Yeah, absolutely. I appreciate it. So I think for me, when I was thinking about getting into the investment world, which was something I've always had a proclivity for, I mean, I've always had interest in the stock market. What makes a stock go up? Why is it priced the way it is? And where seemingly there's news or no news and a stock can go up. In fact, I'll tell you a quick story. When I was at the Academy, I really liked investing. I took every one of my elective classes was on either investing or finance or something like that. And so I was investing in, like, Apple and all the big. Like Apple, I'd be all the big tech stocks and things like that. And I was looking at my phone one time, and the stock that I had invested, Invested in had great earnings, and it made money, and. And the stock was down, and a stock that I didn't invest in didn't make any money in the quarter, but the stock was up. And I was thinking to myself, like, how is this the case? Like, why is this working that way? And, you know, the curiosity in me was like, okay, let's figure out what this is. And so, you know, it's because it beat the expectations of the market. And so even though it didn't make any money, it beat what the market thought. You know, it was better losses than the market. And so it went up. And so that really sparked a lot of curiosity with me. And so at the Academy, you get a starter loan as a junior USAA gives us, you know, because you don't have anything at the Academy. You have a backpack and a shaved head. That's what you show up with freshman year. And so you got to have a starter loan. Most people go out and buy cars and, you know, go to Euro trips and things like that. But what I did was I funded my IRA for 2007 and 2008. I bought an engagement ring and a $4,000 Jeep Cherokee. So that's what I did with my starter loan. I. I ended up, you know, the. The woman that I asked to marry me with that engagement ring said yes. We've been married for 16 years. We have four kiddos now. So that was a good. The Jeep Cherokee that I bought for four grand lasted me a couple years. Really good value on that one. But the. The Roth IRA was the thing that was really great for me. And so another story, though, when, if you know what happened, I got my. I got My starter loan in February of 2008 and you know, put it all in, you know, an S P 500. You know, they had a financial advisors out there and helping us allocate money. These, you know, 19, 20 year olds who didn't know anything what to do. And if, you know what, you know what happened, if the listeners, I'm sure, know what happened seven, eight months after I put all my money in the Roth ira, it got basically cut in half. So that was my. Another integration into financial management and investing was this money is at risk and investing is, takes risk to do and you have to be very good at it. And so anyway, you know, that's just the market you continue to invest in. Dollar cost average.
B (6:59)
Yeah, it's, it's not timing the market. Time in the market. Yeah, I've heard another, I've heard another good one which was I listened to the podcast, the Money Guy show, great podcast about private wealth. And they're funny, they're entertaining, they're great. And they said, you know, the market's like throwing a yo, yo walking up a hill. Right. You're walking up a hill. So you're going up over time. But there's obviously those gyrations in the market and there's products out there that help reduce the amount of volatility or ups and downs in the market. And that's one of the things that, you know, we do today at 1180 with the products that we have is uncorrelated to the market. So you have your stocks, you have your bonds, you have your private equity, venture capital, real estate, commodities, whatever it is that your pie looks like. But you want to have a piece of that pie and a relatively significant amount, like 1 or 2%, but more like, you know, maybe 5, 7% of your portfolio, depending on your views and strategic allocations or tactical allocations there in something that's uncorrelated, that if things are going down and you know, I mean, markets become correlated during times of stress, right? Stocks and bonds, 2022 were both really bad. The 6040 portfolio got crushed in 2022. So, you know, things tend to correlate during times of stress. So you want something in your portfolio that is truly uncorrelated with no beta, no market exposure, but can extract returns over time. And that's what we do at our fund here at 1180. It was very interesting to me. You mentioned I came from Earnest Partners. That was plain vanilla, long only small, smid mid, large cap, small, some, some high quality bonds and some international. That that is what Earnest Partners did. Great. Huge allocations and pension funds and endowments and things have huge allocations.
B (8:50)
As I looked at my career over time and you know, the, the point of this podcast and your education company is to help people come up through this system, understand what they want, how they pursue it. And as I look at my career, I had been in the military for 10 years, I was at Earnest Partners for 10 years. And I looked at myself. You know, I try to make decisions in decade long time horizons and I would really echo that to people who are listening to this or thinking about their career. You know, a lot of times you have people that are making, you know, one year or two year decisions, think about where you want to be in 10 years and make that decision and go for it. So when I step back and look at my career and I said, where is the puck going? How is the pie of a pension fund shifting? What is, what part of that piece of the pie is shrinking and what part is growing? And when I analyze that and had a lot of conversations, you have a handful of mentors. I listened to the podcast you had on with Cheryl a few weeks ago. Unbelievable podcast. I think it was over an hour. I listened to every second of it. It was great. But you have to have a mentor that is help guiding you. And I had a handful of those lucky enough to have those both in the industry and out of the industry. And they said, hey, alternatives are growing in the portfolios. It's coming down to private wealth and retail are growing, access to those portfolios and those solutions are growing. And so that's where I wanted to be. So that's where I am at today. And that was part of the decision I made.
B (11:45)
That's what I envisioned as the market. And there's this entirely other area that dwarfs those, which is the asset management and investing for institutions. Right. And so that was a hard transition for me to understand that that's this huge opportunity set. And so when I came out of the military as a budget officer doing accounting and, and budgeting and auditing and things like that to this investment world for not only individuals, but these pools of capital. And when I was interviewing is like, hey, do you want to be, you know, in the millions or tens of millions and, and do that, or do you want to be in the billions? And I like the B better than the M and so wanted to go in that direction. But when I had, you know, my indoctrination, I didn't know what a Russell 2500 was or what a Russell 2000 was S&P 500, Nasdaq Dow. That was it. And so being, you know, having, I think going into it saying, hey, I have these, these, these hard skills of understanding how to make investments and how to be. I think you had another someone on it was Brett Ann or some, someone that was talking about, she had these skills. Like when you build these funds, it is, it is. Client service is a huge piece.
A (12:55)
Brett was amazing. So Brett was a project manager. So Brett was a project manager. And then I think her previous firm, you know, it was like, like billions of assets, you know, so she pivoted. But if you think about it, it's the same skill set, right. You need to manage stakeholders, you need to probably come up with a timeline of like when things need to be done right. And there's difficult personalities. You're putting together documentation, you're putting together research. I mean, it's all the same things that an engineer would do. It's all the same things that like a consultant would do. So I'd say like 75 to 80% of those skills are transferable. It's just kind of like those, those, those technical specific acronyms, right?
B (13:38)
Yeah. And that's the ramp that, that, that's your, that's your trajectory. And what I did was I said, hey, what gets me the, the up that learning curve the fastest? And I had a mentor. I said, hey, how did, how did you do that? He was a partner at Earnest Partners. I said, how, what do I have to do? I think that's one of the things that I would echo to the listeners here who are started trying to get started in this business, whether it's private equity, venture hedge funds only, whatever is find someone at that firm and say, hey, I'm going to tag along and I'm going to lean on you. I'm going to be as, as helpful to you as I can over time. But I need some, I need some jet fuel to go back to my military. I need some jet fuel on this. What gets me some jet fuel. And I think what you'll find is that people who are approached like that, with someone who's open minded, wants to do a good job and progress and help not only themselves, but as they get better, guess what that does. It helps propel the firm. And if you're an owner or a partner of that firm, their interest, their best interest is to actually help you accelerate.
B (14:47)
So he said, hey, Aaron, you're going to need a cfa. You got to do the CFA program or the CIPM or the Kaya. I would, I would get really involved with any kind of designation or three letters you can put after your name. Obviously, you know, you talk, I think you talked to, I think it was Joe about, you know, his MBA or, you know, going out and doing a hands on. I think, you know, an NBA is probably status quo here. If you have an NBA, it's like, yeah, good, you know what, you got to have that. Obviously there's ones that are better than others. I got mine in the military, got it sponsored by the military, which is great. But it's not, you know, it's not one of the best ones, but it is one. Right. It gets me out in the conversation. And then go do the cfa, go do the CIPM or the Kaya to get into the alts world, get into the, you know, the, the reporting world or the CFA is kind of the gold standard of, hey, I, I can do the rigor. And then once you can have that, you, you're never going to go into a meeting and be totally bewildered with what they're talking about. You're going to have CFA as, you know, an inch deep and a mile wide. Right. You're going to have experience or have touched something at least curricularly that, that, that gets you at least, you know, part of the way. And then it takes time.
B (16:57)
Yeah, let me double. And then, you know what, then the CFA doesn't matter. Once you understand what you want to do, then you pursue it. You connect with folks like yourselves. You get on the, you get on the platform and you start introducing yourself and getting a little Bit deeper. And I think, you know, the, the, the niche solutions, I think a lot more asset allocators are looking for that right there. A lot of their portfolio is filled with kind of the big name brand solutions products and then the, the, you know, the, the big movement is around the edges.
B (17:54)
Yeah, it's great, great question. I think for, for one you said, hey, building a family, running a career and building a family at the same time is very difficult. Yeah, but you have to have a good support system. My wife is fantastic. She's still in the Air Force. In fact, she promoted to lieutenant colonel last or back in July. So she is still up and to the right with her career. Fantastic. Not only human being, but support system and great officer and person. Anyone who comes in contact with her, loves her. Never met a stranger, but she was great support system for me. I mean, studying for the cfa, you work, you come home, you get, you get dinner and get the kids in bed and you, that's when you start studying. And so started with two kids, ended the CFA program with four kids. So sure that time, you know, but, but I think for, for the decision making point for me was, hey, 10 years in the military, 10 years at earnest Partners. What do I want to do for the next 10 years? And you know, Earnest Partners is great, fantastic institution. They do great work, they've been around for a long time and they're going to be around for a long time. But when I thought about it, it was, hey, I've developed these skills, I developed these relationships. I have an entrepreneurial spirit. I mean, you have to have an entrepreneurial spirit. If you just wanted to run portfolios and pick stocks behind a computer, don't start a fund. Yeah, that's not, go work for a hedge fund or something like that. Because that's not how to start a business. Starting a business is going out, meeting people, having conversations, convincing people that your edge is real and you can produce returns that you say you can produce and deliver on that. Messaging, communicating, selling all of those things is what you have to, have to start a firm. And those are very difficult. One of the things that I think will help your listeners, that I learned from my time at Earnest and transitioned into what I'm doing today, is there is a wide gap between people who you can call and who you can go to lunch with and who are your buddies and your cohort. Wide gap between that and someone writing a check, sure. It's a huge gap.
B (20:00)
Hey, you can have the conversation. Maybe your foot's in the door, they answer your email, they pick up your phone calls. That's great. That doesn't mean you're going to get a yes when they, when you ask them for money. So I think that's one thing that you have to have the network and the relationships, but you have to have an edge. You have to have a value proposition. And your ability to communicate that over and over in a compelling way is what's going to build your business, not just having, you know, people who you can call. So I think this is a great, great, great platform for doing the first thing, getting network and people who you can call. And I'm excited for your summit next week. That meeting, people shaking hands and having these conversations. But that second piece is. Oh yeah, that's how you grow.
A (20:45)
So I, and I, and you know, when you say this, it reminds me of a manager, a fund manager that I spoke with maybe about a month ago. He was like, look, I, I pay for all these conferences, I go to these conferences, I talk to these people. But they're surface level conversations. So you have the conversation, they check in on you, oh, hey, Aaron, how's it going? You know, how are the kids?
B (22:26)
Yeah, yeah. And so you have to have a compelling reason why that person would put their job on the line and their credentials and their history of making good decisions to put in your fund or in your investment vehicle. That, that is for sure. You have to have that crystal clear. And I think the second. So that's the first piece. The second piece is. You have to. So that's the, that's the verbiage piece. Hey, what's the commit. What are you communicating? And compelling. That makes that person say, yeah, that's something I want to listen to. Then you have to have all the, all the support around that, the returns, the track record, the assets in there. No one's going to write a $10 million check if your fund's a million dollars. So there is some, there are some prerequisites to have and I really appreciate some of the emerging manager stuff you're doing and starting to get from, you know, the hundred thousand or two hundred thousand to the million to the ten million. Because those are access points, those are gates. You know, once you get to those level, you can't be. You should have those conversations. I don't want to get ahead of myself. There's a long Runway. A lot of institutions, it's a, it's a three year road just to get serious look. Yes, serious look. And then, and then I think from there. So that's. The second piece is kind of.
A (23:41)
We had a fund manager, you know, close a massive institution, but it took 18 months. You know, they, that the, you know, they see them at an event and say, you know, all these, all these people go to the same conferences. Right. If you think about it like, yeah, they've got Milken in May. They've got, there's a cadence. Yeah, there's a cadence. Everyone's got their agm, you know, this month. So you start seeing the same people at a lot of the same events. So, you know, a lot of times the recency builds familiarity, which hopefully translates to trust. But people, you know, people are following you. People are seeing kind of the knowledge that you're posting out there, the content that you're posting. So it's interesting to see how, and I'm not sure if this is as popular in the hedge fund space. But, you know, I think the new private equity or venture capitalist is going to have a. Their own distribution. They're going to have people that are following them. They're going to have their own summits. Like instead of them going to, Instead of them paying for Milken or instead of them going to Super Return, they have the, you know, the. I don't know, let me just come up with a fake name here. The, the black. The Black Box Capital Summit, right? And the Black Box Capital Summit is like the new all in summit, right? They've got a podcast, they get a community, but people that own the distribution that have the following already, they can leverage that to kind of get everybody in the room so that they don't have to sponsor like all these events, right? So I think the own media is going to be a big thing. You know, obviously there's regulatory things you got to think about, but think about it, right? Bill Ackman talks about his best trades on Twitter, you know, I mean, you know, building in public, you know.
B (25:18)
Yeah, yeah, no, absolutely. I think that, that. But you have to. If people are doing it, you have to, you have to do that. That's part of the cost of doing business around here, is to be known and be seen. You know, at Earnest, I would see after conferences, let's say a consultant was hosting a conference, I would go to that. You know, maybe not a lot of search activity before that. I would go to that conference. Search activity for us would pick up after that conference. It's because you were there, you said hello to the right people and you were at least communicating again what your value proposition is. And then there's a third ring to that Venn diagram, right? It's knowing the influencers and the decision makers. It's having all the prerequisites. Then the third one there is. It needs to be in need. Joel, if you want to eat pizza today and I come with you with the best, the best tasting burrito, it doesn't matter how great my burrito is, Joel, you're like, hey, man, Aaron, I wanted to go eat pizza today, like pepperoni or sausage. I don't want a burrito. So you. So all the first two you need to have, continuing to cultivate. And then it's the third one that you can't really control. You can't. I can't, you know, make you want to buy like an allocator. You, you can't say, hey, this is so great. Well, they might already have a solution there.
A (26:40)
Yeah. But at the same time, you know, what's. What's I've seen, which is interesting, is, you know, there are real estate allocators that, that actually take a chance and invest in, you know, private equity. And same thing, like, if you educated on why burritos are great, maybe it's a healthy burrito, and the. The burrito is just phenomenally tasty. Maybe I'll. Maybe I'll change my mandate to eat burritos, right? So I think part of that is, like, education. So, you know, in a world where, like, there's especially, you know, with our fund accelerator program, we've had hundreds of managers go through the program. You know, there's. There's 15 AI funds, right. They all have had the same performance. If you're a hedge fund, you've had the table stakes of the alpha and the hurdle rate that you're supposed to meet. So beyond that, the only thing that they can do is choose. Right? They're choosing you because they like you and your mission and what you're doing, but they're not investing in black box capital, but they're investing in Joel. Right? Because they like what Joel is doing or what that other person is doing. So I think there's a part of it, too, where after you cross all the table stakes, you finish all the diligence, there's still. There's still that choosing of that person that they want to be on that journey with. Right?
B (28:02)
Like who? Who. If you were laid out, who. Who would you rather spend some time with? Because guess what? If they select you and you're on the platform or you're in the portfolio, you're gonna have a lot of interactions. Like, you should be having a lot of interactions. And if you're hard to work with or hard to find information or data, like, you need to make that really easy and have a real, like, real genuine relationship with those people, because that's where those conversations come to light. And so I take your kind of challenge on what I said. I think that's right. I think if you're convincing enough to say, take a look at this, because, hey, like, everything that's in that pizza, I can put in this burrito. It takes a lot better and it's half the calories. Will you be like, you know what? You know, that actually sounds pretty good. Let me take a look at that. Right. And then you're now down the road. So I appreciate that perspective and I agree with it.
A (28:48)
Yeah. So I know we're up on time, but I got two quick rapid fire questions, so let's do it. What do you think is, what do you think are the best attributes for, like, the next hedge fund manager in terms of, like, if you're hiring somebody, if you're just kind of building your skill set as just an amazing hedge fund manager, what are maybe the top two to three bullets? And then, and then, you know, just give me one piece of advice that you want us to take away. It could be from a relative, it could be from a mentor, whatever. You got to take this off. Okay, great.
B (29:17)
Awesome. All right, so in terms of attributes for a hedge fund manager, hey, you gotta have, you gotta have conviction in what you're doing. If you don't believe in it, no one else is going to believe in it. So if you've come up or stumbled upon something or developed something, and I'm having a conversation to you about it, your, your level of conviction should come out and how you're explaining it to me. Don't get super into the weeds. Don't talk to me about deltas and gammas and Vegas and all those things about options. You need to say, hey, this is what we've discovered. We are exploiting that with this algorithm and these are the results and they're super compelling that I should see some excitement out of you when you're telling me what you're doing. So that's the first thing. The second thing is you have to have a. You have to have a real edge. Joel, I don't know if you've ever seen a back test that was bad. Like, no one sends you a bad back test. Back test, always going to be great because you can tweak the model. So you have to have a real edge and an ability to produce returns. And so those two things, in the way that you're telling people you do, I think those are two things. Have conviction and have an edge. So if you can have pair those two things together, that's the first part of success. So that those would be the two. There's a handful more. Hopefully I can come back on your podcast, we can talk about that a little bit more.
A (30:46)
Say about that, you know, I think there's a lot of intelligence that could be crowdsourced. And even if you're part of a syndicate or an investor community or an investor club, everybody's going to, you know, have their consensus. Right. But to your point, you know, you want to be, you want to be contrarian and right. So at the end of the day, you want to pound the table because you believe in it, not just because, like, oh, I don't want to be the one person that sounds stupid because 200 people said that this was the best investment idea. Hey, invest in Nvidia, you know. Yeah, yeah, but I think great idea. Exactly.
B (31:49)
General business. And just an awesome way to get self motivated about what you're doing and, and how you want to go attack the world out there. That's why I listen to him. He's also a gym bro and so it's, it's great anyway, what he says, he, he breaks things down really simply. He says, outwork, self doubt. That's my biggest advocate for advice for people is, hey, you're gonna have self doubt. I have, you know, since I went on this venture, I've had a lot more no's than yeses as you would imagine. And you're going to too, as you start a fund or join a fund or things like that. But the way to combat that is outwork self doubt. Well, guess what? For every no I get, I'm gonna have 15 more conversations. And you know what? If I get 15 no's, that's 15 more conversations that I'm gonna have. Because I'm gonna outwork all the no's and eventually those are gonna turn into yeses. And guess what? Some of the no's that used to be no's might turn into yeses if I work hard enough. So that's my advice to people. Have fun with what you're doing, if you like what you're doing, and you like the challenge. It's gonna be great. If you don't like it, you're probably going to have to find a different career field. But that. That is what I would say. I really enjoyed our conversation, Joel. I hope people got value out of it. Not everyone has the same path. I mean, I don't know if any of your listeners were even in the military at all or went to an academy or things like that, but I appreciated being able to share my story and hopefully some of the overarching themes and lessons that I've learned can help some of your listeners. And I'm always open to have conversations. I help mentor young cadets who are getting out of the academy or getting out of the military. I've had some people who are, you know, spent 10 years in the military getting out there. Garren, how did. How did you do this? And I'm happy to do that for anybody. I'm looking forward to being at your summit in a week, shaking hands with people and opening up to them and continuing to be, hopefully, an advocate and a value add to what you're creating.
