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Failure is a ladder.
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Mistakes are portals of opportunity.
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Try to go into something thinking that you're never going to fail. Is just crazy. It's absolutely insane.
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The thing that I just accomplished or I just done was actually the culmination of, you know, A, B, and C things that had fed into it.
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And so I was uniquely positioned to do it.
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The more somebody believes in luck, the lower agency they probably are.
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If you are successful long-term in the stock market, you have been punched in the face so many times by the market that you better be humble.
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Ambition can kill companies just as much as, you know, mistakes and errors.
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How many businesses that ended up being frauds were actually good businesses if they just hadn't tried to take that one extra 10% leap in Well, hello everyone.
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It's Jim O'Shaughnessy with yet another Infinite Loops.
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My guest today I've known for a long time.
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I met him when he very kindly extended me an invitation to his podcast of the time called Off the Chain.
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In 2018, my guest is Anthony Pompliano, who is the man, the myth, the legend.
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As I was saying to you, man, before we started to record, you I don't know how you have packed so much into 35 years.
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You founder, CEO, professional capital management, you founded and invested in hundreds of companies, you've got one of the biggest financial media platforms of anyone I know.
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But again, I met you back in 2018.
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And and you were you were kind enough to put an old an old like me on your podcast and try to get me to understand crypto.
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And as I recall, uh Anthony, I failed pretty miserably, didn't I?
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You taught me a very important lesson that day, which was uh you were one of the first three people on the podcast.
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And uh I think 50% of the questions I asked you, you responded with I don't know.
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And I just remember saying to myself, well, if Jim O'Shaughnessy can publicly admit he doesn't know 50% of the time on a topic that I think you were interested in trying to figure out, but, you know, you were very clear, look, I'm not an expert on this.
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Uh it's probably a lesson for the rest of us that it's okay to, you know, say, hey, I don't know and not I'm trying to figure it out alongside everybody else.
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So, uh it was very helpful to me and and I think people really enjoyed uh the other 50% of your answers, which were not I don't know and and were uh quite uh quite intelligent and helpful.
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Yeah, I had a lot of fun doing that.
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And like, I don't know is one of the most powerful things, in my opinion, you can tell to somebody.
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Because everybody always wants to have like the answer, right?
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There's a great book by Peter Drucker called Adventures of a Bystander.
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And and he does little vignettes of people that he met throughout his life.
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And one of them is this guy who was a merchant banker in London.
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And he was like, this is in the 1930s, so like a hundred years ago.
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Anyway, this guy was this really eccentric, colorful character uh named Ernest Friedberg, if I'm remembering correctly.
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Anyway, there was a scheme that everyone in the city of London wanted to get in on.
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And he had these two young guys running his merchant bank, right?
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And so they brought the guy in.
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They were so psyched that they got this guy into their office because he was the hottest thing in London at the time. And so gives the spiel.
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The old Friedberg sits and nods and nods, asks him a bunch of questions, and he the guy leaves.
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And then Friedberg looks at his two young partners and he goes, that man is a fraud.
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We're not putting a dime in his scheme.
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And of course, the young guys are like, what the This is like this is Do you realize how lucky we even are to have him come? And they went, why? Why are you saying that?
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And he said, he had an answer to every question I could think of.
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An honest person doesn't and will admit that he doesn't know.
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And that really struck me when I was reading it.
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So I'd been in the habit of saying I don't know, but I really leaned into it after that because it really is kind of true.
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Everybody then has like an a pat answer to everything.
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The my my my my uh radar goes off and it's like, hmm.
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Uh maybe maybe I'll reconsider.
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It reminds me, Jim, of um young people want to boast about their wins to present that they're better than they are.
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And then successful older people want to downplay and only talk about their losses or the times where uh they messed up to try to humanize and, you know, uh pretend they're not as successful as they are.
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And so it kind of uh you could tell where somebody is in their career based on the way that they present information as well.
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Uh because everyone is trying to be somebody that they're not to a degree.
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And so if you watch, you know, I love going on YouTube and watching many of the the great investors and and you listen to their interviews.
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And everyone knows that they're good investors.
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Like, look, your track record's out there for 30 years.
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And they'll start talking about, you know, well, you know, we're just trying to figure it out and blah blah and you're like, look, that is part of it though.
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Is the intellectual humility of saying just because the last 30 years were good doesn't mean the next five are going to be good.
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Um but but I do find it funny that, you know, the younger people try to pretend to be the older people and the older people pretend to be the younger people.
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You know, that that's the I I do talk with a lot of young people in the various verticals that we have at OSB.
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And the thing that I try to impress them with is kind of two things.
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The first is uh failure is a ladder.
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So many of these people are really terrified of like failing publicly.
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And I'm like, that's the only way that you're going to make any progress, right?
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Because mistakes are portals of opportunity.
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And if you look at them that way, you're you're going to learn so much more.
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And to try to go into something thinking that you're never going to fail is just crazy. It's absolutely insane.
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And the the second thing is, and you've got it in your book that we're going to talk about quite a bit today.
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Uh it's nobody's nobody's watching you with an eagle eye, right?
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And and like, oh, he made a mistake or she made a Oh, she's wrong. He's wrong.
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No, that is not the way the world works.
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And yet the idea of of youth doing that. I was that way.
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Like, you know, when I was young, I was like a proselytizer and this is the only way to invest and let me tell you why. I will tell you.
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And then after The other thing that we look for when we're looking at founders and things is we need we want people who've been kicked in the face a couple of times.
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Because if and just to make it about the market, if if you are successful long-term in the stock market, you have been punched in the face so many times by the market that you better be humble.
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Because like, that's the only way you're going to get ahead.
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And and it just works so so much better in in my opinion.
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I want to talk though about your new book, which I love.
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How to live an extraordinarily extraordinary life, which you wrote wrote for your kids.
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Now, uh your wife, who is glamorous and also successful, Paulina, did a piece about the letters that I wrote to my kids, completely different reason.
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And I wish I kind of wish that I'd taken your course uh with like guidance and things like that.
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I hope it kind of emerges from the letters I ended up.
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But what I did was I wrote a bunch of letters for each of my children, and they all got, you know, the same letters.
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But on their 21st birthday, What was the motivation here?
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I know that you said that you kind of worried that you were going to die young and stay pretty.
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Uh and and you didn't even think you'd make it to the incredibly young age, to someone like me, of 35.
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You're younger than my two older kids.
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But was that the catalyst here?
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Yeah, I think it was a combination, right? So, um I don't know why.
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Uh I always just had in the back of my head that, you know, time is finite uh that you get here on Earth.
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And everyone always acts, even if they come to uh maybe the realization that time is finite, that you have 80, 90, 100 years, right?
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Like, if you look at the number of people who think they're going to live to 100 versus the number of people who actually do, there's a big gap.
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And it isn't in favor of the people who think they're going to live to 100, right?
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So, um it's just much shorter than people kind of ex- expect.
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And especially if you look at things like, you know, health issues or or whatever, even if you say, okay, the average, you know, life expectancy in America for a uh male is, you know, 72 years old or whatever.
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There are a lot of people who die at 55 or 60 or 65.
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And so, you know, it doesn't sound like that big of a difference between 65 and 72, but that's still seven years.
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And it's seven years where you're really starting to think about, hey, what did what did I do in my life and who do I want to spend time with in those things.
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And so for me, you know, I opened the book with um what I think kind of puts you in the perspective of when I started to write these letters, which was uh every single time someone would ask me, like, what do you want to do when you get older?
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I would say, well, I got to do it before the age of 35.
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And to be honest, it was kind of like half a joke, half like I did feel that way.
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Um And then when I went in the military, I think that's when it really hit home.
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So, I deployed when I was 20 years old to Iraq.
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Uh and that's when I realized like, "Hey, one, life is definitely finite and we're increasing the odds here that I you don't make it to 100.
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But also two was I had the fortunate opportunity to deploy with guys who are older than me.
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So at 20 years old I got deployed from college um literally during my junior year I get pulled out of college, I go, I'm worried about what parties on Friday night, you know, what's the football game or or whatever.
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These guys have kids and mortgages and you know, they're they're working two jobs and just like like real life stuff.
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And so it opened my eyes to hey, there are or like real life consequences and stresses and and things like that after here.
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So because I am young and I don't have those responsibilities, I may be able to do some things now that I won't be able to do later.
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And so where it showed up, you know, in a negative way is I remember when I came back um and I I talk about in the book, you know, I was driving my motorcycle a little too fast.
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I was kind of like, you know, you feel like you're Superman, right?
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You know, if Al-Qaeda can't kill you, this 18-wheeler that happens to be going pretty fast down the highway as well probably doesn't stand a chance, right?
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So thankfully I made it through that period and matured a little bit.
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But then the good places where it shows up is, you know, when I went back to school to finish, which was really important to my parents, um I took it much more seriously. Right?
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Like all of a sudden now you can like tie, okay, what I'm learning in school actually can help me later versus before maybe you were just doing it because somebody told you, you know, hey, get a good grade or or whatever.
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So I I think that was like a huge piece.
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And then the second part is um Polina really I think she pushed me when our first child was born like write your child a letter.
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And so the first one I wrote isn't in the book and it was more of just like you're here. Great to meet you.
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You know, this is awesome. I'm a dad.
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Like almost like I literally was writing to like you know, a newborn.
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Like not very publishable.
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But what it got me thinking about was like, okay, God forbid something does happen to me.
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Like what what would I want to put down?
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And so for years I'd kept a a note.
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First it was on paper and then eventually I started to do it on on my iPhone of just like anytime I would learn something that was kind of like a pithy, you know, one sentence, you know, kind of take away, I would write it down.
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And so when I decided to write the letters, I said to myself like let's just start with like whatever I think I should know, you know, let's just turn one into a letter.
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And so the very first one I wrote I believe is the first letter in the book, which is how you do one thing is how you do everything, right?
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And um I frankly it was like therapeutic.
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It was almost like I was writing the letter and yeah, I was writing it to them, but I was writing it and it was reminding me.
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Like this is who you aspire to be as well, right?
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And so, you know, one turned into two pretty quick.
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I think Polina was surprised that I wrote a second one.
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She was like, you know, usually again like, you know, I got to like pull teeth to get you to do something.
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Um and by the time I got to I don't know, somewhere between five and 10.
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I was like, oh, this is like a good thing that I want my kids to have.
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It's actually helpful to me and if I put a goal out there, then I will actually go and finish this.
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It may take a while, but I will finish it.
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And so that's when I said, you know, what if I just turned this into a book.
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And so the the dirty secret is I had signed the book deal already, but it was for a different book, which maybe one day I will write, but I had momentum here and I was enjoying it and so it was like, let's not, you know, try to force something that that doesn't feel natural.
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Let's just go write the book that, you know, I want to write right now and and so that's the book that you got your hand.
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So personally, as you know, I I I think the power of writing both for yourself and for others, your kids, is is such an amazing tool.
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And I am so delighted to see your book doing so well because if you can get just like let's say let's say you sell a million copies and if you get even just 10,000 people writing letters to their kids or loved ones or whatever, man, I think that's going to be just a huge addition to people's toolkits because it's something I've done since I was a teenager.
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We're we're creating Sim Jim in our on Bram AI and like I going through all of my old journals like it's really cool to see what I thought about the world when I was 20, right?
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And and so and I also as I mentioned did letters for my kids that we gave on their 21st birthday.
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But I I I want to focus on some of the lessons because I think so many of them I just resonate so much with.
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And and the first or the second one you already mentioned the first is today is practice for tomorrow.
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And I love the way you phrase it because that's right. It is practice. And guess what?
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When you're practicing something, are you always going to do it right? No.
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You're going to screw it up a lot of times.
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I always use I have a lot of grandkids. I'm very very lucky.
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And watching a child learn how to walk is such a great metaphor.
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Can you imagine if we took the mentality of no, you can't do that. It's too dangerous.
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It's too, you know, you might hurt yourself, etc.
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And applied it to a child learning how to walk. No one would ever walk. Yes.
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I mean it's it would never happen.
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And and so when people read that, are they taking that from from the the chapter in the letter?
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Yeah, you know what's interesting is I didn't know this until I had the benefit of hindsight, which was every time I was doing something, this is the most important thing in the world I'm going to do for the rest of my life.
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It's you know, like this is it, whatever.
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And then I one day just kind of popped my head up and I said, you know, the thing that I just accomplished or just done was actually the culmination of, you know, A, B, and C things that had fed into it.
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And so I was uniquely positioned to do it.
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And so, you know, a great example is a lot of people externally will look and say like, "How did he build all of these media properties?"
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What they don't know is I had tried multiple times in different variations.
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There's a medium blog that's out there somewhere.
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There was a interview show in Raleigh, North Carolina.
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Like, you know, all these different things that had kind of been almost practice for what ended up, you know, really working and kind of taking off.
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And so I started to get pretty fascinated with this and and it's timely that we're talking today because over the weekend I read a book called The Art of Learning.
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And it is Josh Waitzkin, I think is how you pronounce his name. Great book.
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You know, kind of he was like the next Bobby Fischer as he was growing up and he was this this great chess player.
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And in it he talks about kind of two types of learning.
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He he describes one which is like an entity-based intelligence and another which is an iterative-based intelligence.
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And so the best way to describe it is entity-based intelligence is somebody who is, let's say, playing chess and they keep winning.
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They keep getting told it's because you're smart.
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You're a winner because you win.
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You're you're winning because you're smart.
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And so when they lose, well, the only thing they know is that's the opposite of winning and so now I'm not smart, right? And I'm a loser.
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And so that's obviously destructive to a a child because you know, they are going to lose at some point.
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Instead, the idea of iterative-based kind of intelligence is you're winning because you're working hard.
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You're winning because you've put the time and effort in.
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You're winning and and it's the kind of process, right?
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Is really what is driving it.
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And so when that child loses, the natural reaction is not I'm stupid or I'm a loser, the reaction is I need to work hard, right?
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I need to go back and and keep, you know, kind of iterating to to get this figured out.
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And so I do think that, you know, that's like a very unique way of looking at the world as we we want more iterative kind of intelligent people.
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And so the idea that today is practice for tomorrow fits right into that because every single thing you're doing today, whether it works or it doesn't, it's a lesson.
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You know, and I always like the old kind of there's no winning and losing, right?
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Or like right and wrong, it's just like either I won or I learned.
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Very similar I think in life, but if you were to go and you were to ask, you know, go back to investing, the best investors, I think they learn more from their losses than their wins.
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And so you need that, right?
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It's kind of like as an input, if you don't have the losses, I love I think Jerry Giffins got this great framework where he talks about before and after the fall.
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And he's like when you meet somebody, you know, the army equivalent is if you've ever watched the movie 12 Strong, they have General Datsun who, you know, is overseeing one of the Afghan kind of military units and the US forces go and they meet up with them and he refuses to talk to the US leader.
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And instead he scans the room and he finds somebody who's standing in the back and he says, "That's the guy I want to talk to."
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And the US leader, you know, young guy right out of kind of training is super pissed.
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He's like, you know, "I'm the leader."
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And he says, "You don't have killer eyes.
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That guy has killer eyes." Right?
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He's got the thousand-yard stare.
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He's seen some you haven't.
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And so before and after the fall very similar of you know, once I heard that and I started to see it in the world, I said, "Oh, there's a humility that comes with, you know, post-fall, but also there's a difference in the risk mitigation or the risk analysis.
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There's a difference in kind of how you allocate capital and all these things that just goes back to, you know, the T-ball player in Little League baseball should not be as prepared for the game as the high schooler, who should not be as prepared as the Major League Baseball player.
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And so, you need practice to to be able to do this stuff, and I think that you know, just reminding yourself of that's important.
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Yeah, and again, I agree with you completely.
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And the the I like the way you put it.
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Uh the the the the notion that you're going to be have everything figured out when wherever you are in your life, right?
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The the the people I'm attracted to are people who basically admit, "Wow, I have so many wrong ideas, and I got to try to root them out.
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I've got to try to replace them.
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I've got to try to upgrade my skill set, etc."
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That that ties into the person after the fall, right?
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Like I had the great misfortune when I wanted to be in the stock market, right?
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Uh I was a kid, and so I had some money, and I had developed this very technical options trading program, and you know, I was programming the computer.
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I had a Texas Instruments, and I got that one cuz it had 16K of RAM.
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So, I'm really dating myself.
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Anyway, uh on my first trade, I doubled my money.
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And of course, I was 20 whatever, and I thought, "Oh my god, I'm the king.
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There I I am the smartest I am the smartest man in the world."
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And then of course, the world disabused me of that notion for the next several years.
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But as you say, it was the next several years where I learned everything, right?
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And and so, being open to that, I just think makes you a a much more uh anti-fragile uh person because it shows you you got to pivot, you've got to iterate, you've got to just keep doing until you get to that groove.
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And then you got to figure that part out, too, right?
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In my opinion, life is growth, right? Death is stasis.
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And and the ability to have like high agency is super important.
22:02
But you have another thing in the book that I also agree with, which is, "Hey, carve your ethics in stone, but your opinions in sand."
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I I I love that wordsmithing.
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Uh but talk a bit of talk talk a bit about that.
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This This came uh to mind because uh I was watching politicians flip-flop all the time.
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And what was so funny about it was they get attacked for it.
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Oh, you're a flip-flopper.
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Oh, you're you know, whatever.
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In business, you actually are rewarded and encouraged to change your mind when you get new information.
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It's a sign of intelligence.
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And so, I started thinking about how do you teach your kids when do you change your mind?
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When when is it appropriate versus when is it not?
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And so, really what I said to myself was, "Ethical decisions are kind of the the red line, right?
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It's look, in ethical decisions, you should make the same decision every single time in your life regardless of how you are presented with different options.
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Everything else, really just your opinion on things, right?
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Can be changed based on what information you receive.
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And so, trying to think through, you know, am I facing an ethical kind of dilemma, or am I facing a opinion or kind of business decision or whatever?
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And if you can always just make sure, okay, if it's an ethical thing, I know exactly what to do is do the right thing.
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Everything else is open for interpretation based on whatever the latest information I have is.
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And so, um you know, if you start to kind of look for this in the world, you will find that actually when people change their mind on an ethical situations, that usually leads to really poor outcomes.
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And one of um one of my favorite books is um Clayton Christensen a couple years ago uh wrote a book called How Will You Measure Your Life?
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And he had been diagnosed with a a a terminal illness or or an illness and um he I think knew, "Hey, you know, I don't have as long as maybe I want to have uh with my life."
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And so, he started thinking about some of these topics.
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And in the book, he talks about ethics, and he says, "Look, I went to business school at Harvard Business School, and all these great people and stuff."
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And he goes, "And some of my classmates went to jail later on in their careers."
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And he says, you know, "Was it worth it?"
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And he talks about "I don't think these were bad people. I knew them.
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But through a series of iterations and and developments in their career, they made little tiny decisions that compounded, and then next thing you know."
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And I think he actually went to um I think he was in business school with one of the Enron executives. Mhm. Right?
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And he says to himself, he's like, "Look, nobody sets out to create Enron in the form that it ended up, but let's change the, you know, uh accounting for one quarter or one week or, you know, and then next thing you know, you end up with this massive issue."
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And so, I do I do think that um by having kind of the again, ethics in stone, you just always know I'm always going to make the same decision there.
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Gives you the confidence then to change your mind on, you know, non-ethical things, uh which are, you know, kind of opinion-based uh decisions you may face.
25:01
Yeah, the road to hell being paved with good intentions is a great proverb, right?
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And I've seen it so many times in my career.
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And and like you advise your kids and others in the book, when there I have a real bright line around ethics versus, you know, situational things, opinion things.
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So, one of the things that I decided really early in my life was I will always honor my word.
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It doesn't have to be in writing.
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If it's a handshake, it's the same as if I've got a contract.
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And I got to tell you, man, there have been times when that really backfired on me. Shocker.
25:43
But but uh the the way you build a reputation is block by block, and it takes time.
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And what does Buffett say?
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You know, it takes uh a lifetime to create a reputation, and it can be destroyed in like a day or a few minutes or one bad decision.
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And the Enron example is a great example.
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A lot of those guys, I knew some of those guys, too.
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A lot of those guys did not go in with their master uh plan to con everyone in the world, right? Yes.
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They went in with good intentions.
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And then it also illustrates the power of negative compounding.
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Like everybody understands or most people understand positive compounding.
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Things can compound negatively, too.
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And the minute you make that tiny little concession, right? You know what?
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Nobody's going to notice.
26:41
Let's let's just accelerate this earnings.
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And then it becomes, "Oh, we signed a 30-year contract.
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Let's take all of the profits we're anticipating over that 30 year, and book them this quarter."
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Like that leads to bad things.
26:58
um Shane Parrish uh did a podcast episode um a while ago on a podcast called Stray Reflections.
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And uh I don't know how popular that podcast is, but somehow I I found it, and I found this episode, and I was listening to it recently.
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And he talks about the importance of positioning.
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Everyone looks at the decision, but so many people don't realize that it's the positioning that either empowers or uh kind of creates good or bad decision-making.
27:23
And so, the example that he uses is um he's got a kid who's got a test, and they don't do well on the test.
27:29
And so, he says, "Well, did you get a good night's sleep the night before?"
27:32
No, cuz you were cramming. "Did you study?"
27:34
No, that's why you had to cram.
27:36
"Did you eat a good breakfast that morning?"
27:38
No, that's because, you know, and cuz you slept in, right?
27:41
And you like kind of do all So, like you went into the test in bad positioning, which obviously was going to decrease your performance.
27:45
If you take it to the Enron situation, there's a whole idea of like if you keep creating bigger and bigger expectations, and you can't fulfill them, then you start to get desperate.
27:56
But how many businesses that ended up being frauds over, you know, generations now were actually good businesses if they just hadn't tried to take that one extra 10% leap in, you know, uh whether it's a public market, you know, earnings report or or whatever.
28:12
And so, you can definitely um I I I I I tell founders this sometimes, and they always are like, "Wait, why are you telling me this?"
28:20
Uh I say, you know, "Ambition can kill companies just as much as, you know, mistakes and errors and and everything else."
28:26
And so, you got to know when is the time to be ambitious, and when is the time to, you know, uh mitigate ambition suffocating your business because you're so focused on, you know, how much revenue, how many employees, or whatever.
28:40
Well, maybe right now actually is time for you to kind of gather everyone around and become resilient.
28:46
And then kind of create that new foundation, so then you can go be ambitious again.
28:52
Again, it's an art, not a science, but I do think that positioning is a really interesting way to kind of think about, you know, why do people make some of these bad decisions? Yeah, I agree.
29:01
Uh my friend Annie Duke calls uh looking at just the result resulting, right?
29:06
Like, "Oh, bad test, you're a bad student." Right? That that's resulting.
29:11
If you don't do that and look at the other things that contributed to why on that one snapshot of a test you didn't do well, you're going to get a much better understanding of base rates, for example, right?
29:22
Like people ignore base rates for the most part, and yet they, in my opinion, are like the most valuable information you can uh have access to.
29:32
Because like I I always use the example when I try to take it out of like investing and and that realm.
29:41
Uh because for whatever reason, people's brains seem to shut off when you're trying to talk to them in that way about investing.
29:46
But then I say, "Okay, hey pop, would you go to a doctor if you had something wrong with you who looked at you, didn't do an exam, and looked and said, 'Yeah, you know what?
29:55
These little yellow pills, a farm rep just gave them to me.
30:00
I think that they're going to fix your problem.'
30:02
and tosses them over to you?"
30:05
I'm going to run like hell out the door from that doctor if he doesn't show me or she doesn't show me long-term double-blind tests, understand what my condition is, all of those things.
30:15
Insurance is another great example.
30:15
Can you imagine if the life insurance industry operated from just a gut level, right?
30:22
Like, "Hey, even though all of your tests all of your male uh forebears died at age below 50 of a heart attack, you have your obese, uh you have diabetes, you have all of these problems, but we like you so much, we're going to give you a $50 million life insurance policy."
30:41
They're going out of business, right?
30:42
The actuarial table, the base rate, all of that is vital information in so many areas of life, and people just totally ignore it.
30:53
And and that has always perplexed me.
30:56
Um and especially on this theme of of people like that one time.
31:02
Like that becomes and I love the bright line you put here.
31:05
That's an ethical issue, right?
31:07
And if you that one up, it doesn't really matter.
31:10
It doesn't really matter how great that business could have been, how great that project could have been.
31:18
Like you're you're on the wrong slope in my opinion.
31:20
Well, it's also um which one can you afford to be wrong on? Right?
31:25
It's like another way to think about this.
31:26
And so, um you can afford to be wrong in your decision-making a lot when it's non-ethical things.
31:31
But what I have seen in kind of you know uh various news stories, current events, people who end up you know kind of doing bad things, once they begin to make an error on an ethical decision, it snowballs. Right?
31:46
It's it's like some weird thing where they've like breached a uh I don't know, an activity that they previously wouldn't have done.
31:53
Now it's like, "Well, I've already done that before. Like, just do it again." Right?
31:58
And then next thing you know, you're just like, "Okay, well, like that took it to the extreme." So, I I don't know.
32:02
I I try not to um pretend like I have all the answers or or or preach to people about that.
32:07
You know, that's one of the challenges of writing a book like this is uh first, you have to make it very clear to people that like every single person's extraordinary life is different.
32:17
You know, mine may be sitting inside reading on a weekend.
32:21
Yours may be like, you know, I don't know, being in uh Monaco partying or Ibiza or whatever.
32:25
And like both of those can be extraordinary lives for the the different people.
32:29
Um but also uh I call out in the beginning some of the letters compliment each other.
32:37
Some of them contradict each other. Right?
32:41
And it's because there's different points in your life.
32:42
And so, sometimes things apply, but other times they don't.
32:47
And you know, part of uh my hope in people reading this book is you got to be smart enough know to know what to apply when. Right?
32:55
Nobody else can do that for you.
32:56
You just want to have like a toolkit that you can kind of reach into and grab what you need when you need it.
32:59
But really, you're you're the person grabbing the tools, right?
33:02
So, if if you are working on a car and you need a screwdriver, but you grab a hammer, good luck. Exactly.
33:11
And uh the the idea is very apparent to me, but it's good to bring that up in our conversation for people listening and watching.
33:20
Because what you're doing is saying, "Hey, right now, I find these to be really good suggestions that will get you ahead, kids. But you know what?
33:29
Subject to change as I learn new things."
33:34
Out of curiosity, as you read the book, the actual physical book, right?
33:39
Uh what what are you what are you looking at and thinking, "You know what?
33:43
I don't I don't know that I believe that piece of advice."
33:47
Well, when I first look at the book, uh I'll tell you a a good story which um is is a classic uh entrepreneurial kind of journey, which was uh the book cover that you're looking at is very close to what I originally set out to want to do, which was um some people like them.
34:05
I happen to not like the book jackets that are put on books.
34:09
I take them off to read the book and and all stuff.
34:11
And so, um I had a uh uh another book uh called Rules of uh For a Knight, I think it is, uh by Ethan Hawke.
34:20
And so, I'd read that and I have a a very nice kind of embossed cover like that, and it was kind of felt timeless.
34:25
And so, I said, "I want something like that."
34:28
And the publisher said, "That's a horrible idea.
34:29
You know, we we don't Let's do something else.
34:31
You know, here's all this data and studies and blah blah blah all stuff."
34:34
And by the way, they're right on having the quotes and you know, the testimonials and the book jacket and like every single thing they said is correct.
34:46
But it really just came down to like, "But I want this other thing.
34:47
And my gut is telling me that, you know, it's kind of a power law.
34:52
If you do something different, you better be right because most people who do something different are just wrong and stupid.
34:56
And so, you know, I'll I'll take my chances, but but let's see."
35:02
But what was interesting is when they brought the book to the book buyers outside the United States, they immediately in many Asian countries specifically, but other places got feedback, "You can't have a black book cover.
35:14
That that color is the color of death.
35:17
That will not do well here."
35:19
And so, the book is actually red outside the United States.
35:23
And so, it's this, you know, kind of a belief of I have this really passionate feeling about the book cover, but let me actually listen to the experts, right?
35:32
Like these people know better than I do.
35:34
And so, um that was the first thing is like the book cover in the United States I really like.
35:38
The one internationally is red because they were like, "Don't be stupid."
35:42
And I said, "Hey, you know, Charlie Munger said, 'Don't be stupid.'
35:45
I'm going to try my best to listen for once." Um so, that's one.
35:48
In terms of uh things in the book, um I don't think there's anything that like I don't believe.
35:53
I think that maybe uh there's like a severity dial that uh usually happens.
35:59
And so, you know, one of the um a friend of mine asked me, he said, "Hey, you wrote a book that uh very quickly could be seen as being almost too simplistic." Right?
36:09
The challenge in writing a book like this is you want things that are very memorable and very simple, but you also need to be profound enough where they're they're uh something that people will try to implement themselves.
36:21
And so, I have a chapter in the book uh where I write a letter to my kids and I say, "Hey, you should go for a walk outside." Right?
36:30
When when when things are on your mind, just go for a walk outside.
36:33
And that is almost so simple that it is dumb to go for a walk outside.
36:38
But at the same time, I've never gone for a walk outside when something's on my mind and come back and been like, "Man, I shouldn't have done that." Right?
36:45
And so, it's important, but it's very simple.
36:48
And so, as uh I was talking to a couple of friends who read the book.
36:52
Immediately, of course, you know, your your good friends latch on to all the stupid stuff and and start giving you a hard time.
36:58
And one of them said to me, "Oh, were we going to go for a walk outside?" Right?
37:01
Like, you know, immediately just give me a hard time.
37:05
And uh I was joking with him and I said, "Well, what's the last time you went for a walk outside?"
37:09
He's like, "Every time I got something on my mind."
37:13
And so, I do think that, you know, those things of like the severity of how much do you believe something also depends on like, "Well, are we talking behind closed doors?
37:21
Cuz I actually believe it." Right?
37:23
Or like, "Do I want to seem cool to my friends?"
37:24
You know, and and kind of people change their their opinion.
37:28
So, so that severity dial I think is important.
37:31
And then the other thing too is um you know, one of the chapters is about uh if everyone throws their problems on a table, like you'll grab yours back real fast.
37:39
You know, and like, you know, we we actually your problems are not as bad as other people's problems.
37:43
Um it depends on who else throws their problems on the table. Right?
37:49
So, if you know, I always laugh at uh if you talk to somebody who's really really wealthy and the things they're worried about are like, you know, "Oh, uh I can't find someone to cut the grass at my fourth home."
38:01
You know, you're kind of like, "What the horror the horror."
38:07
Like like by the way, for the average American, getting someone to cut their grass is a foreign idea.
38:10
Forget the fourth home, right?
38:12
Just like like they're the ones you know, they don't even have a lawn, right?
38:14
They just like live in an apartment or something.
38:16
And so, um you know, kind of uh uh the comparison ends up being important.
38:24
Um and so, from that perspective, uh I actually think I may believe these things more and more the longer that I sit with them rather than less, which hopefully means that they are more timeless uh cuz that was my big goal with the book.
38:41
It's just like, how do you write a book that is just as relevant 100 years from now or 50 years from now that it is today?
38:48
Um I won't probably be here to find out if it is.
38:53
But you know, if it maybe if it's relevant 10 years from now, then that's good enough and and I should be happy with it.
38:59
And also, you make a good point that there is a huge difference between simplistic and simple. Right?
39:05
I I I often say, "Hey, good investing is simple, but it's really hard."
39:11
Like a lot of things, take a walk outside every day, you know, touch grass, all that kind of stuff.
39:16
Sounds very simple, but a lot of people think, "Ah, you know, I'm too busy. I can't do that."
39:24
And then again, we get back to negative compounding, right?
39:26
Because those kinds of things are really good to get your mind in the right frame for what you're trying to deal with, etc.
39:34
I also love your your point about throwing your troubles on the table.
39:38
You're you're to grab your own back really, really fast.
39:43
And another thing you talk about uh the common traits of the smartest people you've met.
39:47
I've been super lucky to meet some of literally the smartest people in the world.
39:51
And um I I was really struck by the similarities that I took away and and you took away.
39:59
So so run through some of those, too, because it they again, some of them are simple and straightforward, but like as a package, they are probably something really good for readers to kind of aspire to hey, I want to find those people.
40:19
Yeah, so there um in the book I have uh uh seven that I put together and they're all around growth and kind of not, you know, uh being subject to the stasis.
40:29
You know, stasis equals death is 100% uh how I think about it.
40:31
And um what I think is interesting um or there are intentional ways to grow and then there's the unintentional way.
40:41
And intentional ways are, you know, they read a lot of books and books is kind of uh um one form, but they may listen to a lot of podcasts or read a lot of, you know, blog posts or whatever, but they're just constantly consuming new information that other people have put time and effort into creating.
40:54
And some of the times they are looking for uh more nuance or detail around something that they're thinking about.
41:01
Sometimes they're looking for new ideas, but also, you know, I read a lot of books cuz I'm looking to discover uh not only new ideas, but new people.
41:10
Right now I'll read about somebody uh you know, I'll read their biography and they'll mention somebody.
41:13
I'll go and I'll Google them.
41:14
I'm like, oh my god, I never knew this person existed, you know, how stupid am I?
41:16
I'm glad nobody knows that I didn't know about this person who did this thing, right?
41:19
Um so so I think that's the kind of intentional.
41:22
But then the other thing that they will do is um they'll put themselves again in the right position.
41:28
And so uh the last two points that I put in this list are they surround themselves with intelligence uh and they seek to understand uh every perspective on a topic.
41:38
And so what they're doing is they're saying, look, you know, maybe I'm just going to go hang out with my smart friends.
41:43
And they'll throw something out that I'd never contemplated before.
41:45
Or they will present, you know, a topic that they're interested in.
41:50
You know, one of the things things that people obviously uh kind of know me publicly for is all the Bitcoin stuff.
41:55
And if you go back and you talk to a lot of the early people, the way they discovered Bitcoin was they were at dinner or they were with a friend or what it was all word of mouth.
42:05
Right, there's no uh board of directors, there's no marketing team, there's no CEO of some decentralized computer network.
42:11
And so that organic spreading of an idea really dependent on whether you were open-minded or not.
42:21
And so I heard about Bitcoin, I think in, you know, 2012, probably. Like pretty early.
42:29
I was real dumb and I didn't do anything about it. Right?
42:30
And so it took me a number of years, like three or four years until I was like, hey, maybe this thing, you know, I should like start learning about it.
42:39
That three or four year difference, I like to think was my education on not being open-minded.
42:47
And it probably cost me hundreds of millions, if not maybe a billion dollars.
42:53
Now again, if you live your entire life looking at what could have been, you're never going to be happy, right?
42:58
So you got to kind of just chalk it up to okay, fine, but I learned the lesson.
43:04
Wouldn't have been nice to make, you know, couple hundred million dollars cuz, you know, I listened to a buddy rather than think I was too smart.
43:10
And so I just think that um in my experience, when you meet these people, you're always surprised at how similar they are.
43:20
And if you ever have the opportunity to see them interact with each other, it it's like um uh I was listening to a podcast years ago.
43:26
Uh I was driving the car, playing it was the uh with me.
43:28
And I don't want to say what podcast it is cuz people will start trying to uh figure out who was who.
43:33
But I said this is like listening to a Ferrari talk to a Honda Accord. Right?
43:39
Like Like there was just one person who was just super intelligent, just I mean just on it.
43:44
And the interviewer was just like, uh explain that more. Right?
43:52
Like Like it was just a complete mismatch of intellectual horsepower.
43:53
And so uh Ferrari and the Honda Accord, well, what happens when you put a Ferrari and a Ferrari together? Right?
44:01
I mean there's and you're just like, oh my god, this is like, you know, watching some magic, you know, kind of like art form of these just two hyper-intelligent people going at it.
44:11
And so I do think that um smart people seek those opportunities out the same way that maybe a really good basketball player wants to play with other really good basketball players. Right?
44:21
And so the more that you start to pick up on these habits or these kind of common attributes, then when you meet people, you you start to put them in buckets, right?
44:29
You say, okay, this person is, you know, really high intellectual horsepower, has really unique ideas.
44:33
That may actually be different than somebody who's really high intellectual horsepower on a very specific topic without original ideas.
44:41
And so depending on what you want to learn or be around, you start to you know, uh kind of pick and choose uh those people, which has, you know, really helped me.
44:49
Yeah, and I I believe very much in cognitive diversity as opposed to as what many are trying to sell in kind of pre-packaged form.
44:58
Cognitive diversity is really important. Right?
45:00
Cuz I have a lot of blind spots.
45:02
And wouldn't it be great if I had somebody on my team who didn't have those particular blind spots, but was also like really switched on?
45:13
And I love the thing about the podcast.
45:15
I I have been in more than one negotiation where there were multiple parties where we were negotiating with them.
45:22
And I'm thinking of one in particular where my lawyer called me on the phone.
45:25
And this will date me because it was back in the early part of the century.
45:31
Um and he called me and he goes, who who who are we who are we talking to today, you know, Mr. X or or Mr. Y? And I went, why?
45:38
And he goes, well, because Mr.
45:40
X uh is running double Pentiums and the other guy is can't even boot up DOS. But it's true, right?
45:50
It is um there's a deal actually right now uh that a friend of mine is working through and um he's trying to buy a business.
46:03
And my friend is very intelligent, very intelligent.
46:06
He does this for a living.
46:08
He can talk through the terms of this deal in 20 minutes on a phone call.
46:13
The seller has never done a deal before.
46:16
And so I've been looking at a number of deals with him and we've gotten close in different forms and factors or whatever.
46:24
And what I came to realize was people think that doing a deal with somebody who's ever done one before gives you an advantage.
46:33
It actually may be a disadvantage.
46:35
And if you look at Silicon Valley, you know, one of the best things uh is that there are some like market norms and there's common documentation like the, you know, Y Combinator safe and things like that where it's kind of just like everyone focuses on the important part, which is are you going to do the deal or are you not?
46:52
And then there's almost like an autopilot of what is standard and not standard that really helps a lot of deals get done. Right?
47:00
And so it evens the playing field between the Ferraris and the Honda Accords.
47:06
Whereas, you know, in maybe like the more kind of traditional private equity world, if somebody's never sold a business before, this is a single most important transaction of their life.
47:13
It's their life's, you know, work and and they're ready to sell and all this stuff.
47:19
They are really going to pay attention to every single word in the document.
47:23
And by the way, they got four attorneys that all are going to look at every single word.
47:28
And you just go through this whole thing you're like, okay, there having some degree of uh kind of commonality of understanding of documentation, etc.
47:38
I mean, how how powerful and important is the YC safe to the success of Silicon Valley? Pretty good, right? Yep. Yep, I agree.
47:50
And uh it's actually a really good point about the the person doing the first deal.
47:55
And that uh they're going to pay much, much closer attention to everything, particularly if it's, as you say, they're selling their life's work.
48:07
Another part of the book that I I think might end up being controversial is your idea that luck is not real.
48:14
So uh a while back, there was our our mutual friend Morgan Housel wrote a thing on luck.
48:21
And so I, you know, took to Twitter and did a thread on on how I viewed luck, right?
48:26
And and I'm the first person to say, hey man, I'm one of the luckiest people in the entire world, right?
48:30
Kind of born on third base and or as, you know, maybe even sliding into home.
48:36
Um but the the idea that you can increase your luck is one that appeals to me and one I believe in.
48:48
And I've got a young friend George Mack who says you can increase the surface area of your luck through almost every decision you make, right?
48:55
Like if you're presented with two opportunities, one is, ah, I'm tired, my girlfriend's coming over, let's just, you know, Netflix and chill.
49:05
Or hey, I got invited to this really cool party, lots of people I don't know are going to be there.
49:12
If you pick that one, what are you doing?
49:14
Well, according to George, and I agree with him, you are increasing the surface area of your luck, right?
49:21
Because you're going into something unfamiliar with people you don't know, giving you lots of opportunities.
49:25
But But what's your view on that and and the very forceful luck is not real.
49:33
Yeah, obviously I know that it it will cause for a conversation at the maybe the best.
49:41
But the more somebody believes in luck, the lower agency they probably are. Right?
49:49
And the less somebody believes in luck, the higher agency they are.
49:52
Now, usually what people are describing when they talk about luck is probability.
49:57
And to your point, increasing the surface area of luck, really what you're trying to do is you're trying to increase the surface area of the probability something positive happens versus negative happens.
50:07
And so, you know, I've always liked the kind of Warren Buffett, "Hey, I won the ovarian lottery."
50:11
You know, like hey, I was just born in the right place, right time, you know, to the right situation.
50:17
And that was obviously much better than if I'd been born somewhere else.
50:22
Now, if you get very technical about it, technically it's just a math probability.
50:28
But if you think about what is really the value in the perspective of the ovarian lottery, it is that you have a optimistic and a and a positive spin on imagine just being able to be born here at this time in the way that I was.
50:44
And so really the point is, and what I describe in the book, is that you know, two people can go through the exact same situation, have the exact same physical injury, and you go talk to one of them and they'll say, "Wow, I was so unlucky to be in that situation and look, I lost my leg or I lost my arm."
51:02
But you go talk to the person in the hospital bed right next to them and they'll tell you, "I'm so lucky to be alive."
51:07
And so it's very much a psychological concept, not a mathematical one.
51:09
Now, the beauty of that is research shows that you can become luckier by simply thinking you're lucky.
51:15
You don't even actually have to increase the surface area of luck.
51:18
You can just say, "Hey, I'm a lucky person."
51:19
And you start to realize, "Wow, I was walking across the street and I didn't get hit by that car. I'm so lucky." Right?
51:25
You know, I was walking in today and my key worked.
51:28
Or, you know, what whatever thing like you you start to almost think like you're on like a hot streak. Right?
51:33
And and it becomes this thing where you start to see the positives versus everyone has been in a world where you're just like nothing can go right right now.
51:40
You become very down and and kind of depressed and and things like that.
51:44
And so um really the point of the letter is that you have agency and you can do things to improve your situation.
51:57
And sometimes they are based on probability.
51:58
What is the probability that you and I go to a bar at a certain time and we meet each other, you know, and there has to be a third that also has a unique interest that's similar to ours, but whatever and we have a great conversation. Probably pretty low.
52:11
If you were delayed by 10 minutes or I was delayed, you know, there's all these things that feed into it.
52:18
But if you start to think to yourself, "I'm so lucky everywhere I go, I meet cool people."
52:23
Maybe it has more to do with you just being, you know, energetic, outgoing, willing to talk to people, etc.
52:29
than it is everywhere you go there's cool people. Right?
52:32
And so I do think that there's this kind of agency component of it.
52:37
Now, I will say that there's a an Instagram account that uh I recently saw and I DM'd this guy and he's got like a thousand followers.
52:48
And I said to him, I said, "Do not stop what you're doing.
52:51
This is going to be a very very big account. Like this is cool."
52:56
He walks through the streets of New York and he films himself giving really positive compliments to people.
53:04
So he may be walking past you on the street and he'll say uh he'll say, "Excuse me, sir, that sweater looks amazing on you.
53:08
It just like it just fits you perfectly. Like you look awesome.
53:12
I just want to I hope you have a great day."
53:14
And you can imagine in New York City people immediately are like, "What do you want?"
53:20
"Why are you being so nice?"
53:22
Their radar goes off, right?
53:22
And he just turns and he just keeps walking.
53:24
And he does this a couple times and he's got ones, you know, he'll say to people, you know, "I really like your tattoos."
53:29
Or there's a guy in Bryant Park that's kind of like moving some of the construction materials and you can tell the guy's kind of down and and he says, "Hey man, we just really appreciate you, you know, doing the work you're doing here.
53:40
There's not many people who show up to work every day and work hard and you know, kind of put their body through what you're doing. Like just keep at it.
53:45
Like there are people out here who appreciate you."
53:46
And you can tell the guy's like, "What's going on?" Right?
53:50
But but what it does is it starts to show that like that guy is probably so happy every day cuz he's walking around, he's saying compliments, he's doing all this stuff, that there is no like I'm so lucky I get to meet cool people every day.
54:03
He goes out and he meets cool people.
54:05
Like he goes and he finds them.
54:07
And so it is controversial to say luck is not real because actually what you find is that people who have good things happen to them feel uncomfortable taking credit for it.
54:20
So they will constantly downplay their investment or their action or, you know, their the time and energy that they put towards something and they'll just say, "Hey, I got lucky."
54:31
And you see it's all, you know, investors are like classic.
54:34
You're talking to somebody, they're a multi-billionaire and they're, you know, like, "How'd you do it?" Like, "I just got lucky.
54:37
You know, good good time, good place."
54:39
You're like, "Dude, you work 90 to 120 hour weeks, you know, you were obsessive about this thing.
54:44
You put all this time, energy, whatever into it." And you're smart.
54:50
And you made a lot of good decisions. But yes, you got lucky. You're right. Okay.
54:53
Like to some degree it's a cop-out because it's like an intellectual like pulling the ladder up behind you. Right?
55:01
You're like, "Hey, you were successful.
55:02
Rather than tell people how you did it, you just pulled the ladder up and you're like, 'Ah, just if you're lucky you can do it.
55:06
If you're not, you you can't.'"
55:09
And so by putting it in there, hopefully that will cause people to think a little bit more about, you know, agency and and kind of paying it forward.
55:15
Like tell people how you did it so that you're not pulling the intellectual ladder up and kind of leaving the next generation behind.
55:24
Man, there's so much to unpack there because I agree with you wholeheartedly.
55:29
I used to uh when I was around on Twitter, whenever when anyone said like, "They're just they're they're they're they're just lucky."
55:35
And I would I had this gift, right, of this guy with a rain cloud following him around.
55:40
And and and my quote was, "Everything is luck."
55:44
Said the most unlucky man in the world.
55:51
It's because I completely agree with the premise that you can make your own luck, right?
55:56
So there in in in response to Morian, I was like, "Hey, there is dumb luck, right?
56:04
You you win the lottery or just whatever.
56:07
It's just totally a random probability that just landed on you.
56:09
And then there is informed luck.
56:12
In other words, you keep your aperture wide open.
56:17
You keep your viewpoint wide open and it gives you the opportunity to see and sense unusual things occurring.
56:26
And then, to your point about agency, right? You have to take action.
56:30
You have to say, "Wow, I bet this isn't going to last.
56:36
I'm going to go jump on that like right now."
56:40
And so the the idea of agency also is something I think a lot about because like it alone can trump like agency and persistence can trump IQ, can trump like like most things.
56:57
And again, back to George, he's really great at coming up with these clever ways of looking at it.
57:03
He's like, "You want to know who the highest agency person you know is? Answer this question.
57:08
If you were put in jail in a third world emerging country and you had one phone call, who would you call to get you out?"
57:20
And that is your that is your most agentic friend.
57:24
And and one of the worries that I have, like I I'm doing a lot with Rush N C Ventures because I just think that there's so many people rooting against things, right? I hate that. That's bad. That's awful.
57:37
And I just think we would like your guy walking around giving people compliments.
57:42
There's so many things that are so cool right now happening.
57:45
That there is so much to root for, right?
57:47
And and the energy that you get back when you're rooting for as opposed to against.
57:56
Like you really don't have to be terribly smart to be a pessimist, right? Oh, that'll never work. Oh, that that's dumb. That'll right?
58:03
And and so this idea of optimistic realistic realist, you know, I'm not talking Panglossian pie in the sky, but like literally an optimistic framework and outlook married to high agency, like what a formula.
58:24
I heard 50 Cent, the rapper, say this once and it stuck with me, which upsets people, but I think the general point that he makes uh is definitely applicable.
58:37
He said, "Growing up, nobody was depressed. That's a luxury.
58:43
We're worried about where we're going to eat.
58:45
We're worried about how to be safe.
58:47
We're worried about A B C, you know, D things.
58:49
Where I come from, depression is a luxury."
58:55
And what I took away from it was our country and our civilization is so advanced, we can sit around criticizing it. I hear that.
59:06
You know, if you go back, there's this great book, I think it's called The Rise and Fall of American Growth by Robert Gordon, maybe.
59:11
And in it, basically he talks about the period between like 1870 and 1940 and how much technological progress we made.
59:22
And he says, you know, at the beginning of that period there's a house and it's basically isolated.
59:26
It has no connectivity via roads, via electricity, via water, via a any of that stuff.
59:30
But by the end of that period, it's fully hooked up to the, you know, the system and and ready to go.
59:38
And he talks about the invention of the elevator, how important it was to be able to go up, not out, which used to be the thing is you got to just keep expanding further and further out.
59:46
But the fact that we could build up and how much density could now go into a city or an urban area and all stuff.
59:53
And so during those times, there were not people criticizing. They were building.
59:59
They were looking for growth.
1:00:01
And so I do think um pessimism is a luxury, which sounds really kind of weird.
1:00:09
But it just comes back to this idea of your life is probably pretty good if you can walk around being pessimistic all day.
1:00:18
And so maybe the number of pessimists is a sign of like economic development and civilization, you know, kind of progress.
1:00:27
That we are we've finally reached the point where people can sit on Twitter all day and just complain about things. Like we made it. Louis C. K.'
1:00:36
s got this great bit where he's talking about the first time he experiences Wi-Fi in an airplane.
1:00:40
And he's like, "You're like, I can't believe it.
1:00:46
I'm 30,000 ft above the air and I can surf Twitter and the internet and everything else."
1:00:51
And he goes, "Then the minute it goes out, you go, 'What the fuck?'" It's true. It really is.
1:00:58
And you know, I I'm a huge believer in travel.
1:01:01
I think it broadens your mind.
1:01:03
Uh Like more than many other activities because you see how other people live, how other cultures work, etc.
1:01:10
I remember being in Bhutan.
1:01:13
If you've never been, I highly recommend going.
1:01:15
It's like an amazing, amazing place.
1:01:18
But like they're a developing nation.
1:01:22
And my wife and I were taking a walk in a village there and they had no electricity. Like none.
1:01:30
And yet this group of kids runs up to us.
1:01:32
Huge smiles on their face.
1:01:36
And like all they wanted to and so we start talking with them, the ones who spoke English.
1:01:40
They came up to us because obviously Americans.
1:01:41
Let and they wanted to practice their English, right?
1:01:46
And so the the older kid who was pretty good with his English, I'm like, "So you know, I tell me your story and everything."
1:01:53
And Anthony, everything he said to me was like the most positive outlook on life.
1:02:03
And I when we were back at the hotel, I looked at my wife and I'm like, "Man, wouldn't it be great if we could import that into the United States, that kind of attitude?
1:02:12
Like this kid, no electricity in his village, not much going on, and yet everything.
1:02:18
I'm so excited about this, this, and this and I'm learning this, this, and this."
1:02:24
I was just so taken by it.
1:02:26
So I think that you're you're right.
1:02:29
When when when you when you create like such an advanced economy, it's much easier to be pessimistic. Dr.
1:02:37
John Sarno uh highlighted the idea of these mind-body issues, you know, where where, you know, ulcers or bad backs or stiff necks. Guess what?
1:02:49
They only happen in super advanced economies.
1:02:52
Like elsewhere, they don't exist.
1:02:56
And so I think that yeah.
1:02:56
We're just the idiots who sit in chairs all day while the rest of the world is up and moving. Right. Exactly.
1:03:03
Kind of live your life as a verb, not a noun, is good advice.
1:03:09
Um the other the other thing that you you talk about that I also believe in is power laws are like everywhere.
1:03:16
One thing and I want your opinion on this.
1:03:18
Um I have the view that the power laws are actually going to be more available to more people now because the tails have gotten much longer in the distribution.
1:03:29
And by that I mean like in the old days, if you wanted to be a TV star, well, you had Lucy Lucille Ball to contend with, right?
1:03:39
Nowadays, there's so much media that you can be on.
1:03:42
You can go into a niche part of TV and and your power law can take over.
1:03:47
Same thing in podcasting and substacks and all of those types of thing.
1:03:52
There are all these new, smaller hills, but hills nonetheless, that you can conquer. Do Do you agree?
1:04:00
Well, I think that just objectively that's true.
1:04:02
Um content is a great way to look at it.
1:04:05
You know, uh it used to be that there was only a couple of TV stations.
1:04:11
So if you wanted to be quote unquote famous on TV, then you had to be one of 20 people or 50 people.
1:04:20
Now, there has been fragmentation, which usually is looked at negatively, but now you can be famous to a thousand people or 10,000 people.
1:04:27
You don't have to be famous to the entire country.
1:04:29
You don't have to be the on the five TV stations.
1:04:34
Now you can be on the millions or hundreds of millions of TV stations in terms of social media accounts and and things like that.
1:04:41
And so I think that technology is obviously changed it uh for the better.
1:04:45
But I also think the severity of the power uh law is moving in a direction that will it'll benefit people.
1:04:55
And so, you know, maybe the best way to describe it is like the power law of, let's say, writing a book used to be, do you get on the New York Times bestseller list or not?
1:05:07
I know many friends, not even like one or two.
1:05:11
Like at this point, a lot of friends who have sold a hell of a lot of books could have been, based on the numbers, on the New York Times bestseller list, but they weren't. It's editorialized.
1:05:21
They didn't, you know, they self-published.
1:05:24
They did all this kind of stuff, whatever.
1:05:25
And so there's a lot of people who would say, "Oh, based on some, you know, antiquated criteria, uh you know, you didn't make the power law that, you know, is that criteria."
1:05:37
Friends who made a million dollars selling books, they don't care about a list. Right.
1:05:42
It's They're like, "Uh just put me on the the sellers list, right?
1:05:47
Like I don't need to be on the New York Times bestseller list.
1:05:48
Just put me on the revenue list."
1:05:52
Um and so I think that that stuff happens.
1:05:53
The other thing about power laws, um you know, 80/20 is kind of the the Pareto principle, all that.
1:05:58
I I say in the book that I actually think it's like 95/5.
1:06:03
It It's not 20% of your decisions.
1:06:03
It's like less than five, maybe even like one in 99.
1:06:07
You know, I mean it is, you know, yes, that is a good guiding principle to do 80/20, but it is much, much more, you know, kind of magnified than that.
1:06:15
Um and so we've done this in some of our businesses.
1:06:20
At the end of the year, we look back and we say, "If we only got to make two or three decisions, what were the two or three decisions that we made that led to most of the outcome?"
1:06:28
And one year, I mean this sounds insane, one year we looked at, we had a very good year.
1:06:34
We made one decision with the balance sheet to invest some capital off of the balance sheet and that drove like 99% of the return for that year.
1:06:43
And so we sat there and we said, "We could have made that one decision and all just not worked the whole year.
1:06:50
And we would have had nearly the same outcome." That makes us dumb.
1:06:54
Like Like why are we doing we spend all this time, energy, like all this stuff, whatever?
1:06:57
And so then going into the next year, we said to ourselves like you can't say that every year it's going to repeat and you're not always going to make good decisions, but maybe we should actually change the way that we think about decision-making and what's important and and you learn, right?
1:07:09
And then you kind of go from there.
1:07:11
And so I do think that understanding power laws is less about like trying to replicate them all the time and it may be about avoiding the, you know, big amount of decisions or actions that aren't going to have an outcome.
1:07:23
So it's like less than it being a creative and like let's go find, you know, 20 more new power out laws uh power laws.
1:07:28
Instead, maybe it's about like, "Well, let's just reduce the 20 things we're doing down to two because we think one of these two is the power law."
1:07:36
You know, and then it's kind of like a subtraction thing, not an addition thing um that can be an outcome once you, you know, once you start seeing the power laws everywhere. Yeah.
1:07:44
And uh it also helps you focus the mind on like what is really going to move the needle.
1:07:49
And and what like could could lead me down a path back to luck.
1:07:56
I always loved Cormac McCarthy's quote, "You'll never know what your what worst luck your bad luck has saved you from."
1:08:04
Um and so to kind of focus on uh you know, never multiply by zero, right?
1:08:10
Multiplying by zero always gets to zero.
1:08:12
And and so I I agree completely there.
1:08:16
Well, we're we're closing in on time, man.
1:08:18
I could have done I could have actually made this like everyone's bagging on, "I hate long-form uh podcasts."
1:08:25
I could have done 4 hours with you here, my friend.
1:08:28
I think that had uh less than 10-minute content and more than 2 hours.
1:08:32
Based on the data on our platforms, that's the content that does well.
1:08:36
People either want the quick hit or they're going to sit down and let's go on a journey together.
1:08:40
So long-form, I'm I'm a big fan of.
1:08:41
You should do more and more of it.
1:08:43
And as I do, I will invite you back on because I recommend the book to everyone. I I loved reading it.
1:08:51
Um and it's sold out right now, though, isn't it?
1:08:56
I did not know that you could sell out on Amazon.
1:08:57
That is a new new idea to me. Um it it did that.
1:09:01
Uh they refreshed, but then um now we're hearing in some other countries like I got an email today, the UK only had three copies and the woman's like, "I don't want to buy it so cuz then nobody else can get a book."
1:09:13
I was like, "You just buy you know, that's okay.
1:09:15
If you buy three copies, I won't be bad."
1:09:18
Um so uh we're working on it.
1:09:18
But I I think that I think we should be in pretty good shape and we'll see when all the sales data comes out.
1:09:26
Well, I'm delighted to see you uh having so much success with it.
1:09:29
You definitely deserve it.
1:09:31
As you know, cuz you've been on the podcast before, we do have that final question.
1:09:35
So, you get another chance.
1:09:37
We're going to make you the emperor of the world. You can't kill anyone.
1:09:41
You can't put anyone in a concentration camp or reeducation camp.
1:09:47
But, what you can do is we're going to give you a magic microphone and you can say two things into it that is going to incept the of the earth.
1:09:57
Whenever their tomorrow is, they're going to wake up and the two things you've said, they're going to think were their own ideas and they're going to look and say, you know, unlike all those other times, I'm going to actually take action against both of these things right now and continue to do so.
1:10:12
What you going to incept?
1:10:16
One of my favorite letters in the book is all about call your friends just for no reason.
1:10:23
Just call and just say, hey, what's going on?
1:10:24
Um and I explicitly say it's not for them, it's for you. Right?
1:10:29
It'll make you feel better.
1:10:29
And it'll it'll you'll learn, but you have to be genuinely interested if you do it.
1:10:34
Like if you're the idiot who calls and then you're like, and you really don't care, you're not listening and you're like, you know, watching TV way it doesn't work.
1:10:40
But, I think that's one of just like like interact with people, especially young people today who kind of hide behind computer screens.
1:10:49
I I think it's probably a big one.
1:10:49
It's like maybe love is the answer, you know, type type thought process.
1:10:54
Um and then the other one maybe is an investing one, which is I think the next, I don't know, 20 years, 50 years, whatever, some long period of time is just going to be defined by the devaluation of whatever fiat currency is your local currency.
1:11:07
And so, yeah, there's kind of a simple just investors are going to be winners and savers are going to be losers.
1:11:14
And so, it runs counter to so much of personal finance of like save, save, save.
1:11:19
And so, that doesn't mean like go buy some risky, whatever altcoin or stock or meme coin or whatever.
1:11:29
You can do just fine as many people have for a very long time just buying, you know, the S&P 500 or whatever, but just don't sit with 100% of your net worth in cash and think that like you're going to save your way to that house or save your way to, you know, whatever you want.
1:11:45
And so, you know, everyone's different, everyone's got kind of different risk profiles and responsibilities or whatever, but I think that's probably on the investing side just they're going to devalue it. I promise.
1:11:54
They may do it faster or slower at different times, but they're definitely going to devalue it.
1:11:58
Great great advice both of them.
1:12:02
And, you know, there's empirical evidence behind your second one.
1:12:04
So, for what works on Wall Street, we looked at varying investments, but we took in place, we stripped inflation away.
1:12:10
If you'd put money, a dollar, in US Treasury bills, which many perceive as the safest investment in the world back in 19, whatever, 27, right now, what would it be worth? About a dollar 80.
1:12:28
The same investment just invested in the S&P would be worth like well over 400 bucks.
1:12:35
And and like it just that which appears safest in the short term is often riskiest in the long term and vice versa.
1:12:44
So, I think both of those inceptions are going to help a lot of people.
1:12:47
Well, Paul, this has been super fun.
1:12:50
Uh really really love the book and wish you all the best with it and and hope to see you again, sir. Thanks so much, Jim. I appreciate it.