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Hi, I'm Jim O'Shaughnessy and welcome to Infinite Loops.
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Sometimes we get caught up in what feel like infinite loops when trying to figure things out.
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Markets go up and down, research is presented and then refuted, and we find ourselves right back where we started.
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The goal of this podcast is to learn how we can reset our thinking on issues that hopefully leaves us with a better understanding as to why we think the way we think and how we might be able to change that to avoid going in infinite loops of thought.
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We hope to offer our listeners a fresh perspective on a variety of issues and look at them through a multifaceted lens — including history, philosophy, art, science, linguistics, and yes, also through quantitative analysis.
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And through these discussions help you not only become a better investor, but also become a more nuanced thinker.
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With each episode we hope to bring you along with us as we learn together.
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Thanks for joining us, now please enjoy this episode of Infinite Loops.
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Disclaimer: Jim O'Shaughnessy is chairman and Co-Chief Investment Officer of O'Shaughnessy Asset Management, where Jamie Catherwood is an associate.
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All opinions expressed by Jim, Jamie and podcast guests are solely their own opinions and do not reflect the opinions of O'Shaughnessy Asset Management.
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This podcast is for informational purposes only, and should not be relied upon as a basis for investment decisions.
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Clients of O'Shaughnessy Asset Management may maintain positions in the securities discussed in this podcast.
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Jim O'Shaughnessy: Well, hello everyone.
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It's Jim O'Shaughnessy with another Infinite Loops.
2:03
I have been waiting for today's guest for a bit.
2:06
His name is William Green.
2:08
He is the author of Richer, Wiser, Happier: How the World's Greatest Investors Win in Markets and in Life. Welcome.
2:17
William Green: Hi, great to be here with you.
2:19
Jim O'Shaughnessy: So the reason I was so excited to talk to you is, it seems like we might even be brothers from different mothers, because as I read your book and as I listened to other podcasts with you, we have really, really similar outlooks on how one goes on to succeed and how many can go on to fail in investing.
2:45
You wrote a great book about it and I hope that we can illuminate some of these things for our listeners and viewers.
2:54
But, tell me, your CV is wonderful.
2:57
You were at Oxford, and then you were at Columbia where you got a Masters in Journalism.
3:03
Journalism, English literature, investing, how'd you make that switch?
3:07
William Green: Yeah, it's a little bit of a joke, because the truth is I never took a business class.
3:16
I never took a class on investing.
3:18
I never went to an accounting class.
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I can count to maybe six or seven.
3:23
I know nothing about economics.
3:26
Well, at least I never, which makes me not that different from most economists anyway, although- Jim O'Shaughnessy: I was going to say it. William Green: ...
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but I never studied economics.
3:36
And so I'm singularly unqualified for everything that I've done professionally and I think that's probably been the case with most of the things that I've done professionally.
3:44
I think I always had some strange interests that then I pursued.
3:48
And so part of what happened with my fascination with investing I think is, originally, if you really go back a long way, originally it's that my father loved the stock market.
4:02
And so I would sit there watching my dad read the financial times with a glass of scotch in this beautiful cut glass, crystal glass.
4:10
And I think there was something in the stock charts, he was a lawyer and then a judge.
4:18
There was something in the stocks that gave him a sense of escape and order and possibility.
4:27
And so there was a kind of magic in there, I think, that...
4:32
And he never got on hugely well with his brother who was a very good investor.
4:38
And maybe once a year they would go out for dinner and he would come back and he would say, son, I got a stock from Matthew. And so there was...
4:46
So I think I grew up with this sense that there was a kind of wonder and magic to investing.
4:53
And then I guess when I was about 24, something like that, 24, 25, my brother and I sold an apartment that we'd owned together in London and suddenly I had to actually figure out what to do with the money.
5:08
And so, it wasn't a huge amount of money, but I started to really read obsessively about the stock market.
5:16
And so I think there was an element of greed about it.
5:20
That was just like, this is cool, I could make money without doing any work.
5:25
But there was also an element of just sheer smart aleckry, where I was always lazy and always looking for a way to rig the game in my favor.
5:35
So, if I was studying for my finals at Oxford, for example, I would be like really carefully figuring out what did they ask last year so I don't have to study that.
5:44
And then of course I'd always be totally wrong and they would ask the same thing again.
5:47
But I was always looking for a way to stack the game in my favor.
5:51
And so when I started to study investing, I just thought, this is so cool that if you are smart about this and you think about it, well, maybe you don't have to work for somebody you dislike.
6:02
Maybe you don't have to take orders.
6:03
Maybe you'd have the freedom to do whatever you want in terms of travel and writing and creative projects.
6:09
And to some degree that's been true, not necessarily in the straight kind of trajectory way that I had hoped where I would suddenly hit the jackpot, but I do think it's given me an ability to live my life in a way that I probably couldn't have done if I would just a poor ink stained wretch.
6:29
And so, I've been a poor ink stained wretch for most of my career, but at the same I've always had this sort of secret obsession with investing.
6:37
And so I think what made me a little different from a lot of writers who write about investing, a lot of journalists who write about investing, is that I had skin in the game.
6:47
And so I wasn't doing it because I fell into it because that was what I was assigned or it was the opportunity.
6:52
I actually really wanted to learn about it.
6:55
So when I went off and I interviewed famous investors, I was really looking to figure out what they could teach me.
7:01
And so, I think if you deeply and intensely care about something, it shows in your work.
7:08
I mean, you are just interested in talking to people, right?
7:11
You love people and conversations and learning stuff from books.
7:14
You can't really fake that.
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And so I don't think I could have faked the fact that I was fascinated in investing.
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It just seemed like a cool game. Jim O'Shaughnessy: Yeah.
7:23
And again, brother from another mother, the German general who had a tiff with Hitler, he had this wonderful hierarchy where he would say where people would go in the army.
7:38
And clever and lazy, he said, were reserved for the highest of command. William Green: Ah.
7:44
Jim O'Shaughnessy: You know, arrogance, stupid and aggressive, they're on the front lines. William Green: Yeah. That's good. That's good.
7:53
Jim O'Shaughnessy: So, I too had a similar obsession about the stock market.
7:58
Mine came from listening to my uncles debating it, and it was all they talked about through their entire debate.
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I believe it was about IBM and I'd just turned the age where I got to sit with the adults at the dinner.
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And a large Irish family, if there are 14 people at the table, there are 17 opinions minimum.
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And so I was listening to them and they were only talking about the CEO.
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And I thought to myself that doesn't make any sense to me.
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It would seem that if I was going to look at that, I'd want to know what they did, how much money they made, how much did I have to pay for that and all that, and thus I was off on my quest.
8:43
But I also want to underline something that you said.
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And because I think it's true, especially in this field, in investing, I have had the great good fortune and I'm incredibly grateful for having met just sort of like some of the greatest investors in the world.
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And I don't think that I've met one who wasn't obsessed with something.
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And by that I mean, like you said, you can't fake it. William Green: Mm.
9:13
Jim O'Shaughnessy: You can't fake being so obsessed that you will go down to the research library and get every single book that lists the Dow components, this is something I did, all the way back to 1927, right, and my parents are looking at me like, what the hell are you doing?
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And so the obsession when I was writing, What Works on Wall Street, I filled the back of our Ford Explorer with computers.
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And if you remember that time, the monitors were this big. William Green: Yeah.
9:44
Jim O'Shaughnessy: So, but I really noticed it around other people that I spoke with, and it wasn't always the same obsession, very, very different.
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But there were also very interesting to me and I always looked forward to conversations with market people because the topics that we could cover were like almost limitless. William Green: Yeah.
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Jim O'Shaughnessy: And most of these people could speak extemporaneously about any...
10:13
I mean, quantum physics, sure we could do that for 45 minutes.
10:16
Oh, psychology and the latest, oh yeah, I read that.
10:20
I think that you are also an excellent example of this, is this obsession to learn to, you are voraciously curious and that's something that I find in a lot of these great investors.
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And when I was thinking about you, I was thinking to me, what's funny is that he has, at least apparently to me, I'll find out when I talk to him, he seems to have a lot of the qualities that he saw in those great investors.
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And I think that's really interesting that- William Green: Yeah.
10:54
You know what I don't have though, Jim, is that I don't have the lack of emotion or the systematic mind or the rationality or the self-control, things like that.
11:06
There are things that are kind of missing in my makeup.
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I was thinking about this last week, because I'm doing this new podcast that I've started to host and I interviewed Howard Marks for it.
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And when I was preparing, I'm sort of very obsessive about everything, so I prepared obsessively and I was rereading lots of stuff about him.
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And I was just thinking, here's this guy who loves games like Backgammon and he loves odds and he's totally dispassionate and he's very patient.
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And then I was thinking, what am I like when I play games?
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And even something like Scrabble, which is a word game, which should suit me, I find almost torture. It's painful to me. I'm impatient.
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I have this sense that there's, that if I were only smarter and only more focused and only more disciplined or only had more time, I would get a better word.
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I know that it's there and it tortures me.
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And so I'm kind of restless and so then I would rush to a decision.
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So I would think really hard.
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I torture myself, beat myself up, and then I'd rush to a decision. And I think...
12:12
So, and I was just thinking, wow, that's just so different from the way someone like Howard plays games, or someone like Joel Greenblatt, who I spent a lot of time writing about, plays games, or Buffet, or Munger, or how Mohnish Pabrai, all of these game players, Peter Lynch, all of these great game players I've interviewed over the years.
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And so just recognizing, really, honestly what you do and don't have in your makeup.
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That to me, in a way that's been one of the greatest lessons I think from studying all of these guys, is to realize, yeah, I have a lot in common with them.
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Like I have the desire to...
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I have the ability to be an outsider who thinks for myself, which I think is the quality of all of the best investors I know.
12:58
I don't really listen to conventional opinion.
13:00
I don't really care about conventional opinion.
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I think for myself that I'm sort of...
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You know, I'm an English Jew who went to Eton, which is the school that had 10 Jews, and I have a birthmark on my face. I mean, I was like a...
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I wasn't born to be sort of the inner tribe of the tribe, right?
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I was going to be an outsider always.
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So I have that part naturally.
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That's really part of my makeup and that's important for a writer as well as an investor I think, for a great investor.
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Anyway, but just knowing that I don't have the game playing gene, that's been really helpful.
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And so I do think if there's any takeaway, any sort of practical takeaway for anyone, it's really to think carefully about how you are wired and whether you have the wiring and the talent and the obsessiveness and the fascination to play the particular game that you want to play and to win it.
13:55
And so for me, the discovery that actually I'm not truly wired to win the game of managing a stock portfolio, for example, just doesn't, I could be okay at it.
14:07
I could probably trail the market just marginally over the long term if I really put all my effort into it.
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Jim O'Shaughnessy: Upper quartile.
14:15
Upper quartile right there. William Green: Exactly.
14:17
So I, and I'd be able to charge fees and get really rich while being really mediocre and having to pretend to myself that I was adding value.
14:24
But I don't think, I would never be great.
14:28
Whereas I look at someone like Joel Greenblatt, for example, and I can just see, ah, what a temperament the guy's got.
14:36
So it's not only that he's got the intellectual tools and the knowledge and the...
14:40
You know, I'm not interested in sitting around reading annual reports, whereas I can read obsessively about Buddhism, Cabala, I don't know, any sort of weird esoteric subject.
14:57
I read those books over and over again, I can't even tell you.
15:00
It's like I have like underlinings over my underlinings multiple times, because I've gone through them so many times.
15:08
So, yeah, I do think playing...
15:11
Not only playing to your own strengths, but harnessing your own craziness, your own particular form of craziness, is actually, it sounds like I'm being a little facetious or facile that I'm saying that, but I actually think there's deep truth in that, that you want somehow to harness your own craziness. Jim O'Shaughnessy: Yeah. I agree.
15:30
I think everything you listed I find important as well.
15:34
In my particular case, I had an event in my trading history that made me embrace being a full quant. William Green: Mm.
15:45
Jim O'Shaughnessy: Which, by the way, works for me.
15:50
I don't tell others that it might work for them, because it might not.
15:54
You do have to have a disposition where you can be very dispassionate, where you can be very long term in your outlook.
16:05
You can't get upset about short term conditions or you'll break.
16:09
For example, we had a analyst come out after the great financial crisis and tell us that we were one of the few quants that he covered that didn't override their models. William Green: Huh.
16:20
Jim O'Shaughnessy: And to me, that's the whole game.
16:23
If I override a model, that's it, my entire track record is negated.
16:28
And so it's, you can learn a lot from what quants do, but if you don't have that nature, then don't try to be that.
16:39
One of the things that I often say to young students who are trying to find their footing is, read as much as you can, read everything you can get your hands on.
16:51
Watch and listen and do everything and then start taking notes, and what will emerge is what feels right for you.
17:01
And that's what you want because if you try to bolt a process onto somebody where they are simply not going to be able to make that work, well, that's, you're guaranteeing failure.
17:16
So I would say, find something that works for you and a process that you can follow and then these other things are going to get in the way, there's just, there's no denying it.
17:29
And like, I had a friend ask me to participate in his behavioral bias survey.
17:36
And the question I believe, this is years ago, but I think the question was something like, what is the largest behavioral bias you have?
17:45
And then how did you solve it?
17:47
And my answer was, what is the largest behavioral bias I have? Being a human being.
17:52
And then I answered, how did you solve it? I am entirely a quant.
17:57
So I think- William Green: I was thinking death is really the only way to solve that particular bias.
18:03
Jim O'Shaughnessy: Exactly.
18:07
And understanding that and accepting that is something that I, it's very difficult to convey that to people because there's this disconnect between...
18:19
Like, the first paper I wrote, its around here somewhere, and I wrote it in '86, and it was...
18:24
but I was using psychology before we had behavioral psychology.
18:30
And I thought I was so smart, and finding all these things and honestly I wasn't.
18:35
And it was horribly written, at least I've gotten better at that thanks mostly to my summa cum laude journalist wife who has moved over to taking street photography.
18:47
All of her talents made me much better.
18:50
Anyway, but the disconnect that we get is, we can all intellectually understand behavioral biases and it doesn't matter which one you want to talk about, yeah. Okay.
19:03
I had a diagnosis bias here and then after I had that problem, then I had confirmation bias because my reticular activating system only showed me everything that I agreed with, et cetera, et cetera, et cetera.
19:16
And you could have everyone nod a yes, yes, yes.
19:19
Then the shit hits the fan.
19:23
The market is terrified and everybody panics no matter how much they intellectually understand about behavioral problems and kinks.
19:34
I mean, I was writing earlier today, Jason Zweig is a friend, and he wrote a great piece for the journal today and he mentioned Sir John Templeton who is famous for doing a couple things that I just love.
19:48
One is he would routinely put orders in, limit orders, in on stocks at prices that were way below prevailing prices.
19:59
And when asked why he would do this, Templeton answered quite simply, oh, because I would be far too terrified to do it when those prices actually hit those levels.
20:09
And so he had this, I think, very elegant solution towards, I know I'll be just like everyone else and that I will be panicked and I will be crazed.
20:19
And so that was one of his solutions for it.
20:23
And I think that, one of the things that I say is, and I want to get to some of your advice upon analyzing all of these fantastic investors.
20:39
The first one, I think it's kind of game over if you don't have it, and that is you have to be patient.
20:46
Talk to me a bit about that. William Green: Yeah. Extreme patience. I'm working on...
20:56
I'm close friends with Guy Spier who runs this fund, the Aquamarine fund, and one of the strange things I do, I edit his annual report every year and I do it partly just because it gives me an excuse to chat to Guy which is kind of fun.
21:13
And so I'm, I've been working on that this morning.
21:16
And one of the things that...
21:17
I helped him write his book, The Educational of a Value Investor.
21:20
And one of the things that he learned from Mohnish, Mohnish said, when I buy a stock, if it goes wrong, I should own it.
21:30
I still have a rule that I should own it for at least two years basically.
21:35
And Guy cloned that and Guy was saying to me, and it's in his new annual report, he's like, yeah, I should just change that for five years.
21:44
And so he's constantly expanding the amount of time that he won't do anything.
21:48
And I kind of have a rule for myself that I can't sell anything within five years and I violate the rule intermittently.
21:56
But I think it's a good rule to be constantly kind of tying your hands behind your back so that in a world that's become increasingly short term, you are pushing yourself very consciously in the opposite direction.
22:12
And I feel like that's one of the great superpowers in life that, the ability when everybody else is getting these dopamine hits from their phones and their Twitter accounts and the extra donut and all of these things, the ability to defer gratification is incredibly powerful.
22:37
And because I don't particularly have it and I'm incredibly susceptible to the extra donut, although not particularly donuts, but chocolate bread, everything else, so temptation is big for me.
22:50
It's not like I'm one of these people who finds it really easy to defer gratification.
22:54
I think about this a lot.
22:56
And so I think the ability to be patient in everything is extraordinarily important.
23:05
So with investing it's obviously a massive advantage, but I'm kind of interested in the fact that it's an advantage in everything, right?
23:15
You think about all of the ways in which we screw up in life.
23:19
I talk, I wrote about this in the chapter where I wrote about Nick Sleep and Qais Zakaria, where Nick would say, yeah, think of all of the ways in which you blow yourself up.
23:29
Like you have an affair, you go to a strip club, you steal something from the store, whatever it is, all of these...
23:41
you trade your stocks instantly.
23:43
All of these things that give you a little hit of energy, but you're borrowing from the future.
23:47
And so the ability, well, it starts with the knowledge that that's going to get you in trouble.
23:57
So it's kind of like admitting your addiction.
23:59
Like, once you at least know that this is going to be one of the things that's going to determine whether you have a happy and successful life, at least then you can fail consciously.
24:11
And so I'm consciously failing on this, because I'm constantly checking my email and checking my Twitter account and going for the extra piece of toast and drinking the 17th cup of coffee.
24:22
So it's not like I'm one of these people who is sort of a sage telling everyone how I mastered life and now you should learn from me and pay me $20,000 a year.
24:35
It's, I'm struggling with all of these things, but I'm pretty sure that I'm right about this.
24:40
I'm not sure that I'm right about many things.
24:41
In fact, I'm sure that I'm wrong about most things.
24:44
But this one, this idea that you're constantly faced with these decisions about whether to defer gratification or indulge instant gratification, that's a kind of, those are these kind of fulcrum moments in life that you are presented with over and over again.
25:02
And one of the things that I love is, when you find these lessons going through every area of life, every book, every spiritual path that you study, every discipline, whether it's investing or sports or whatever.
25:17
And so I love the fact that if you look at Genesis, right, there's the brother who's selling his birthright for a bowl of lentil soup.
25:28
And so it's the perfect example of instant gratification.
25:32
And then you have Joseph who...
25:33
I regard a lot of these things as sort of metaphorical.
25:39
My knowledge of this runs shallow but I think of these things as very important metaphorical truths and stories.
25:45
So you have Joseph deferring gratification by setting aside seven years of grain during the good times for the period where there'll be famine.
25:58
And he becomes the wealthiest man in the land, the most powerful man in the land other than Pharaoh.
26:03
And so I think, deeply embedded in our knowledge of what works and doesn't work in life, we have this sense that you need to defer gratification.
26:10
And so patience in investing is just yet another example of this larger principle at work.
26:21
Does any of that make any sense?
26:22
Jim O'Shaughnessy: Makes total sense to me.
26:24
And it is a nice bridge for me because I know you love Buddhism as do I, but my crutch of choice tends to be more Daoism and stoicism and the two together and sprinkle in a little Viktor Frankl and you've got a pretty robust way to, or scaffolding if you will, for you to build your ideas on.
26:53
And the idea that I'm fascinated by, and I wanted to ask whether you saw this as well.
27:02
Many of the people that I know, and I think the high, most highly of in terms of their investment skills, I don't think, and this is my, obviously be self-selection bias on my part, but they are interested in some philosophical, religious, spiritual be what it might may.
27:26
I mean, with me it's Daoism, with you it's more Buddhism and- William Green: Yeah, and stoicism and I read Viktor Frankl and I see the same thing when I see Viktor Frankl.
27:37
You see Frankl saying, in the space between stimulus and response, that's where you have the freedom to choose.
27:44
That's exactly what we're talking about.
27:46
Jim O'Shaughnessy: Exactly.
27:47
William Green: It's the same thing.
27:48
And you see it, you see it with the Buddhists just abiding with whatever's coming up, you see it with the Catholics who are saying, yeah, they call it restriction where you have this sort of instant temptation.
28:00
And you're like, no, let me go against my instincts here.
28:03
And so you're seeing it in all of these paths and I, so I love studying stoicism, for example, because I see all of the same things that I see in these other paths.
28:11
Jim O'Shaughnessy: Absolutely. As do I.
28:13
And if you haven't read it yet, Derren Brown's book, Happy: Why More Or Less Everything is Okay, is quite good.
28:23
I knew him as a magician and not as an incredibly erudite thinker.
28:29
And it's a great book, I think, for people who don't, who haven't read the original stoic material, he does a better job presenting it for say a younger reader than I probably would.
28:43
I read all the originals.
28:44
So Aurelius and Seneca, the full thing [crosstalk] And what I find fascinating is the way these things, as you just pointed out, they all really do work together and symbiotically.
29:01
And by that I mean, the Dallas, for example, I always say the Dallas farmer, when something really bad happens and everyone at the firm is like, oh, what are we going to do? What are we going to do?
29:12
And then I tell the tale of the Dallas farmer, which I'm sure you've heard.
29:15
William Green: Remind me the story. Jim O'Shaughnessy: Sure.
29:19
So there is a farmer in China and he has two beautiful horses.
29:26
And all of his neighbors envy him for these beautiful horses.
29:33
And one night, one runs away and they all come and he's sitting there by the single horse and they're all, oh, we're so sorry. This is horrible.
29:44
You've lost half your wealth and oh my God, this is just an awful, awful thing.
29:48
And his response is, we'll see.
29:51
Later that day, the horse that ran away brings another beautiful horse back and everyone rushes to congratulate him, we'll see.
30:00
We can go all the way, it's a shaggy dog.
30:02
You get all the way to the end where his only son is helping on the farm and falls and breaks his leg.
30:12
And everyone rushes to give the condolences to him and his answer is the same, we'll see.
30:17
The next day the Chinese army comes through and conscripts every able-bodied young man leaving his son because of the broken leg.
30:28
So it's this idea that ...
30:28
And then we go to the stoics for help in understanding, why is that smart?
30:38
Well, that's smart because it lets us understand that worrying about things that are outside of our control, we're just burning all of our emotional energy, we're burning all of our metabolic budget for our brains and worry is an endlessly reforming onion.
31:04
I'm stealing that somewhere from somebody.
31:06
But if you really can understand these lessons, as far as I'm concerned, then you can become materially better at practicing the craft of investing, by the way, in whatever way you choose, whatever works for you, right?
31:23
William Green: And investing is just a microcosm of life anyway.
31:27
So really what you're dealing with is uncertainty.
31:32
How do I deal with the fact that the future is unknowable and the world is full of shysters and self-deceivers who pretend that it's knowable and will charge you for their insight into why it's knowable, despite the fact that they don't know.
31:49
And so you're trying to figure out your way through this very murky world where nothing is knowable, nothing is predictable, where you can still stack the odds in your favor by thinking better and by avoiding certain stupid behaviors.
32:05
So for me, it's all connected.
32:09
And when you were telling that story, the Dallas story, I'm thinking there's exactly the same story basically in Judaism from a couple of thousand years ago, where there's a story.
32:22
I think it was Rabbi Akiva, who a lot of the Catholics will say was the greatest soul who ever lived contemporary of Jesus.
32:27
And there's a story where I think he or his teacher, maybe it was his teacher was camping and their tent blows away.
32:36
They're going to some town village, the tent blows away, then the goat has eaten their ...
32:41
It's a series of disasters.
32:43
And basically it leads to the ...
32:43
And each time he says "Gam zu L'tovah" which means, and this too is for the best.
32:50
This is from the light too.
32:51
But in the end they discovered that if they had made it to the village, they all would've been killed.
32:56
And so for me, because I'm very- Jim O'Shaughnessy: I love that story by the way. William Green: Yeah.
33:02
It's a really powerful story.
33:03
And because I'm prone to worry and fear about uncertainty and the unknowable future myself, temperamentally, I'm very prey to this stuff.
33:12
For me, part of what I'm trying to do is rewire my brain by very consciously thinking about things like that phrase, "Gam zu L'tovah," this too is for the best.
33:24
So when I'm getting the crap kicked out of me by something, whether it's a mistake that I've made with investing or a conflict that I have with someone, or something that I've messed up that isn't working out, whatever it is, I'm very consciously saying to myself, no, no, this is from the light too.
33:43
This is for the best too.
33:44
This is going to be for my good too.
33:46
What can I learn from this?
33:47
And that may be a total and up to delusion, but it's a very powerful habit because instead of ...
33:54
Similar to that stoic idea of saying, "Okay, what can I control and what can't I control?"
34:02
Well, I can control my reaction.
34:03
And so I can control as Marcus Aurelius would say, I can control my attitude, my intentions, trying to be an honorable person in response to difficulty.
34:16
And so these very old principles, like looking for the best in every situation, looking for what you can learn, looking for your own responsibility for the [inaudible] or just focusing on what you can control, they're incredibly robust.
34:33
And they're always to deal with the fact that we don't know, and we're all scared, and we're all imperfect and we're all screwing up the whole time.
34:43
And so I think what I love about investing is, as you were saying before, it contains everything, which is why all of these really smart investors are such voracious readers, because they can read something from stoicism, from philosophy, any area and say, that relates.
35:04
And so this is one of the reasons why I fell in love with interviewing Bill Miller 20 years ago is because you would be interviewing and he'd start talking about why he was buying Amazon.
35:13
This is back in 1999, 2000 when I was writing about him for Fortune at the time.
35:19
And he's literally looking at Wittgenstein drawing of a triangle where Wittgenstein is saying, "What is this?
35:25
How do you describe this? Is it a triangle? What is it?"
35:28
And Bill is saying, "Well, what is Amazon?
35:31
Is it a money losing business run by this young billionaire who doesn't deserve to be rich?
35:39
And the company has just vaporized all of this money because the stock has just gone down 90% in the tech bubble.
35:47
Or is it a company that's more like Fannie Mae where you are going to see eventually that it has this cost advantage.
35:56
Because it doesn't have all of these physical stores, it has these warehouses so it has lower costs.
36:02
And so its superiority is actually concealed at the moment by it losing money."
36:09
And similarly he's drawing at that time on William James and he is saying, "Well ..."
36:09
I remember him telling me to read this story about William James. So William James ...
36:18
I'll probably be getting this wrong.
36:22
I read it again recently.
36:23
It's an amazing story where William James goes to the woods somewhere in the south.
36:29
And he sees these woods that have been just eviscerated to make wave for some hut or something that someone's living in.
36:36
And he calls it an ulcer.
36:38
He's saying, it's just this ulcer the way they've ravaged this area.
36:41
And he's talking to one of the locals and the guy says to him, "No, you don't understand.
36:45
This person who's living here, who's created this home for himself and his family where he's taken control role of this area that was kind of wild and turned it into a comfortable home for his family."
36:58
And William James who's one of the wisest man of the last few centuries starts talking about, well, if he came to Harvard, to Cambridge and saw my life there, he would be just as bemused by my lifestyle there as I was by his.
37:15
And so Miller reads this and he's thinking, oh, so when I look at this guy from barons who pans Amazon every single week and says why it's going past, he's just viewing it through a particular set of biases.
37:29
And so how do I look at it dispassionately so I'm seeing it not as this ulcer like the home in the woods. And so I love that.
37:40
I love that ability to draw on ideas and principles and ways of seeing from different areas and apply them in every area of life.
37:48
And so that in a sense is what I'm doing.
37:50
And I kind of almost can't control myself.
37:52
It's like, I start off thinking I'm going to be writing about investing, and then in fact, really what I'm writing about is the fact that we are all kind of lost in the fog and we're trying to figure out a way through. Jim O'Shaughnessy: Yeah.
38:08
So many beautiful things you touched on there.
38:11
The James brothers, William and Henry, what a pair.
38:16
If you read a Henry James novel though, prepare yourself for three page long sentences.
38:21
William Green: I'm in a book group and Jason's like ...
38:21
And his one rule always is that he absolutely refuses to read Henry James and I love Henry James.
38:32
Jim O'Shaughnessy: I do too.
38:33
And Jason hates him so much that I put up something on Twitter referring to Henry James [inaudible] from Jason saying, "Jim, you know I can't deal with it."
38:47
William Green: And he can even write these kind of paradigms in Henry James style.
38:52
Jim O'Shaughnessy: Oh, they're brilliant. I have several.
38:55
They are really brilliant.
38:59
But I think it's wise for younger people to read people like Henry James because that's not the only thing you learn.
39:07
The other thing learn is that our attention span is decreasing, it is decreasing rapidly and there's a lot of reasons for that.
39:17
We're probably all well above our Shannon limits in terms of information.
39:24
And this idea that I wanted to come back to with patience, what's happened with many people regardless of their age, is the speeding up of the cycles and of the feedback has them becoming hyperbolic discounters.
39:47
And I believe that now, today, that patient money has an even larger advantage over patient money of say 1985 when I started out in the business.
40:04
And I think there's just so many things that are difficult.
40:11
Another thing that I love about this and will never stop loving because you're never going to learn everything, ever.
40:17
And most of what you think you absolutely know, you're probably wrong about.
40:24
And so it is a very humbling experience.
40:30
And if you don't care about that, the world can literally be your oyster, because you will go from point A to point Z and you will be like, oh, well, I didn't know that I was going to have to read all the math I needed for quantum physics, but I'm glad I did it.
40:49
But the point that I think that really resonates with me is this idea of the human need for certainty.
41:03
It is, in my opinion, and the term of art is the illusion of certainty, because that's what it is.
41:13
It's an illusion and people will pay such a high price for that illusion, however erroneous it happens to be that it creates a symmetry that people who are under no such illusion or delusion can take advantage of.
41:34
So one of my little hobby horses and that's what we'll probably edit it out because I always say it and he's like, people love that, Jim.
41:43
But that is, we are deterministic thinkers living in a probabilistic world and hilarity or tragedy often ensue.
41:54
We are so trained in, yes, no, zero, one, black, white, and the world is gray.
42:06
And let's say we get 10% of the distribution in the yes column.
42:13
And let's say we get 10% of the distribution and the no column.
42:17
80% of the distribution is in the maybe, we'll see column.
42:22
William Green: Well, I'll give you a beautiful teaching about this that I learned that's actually had a profound impact on me, which is, there was a guy whose name I'll totally mispronounce, who I think was called Rav Bunim of [inaudible] and- Jim O'Shaughnessy: Oh, I love that.
42:38
William Green: [Crosstalk] teacher.
42:39
And I think he was a 19th century Catholist.
42:42
And he said that you should have two pieces of paper, one in each pocket.
42:48
And on one piece of paper it should say, I am the dust and ashes.
42:53
And on the other piece of paper, it should say, the whole world was created just for me.
42:59
And he says, whichever piece of paper you need at that particular time, you pull out that piece of paper.
43:04
And what I love about that is that you have these two diametrically opposite things that are both true.
43:10
And for me, that's incredibly helpful that every time I start talking about something, I realize that the opposite is almost always, totally true as well.
43:23
I was saying something to my daughter this morning, who's home from college this week.
43:27
And I was talking to her about saying yes to things and saying, yeah, I'll do that.
43:36
Because as my friend [inaudible] would say, there are these invitations to serendipity where you want to buy in, because otherwise if you just stay home and you don't do anything, you are cutting yourself off in these invitations to serendipity. And so saying yes.
43:47
So you always want to say yes, and then I pause and then I say, except when you really want to say no a lot, because then I'm thinking, well, look at the strength of someone like Buffett, which is his ability to say no to almost everything.
44:00
And so something is really fundamentally important as that.
44:07
I'm wrong and right, whichever side of the debate I take. Jim O'Shaughnessy: Yes.
44:13
William Green: And so just to have ... I mean, was it F.
44:17
Scott Fitzgerald who said, the mark of intelligence is this ability to hold these contradictory ideas in your head at the same time.
44:24
And to me, that's very fertile and helpful because it protects me from being super arrogant and getting carried away with thinking that I'm right.
44:35
But it's also somewhat paralyzing because I can also agonize over things and say, I just don't know.
44:47
And I just throw up my hands.
44:48
So I think somehow you need to get to a point where you're like, yeah, I may be wrong, but the odds are in my favor.
44:56
And if I play this type of hand again and again, over time, it's likely to be true.
45:03
And so I was saying to a friend of mine who manages an enormous amount of money a couple of weeks ago, one of the lessons I learned from studying Joe Greenblatt a lot was that I figured you come up with these principles that are approximately true on average over time.
45:20
And that to me is a pretty good hedge to sort of say, yeah, sometimes this is going to be wrong and it could be catastrophically wrong but if it's approximately true on average over time, if I just don't blow myself up, if I don't do anything hugely stupid and I keep endearing to principles that are approximately true on average over time, I'll do okay.
45:41
So for example, just buying things when they're undervalued, at times, you're going to have a crazy market where for a couple of years, if you just bought profitless companies, you'd actually do better than the people who are buying companies that are going up.
45:57
So it can be agony if you are a fund manager and you are judged by that performance week in week out, and the world is nuts.
46:06
But if you can handle it, if you can keep going, eventually it'll work out.
46:11
And I was thinking about it this morning, because I wrote a lot about Arnold Vanderberg at the end of my book and Arnold, who's an extraordinary role model in life kept saying to me, "I don't know that you should put me in your book because my record has been terrible the last few years, I've been totally out of favor."
46:29
And one of the reasons why he was out of favor was because he was looking at oil stocks and he was saying all these energy stocks, they're the cheapest I've seen any stocks since 1974.
46:39
And so he loaded up and he kept being wrong and wrong and wrong.
46:43
And Arnold, he's like 81, I think.
46:46
And a certain point I started thinking, he's such a wonderful guy, but is he a good investor? I don't know.
46:51
I mean, he is a very admirable guy and he's got this great 40 something year record, but maybe he's losing it slightly.
46:57
And then suddenly oil takes off.
47:00
And the fact that he was buying these very cheap stocks that were massively undervalued because he had the courage and the strength and the patience to hang in there, that principle of buying things cheap, which is approximately true on average over time, became hugely powerful.
47:18
Jim O'Shaughnessy: I love that.
47:21
And I'm writing it down because you've just described my book, What Works on Wall Street.
47:30
Basically it's approximately true on average over time and people will get so fixated on ...
47:37
But you said in the first edition that it was this ratio and then you changed your mind.
47:44
I went, no, the data changed.
47:46
So I had to change the way I looked at it.
47:50
But I love that approximately true on average over time, that's a perfect description to me of a very robust investment strategy and process because- William Green: And it's true for life as well, right?
48:05
Jim O'Shaughnessy: Absolutely.
48:06
William Green: If you say, for example, let me be more loving and kinder and more compassionate.
48:13
On average, you're going to have better relationships.
48:15
You're going to feel better about yourself, you'll have more self-respect.
48:21
You'll draw better people into your orbit and good things are likely to happen.
48:26
And once in a while, you'll get really taken advantage of by someone unscrupulous and you'll say, "Was that really stupid or?"
48:35
But on average, it's true that it works over time.
48:39
And so for me, I think partly because I'm so confused about so many things and I'm not saying that out of false modesty, it's like, I'm really confused about a lot of things.
48:49
And my mind is kind of scattered. I'm all over the place.
48:52
I'm reading too many things.
48:54
I'm thinking about too many things.
48:56
I'm listening to too many interviews and podcasts.
48:58
For me to come back and have a few things that are a true north, that I'm like, now, this much I believe is true.
49:09
That to me has been massively helpful.
49:12
And one of the things that I do, which sounds so banal and prosaic like most [inaudible] is I just have the post-its all over the place on my wall that remind me of little things or I'll write them in books that I look at every morning.
49:28
So literally, I mean, I'm looking here over my computer and there's a post-it that's right above my computer but on the wall behind that says, this, just this, and it's a reminder to me.
49:44
And right next to it, there's a thing that says "Hineni" which is a Hebrew word that says, here I am.
49:49
And so it's reminding me, no, just this moment, everything is in this moment.
49:55
So I need to bring myself back to be fully present in this moment.
49:59
I don't need to worry about the future, I don't need to be torn apart by the past, just this, this is what I have control over, this moment.
50:07
And so I think for me, when you find these principles, these truths, something like the ability to defer gratification or the importance of being kind and compounding goodwill by being kind to people the whole time, or the stoic idea of controlling what you can control and letting go off the rest.
50:27
When you find something that's a really powerful truth, that's robust, that stood the test of time and that's worked in your own life, for me, you really want to go big on that.
50:39
And what surprised me when I wrote this book was that I found these principles going through everything.
50:47
When you find a principle that works in investing, it works in every other area too, I think, I may be wrong.
50:55
But you think of something like deferred ...
50:55
Well, I'm probably wrong.
50:57
But when you think of something like deferred gratification, when I write about Nick Sleep and Qais Zakaria, it applies very much to their information diet, right?
51:08
They're chucking away all of the short term nonsense that most people on Wall Street are focusing on, right?
51:16
Like what's the news this morning?
51:23
What's the one year projection for the price?
51:26
What's the 12 week projection for the earnings, whether it's going to miss by a penny ...
51:26
Such bullshit, total bullshit, that is all of these calls to action.
51:36
So they're deferring gratification.
51:38
They're saying, let's focus on if information that has a longer shelf life, like is this company behaving in a way that's deepening its bond to its customers?
51:50
Are they treating their customers in a way where they're delivering so much value?
51:54
A company like Amazon that became 70% of their personal portfolio.
52:01
Are they making their customers lives so much easier by driving down costs, improving efficiency?
52:07
Are they treating their employees well or not?
52:11
Maybe not as well as Costco is doing.
52:13
So they're doing this kind of destination analysis where they're looking at the outcome 10, 15, 20 years from now and then they're saying, what are the inputs to get there?
52:24
And are the inputs in place to get to that destination?
52:28
You apply that same technique to your own life and you say, okay, so did I use the peloton this week?
52:35
No, I skipped it three times. Did I eat too much? Yeah. Did I meditate? Once.
52:42
This is a description of my week so far. And so yeah.
52:47
Did I masses more toast than I said I was going to? Oh yeah.
52:51
So all of these inputs that are not deferring gratification and are likely not to lead to a good outcome.
52:57
And so I need to know, okay, so let me as great mindfulness teachers like Sharon Schwartzberg would say, let go with self-compassion and begin again to say, okay, let me start again, because I screwed up there, but at least I know how I can get to a good destination and these are the inputs to get there.
53:16
And so you take these little principles like that, these little ways of thinking, and they just run through everything.
53:22
Think of destination analysis and you say if the ultimate destination is my grave, whether you believe in afterlife or not, which I irrationally probably believe in.
53:38
If I picture my funeral, how will my kids feel? How will my wife feel?
53:45
How will my friends feel?
53:47
Will they talk about me with love and gratitude and appreciation and amusement and all of that or not?
53:58
And what kind of inputs do I need to get there?
54:01
And so this is what I love, is the fact that you can take these ideas from investing or anything else and they work in all of these areas.
54:10
And so it gets back to your question or your observation about the greatest investors being big readers and thinkers and drawing on philosophy and spirituality.
54:20
It comes back to the idea of someone like Charlie Munger being such a polymath, drawing from all of these different mental models.
54:31
And so that's I think why this particular microcosm of investing is so infinitely interesting.
54:38
You know how when you write a book people will say, God, watch out, because you may be so bored with your book by the time you're done with the subject that you'll never want to look at it again.
54:47
With investing, I kept waiting for that to happen.
54:50
And I'm more interested in it now.
54:52
If anything, it keeps getting more interesting because it includes everything.
54:56
Jim O'Shaughnessy: It absolutely does.
54:59
And it's just so funny listening to you I just start thinking about all of these things and you're making these wonderful points.
55:08
And I thought about the idea of when you find something that really works and it shoots its way through every aspect of your life, everything that you're trying to figure out.
55:18
And one that has been working particularly well for me and is relatively new for me, and that is "amor fati," love your fate, love your fate.
55:31
And I thought of that when you were talking about the two pieces of paper.
55:35
You are nothing but ash... William Green: Yeah. Ashes and dust. Jim O'Shaughnessy: ... the wind blow... Yeah, ashes and dust.
55:40
"And the universe was created just for you." I love that.
55:44
Because if you are able to think along that spectrum and realize that some days the ashes and dust is going to be the one you really do need to read, maybe when you're feeling particularly...
56:01
like you're sitting in the cat bird seat, or you've done something very, very clever, you might need to remind yourself in the Latin sic transit gloria mundi. Right? William Green: Yeah.
56:13
Jim O'Shaughnessy: "All worldly glory is fleeting."
56:15
Or, when you're down to the dumps, then maybe Shakespeare's, "When in disgrace with fortune and men's eyes, I all alone beweep my outcast state.
56:26
And trouble deaf heaven with my bootless cries.
56:28
And look upon myself and curse my fate." William Green: Hmm.
56:34
Jim O'Shaughnessy: I love that example because it does in fact go the spectrum, but what I love about it is every day you're going to need one of those. William Green: Yeah.
56:48
And maybe every hour, maybe every minute.
56:50
Jim O'Shaughnessy: Maybe.
56:51
William Green: I'm looking at something here that I...
56:52
Sorry, I'm going to stand for a second because I wrote this on my wall the other day.
56:57
So this is from a portion of the Torah called Pekudei, and it says, " When I fall, I shall arise."
57:04
And then I was looking it up.
57:06
I think it's from Micah or Micah.
57:08
It says, "Rejoice not against me, O my enemy; when I fall, I shall arise."
57:13
And I was thinking that as you're watching Ukraine.
57:17
And that whole idea of is, when you fall, you shall arise.
57:22
So something about this beautiful piece of writing resonated for me that I couldn't let go of.
57:27
I want to keep thinking about that and working a way of ideas.
57:30
So it's on my wall now, so I don't forget it.
57:32
And I've written the reference to where it's from in both the Zohar and the Old Testament.
57:37
So that I can look back at it.
57:39
Because it's not only about geopolitics, it's about everything. Right?
57:47
It's this sense that every time you fall, like that idea that I said from Sharon Salzberg of "let go with self-compassion and begin again."
57:54
Which is something she talks about with meditation, where when you lose the breath...
57:59
You're trying to focus on the breath and you realize you got totally distracted.
58:02
And then you're, "Let go with self-compassion and begin again."
58:05
And that applies, I think, to everything.
58:07
And likewise, "When I fall, I shall arise."
58:10
It's like, yeah, every time you screw up, every time you stumble, every time you eat the extra donut, you lose your temper and you get in a fight with someone.
58:19
And you're like, "Really?
58:20
I still behaved that way?
58:22
To know now, when I fall, I shall arise.
58:26
So I'm trying to pound these ideas into my mind and repeat them.
58:35
And look at them the whole time.
58:37
So one of the things I did, literally, I have this thing on my wall here that's written in Hebrew that I got a scribe to write for me, that has all of these phrases.
58:47
And one of the phrases is, Ganzel Tova, "This tour's for the best."
58:51
Which we were talking about before.
58:53
And one of them is [foreign language] which means, I am but dust and ashes.
58:59
And that has deep connotations as well.
59:03
Because even that one piece of paper, if you look...
59:05
If you look at each of those two pieces of paper that's saying, "I am but dust and ashes," part of what you're saying is when you are looking at your own ego, and you're saying, "Ah, I'm kind of nothing anyway," you become a channel for something.
59:22
Because you're getting out of your own way.
59:24
So it's not all about me, me, me, my ego, and is everyone going to respect me.
59:27
And think I'm smart, or handsome or rich, or whatever.
59:31
You're just like, "I'm nothing."
59:35
So I had a teacher who used to say, "The big man is the small man and the small man is the big man."
59:40
And so what you're trying to do is, get rid of your ego so you don't have the sense that you are everything.
59:48
And then there's this beautiful paradox that, "In getting rid of your ego, you are actually become something, you become everything, you become a channel for everything."
59:55
So even within those two pockets, there's this sort of infinite unraveling of the onion.
1:00:00
Jim O'Shaughnessy: An infinite loop, if you will. William Green: Yeah.
1:00:07
So it's an infinite loop and you can get to that state of paralysis that I was talking about before, where you're like, "I don't know what to believe," because both of these things are true.
1:00:16
Or you can just say, "These are ideas that have stood the test of time for thousands of years."
1:00:22
The idea that the more you remove yourself from the equation, the more you're going to be a channel for something.
1:00:32
And that sounds very woo-woo and mystical, but...
1:00:34
I remember a guy I was friends with who was in the Israeli Special Forces.
1:00:40
He was in the unit that [Fauda] was based on.
1:00:43
So he was one of these guys who had to go in and rescue people from terrorists and the like.
1:00:50
When I was first working on this book, he said, "You want to ask to be a clean pipe."
1:00:56
And it was really a reference, I think, to the cleaning of his gun.
1:01:00
He was like, "Before you go into battle, you have to clean the pipe."
1:01:06
And that was really helpful to me.
1:01:08
He said, "Do you want this book just to be a channel for the ego of William Green, or do you want it to be for something beyond that?"
1:01:15
And so that for me, that sort of idea radiates out in every way.
1:01:19
Because then you say, "Okay, so I get to come talk with Jim here.
1:01:23
Is it about me, is it about my ego, is it about me sounding smarter?
1:01:28
Can I somehow be of use or service or something?
1:01:33
And the fact that you are here trying to spread ideas that you've learned over the years that have really helped you, that's why the podcast resonates.
1:01:40
So you're experiencing this yourself, but as you get out of your own way, that's when you become powerful.
1:01:48
So this is what obsesses me.
1:01:50
I love these old ideas that kind of radiate out into everything.
1:01:54
Jim O'Shaughnessy: Again, we are reading from the same book and reading the exact same line.
1:02:02
Getting out of your own way is something that took years and years for me, at least, to do.
1:02:10
I started reading the Tao Te Jing at age 18.
1:02:14
I can't even remember the number of times I've read it.
1:02:16
I read it every year certainly.
1:02:19
Probably more than once a year.
1:02:21
And I read some Buddhist texts and the Gita and a variety of those.
1:02:28
And the absolute wisdom in them, you would think it be getting out of your own way.
1:02:34
And the big man is the small man and the small man is the big man.
1:02:38
Well, I hear Lao Tzu saying, "A leader who is feared is one of the worst type of leaders."
1:02:45
And he goes through the litany until he gets to the best leader.
1:02:50
And the best leader is a person who the people all explain after things have been done. "We did this ourselves."
1:03:00
So the best leader is not the heavy hand, is not the "you will fear me," is truly powerful.
1:03:12
Truly powerful people get out of their own way.
1:03:18
I don't think that you can transcend the ego, but... No, sorry.
1:03:21
I don't think you can obliterate the ego.
1:03:24
I think you can transcend it.
1:03:27
And one of the reasons that I think that, and I often recommend this to the young people I work with, is I have kept journals since I was 18 years old.
1:03:36
And boy, do they teach you humility, number one.
1:03:42
But they teach you so much more.
1:03:44
For example, it was through my journals that I came to understand that all of our memories, because we're human, are unreliable narrators, and our brains do us what apparently evolution thinks of as the kindness by overwriting and updating our memories to make them consistent with what we think now.
1:04:04
William Green: You told an amazing story on a previous episode that I heard where you talked about saying how right before 1987, before the crash.
1:04:16
And then you look back at your diary and you're like, "Actually no, I cashed out the day before."
1:04:21
And I thought that was such a wonderful insight.
1:04:23
Our capacity for self-delusion is really extraordinary.
1:04:26
Jim O'Shaughnessy: It's endless. William Green: Yeah. And really dangerous.
1:04:31
Jim O'Shaughnessy: Incredibly [crosstalk].
1:04:33
William Green: But at the same time very helpful.
1:04:36
I'm not sure that you would write a book, for example, or have a baby if you didn't have a capacity for self-delusion.
1:04:45
Jim O'Shaughnessy: Exactly.
1:04:47
William Green: So there's, again, there's a beautiful phrase from a great capitalist called Rav Ashlag who I often think is kind of the greatest figure I've encountered over the last century.
1:04:59
Not encountered physically, but when you read his books, you're just like, "Oh, that's true."
1:05:04
Everything you read you're just like, "Oh okay, that's truth. Deep truth."
1:05:08
And he talks about certainty beyond logic.
1:05:12
And so, you have to get to this state where somehow your rational mind is telling you certain things like, "Okay.
1:05:24
No, this situation is totally dark," or "I screwed up totally," or whatever. And it's like, "No, no.
1:05:31
I believe that there's only light.
1:05:32
There's nothing but oneness and unity. Everything is light."
1:05:36
And you have to have that certainty beyond logic.
1:05:38
And one of the things that I find really tricky that I haven't resolved in any way is within the world of investing, particularly the investors I'm writing about, these are masters of rationality.
1:05:54
And I'm writing about how to become more rational, how to overcome your biases.
1:05:58
But I have this nasty little secret.
1:06:01
That not only am I personally not very rational, but I don't really believe in rationality.
1:06:06
Like I sort of feel like the deep truths actually are not necessarily rational.
1:06:11
They're paradoxical, they're intuitive.
1:06:14
And this is something that I wrestle with a lot.
1:06:18
I think of again, of someone like Howard Marks, who, when I was interviewing him a couple of weeks ago, I was thinking, "God, that's so interesting."
1:06:26
Because when I first met him, I thought, "Here's a guy who's like a more superior computer, a more superior machine."
1:06:33
And you feel like when you're in his presence, you're like, "Oh yes, he's got an extra 30 or 40 IQ points."
1:06:37
And he is very unemotional and dispassionate and a really good game player.
1:06:42
And then you realize actually he was an artist as a kid and his entire approach to investing is entirely impressionistic and entirely intuitive and gut.
1:06:50
And he says, "Yeah, I'm just looking at things.
1:06:52
I'm seeing how people behave, and it's all intuition."
1:06:56
And both of those things are true.
1:06:59
He's incredibly rational, incredibly pragmatic, incredibly unemotional and entirely intuitive.
1:07:05
And this is something I'm wrestling with. I don't know.
1:07:10
Do you have any thoughts about that, Jim?
1:07:11
Because I feel like everything I'm talking about, you've thought about it more than I have anyway.
1:07:16
Before I got on the interview, I was like, "You should just be interviewing yourself really."
1:07:21
Jim O'Shaughnessy: I doubt it.
1:07:25
So I actually do have thoughts on that.
1:07:27
I would actually direct you to my friend, Tom Morgan, who has developed a fairly robust thesis around it.
1:07:35
William Green: Yeah, we had lunch recently. He's lovely.
1:07:37
Jim O'Shaughnessy: Oh, good. Lovely guy.
1:07:39
I quibble with some of his conclusions.
1:07:42
What you're describing, the way I think about it, is a whole human mind.
1:07:48
In Taoism, they have this idea of wu-wei, actionless activity.
1:08:01
In fact, I have a thing I'm writing that I'll probably never publish, the tentative title is, I'm trying not to try.
1:08:10
And it took me a long time to learn how to do that.
1:08:21
Once you remove yourself from the ego eye and you just let your awareness imbue the way you're thinking about or doing or whatever, some activity, I think that... I'm a good example.
1:08:42
In public markets, I am entirely rational.
1:08:45
I am com completely unemotional.
1:08:47
I have a running joke on Twitter that chose the dude sitting on his couch like this as me, because I am about as slothful a person as you could ever want to meet.
1:09:01
And the fact is that, in that regard, in public markets, what I'm really betting on is not the formulas, it's not the base rates, it's not any of that, I'm betting on the fact that human nature won't change.
1:09:18
Essentially what I'm doing is arbitraging human nature.
1:09:23
And until I have sufficient evidence that we humans will get out of our own way, I think that will be on average over time a excellent way to invest your money in public markets.
1:09:40
Now, we have been investing in private markets and funding seed stage companies since 2007.
1:09:50
Entirely different set of skills.
1:09:53
And so, there, you have to let the more intuitive, what I call imbued intuition, or saturated intuition. What does that mean?
1:10:06
Well, it's pretty simple. For 61 years old...
1:10:09
I started in markets when I was 21.
1:10:10
I had seen things happen so many times that pattern just got put into my DNA.
1:10:20
And it's like the [tingles], right? A funny story.
1:10:25
Going into the great financial crisis, I was at Bear Stearns at the time.
1:10:29
And I was senior managing director.
1:10:30
And I was walking around and telling anyone who would listen to me, "Short your house.
1:10:37
This is going to be really, really bad."
1:10:41
Here's the interesting thing. I didn't act on it.
1:10:45
Because I had so downloaded the quant rule set into my being that I didn't have a model telling me that I should short these exotic CDOs.
1:10:57
So, I didn't do anything about it.
1:11:00
But it was interesting because it was the intuition saying, "Jim, watch out. Don't don't do this. Don't do this."
1:11:09
And so, what I found much to my delight, is that I'm glad I never shut that portion of myself off.
1:11:19
I did for public markets because I had to.
1:11:21
Because if I didn't, the mayhem that I would create. Not because I like you.
1:11:29
Like, "Are you kidding me?
1:11:31
If you're going to let me just go with my own device, I'll make every fucking mistake you can make."
1:11:38
And probably quite reliably.
1:11:40
William Green: So it sounds like it all starts with self-knowledge.
1:11:44
It all starts with knowing how you're wired.
1:11:50
And what workarounds you can have for your own crappy wiring.
1:11:54
But also being able to stay away from games that don't suit you, or that bring out the worst in you.
1:12:00
I think someone like Joel Tillinghast has to.
1:12:01
He's had an amazing record over something like 40 years.
1:12:04
Who said to me, "I don't invest in biotech stocks because I know that they're going to make me go crazy."
1:12:10
He says, "I can't model them, I don't know what they're going to do. They're really volatile.
1:12:15
They're going to make me nuts.
1:12:17
And so I need to stay away from my own craziness."
1:12:19
Jim O'Shaughnessy: Mm-hmm (affirmative).
1:12:20
William Green: And that's a really powerful insight.
1:12:24
I feel like one of the few things that I...
1:12:27
I have one of the few things I've learned.
1:12:28
One of the most important things I've learned in the last couple of years, I think this gets deeper and deeper for me, this belief.
1:12:36
And this is the importance of playing games that are right for you, playing games that you can win and staying away from games that you can't win.
1:12:47
And I feel like most truths in life, it's such a profound platitude that your eyes kind of glaze over when you hear it.
1:12:57
So you're unlikely actually to take advantage of it.
1:13:02
But I think when you find one of these great truths, you want to go really big on it.
1:13:06
And [Manga] talks about it.
1:13:08
I remember Manga saying, "If you are 5'3", don't become a basketball player."
1:13:14
Jim O'Shaughnessy: Right.
1:13:15
William Green: Because you're going to be competing against someone who's 7'8".
1:13:20
And he said, "Just play games where you are really, really interested in it, for its own sake.
1:13:27
And it plays to your strengths."
1:13:30
Think of someone like Manga, who doesn't read fiction.
1:13:34
There's some sense in which he's stunted. Manga is genius. Right?
1:13:40
And he's extraordinarily moral and a wonderful role model in so many ways. There's something...
1:13:45
A friend of mine once said to me, for example, "You don't go to Charlie to learn manners, because Charlie is...
1:13:52
" I actually think Charlie has wonderful manners.
1:13:55
He's very polite and courteous.
1:13:56
And nice in certain circumstances.
1:14:00
I was watching a video of him yesterday, an old video of him saying, "Every time, every time you hear the phrase, EBITDA, just substitute the phrase, bullshit onions."
1:14:10
And so, you don't necessarily go to Charlie to learn tact, politeness, etiquette. Jim O'Shaughnessy: Yeah.
1:14:19
He had a great line, which is, "No, I don't look at earnings forecast because I prefer not to throw up on my desk."
1:14:28
William Green: Yeah, yeah. That's a wonderful line. Yeah.
1:14:35
I was thinking of this before when we were talking.
1:14:36
There's a beautiful line from Josh Waitzkin.
1:14:41
I think I heard in one of the rare interviews that he had done.
1:14:44
I think probably with Tim Ferriss years ago.
1:14:46
Josh Waitzkin sort of comes out of his man cave and does an occasional interview with Tim Ferriss and then seems to go back.
1:14:53
And he used the phrase, he talked about unobstructed self-expression.
1:14:58
And that's related to this idea of playing the right game.
1:15:02
It's to know yourself well enough that you stick with the right games.
1:15:08
And then play them in a way that involves this kind of unobstructed self-expression.
1:15:15
So it embraces your own particular form of craziness, your own particular idiosyncratic talent.
1:15:20
And so, I was thinking of someone like Howard Marks the other day that...
1:15:24
There's an extraordinary insight that came from...
1:15:30
There was a quote where basically he said that when he was young and he was at high school and was doing an advanced accounting course in high school of all places, he said he loved the symmetry of accounting because there were these ways in which numbers were bouncing each other out.
1:15:46
And there's something kind of sensual about that. Right?
1:15:50
To harness that weird love of symmetry of numbers that you can't explain, that's powerful form of self-expression.
1:15:58
So part of his success is that you've got all of these contradictory paradoxical characteristics.
1:16:03
Like the intuition, the rationality, the love of numbers, the love of art, the love of writing, the love of teaching, the need for recognition of being a good human being who lives his life.
1:16:16
All of these idiosyncrasies in his personality and many more are coming together perfectly in this inimitable way.
1:16:24
And he's succeeded outlandishly partly through luck, partly through perseverance, partly through brilliance.
1:16:31
But the lesson for me is, I can't be him.
1:16:38
I need to learn from him.
1:16:40
But my particular form of craziness is so different.
1:16:45
I was thinking, again, it's sounds like an odd observation, but when I was picking my college to go to at Oxford when I was 17 and I was looking... Maybe 16.
1:16:56
And I was looking at the different names and reading about them, the reason I picked Oriel is partly because I really liked the word.
1:17:06
There was something about the shape of the O and then the R and the I and the E-L. And it's a window. And it was kind of soft.
1:17:15
And I never told anybody about this.
1:17:18
And then I was talking to my daughter about a while back who's very musical and very literary...
1:17:23
And she was like, "No, that totally makes sense."
1:17:26
And so, it's kind of logical that I would end up being a writer.
1:17:29
I'm the son of very literate people.
1:17:34
My mother writes and is a very good writer.
1:17:36
Both my kids are very good writers.
1:17:39
But my father used to sit around as a judge reading the Oxford English dictionary, and studying the etymology.
1:17:47
I was thinking, I'd listened to your podcast, you would ask people about ideas that you shouldn't set.
1:17:55
And I literally, I look up the etymology of the word and I'm like, "Well, that's interesting."
1:17:58
So in some way, I'm on deadline and I'm looking at the etymology of the word "insect," because I'm just like, "That's kind of cool."
1:18:10
So I'm having somehow to find a game that harnesses my own particular form of insanity, an idiosyncrasy and talent and the weirdness of my wiring.
1:18:23
And I've been reading that Miguel Crispa book that you and Tom Morgan have been discussing.
1:18:29
And when you read this stuff about the left brain and the right...
1:18:31
when you just realize just how extraordinarily esoteric and mysterious a lot of these wirings are.
1:18:42
But you realize just how idiosyncratic we each are, I think.
1:18:47
Jim O'Shaughnessy: Absolutely. William Green: Yeah.
1:18:49
So somehow to harness that idiosyncrasy, I think in a way that leads to unobstructed self-expression.
1:18:56
This all sounds so weird, but when I look at the great investors, that's what they're doing, I think. Jim O'Shaughnessy: Yeah.
1:19:04
And you know it's so funny, just listening to you, I just hear myself trying to explain things to people.
1:19:11
And I run into the same kind of...
1:19:13
William Green: I hope you do a better job.
1:19:14
I mostly confuse myself as I [crosstalk].
1:19:15
I'm like, "Does this make any sense?"
1:19:18
Jim O'Shaughnessy: You are doing a great job, William.
1:19:21
But this incessant worry that I have, that a lot of this stuff sounds just too woo-woo.
1:19:31
And so, I often will try to reframe things enough so that it sounds like it's more or less rational. And you lose something. Right? William Green: Yeah.
1:19:47
Jim O'Shaughnessy: And so, one time, I was talking to somebody, a young person and trying to make some points about...
1:19:53
I've never met anyone who was incredibly rich, whose goal in life was to be rich. Never.
1:20:00
I've never met a single person like that. I'm sure they exist. I'm sure they exist.
1:20:06
I just have the good fortune of never having met them.
1:20:10
The people that I've met, it was about obsession, it was about passion, it was a voracious desire to know a whole host of things. And it was [crosstalk].
1:20:18
William Green: I wouldn't entirely agree.
1:20:19
I think in the early days, for a lot of them, they wanted to get rich or they wanted to have tremendous independence.
1:20:25
And then I think once you start to make it, it changes. Jim O'Shaughnessy: Yeah.
1:20:29
But I would challenge you on one thing.
1:20:34
Independence and being rich, yes, one allows the other.
1:20:38
But a desire to be independent is quite different in my opinion than a desire to be rich. You see what I'm saying? William Green: Yeah.
1:20:48
And I think people like Manga or with Bill Akman, who I've interviewed a lot of these great investors, there was something about their personalities that resonates very deeply with me about this just intense desire to be independent.
1:21:02
Not to have anyone give you shit.
1:21:03
And I see that- Jim O'Shaughnessy: That, I 100% agree with. William Green: Yeah.
1:21:07
And that I think is one of the reasons why I connect so deeply with these investors.
1:21:11
Because that's a very powerful part of my personality.
1:21:13
I just lack the ability to make enormous amounts of money.
1:21:19
But at least I have that character trait that makes me obnoxious and social.
1:21:28
When you look at people like Mario Gabelli, for example, I think he wanted to make money.
1:21:34
I do think they wanted to make money.
1:21:36
But I think then, there was some aspect of someone like Mario Gabelli, who I don't know well, but I've interviewed over several hours over the years.
1:21:42
I haven't written about him much.
1:21:45
But I think there's something about the game that's utterly captivating for him.
1:21:51
And the chase of the information is utterly obsessive and all consuming.
1:21:57
So it becomes the game, not the desire to rich.
1:22:00
But I think it often starts with a desire for wealth. But it's complicated.
1:22:06
Because it's a desire for wealth, for recognition, for freedom, for less stress. It's also complicated.
1:22:13
But I do think there's some aspect of wanting money in the beginning. But it's inchoate.
1:22:21
It's sort of wrapped up with wanting freedom, independence, respect.
1:22:24
Jim O'Shaughnessy: Exactly. And...
1:22:27
William Green: [crosstalk].
1:22:28
Jim O'Shaughnessy: Right.
1:22:30
It's so funny because Robert Anton Wilson, who was way ahead of his time, was talking about how we moved from tribalism, which we still have, by the way, I'm sorry, Robert, you were wrong.
1:22:42
But to this, his point though, was elegant, because what he was saying is, in...
1:22:48
For most of human history, we had to be members of the tribe and we had this delicate dance that we had to do, which was stand out, but not too much. Right?
1:23:02
Because in those days of hunter gatherer, if you were exiled from the tribe, that's worse than death.
1:23:09
Because you know, you're going to die and you know that you're just crestfallen, with the actual...
1:23:18
This is a completely different topic, but they've tested, it's not just humans.
1:23:23
It's monkeys, it's ants, it's bees.
1:23:26
And if you check the various levels of the very chemicals that once a monkey wins the alpha position.
1:23:37
Literally he stands taller, his testicles descend. Huh.
1:23:42
And his eyes clear, I mean, "what?" - William Green: Wow. Wow. Jim O'Shaughnessy: ...
1:23:48
And, but the point is that- William Green: I checked my testicles right before this interview to see where that I was okay.
1:23:54
You know, I just- Jim O'Shaughnessy: Very Important. It's Very important. William Green: ... Yeah.
1:23:58
I remember once Tony Robbins saying that he showed how when you move your sternum, there's like a certain point where your mood changes depending on where your sternum is.
1:24:10
And so I tend to slouch the whole time, usually leaning back on my chair with my feet up on my desk. But yeah.
1:24:17
These physiological things are really interesting- Jim O'Shaughnessy: They really are. William Green: ...
1:24:19
Like how they affect your mood. Jim O'Shaughnessy: Yeah.
1:24:22
But so I'm just trying to wrap up the idea that I understand when you say they started out wanting money, but I think you're using money as a proxy. William Green: Yeah.
1:24:34
Jim O'Shaughnessy: Like for these other things. William Green: Yeah.
1:24:36
Jim O'Shaughnessy: And, and that's why I brought Wilson into it because he was brilliant in the way he presented that, he called them fun coupons.
1:24:43
And that, he said fun coupons changed civilization far more than like even agriculture because we essentially built a higher and higher symbol stack.
1:25:01
And one of the things that you must believe is that it all starts right there. Belief. Right?
1:25:08
And I was thinking, when you were talking about the two very different messages, so Lewis Carol was actually in his day job.
1:25:21
Charles Dodson was a well-respected magician and he wrote, by the way, if you read Alice In Wonderland, this is what I wrote by being a sincere business on.
1:25:32
Alice In wonderland is not a children's book- William Green: Oh Yeah, let's put it that way. Jim O'Shaughnessy: ...
1:25:38
But, but so under his actual name, Charles Dodson, he wrote a very short piece that is called what the tortoise said to Achilles and the "so what" of the piece, which I think is brilliant, and it's literally three pages long, but what it is, is he continues to make the point that every Axiom, right?
1:26:01
Well, how do we get this one?
1:26:03
Well, we got it from the one above. Okay. How do we get that one?
1:26:07
Oh, we got it from the one above.
1:26:08
And then essentially he makes the case that when you get to the very bottom, what do you find?
1:26:18
You find sand and a human being asserting. This is true.
1:26:26
So he makes the point very elegantly in a very short span of pages that even our most, what would be considered rigorous mathematical systems. start with that's true.
1:26:42
William Green: I have a strong feeling, I thought about this a lot, and I have a strong feeling there are certain things that are just revealed, and it's so antithetical to so much of what I write about in writing about the great rational thinkers in the world of investing.
1:27:04
But when I read something like Rav Ashlag for example, I mentioned before there's great calvis.
1:27:11
He'll literally say there's a book of his called the wisdom of truth that I've read multiple times.
1:27:19
And I think, I think it's in that book where he says, at one point I reveal one hair's breadth and I conceal two, and it's literally, he's been given permission to reveal certain secrets. And I kind of love that.
1:27:36
I think because I'm a writer, I love stories.
1:27:39
And I love the sense of mystery.
1:27:43
I love the fact that you can't explain everything rationally and- Jim O'Shaughnessy: Me too. William Green: ...
1:27:48
So the idea that there are certain things that are revealed or that the stories of great physicists discovering things in dreams, or I love the mystery of this.
1:28:00
And so I'm at some level, I'm at war with myself and I wish I could be more rational and a better thinking machine.
1:28:10
And at some level I read something like Rav Ashlag and I'm like, "no, this is revelation".
1:28:16
And look, I tell you one of the beautiful ideas that he teaches that's related to this idea of money.
1:28:21
And whether it's about starting off wanting the money or not one of these things.
1:28:25
And it's a while since I read this, I have to try to get it right.
1:28:28
One of the things he talks about is he basically says that all of us, we are born with what he calls the desire to receive for the self alone, which is basically the ego.
1:28:40
And so you look at babies, clutching their hands and crying and being like, "me, me, give it to me now".
1:28:45
And gradually over the course of our lifetime, the trajectory of our life is to try to transform that desire to receive for the self, learn into the desire to receive for the sake of sharing.
1:29:01
And so we still want to receive, we still want all those blessings, the beautiful family, the beautiful home, the freedom, the independence, the respect, all of these things.
1:29:13
But you want to share it, and so this is something I've heard you talk about in an episode with Tren Griffin, right?
1:29:21
Just this immense importance of giving and sharing, right?
1:29:24
But what Rav Ashlag says is that the ultimate level, he says, you go through this trajectory, right?
1:29:34
And so you start off and you're like, well, I want to transform my ego, my desire to self alone, because otherwise this isn't going to work out.
1:29:40
I'm going to get in trouble, I'm going to end up in jail, or people are going to hate me, or I'll end up in hell or whatever your fear of punishment is, my parents won't love me or whatever.
1:29:51
And then gradually you transform what it is that's motivating you, and he says that the highest level is what he calls lishmah.
1:30:00
And this is one of the Hebrew words that I have at the top of that piece of paper that I had written by a calligrapher on my wall here and lishmah basically and my Hebrew is terrible, so I'm totally wing it here.
1:30:14
It's basically the way Rav Ashlag describes it, it is to give pleasure to your creator and so the highest level is where you're not saying I'm not going to be punished or I'm going to do well because if I keep compounding Goodwill and I keep treating people well, as Robert Cialdini has taught me, there's a reciprocation principle at play and people are going to treat me well, because I treat them well and it's going to benefit me.
1:30:36
No, at a certain level, it's just, I'm going to do this because it gives pleasure to my creator and so I would've rebelled against this in the past, because I would've thought, wow, I don't know if there is a creator and I don't know and I would've tied myself up in these knots. But...
1:30:51
And I tie myself up less in those knots these days, because I just sort of define the creator in a different way.
1:30:57
I'm like, okay, so love mercy, kindness, compassion, all of these virtues.
1:31:02
That's more how I think of it.
1:31:05
But I think that idea is incredibly clarifying, that what you're really trying to do is give pleasure to your creator.
1:31:12
So then if you think, okay, so I've been given all of these talents, or these opportunities, or this particular family that I was born into, or this place that I was born into, or these opportunities to be on a podcast, or to write a book as you did, or to run a funders.
1:31:28
You have all of these things, how do I use those things in a way that gives pleasure to my creator?
1:31:35
And that totally changes everything.
1:31:37
So that to me, that changes everything because so then I'm thinking, and I'm not saying this in any sort of self-righteous way, because I still behave crappy at the whole time or at least 75% of the time.
1:31:51
But at least it gives you a sense of like, okay, so it can start when I want to make money, and I want to get fame, and I want my book to do well, or I want my fund to do well, or I want to make more money or get a bigger house.
1:32:03
You, you can look at that and say, well, because I have desire to receive for the self alone.
1:32:07
But I know that I need to get to a point where I transform that into the desire to receive for the sake of sharing.
1:32:13
And then I know that ultimately if I could get to a point where I'm just giving pleasure to my creator, that I'm not doing it so the world will think I'm smart, or successful, or rich, or powerful.
1:32:25
It's just, no, this is just between me and my life or whatever you think of it, me and my dead ancestor who I really admire.
1:32:33
I remember seeing Charlie Munger, someone saying to him, what would you say?
1:32:38
Who would you want to meet?
1:32:40
If you had a conversation with Ben Franklin, what would you talk about?
1:32:43
He said, "I've had my conversations with Ben Franklin, I don't need to meet him".
1:32:47
And so how you define who it is you give pleasure to is very personal, and idiosyncratic.
1:32:56
It's in a scorecard stuff, but I think that's what this is getting towards.
1:33:02
And so it starts with the desire to make lots of money and have people respect you and think you're something.
1:33:08
And then gradually I think when I look at the people I've written about the Munger's and the Howard Marks's, and the Buffets, they are thought, people like that, they're not the people who are just rapacious and are just brilliant at making money.
1:33:23
They're the people who've figured out actually more about how to live and they're sharing their insights in very interesting ways, and so I think they all kind of embody this idea.
1:33:34
The reason I end the book with Arnold van den Bergh is because basically he embodies this idea and I look at Arnold and I think, oh, he's transformed that his dad received for the self alone, into that desire received for the sake of sharing. It's all he does.
1:33:46
All he's doing is trying to help other people- Jim O'Shaughnessy: Yeah. William Green: ...
1:33:51
And so I'm not having to be a proselytizer in the book I'm concealing.
1:33:54
As Rav Ashlag was the doing, I reveal one hair's breath and conceal two, but really what that is, that story is about someone who's transformed his own ego, totally.
1:34:04
Jim O'Shaughnessy: Totally.
1:34:06
I had the great pleasure of not recording it as a podcast, but spending several hours on the phone with him after listening to his podcast with Bill Brewster- William Green: Oh Great. Yeah. Jim O'Shaughnessy: ...
1:34:18
And, and so I just kind of called him and said, "this is very rude of me, you don't know who I am, but I would love to talk to you".
1:34:26
And his secretary looked me up or assistant booked me up and there he was- William Green: Yeah. Jim O'Shaughnessy: ...
1:34:31
And he spent two hours on the phone with me. William Green: Amazing.
1:34:34
Jim O'Shaughnessy: He was just an amazing human being. William Green: Yeah. amazing human being. Jim O'Shaughnessy: Yeah.
1:34:38
And I think that Bill did a fantastic job with his interview of him. William Green: Yeah.
1:34:43
Jim O'Shaughnessy: Well, listen, this has been way too much fun, I love your notion about these are not...
1:34:53
And listeners, if you're taking away and Watchers, if you're taking away one thing from William, I think what you want to take away is, these aren't rules of investing, these are rules for life.
1:35:06
These are ways to learn how to live your life better, and why would you want to do that?
1:35:12
Well, it's pretty obvious, you we're here for a very brief time, some of us believe that we come back, some don't.
1:35:20
But I think it's best if the probabilities might suggest that this is not a dressed rehearsal, this is it.
1:35:27
And, and so- William Green: It's Funny, even that I think about that, I listen to your Tren Griffin interview and you, he was like, this is it, unless you're a Hindu or whatever.
1:35:37
And I'm like, my limits of what I really know and believe are so in enormous.
1:35:43
I kind of feel like we come back, the catalyst believe that, the Hindus believe that, the Buddhist believe that, a lot of the great stages that I revere- Jim O'Shaughnessy: Yeah. William Green: ...
1:35:52
Believe that- Jim O'Shaughnessy: Yeah. William Green: ...
1:35:54
But so even something as fundamental as that, the truth is I have nobody idea and- Jim O'Shaughnessy: Nor do I. William Green: ...
1:36:01
And there's something so wonderfully humbling and profound about that, that these very totally...
1:36:09
I mean, that's foundational, is this one time around? Or is this one of many?
1:36:15
That is such a foundational thing and we have no idea.
1:36:19
And once you start to realize that, then you want to tread a little more lightly, because you want to say, "the hell do I know?" .
1:36:26
And so if somebody else thinks something different just to be like, "I have no idea if I'm right or not".
1:36:34
I think I have a vague prejudice or a vague belief or a vague inclination or a vague sense that this, this kind of pattern recognition leads me to believe that this is more likely to be true than not. I don't really know.
1:36:47
And the fact that I've been wrong so often, I mean, I started off, I went to synagogue as a kid and got my gifts for my permits, for which was all I really cared about- Jim O'Shaughnessy: Yeah. William Green: ...
1:36:57
And I would sit in the synagogue, staring at the girls and thinking about soccer.
1:37:01
And then, I became kind of agnostic and refused to go home from boarding school for [inaudible] because I was like, I'm not doing it just to please my parents, and then I became some [inaudible], and then at the age of 40, I became increasingly spiritual and it's become a really central part of my life.
1:37:23
And so all that you know for sure is that I've been wrong because so I've occupied every single position.
1:37:30
So even something as profound and foundational as this discussion we're having about whether we're coming back or not, or whether this is the end or whether everything is from the light or is just random and chaotic, we don't really know.
1:37:47
And that's profoundly humbling. Jim O'Shaughnessy: Yeah.
1:37:52
You're absolutely right, and the more that you can- William Green: Probably not. Jim O'Shaughnessy: ... Can...
1:38:00
Well you're probably way off- William Green: Even the moment you say that, I'm like, "no, I don't think so".
1:38:07
Jim O'Shaughnessy: Well, as you know, we end this podcast with a word that you be the honor of looking up.
1:38:17
Where that is, we are going to wave a wand and make you the emperor of the world for the day.
1:38:22
You can't kill anyone, you can't put anyone in a camp, but what you can do is you can incept them, meaning you have a magic microphone that you speak words into, every human being on the planet, has it implanted in their brain.
1:38:39
They wake up the next day thinking they came up with the idea.
1:38:42
Notice how similar this is to what Lan Su says is a great leader?
1:38:48
What two things are you going to incept every- William Green: I understand. Jim O'Shaughnessy: ... Human?
1:38:53
William Green: Which as I looked up, if I understood this correctly, it basically means to take in, that's very common.
1:38:59
That's the Latin in origin.
1:39:01
Jim O'Shaughnessy: Right.
1:39:02
William Green: So, one idea that I would take in, which is totally not my own, which makes it more likely to be true.
1:39:11
It's from a teacher of mine who's not alive anymore, who was a great catalyst, who would say over and over again, "everything is consciousness".
1:39:21
And when you think about that idea, when it can mean pretty much anything, but that goes deep because you start to think, okay, if everything is consciousness, then I have some control of my own reality.
1:39:40
I'm creating my own reality by how I think and how I behave, how I view, what happens to me.
1:39:47
And so my view for what it's worth is not that there's some objective empirical reality out there.
1:39:55
That's going to be the same to me and to you and to everyone else, is that I'm creating or co-creating my reality based on how I view things, which is something that runs through stoicism, Buddhism and all of these other experiments- Jim O'Shaughnessy: It's everywhere. William Green: ...
1:40:09
And if that's the case, then you want to be working on your consciousness.
1:40:16
That's the playground in which you're operating through the course of your life.
1:40:20
And so you want to figure out ways to strengthen, and purify, and upgrade your consciousness.
1:40:28
And so things like meditation, prayer, exercise, charity, whatever it is, whatever your particular tool is, affirmations, they're all in different senses.
1:40:41
Ways to upgrade your consciousness and having to teacher, when Buffet talks about, hang out with people who are better than you are because you can't help, but improve.
1:40:59
Picking the right circle of people doing business with the right people.
1:41:09
What you read, who you study study from the past.
1:41:14
If I'm thinking about people like Rav Ashlag or this teacher of mine who said everything is consciousness, who basically...
1:41:23
Rav Ashlag's great student was Rav Brandwein.
1:41:25
Rav means teacher and Rav Brandwein's great student was Rav Berg and that's who I'm talking about.
1:41:30
So it comes from that lineage of great catalyst.
1:41:33
And so if I'm latching on in some sense in my mind to these extraordinary thinkers who were also kind of moral beacons in some way, that increases the chances that I'm going to live a good and decent life.
1:41:52
And so I think you can apply this idea in every area.
1:41:56
It runs through everything, right?
1:41:58
Are you going to go to Omaha to hang out with Warren and Charlie because they treat their investors like partners and they're honest about their mistakes? And they don't take...
1:42:10
What does Warren get paid to run this in enormous company?
1:42:13
Jim O'Shaughnessy: A 100 000. William Green: Yeah.
1:42:15
So they're going to treat you honorably.
1:42:17
They're not going to make money off you, but with you.
1:42:21
So, these are all ways actually of strengthening your consciousness, who you hang out with, what you think, how you speak to yourself, how you behave.
1:42:31
So, that I don't know if I've articulated that in a way that's helpful, but that to me, at least to know that's the game I'm playing and that it's not...
1:42:45
For example, I got in a kind of in an argument with a close friend of mine recently, like a business related argument that totally wasn't his fault.
1:42:55
It was someone he worked with and I'm really throughout that really unpleasant period that last it a few days.
1:43:05
I was thinking, okay, well, if I really believe that everything is from the light, but everything is from my benefit, how do I apply that?
1:43:13
And so it's kind of going crazy, and I was really irrational and emotional.
1:43:16
And I had have these infinite loops in my head, if I can't believe people would treat me this way and I did this and how come they don't value you go through all of those loops, but then I kept coming back to this idea of, okay, so how do I handle this in a way that doesn't create more separation, more fragmentation, more animosity.
1:43:35
And so I kept coming back to these lessons that I had learned over the years about how to behave and how not to create that kind of fragmentation.
1:43:42
And it really helped, and it worked out kind of beautifully, thank God.
1:43:48
And so Just to find these simple ideas, like knowing that your consciousness is going to change the situation, how the situation works out.
1:43:59
And if you think that there's something to be learned in it, and there's some responsibility, you need to take from it.
1:44:06
It's going to turn out differently, than if you think I can't believe the world.
1:44:10
Doesn't appreciate me, and everyone's out to get me and it's Darwinian and I better screw them before they screw me.
1:44:16
And so for me, all of this wisdom has become very practical.
1:44:23
It's like, I'm actually trying to apply these things to situations like that where I'm in a conflict.
1:44:29
And what's beautiful about it, is when you apply these ideas that are very repress that have worked for thousands of years, you find they actually work. You're like, oh, wow. Yeah.
1:44:41
If I try not to create separation and fragmentation, then I take control of my own consciousness, which is what the Stoics would do, right?
1:44:46
Like, like try to be an honorable person. It actually works.
1:44:51
And- Jim O'Shaughnessy: It does. William Green: ...
1:44:53
And it comes back to Munger, right?
1:44:54
Saying "I observe what works and doesn't work and why".
1:44:56
Jim O'Shaughnessy: It's fairly simple. William Green: Yeah. Jim O'Shaughnessy: ...
1:44:59
And that does not make it easy many times- William Green: Yeah. Jim O'Shaughnessy: ...
1:45:05
The simplest things, the truest things are the hardest for us to embrace and actually do.
1:45:13
You said something earlier that I just want to highlight because I loved that I heard it phrase that way, and you used the term co-creator.
1:45:24
You are the co-creator, you are not the creator.
1:45:29
And when its huge difference, and it speaks to the whole idea of Buffet and Munger treating their investors like partners.
1:45:39
The universe is here for us, I think, and every single person that I've read deeply on quantum physics, right?
1:45:51
They all embrace either Daoism or Buddhism.
1:45:54
And one of the first books I ever read was The Dancing Wu Li Masters about quantum physics.
1:45:59
But the fact is, there is...
1:46:02
And I don't even think this is subtle.
1:46:05
The idea of co-creator versus creator, that immediately helps you to make yourself not the star here. Right?
1:46:21
You're a co-creator, and if you're willing to say, I'm the co-creator, oh my God!
1:46:26
The universe will help you make so many things, but if you're going to be all proud about it and say, I did this, and I did that, and I'm not interested- William Green: Yeah. Jim O'Shaughnessy: ...
1:46:36
Nor is anyone else going to be, frankly- William Green: Yeah.
1:46:39
We are just ashes and dust, right?