mattel. I think Mattel is a very interesting company. It's a company that is the, you know, it is seen as a toy manufacturer. But right now they're in this transition into an IP company. I think that people are extremely skeptical of this transition. I think that right now Mattel offers this incredible asymmetric upside opportunity. But I think it's because I'm willing to kind of take this intangible view of their assets. If I take a solely physical property, plant and equipment type of view of this toy maker, I don't think that the. It looks like a good investment. Again, you got to be very careful into employing the right paradigms at the right times. But I think that eventually, I think the market is moving towards seeing Mattel as that sort of IP company. But there needs to be certain catalysts that cause that transition in perspective. For instance, right now they only have one successful movie, the Barbie movie. And most Wall street analysts write that off as a. A, you know, a, a flash in the pan, so to say. So for me, I'm constantly not just thinking about companies now as an investor, but I'm thinking about other people's thinking about companies, that sort of second level thinking that Howard Marks talks about. So I, you know, kind of talking about my evolution and my development as an investor. It kind of goes from thinking about stocks and companies to kind of been thinking about myself and evaluating who am I as an investor. And then once I become comfortable with who I am as an investor, now I'm thinking about different layers of thinking in the external market. And I would say at the end of the day, I'm constantly still evolving and it's not a linear process. That's what I think is also another thing. It's funny because for law school in the US you have to take an entry exam called the lsat and it's a very, very difficult test and you have to get a really high score to get into a great law school. Anyway, the progress for most people is not linear. It's not like you study, you study and you go better, better, better. Oftentimes you take a step back, you try a new strategy and you realize that it's actually hurting you. And I find that with investing so much, it's a really, you know, what's, what academics call a wicked learning environment, which means that like you don't necessarily receive accurate direct feedback for doing something that was good. You don't necessarily get a good result. The problem with a wicked learning environment is you can do something bad and still get feedback of, oh, you get rewarded because again, oftentimes you, you can be lucky and be right for the wrong reasons. So again, I, I, I think that for me as an investor, I'm constantly grappling with these questions and I'm now kind of in this phase where I'm looking for things that other people don't see, but at the same time they need to see it eventually. I think another problem with my past investing was I would think about things insofar as how they should be, oh well, it should be that way. People should recognize the value here. But I've kind of moved more towards the practical view of, okay, will they recognize what I see now and if so, how long is it going to take? And if they never do, what's my downside? So, yeah, listen, it's a, it's so hard to, to provide a comprehensive view of who you are as an investor, but I think that's a good start.
- [43:26]
A
And professionally, you are an investment analyst at Galvin, Gausstad and Stein, as you mentioned in the beginning. Can you tell us a bit about the firm and what you do as an investment analyst?
- [43:35]
B
Yes. So we have about $1.3 billion in assets under management. We manage a large cap equity strategy that mainly focuses on quality businesses with durable moats that we think are not efficiently priced by the market. We've also expanded to a new strategy that's our dynamic strategy which focuses more on small and mid cap companies. It kind of ventures out a little further than just the high quality durable companies and kind of is more accepting of the sorts of special situations and one off inefficiencies that we might not invest in when it comes to the large cap strategy. But yeah, on a daily basis I am looking for these investments and I think that one thing that I want to, you know, make clear to people and for anybody who might feel like, oh my God, I need to, you know, up my investing process because I'm not finding that many investments, I'm of the opinion if you're not killing 999 out of a thousand of your ideas, you're not doing it right. Most of my day consists of me having an idea and killing it and having an idea and killing it. And I think it was Bruce Berkowitz who said that once you find that idea that you can't kill after trying to kill it all you can and it's still there, that's when that might be worth something. But you got to be careful because I will say I've also had the problem where I've been overly critical of my own ideas and missed great ideas, where I wrongly dismissed the investment idea. So on a daily basis I'm kind of grappling with my, I'm in my own head, you know, going through all these investment ideas because for every idea that I pitched to the investment committee, right, I'm doing this own filtering process in my own head. And I think the, the question becomes like on a daily basis, how do I deal with that internal dialogue? And that's where I think that a lot of this philosophical stuff comes into, into the equation. It becomes relevant because that internal dialogue, how is it shaped? How am I going about talking to myself, for lack of a better word, talking to myself about which investments I think have promise, which, which ones don't, which ones are on the watch list. These are all internal dialogues that I think benefit greatly from philosophical perspectives.
- [46:10]
A
As you talk about your daily activities and how you think about the markets and investments, I'm starting to think about your grandfather who was a student of Ben Graham. You said that was many decades ago, he was practicing. Are there any lessons from him that you are nurturing and have been helped of.
- [46:29]
B
Well, you know, I'm so happy and thankful for you to ask that. My grandfather, while I didn't know him too well because I was only 10 years old, he stood for a lot of things. And one of the things that he stood for was that he would never invest in anything that he did not feel like. That he felt like had an actively horrible effect on the world. He was very against investing in tobacco companies because specifically this was at a time when they didn't admit that nicotine was addictive or that cigarettes caused cancer. And my grandfather, I think there's a philosophical tie in here because for him, if he was investing in something like tobacco, it would rob his investing endeavors of the meaning that made it important to him. For him, it wasn't about the ones and zeros. I think that for him, investing was about the intrigue and the puzzle, but also about being able to build up a family foundation so he could give all this money away ultimately. And I think my grandfather, if I take a lesson from him, it's how he was so good about building meaning into his investing activities. As we kind of, you know, basically going with what Kierkegaard kind of encourages this idea of embedding meaning in these activities and not just treating money as an object, as an end in itself, but a means to accomplishing things. And I think my grandfather. And if there's one other thing to highlight, you know, he. His father passed away when he was a teenager. He comes from nothing. He went to business school on the GI Bill after World War II, and he took investing and created a lifetime of meaning through it. So I think that's something I like to highlight through my grandfather. He was. He was a very, very interesting guy. And that was. I hope that I can embed as much meaning in my investing endeavors as he did in his.
- [48:46]
A
What are your ambitions? If you look ahead a couple of decades, it's so.
- [48:53]
B
It's so funny because I. I want to. I want to say humble, but you also want to aim. Aim high. And for me, there are many causes that are. Are, you know, kind of close to my heart, specifically working with the elderly as well as education. But on top of that, for me, I would love to. I have an entrepreneurial spirit in me, and that expresses itself in many ways. That expresses itself in my investing. But also I right now have something that I just started. It's a venture called Cxity City AI for anyone who wants to check it out. C O L L E X I T Y and basically it's a venture that takes LLMs and utilizes them to do equity research that is not just gobbledygook, but actually I think of a quality higher than most institutional level investment research. The key big thing about it is that it doesn't use any specific LLM exclusively. It uses lots of different LLMs for lots of different types of investing analyses. My goal in the long term, I think that this. Again, there's a lot of AI stuff going on right now and I. There's tons of things that aren't going to exist five years from now that are getting venture capital funding. But I would. My goal is to build this thing up to be what I can't get right now. What do I mean by that? I pay $32,000 a year. My company does, I should say, $32,000 a year for my Bloomberg terminal for one seat. FactSet is something like, let's say it's the 12,000 whatever dollars a year per seat. We have alpha sense for expert calls, expert number of calls. We pay thousands of thousands of dollars. But I have to say that the use of AI across all of these systems, I just don't feel like it adds the value that I want. It has not enriched my investment process to the point that it's actually adding to me generating alpha. And it's funny because Ken Griffin from Citadel actually recently came out and said that. He said he doesn't think AI right now is actually adding to alpha. My goal is to build and my goal is not to build AI that in and of itself creates alpha, but that enables people to actually create legitimate alpha. So yeah, I'm the type of person, if you ask me what are my ambitions, My ambitions are to build the things that I want or would have wanted that don't exist. And it's funny because we talk about with the investment philosophers, why did I write it? I wrote the book that I wanted to, that I wrote the book that I wished had existed for me to be able to explore philosophy and its connection to investing without all of the hurdles and enigmas and vacuous language that all these philosophers use. So I started building this collectity project out of the idea of I can't find this AI tool that I want to do the type of actually higher level investment analysis that, that I think AI is capable of doing. What would it take to create this? And it just so happens that there's enough AI tools now and I have just enough coding knowledge that I'm able to do it myself. So it's an institutional product, I should say it's meant for. For institutional investors. We already have it with significant depth of knowledge on all the Russell 1000 stocks. What is my goal? My goal is to build it into something that is as recognizable as Bloomberg. That might be a little overly ambitious, but let's see. That's my next big ambition.
- [52:58]
A
It will be exciting to follow that venture as this is a book podcast. We like to wrap up with a few questions on. On reading and writing. And besides your book, I'm curious if you have one or two titles about philosophy, perhaps, or investing that you think our listeners should read.
- [53:16]
B
It's so funny. You ask a movie fan for a hardcore movie fan, their favorite two movies of all time and they'll take three minutes. They'll give some prepace. I want to try and not do that here. I want to try and give you something direct. I think that in terms of like, bang for your buck, right? I think that if you wanted to read something like Montaigne, why do I. Why do I recommend him? Michel Montaigne is actually recognized as the creator, or some people say he is the originator of the modern essay format. He is such a wonderful writer because first of all, given his kind of essay format, you can read one of his short essays and feel like you got a lot out of it without committing to some giant book or reading endeavor. But on top of that, the reason I love Montaigne is he's so accessible and he talks about how he is not a perfect person and, and how, how he talks about like, the bad smells that occur in life and like just. He talks about everything. He is the guy who said that no matter how high we sit on a throne, we still sit on our butts. I mean, so I really highly recommend people look at Montaigne and his essays. And I think what it will be really, really pleasing for most people is you can read one essay that's just a couple pages and feel like you've taken a lot out of it. I feel like with a lot of these philosophers, you have to kind of commit to this entire work. And then if you only have time to read some of it, you'd feel like you're walking away without like kind of a full picture. Whereas when you read Montaigne's essays, I think it's a really, really great starting point for people. So I highly, I highly recommend those. Something else I might recommend, I would say that for me, Nietzsche is. I just find his writing to be. So there's a Lot of it. But, like, he literally writes sometimes in the form of. Whether it be poetry or the form of songs. He just says some things that I really, really, really think that most people would find very funny. I find myself laughing multiple times when I read Nietzsche. It's a little hard because some of his stuff is not as approachable. But I would definitely recommend it. I would say probably the book, the Gay Science, it's written in ways where it has these basically sections where it talks about a whole topic in, like, a couple paragraphs, then it moves on to another topic. Again, I think I wanted to recommend these specific books to people because I don't want them to be put off by this idea, oh, my God, this giant book in its totality. I have to read it. Like, there's a reason. One of the most important books, in my opinion, ever is Spinoza's Ethics. I'm not recommending that. Why? That was the book that scared me from almost not studying philosophy. It's this giant geometrical proof. The entire book is a geometrical proof about the nature of reality. Now, not only is it long, it's complicated as heck, and it's literally written like a Euclidean. Like. Like you think you're back in geometry class. That's what I'm trying to not. I want to maybe one day. It's not that people can't get there, but even I struggle with that type of stuff at this point. I recommend those ones where you can kind of bite off a little bit, kind of stick your toe in and get a foothold. So I think that Montaigne, in some, especially some of Nietzsche's writings, the Gay Science, is an example that I think provide those sorts of opportunities.
- [57:22]
A
Good advice. Do you want to write more books yourself?
- [57:26]
B
So I have two in the works that are on pause. The first one is about the connections between law and investing, and the second one is about the connections between martial arts and investing. So I'll quickly talk about with law. I'm not saying that there's a disproportionate amount of lawyers who are successful investors, but across Wall street, there are many former lawyers. And at the end of the day, they're bringing in thought paradigms from law school and from their practice as lawyers into the world of investing. And the question I wanted to answer was, which of those paradigms are really helping them succeed? Obviously, it's not all of every single thing they learned in law school, but I wanted to go in and find out, are there legal concepts that really add to an investor's perspective that someone who went to law school has, whereas someone who didn't go to law school is missing out on. And I'd be happy to go through some of those instances. I think the other book that I have going on, this martial arts book, which again is who knows? Right now I'm focused on this startup collection, but I think it has a lot of potential. It actually comes from the last chapter of my book. In this book, when I talk about Bruce Lee, Bruce Lee is really interesting because again, people know him as the movie star. He was a real martial. He's the father of modern mixed martial arts. But he actually not only studied philosophy when he lived in Washington state, but he actually also taught Chinese philosophy classes at local high schools. So he falls into this kind of category of philosopher. But there's so much more to the things that can be or the connections that can be drawn between investing in combat sports, because combat sports has a set of rules, but within that set of rules, there are so many different combinations of things and so many creativities and so many things about you needing to respond to kind of this fluid opponent who can do anything that really, really evokes a lot of the aspects of investing. And I kept it was so often I would watch either a boxing match or a UFC match and, you know, let's say in a, let's say Joe Rogan would say something, I'd be like, wait, that's so applicable to investing. So I started basically like writing notes every time something happened like this. And, and then I said, you know what? I'm going to start at the beginning UFC events and go all the way through and find every single time there's a quote that literally, if you didn't know, it could have been about investing, even though it's literally talking about a fighter. And there's just so many darn lessons to be learned. So I think that's, I don't know which one is going to be is going to be first. Hopefully I have time for, for both of them. I think it's exciting to think that maybe I could finish another book, but I think it's going to be a while. This one took, I think about eight, seven more years than I thought it would.
- [60:39]
A
But now you've done one and we will keep our eyes open for the next one. Ethan Everett, thank you so much for coming on Investing by the Books Podcast to talk about you and your great book, the Investment Philosophers. Do you have something more you want to add here before we finish up?
- [60:53]
B
Just I wanted to thank you for having me on and I wanted to encourage people to not only read my book, but if you're inspired by any of the thinkers in there, go through, go to the next level and read their books. And if you have any questions on any of them, I'm happy to provide my own guidance. If anybody wants to get in touch with me, LinkedIn is the best way to do it. And again, I wanted to thank you for just such a rich discussion. I really appreciate your time.
- [61:20]
A
Perfect. We'll put that in the show Notes. Thank you so much.
- [61:22]
B
Ethan thanks so much.
- [61:27]
A
Thank you for listening to Investing by the Books, a podcast by Red Eye. Follow us on twitterbredai and email us at ib Podcastede SE to improve. We'd love to hear your feedback, so please rate and review us. Notice that the content in this podcast is not and shall not be construed as investment advice. This information is meant to be informative and for general purposes only. For full disclaimer, visit Redeye se. I'm your host, Eddie Palmian, and until next time, I sincerely wish you the best of luck on your journey through life and investing.