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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 yet another Infinite Loops.
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Today I have on one of the more fascinating guys that I have been following and reading for a long time.
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It is Ben Hunt, the founder of Epsilon Theory, as well as the second foundation partners, Hari Seldon chops. I love Hari Seldon. I love [crosstalk].
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Ben Hunt: Thank you for noting it, Jim. Thank you for noticing. Thank you.
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Jim O'Shaughnessy: I'm a huge fan of Hari Seldon.
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You've got over 100,000 subscribers.
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Basically, what you're doing is you're trying to look at the market, but world as well, through the lens of game theory, history and narrative.
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You got some killer quotes, man.
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And before I get onto what I want you to do, and we discussed earlier, which is going to give you a platform to really make your case for why you're looking at things.
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I got to ask you, on Twitter, my most commonly seen Ben Hunt tweet is burn it the fuck down.
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Ben Hunt: Oh man, you caught me, Jim, you caught me.
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Yeah, I'm really trying to do it less. I really am.
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But shall I tell you about it? Do you want to? Jim O'Shaughnessy: Yeah. Yeah. I'm interested.
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And before you do, because what I think when I see that, I hear the old neural linguistic programmers guys, who in the '70s, so they swore all the time and they swore to do a hard reset.
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Because back in the '70s, people didn't swear in public. Most people. Right? Ben Hunt: It's true. Right. That's right.
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Jim O'Shaughnessy: And so, the leaders of this, who were very good at this would, right in the middle of a seminar with 200 people, say, somebody will ask innocuous question and they'll respond, "Fuck you."
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And it resets everybody, what they call a hard reset.
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Is that what you're up to?
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Ben Hunt: It's funny, I saw that notion of a hard reset about interjecting, with a slap of hands and a profanity, actually on the most recent episode of Billions.
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Jim O'Shaughnessy: Really?
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I stopped watching it, so tell me about it.
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Ben Hunt: Well, I honestly, I should stop watching it. I mean, honestly.
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I mean, I know compliment, I think he's a great guy and all, but that show jumped the shark a couple of seasons ago to be fair.
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But I still kind of watch it out habit.
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But yes, that was a plot device in the most recent episode.
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There is absolutely an element of that in how I use the term, because when I write it out, it's capital B, bird, period capital IT. Making it that...
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It absolutely has that element, and it was intended to shock.
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It was also intended my catch phrase.
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Because it's Twitter after all and you need a catch phrase, I guess.
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But my catch phrase prior to that was, they're not even pretending anymore.
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Jim O'Shaughnessy: I love that one by the way, but yeah.
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[crosstalk] Ben Hunt: And I need to go back to it.
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I adopted burn it the fuck down when Epstein died in custody because I was so angry, Jim, I didn't know how to process that event, except by wake the fuck up, people. Like that.
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And this is actually something interesting.
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It'll go in our larger conversation I think about metaverse and narratives. Jim O'Shaughnessy: Sure.
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Ben Hunt: I know you write a lot.
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You think a lot and so you're a creative.
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But there's an ego element to writing.
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I enjoyed the way it made me feel to use that language.
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Jim O'Shaughnessy: Cathartic, cathartic. Yeah.
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Ben Hunt: It was cathartic.
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I did get a positive response from it.
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And so, emboldens the wrong word.
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It reinforced in me to use that phrase frankly more than I should.
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It should not be a catchphrase.
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It should be, as you mentioned it earlier, that shock event, that clap that's used in those rarest of circumstances. I don't regret using it.
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I try not to use it anymore, except in those circumstances, when again, I'm really angry. Jim O'Shaughnessy: Sure.
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Ben Hunt: And I do think it requires that sort of invective that the modality of Twitter is actually pretty well suited for.
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Jim O'Shaughnessy: Oh, yeah. Ben Hunt: Yeah.
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I appreciate you bringing it up.
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That's the etymology of it.
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That's where it originated.
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It is designed to shock with that hand clap.
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As our world, we have more and more evidence of our world actually physically being burned down.
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Jim O'Shaughnessy: Right. Right.
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Ben Hunt: It's not a phrase that I use much anymore, and I want to reserve it for those times when the event deserves that sort of exclamation mark.
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Well, that's the full story. Jim O'Shaughnessy: Yeah.
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That's a good story actually.
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Another one I had was like, you have a PhD from Harvard.
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And so let's not get ourselves here.
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That a lot of people might find that very unapproachable.
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Like, "Ooh, he's a PhD from Harvard.
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He's not going to get what I say, or he's going to dismiss what I say.
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Or look down at his nose at me."
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And I know, from reading you for years, you're not that kind of guy.
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I definitely, I personally thought, "Ah, I like his reframing here," because frankly, it makes you very approachable.
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Ben Hunt: Well, thank you. Jim O'Shaughnessy: Yeah. Yeah.
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When you say things like that.
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I've used the technique, not with burn it the fuck down, but with the capital and period with each one.
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With the World Economic Forum, I think is run by lunatics.
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Ben Hunt: Yeah, without a doubt.
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Jim O'Shaughnessy: They have this, I've used it in, you know their gig, it's 2030, and you own nothing and you're happy.
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Oh, double plus good, guys. Double plus good.
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Ben Hunt: Yeah, right, right. It is that Orwellian.
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I knew Klaus Schwab back in the day.
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[crosstalk] I knew him when he starts... Yeah. Yeah.
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You want to hear that story?
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I mean, it's a great story. Jim O'Shaughnessy: Yeah. Yeah. Let's hear it.
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Ben Hunt: This goes back to my Harvard graduate school days.
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I'll start with my take on Harvard, and it is an old story.
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You've probably heard it before.
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But it's all about narratives and archetypes stories we tell each other over and over again.
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And so, this is the story of a kid from Alabama, me, going up to Harvard.
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And as the classic joke goes, the young kid from Alabama is walking through Harvard yard and marveling at everything.
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And he's looking around, he's trying to find the library.
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And so, he stops up a couple of other students that are there in the yard and says, "Excuse me, guys, but can you tell me where the library's at?"
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And so the leader of the group he's talking to, draws himself up in his full [Brahman-hood] and he goes, "My good fellow, here at Harvard, we simply do not end our sentences in a preposition." Jim O'Shaughnessy: Zoom. I love that joke.
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My daughter graduated from Yale and they tell the same joke about Yale.
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Ben Hunt: And of course they do.
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And of course, the punchline is, "Oh, well, can you tell me where the library is at, asshole?"
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Jim O'Shaughnessy: Asshole. Ben Hunt: Right.
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Jim O'Shaughnessy: I love it. Ben Hunt: Yeah.
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It's like that classic joke.
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And so that, I love that it set the stage of my experience with Harvard.
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That said the, getting my passport stamped, joining the academic church as a PhD from Harvard, it changed my life so much, clearly for the better, but it put me on the path where I can do what I'm doing today, for sure.
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That said, I've always had the entrepreneurial bug.
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I know you have too, Jim.
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And it's, if you have it, it is a bug.
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It's not a feature, it's a bug. We can't help ourselves.
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Jim O'Shaughnessy: Exactly.
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Ben Hunt: But find these entrepreneurial opportunities.
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And one of the opportunities was that Harvard has this saying in the budgeting process between the different schools of Harvard, which is every tub on its own bottom.
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And what that means is that each school, from the business school to the law school, to the college of arts and sciences they all have to essentially fund themselves.
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There is no common pot of money, that they're allocated.
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It lends itself to the very well healed schools, like the business school, being the haves in a school like the School of Education.
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And they have [crosstalk] Jim O'Shaughnessy: Right.
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Which has got a begging bowl. Ben Hunt: Absolutely. But here is the thing.
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What I noticed was that one of the big moneymakers for the business school is what they refer to as their executive education classes.
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Where you come up and you attend classes.
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You do a couple of cases for a few weeks, you get a certificate.
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They're not a degree granting program.
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They're a certificate granting program.
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But it's an enormous moneymaker for HBS and has been for decades.
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Just enormous moneymaker. I had the bright idea.
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I was like, "Well, you know what?
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I can do one of these executive education conferences. I can market it.
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I can hire the business school professors," which I did.
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I would hire them to come give a talk.
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And I'll have it sponsored by the School of Education.
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I'll split the revenue with them.
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I'll charge an arm and a leg to let's say CEO, senior management, people with a C in the title from, my focus was Southeast Asia, frankly.
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But yeah, they come over, they listen to a couple of HBS professors give their fun talks.
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I put them up at the Ritz, back when the Ritz was a nice hotel and in Boston.
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And I take them out to nice dinners and they get a certificate at the end that says Harvard University on it. And man, that worked.
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It was great for the School of Education. It was great for me.
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I started this company and I had a little office in Harvard Square and it all worked right.
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The brilliance of Klaus Schwab was he made his executive education program a club in and of itself.
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That was such a brilliant thing because what he figured out was, and I blatantly got to this, was that once they got the little certificate from Harvard, that wasn't enough.
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What they really wanted was to then have their reunion meetings.
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They wanted to be with other people who had that certificate from Harvard.
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That's what Klaus figured out.
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Jim O'Shaughnessy: Brilliant really.
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Ben Hunt: Klaus was about money from the word go.
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It's the phrase I like to use, I call them raccoons.
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Jim O'Shaughnessy: Yeah, I love it.
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I agree, he's a raccoon for sure.
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Ben Hunt: He's a raccoon.
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He's a raccoon from the word go.
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It was always about the money with Klaus, frankly like it was with me, when I started those programs.
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Ultimately, I got shut down because the business school got wind of me hiring the business school professors.
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They had a meeting, this is when Larry Summers was still there, if you're familiar with The Social Network, that movie.
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Jim O'Shaughnessy: Oh, very, very familiar, and Larry Summers too, but continue.
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Ben Hunt: Right, where the Winkle the Winklevoss twins have their meeting in Larry Summer's office?
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Well, the meeting in Larry Summer's office route for me was with the dean of the ed school and the dean of the business school, where the education school agreed to stop doing their executive education programs and, in exchange, the business school would give them a cut of money.
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That's how education works.
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It's all about the money, Jim.
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It's been about the money from the word go with Schwab and the World Economic Forum.
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It's all about the money.
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He just figured out this great gig. He's just a grift. I'll call it a grift.
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He's a grift from the word go.
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Jim O'Shaughnessy: Totally a grift.
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I'm sure I stole it from, but I always say, "Always ask yourself, why am I reading this now?"
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I know I stole it from you. I'm pretty sure.
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But I had also been saying, "Follow the money," because that's where you...
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Even really super smart people, I'll say, "Have you ever done a Google patent search on that and see whose name's attached to it?"
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Sometimes it drives me crazy when these really super smart people...
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Like, let me introduce you to this wonderful idea called a search engine that also has its own search engine for patents and- Ben Hunt: Absolutely, right?
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Jim O'Shaughnessy: It amazes me.
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Well, that's very interesting.
16:43
What I thought would be really great though, and we chatted about this beforehand, rather than starting with specifics, we'll cover those later, but I really wanted to give you a chance to, in line with your recent series, talk about your view and your take, the way
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you frame, the idea of the metaverse and the objectives, some good, some bad, of some very famous and powerful players and how that's going to affect mostly markets, but I'd also be interested in extending it a little to society as a whole. Are you good for that? Are you good for that? Are we good to do that?
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Ben Hunt: I am so good for that.
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Where I'd start, Jim, is that I've spent my adulthood, my professional career, trying to understand the power of words, of narratives.
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This was my PhD research.
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I wrote up a book, this was my academic career.
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It was focused on political science, not investing in markets, but it's all about how we, as a social animal, in the technical sense of the word, the E. O.
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Wilson sense of the word- Jim O'Shaughnessy: Yeah, we as domesticated primates, right? Ben Hunt: Yeah.
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Well, that's it, that technical sense of social animal, and the reason I mentioned E. O.
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Wilson, this amazing writer, is that his focus was on ants.
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Jim O'Shaughnessy: I know. Ben Hunt: Right? Jim O'Shaughnessy: Yeah.
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Ben Hunt: His larger point, or his larger interest, where he connected ants to human beings, was in this idea of us being technically a social animal.
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And by technically a social animal, there are these different characteristics, like multiple generations care for the brood in the nest.
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There are all these technical words that apply to insects, because most social animals are insects.
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The four social animals that we all know about and are the most common social animals are ants, bees, termites, and Homo sapiens. Jim O'Shaughnessy: Yeah. Ben Hunt: Yep, right?
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And it's not a coincidence that those four species are, I'd argue, certainly E. O.
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Wilson would argue, the most successful on earth. Right?
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Jim O'Shaughnessy: Absolutely.
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Ben Hunt: We are basically a giant termite with opposable thumbs, the ability to use fire and language, because that's the hallmark of a social animal in the technical sense of the word.
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It is intra-species communication.
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All four of those species, I just named, all four of them and us, we swim in an ocean of signals and communications from our own kind.
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For most of those insects I mentioned, it's chemical communications, it's pheromones and the like.
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For humans, it's language, it's words, but the impact, the way that we are evolved over millions of years, and socially trained over tens of thousands of years is identical.
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We respond to words in exactly the same way that a bee would respond to the pheromones of it's queen. Jim O'Shaughnessy: Yeah.
20:46
Sorry to interrupt, but that's Dawkins' original definition of memes, which has nothing to do with cute photos.
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It has to do with the fitness of a communication, usually in words. Right? Ben Hunt: Yep.
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Jim O'Shaughnessy: For example, I saw one of your quotes saying that St.
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Paul was communicating vis-à-vis the metaverse, and that really dovetailed very nicely with a concept that I had, which was, upon reading it, realizing that Saul, who became Paul, was literally the first memer in religion in that he had his precepts.
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I don't remember how many there were, 130 or something like that, but the fascination I had with Paul was he was the first person that I can find who was saying to everyone who would listen, "It doesn't matter where you were born, it doesn't matter what sex you are, it doesn't matter what color you are, it doesn't matter what tribe you're from, you don't have to worship your ancestral gods. This is the real God.
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Come on, we have room for everybody here." Ben Hunt: Yeah.
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What you just described is true for, I would say, I mean, the majority for others, but I'll say for all the great religions. Jim O'Shaughnessy: Yeah.
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Ben Hunt: There's a very, very conscious focus on the words, small "w" plural, and the Word with a capital W.
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that's the first line of the Book of John, God is the Word.
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Jim O'Shaughnessy: And the Word is good. And the word is God.
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Ben Hunt: The word is God, right?
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It's putting language at the center, that language is not just the means by which an idea is communicated.
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Yes, it's that and words themselves, the Word, is what makes us human.
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Jim O'Shaughnessy: Yeah, the limits of my language are the limits of my life. Wittgenstein, right? Ben Hunt: Exactly right. That's exactly it.
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So I've been immersed in this world of words and language and how they impact us, how we're hardwired to respond to words in language.
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And then, my research, both in political science and now in markets, has been in the ways in which, frankly, words in language are used against us.
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And I really mean that, against us, against all of us, our human interests, and in service to what I like to call is the nudging state, the nudging oligarchy, because that's how power is exercised today, I believe, the power of the state, the power of a giant corporation, for their own power interest.
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It's not a jackbooted thug stepping on your face, the image of 1984.
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Jim O'Shaughnessy: Yeah, it more Brave New world, right?
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Ben Hunt: It is absolutely more Brave New World, and if you want to make 1984 comparison, it's the use of language.
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Jim O'Shaughnessy: And that's why I said double-plus-good.
24:31
Ben Hunt: That's exactly right, because when you eliminate words, and that was the whole notion of [inaudible], language of 1984.
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The idea was to remove words from the language. To remove them.
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Jim O'Shaughnessy: Actually, again, my thought would be, the real goal was to remove the ability to think differently.
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Ben Hunt: That's my point.
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Jim O'Shaughnessy: Using words, right?
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Ben Hunt: That's right, Jim, because, to the point you're making about how language defies, if you don't have the words for something, you can't think it.
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Jim O'Shaughnessy: That's right.
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Ben Hunt: Man, that's control.
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Jim O'Shaughnessy: Total.
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Ben Hunt: The flip side is true as well, and this is the flip side of great philosophers and religious figures.
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If you introduce new words, you're able to think new thoughts, you're able to see the world in a profoundly different way.
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For example, the first revelation to Muhammad, by the Angel Gabriel, and in that theology, the Angel Gabriel came to Muhammad and the command was, "Read, for Allah is the Word."
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The Siddhartha, when he becomes the Buddha sitting under the Bodhi Tree, the phrase is, "Touch the earth," to link with what is real, to see the world again not as a progression of self, but as not self.
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Anyway, I can get all metaphysical with you as much as you like, Jim, but this is the point, that if you don't have the words for something, you can't think the thoughts for it.
26:25
That's the core of it, and if you don't think that Mark Zuckerberg gets that you're sadly mistaken. He absolutely gets that.
26:33
Jim O'Shaughnessy: Yes, he does.
26:35
Ben Hunt: So what I mean by the metaverse is not, "Oh, it's this virtual place where you have your little avatar and you go [inaudible].
26:43
No, what I believe is the metaverse is that world of language.
26:53
And language, it's both our superpower as humanity, because it does allow us to think new thoughts and create beauty and joy, and it's also our Achilles heel because we are hardwired to respond to language and words used in certain ways and I think that is intentionally being done by organizations of power for their own interests.
27:27
The cost we pay, Jim, at the end of the day is that I think we lose our autonomy of mind.
27:34
To your point, we lose the ability to think certain thoughts. Jim O'Shaughnessy: Yeah.
27:39
I once wrote that many think that language is for enlightenment, I often wonder whether it is not for confinement.
27:48
Ben Hunt: I think that, and this was the point of these articles I was trying to write here, it's both, Jim.
27:59
It's both, but what we are immersed in today is a world where everyone's figured this out, that, whether you're talking about markets or whether you're talking about politics or whether you're talking about any sort of social interaction, the story's the thing much more so than the reality, much more so than touching the earth.
28:26
It's, can I tell you a story and, if it's certainly long enough with the right words, will you believe it?
28:35
So that's what I do, Jim.
28:36
I try to understand what are the structures of these stories, these archetypes, I like to call them, because, an example I like to use is that TV show, Law & Order, over 600 episodes have been filmed.
28:54
There are only about a dozen basic scripts for Law & Order.
28:59
Jim O'Shaughnessy: Well, Joseph Campbell might argue there are maybe only about a dozen scripts for anything, right?
29:05
Ben Hunt: That's my point.
29:08
That's exactly my point, Jim.
29:09
It's a little bit more than a dozen, but there's a finite number of scripts.
29:13
Whether we're talking about investing, whether we're talking about our political lives, we tell the same stories ourselves over and over and over again.
29:24
What I really believe, Jim, is that there are two types of stories that have been adopted by, again, I call it the nudging state, the nudging oligarchy, big corporations, and these are the archetypes, the grammars, if you will, are stories of the other and stories of transactions, which we, again, are hardwired to respond to these stories.
29:57
But what it does, Jim, is that it crowds out the stories of Jesus and Muhammad and Buddha and every other great religious figure, and non-religious figure.
30:11
It crowds out the stories of a Socrates, an Aristotle, a Martin Luther and a Martin Luther King Jr.
30:20
It crowds those stories out.
30:21
And when I say crowded out, this is the hook of the story that I think got a lot of people are thinking, I don't just mean in an ethereal, nonphysical way.
30:34
My strong belief is that at the neuron level, in our brains, these stories of transactions and other, they rewire our neurons, that our neural clusters, the way we understand language, we, again, are hardwired to respond to certain grammars that's...
31:04
In this weird sense, what is the metaverse?
31:06
Well, the metaverse, I believe is as real as the macro verse, the world that you and I are sitting in.
31:12
It's as real as the micro verse, the world where viruses and microbes and bacteria live.
31:19
It's an invisible world, like the micro verse, but it's no less real for being invisible. What is it?
31:28
It is the quadrillions of human neurons across billions of human brains that are linked together by these linguistic structures, these grammars, these archetypes of story.
31:47
The story arc that we can talk about, the narrative archetypes we talk about, this is what drives how we think, and there is a real effort today to weaponize these grammars and these narrative structures.
32:10
The Facebook whistleblower, I'm blanking on her name right now, but she's talking about exactly this, where the content, I'll pick on Facebook for a while because they certainly deserve it, is designed to trigger those dopamine and norepinephrine receptors in our brains, and it was results in a reconfiguring of our brains at a neural level, which sounds crazy but is absolutely true.
32:40
Jim O'Shaughnessy: I don't think that sounds crazy at all, because this is one of my favorite areas of research and they absolutely change even the shape of our brain. Ben Hunt: Correct.
32:54
Jim O'Shaughnessy: And it isn't just words, though.
32:56
I guess if I was going to make a suggestion or offer another area that I think has a huge impact on us as a species is this idea of aggregate social evolution.
33:12
The guy who wrote the book The WEIRDest People in the World makes a really good case for that it isn't just language, although language is the most powerful because we've had it the longest, but it is also writing.
33:32
The book was a killer app, so to speak, because it allowed us to, in Wilson's words, time bind our ideas and thoughts, and we, you and I, could have a conversation with Aristotle even today. Ben Hunt: Correct.
33:48
Jim O'Shaughnessy: By reading his work.
33:52
One of the things that really made me interested in The WEIRDest People in the World was they actually showed that the brain scans of highly literate people, and then brain scans of people who are illiterate, our brains are formed differently.
34:11
Literally, the learning to read borrowed from the part of our brain that normally goes for facial recognition, which, in a tribe environment, that's pretty important, and so ours, yours, mine and anyone listening to this show, hopefully, we have different brain shapes than the person who has never been taught to read.
34:39
So I think that you're correct in the weaponizing of words and all of that, but haven't we been doing that a long time?
34:47
Ben Hunt: Well, we have, Jim.
34:49
I'll make one point though, that those changes in the morphology of our brains, it doesn't mean we're smarter.
34:58
Jim O'Shaughnessy: Mm-mm. Ben Hunt: At all.
35:00
Jim O'Shaughnessy: Oh, absolutely not.
35:02
Ben Hunt: What it means is that I think of language, frankly, you can think of it as a parasite.
35:09
It's like a virus, literally like a virus, or a symbiote maybe is the better way to describe it.
35:19
Jim O'Shaughnessy: See, the problem here, Ben, is you're hitting on, you're using all these words that I love and so you're making me think of all these things that are going to get me to interrupt you.
35:30
Ben Hunt: But this is the beauty of language, is it allows us to make new connections and to think, and thus the purpose of the use of words and language and grammatical structures by the nudging state and the nudging oligarchy is just the reverse.
35:47
The intention is to make us think fewer new thoughts.
35:53
The intention is to domesticate us, not through selective breeding, like we have with animals for tens of thousands of years, but through selective narratives.
36:04
And you're right, this has been an effort since people existed.
36:09
What's changed today though, Jim, and I want to hold it up so you can see is he's got a little portable dopamine machine.
36:15
Jim O'Shaughnessy: Yep, I got one here too. Ben Hunt: Right?
36:19
The smartphone, the devices that we are all, I mean this word literally, addicted to.
36:24
Jim O'Shaughnessy: Yep, so is mine.
36:27
Ben Hunt: Yep, we all have of them, and they are our windows onto the metaverse so that we are exposed to, and again I'm using that word deliberately, because it's like being exposed to a virus, we are exposed to these messages, these stories of transactions and stories of othering constantly.
36:54
So two big differences today then versus a hundred years ago, one, we are always plugged into the metaverse and the linguistic viruses that come out from the metaverse.
37:06
Again, I mean this in a physical sense.
37:09
It physically rewires our neurons.
37:12
The second is it's an intensive effort by big tech, big politics, big media to weaponize those viruses for maximum impact on our brain chemicals.
37:27
Jim O'Shaughnessy: Okay, so let me stop you there, because I have several questions.
37:32
The first book I ever read about memes was called Viruses of the Mind.
37:36
It was written by a Microsoft guy, I think, in the late '90s.
37:41
I became very interested in it because I thought, much like you think, that it was going to impact markets ultimately and impact them pretty seriously.
37:55
But one of the other things that always stops me somewhat is we're quants, we are entirely quants, so I want to be able to study something as far back in time at as possible.
38:07
I want to use base rates.
38:08
I want to do all of that kind of stuff.
38:11
One of the things that emerges from this research is that narrative follows price, not the other way around, at least in the market.
38:21
So price moves for, at the time, often reasons that no one knows about or understands.
38:30
I'll give you a great example.
38:34
As a quant, I don't care what names are in my portfolio.
38:37
I care about the underlying factors of those names but I don't care about the names.
38:44
And so in the early 2000s, are most aggressive growth strategy, which was a small cap, but also had a momentum factor, all of a sudden started buying a bunch of tiny steel companies.
38:57
And so I called my analysts in, we're looking at the screen, I'm like, anyone care to explain why we're buying these tiny steel companies?
39:09
Well, about six months later, right as one of the most prominent stories of the Wall Street Journal, China building the equivalent of one Boston every month, and what were they using to build those cities? Steel? Right.
39:25
So my point is we were buying those steel stocks because of price momentum, basically, and that they were cheap and the story didn't catch up for many, many months.
39:38
So how do you square that with the idea that perhaps the inverse, which is narrative causes price.
39:47
Ben Hunt: I'll tell you, Jim, both of those causal patterns exist.
40:00
Price action will always ultimately create a narrative.
40:06
An example I'll give you, let's say we're in earning season and, for whatever idiosyncratic reason, you've got...
40:16
I'll pick on the financial sector.
40:20
Two banks come out and they see there are disappointing earnings, what have you, and those stocks are down, whatever they're down that day.
40:30
And over the course of that week, the whole financial sector is down whatever that week.
40:37
What I promise you is that immediately at afterwards for a couple of sell-side reports, and then more generally as it spreads like a virus in other media channels, like The Journal or Bloomberg, what have you, is there will be a why.
41:01
We will have explained to us the reason why those stocks are down and why you should be bearish on that sector now, or why, "Ph, no, no, no, but we're still bullish because of X, Y, Z."
41:18
As a human animal, we are driven by the why.
41:24
It's not the fact, it's not the event, we must have a why for us to take action, for us to buy or to sell.
41:34
Jim O'Shaughnessy: I'm sorry, I got to stop you again. Ben Hunt: Yeah, go on.
41:38
Jim O'Shaughnessy: I have two areas that I think you might be interested in.
41:42
I'm reading a book about the scientific power of storytelling and essentially the author makes a very good case from looking at research that replicates that essentially all of us, me, you, everyone, we're all confabulating, unreliable narrators. Ben Hunt: Yes.
42:08
Jim O'Shaughnessy: They prove it pretty well, people who've had their brain split because of epilepsy.
42:17
Most people are left brained, verbal, or...
42:23
What do the kids call it now? The wordcel part.
42:27
And of course, the image side of the right hemisphere, very different, isn't language oriented, et cetera.
42:35
And one of the things they do is with the people who've actually had surgery to split their brain, to prevent all the horror of the epileptic fits, they'll show a card that says walk and, here's what just blows me away at least is, the person will get up and start to walk.
42:57
When queried the why, the confabulating, unreliable narrator makes up a story on the fly. Ben Hunt: On the fly. Absolutely.
43:09
Jim O'Shaughnessy: I'm walking because I want to get a Coke.
43:12
I'm walking because I need to use the restroom.
43:15
So one of the things I've been persecuting in the way I try to get people to think about things is you need to understand this.
43:25
You need to understand that you are, verses professor Feynman's fine advice, often and continually fooling just yourself.
43:37
Ben Hunt: But here, Jim, I'll give you another example that doesn't even rely on a study of cutting that corpus callosum, or whatever they do for the separating their brains.
43:47
This is a recent study that came out.
43:49
I mean, we will create a story of cause and effect, even when, the sensory perception to our eyes, it's reversed. Jim O'Shaughnessy: Yes.
44:01
Ben Hunt: We can't help ourselves.
44:04
We have to create causality and a story of causality. Jim O'Shaughnessy: Yes.
44:09
Ben Hunt: I'm going to bring it back to investing here though, Jim, because what we try to measure is then the creation of that story, post the whatever event occurred that created the story.
44:27
And so what we're tracking is not just the creation of the story, but then it's spread, what we call common knowledge, and what we mean by that basically is when that story, "Oh, here's what's going on with the banks," appears and in your Bloomberg morning email, that's when you need to fade the story.
44:50
Jim O'Shaughnessy: Yes, I agree.
44:51
Ben Hunt: So from an investing perspective, that's when you want to then buy the banks.
44:58
So you're absolutely right, that events create a story because we, as humans, create stories, the unreliable confabulation, as you say.
45:08
We will always create a story to explain what just happened. Jim O'Shaughnessy: Yep.
45:12
Ben Hunt: And then, when that story spreads, when everybody goes, "Oh yeah, that's what's happening," actually, that's the time you fade it because it's just made up.
45:18
It's a made up story that more likely has nothing to do with the reality.
45:23
I'm going to give you another example of the way this process can work as well, Jim, which starts with the story.
45:30
I'm going to use an example, not of some event shock that happens to companies or corporations, positive or negative, but I'm going to use the intentional effort to create a narrative like our central bankers have done.
45:48
They're very upfront about it, this is communication policy, this is forward guidance, this is all the phrases they use to describe it and it is intentionally the use of words to create a behavior where the words are not reflective of what a central banker actually thinks or believes, but the words are there to create that response in you. Jim O'Shaughnessy: Sure.
46:12
Ben Hunt: What we might call lying under other circumstances, but it's all right.
46:19
This is a situation, Jim, where the narrative comes first and then the price movement responds to that.
46:28
What you're describing is absolutely right.
46:31
Events occur in the world and then we make up stories to explain them.
46:35
Then what you want to do is you want to measure the spread of that story because you want to go the other way.
46:40
You want to fade the story.
46:43
And then there are other stories that are used intentionally so that are actually the spark or the driver of a direct implication.
46:52
Now here's the point, Jim, what I just described to you is what a good trader does every day.
47:02
Every day, they sit in front of a screen and they'll see a piece of news come across the screen.
47:07
And the question is, do I press it or do I fade it? Do I press it? Or do I fade it?
47:14
And that's what I think is the benefit of this highly systematic and methodological review understanding of narrative, where we actually measure what I call the n-grams, the units of grammatical meaning, to give you a sense, do I press the story or do I fade it?
47:34
That's what we do in our research, because what you're describing is absolutely right and we are hard wired to respond to it.
47:41
And it can work both for the story to create the behavior and the story to come as a reaction to price.
47:48
It goes back and forth because that's who we are as human animals.
47:52
Jim O'Shaughnessy: That's really interesting and it makes me think of two things, two questions.
47:57
Well, the first is more of an observation, and that is, I am endeavoring a new research project and I'm lucky in that I always assume the null hypothesis.
48:11
I always assume that I'm wrong. Just easier that way.
48:18
It centers around the use of machine learning and artificial intelligence.
48:23
I was having a conversation with, I would rank this person as one of the most gifted programmers in machine learning and theorists, and I asked him a question that he called me back like a week later, because he had to think about it.
48:41
I'm like, picking up on your theme, I said, "Do you think it's going to be difficult for the average investor, or even people who are sitting where I'm sitting on the asset management side, do you think it's going to be difficult for them to accept the results of machine learning that only say to them when, what, no why?"
49:12
He was caught for a moment, because he'd never thought about that.
49:17
He'd never thought about our base code DNA, which really cares about the why more than it cares about anything else, and it will invent all sorts of bullshit stories to describe the why.
49:36
That leads to my question and that is, aren't there large groups of people, well the traders that you cite, for example, who make their careers going against fading or pressing, right?
49:54
Ben Hunt: Mm-hmm (affirmative).
49:55
Jim O'Shaughnessy: I mean, there does seem to me, at least to the people I'm acquainted with, and good Lord knows I don't know all the people in the world, but I would certainly think that those are going to be the hard people to start referring to things as double-plus-good.
50:13
Ben Hunt: I think you're right, because what a good trader has figured out is how to maintain critical distance. Jim O'Shaughnessy: Yes.
50:21
Ben Hunt: That they don't take it into their hearts.
50:25
Now, when we do that as a society though, Jim, I think we lose a lot, because what we lose is any sort of trust we have in any of our leaders.
50:35
Now, frankly, my view is our leaders, and this is any on the spectrum, they've done nothing to gain our trust and they've done everything to abuse our trust.
50:47
I'm not saying at all, "Oh, we need to trust the people."
50:52
No, they've done nothing but abuse our trust.
50:55
The reason I think they've abused our trust so egregiously is that they've all gotten in on the idea that, "Oh, if I can just nudge you, if I can just use the right words, I can make you do what I want."
51:11
That's not how it freaking works, Jim.
51:13
That is so not how it works.
51:16
It's a child's version of what they think nudging and the like works, but everybody is trying to do it, CEOs.
51:27
This is what it means to be a successful CEO today.
51:30
It's not operational efficiency; it's narrative efficiency.
51:32
Can I create a good story that drives a better multiple? It's crazy, man.
51:38
Jim O'Shaughnessy: Question. Ben Hunt: Yeah.
51:42
Jim O'Shaughnessy: I accept the premise that we are narrative-based creatures.
51:48
I accept the premise that why, I have certainly been on the record, I try to avoid politics publicly like it's the plague, because it kind of is.
52:00
It's an emotional plague of people's minds being abused by these people.
52:06
I am on record as saying we have the worst political class in the history of this country and I think the pandemic, if it taught us anything, taught us that it ain't just us. It is worldwide. Ben Hunt: It's global.
52:20
Jim O'Shaughnessy: The political class, to use your term, has turned into a bunch of grifting raccoons who are trying to suck as much money and as much power out of the system as possible and, well, it seems to me we have a choice here.
52:45
Are we going to let them do this or are we going to have the moment where the little girl says, "The Emperor has no clothes on?" Ben Hunt: Yeah.
52:56
That's what I tried to wrap up this three note series with, what do we do about it?
53:02
What do we do about this, Jim?
53:04
I will tell you, I don't think that, I'll call it, a top-down approach really works here.
53:11
Jim O'Shaughnessy: It's a complex, adaptive system them, and if you knew anything about complex, adaptive systems, all emergence comes from below.
53:22
Ben Hunt: It comes from below.
53:24
Jim O'Shaughnessy: That's why all the command from the top economies collapse, because they had to. Ben Hunt: Yep.
53:30
So in my view, Jim, here's what the answer is not.
53:35
The answer is not a new political party that some billionaire creates.
53:42
That is not the answer, but the same token, the answer is not within one of the existing political parties either.
53:48
Jim O'Shaughnessy: I agree.
53:49
Ben Hunt: That's not where this can happen.
53:53
Would it be helpful to do antitrust and break up Facebook into component parts, and Google? I think it would.
54:06
I think it would be helpful on the margins, I actually really do, but that's not my focus.
54:11
My focus is, well, what if anything is to be done from the bottom-up?
54:18
Jim O'Shaughnessy: Right.
54:20
Ben Hunt: Where I come back to, Jim, is that notion that what we are being immersed in and what is literally making us sick, what is literally domesticating us, what is literally changing the thoughts we are able to think, is the inundation we have with these messages and stories of transactions where everything is a transaction and the stories of othering.
54:58
And the stories of othering, I think there are a couple of types within each of these narrative grammars.
55:03
It really is a linguistic study.
55:05
They're different languages.
55:07
There's the language of, I'll call them, tribal grammars. One is othering.
55:13
Here's the other, you must hate them. We're not Americans.
55:18
We are either red or blue.
55:20
And the other side is the evil.
55:23
There's also tribal narratives in the sense of asking you to look at the crowd and what drives, again, there is hardwiring to respond to the crowd seeing the crowd, what's common knowledge.
55:40
We write a lot about that.
55:41
So I think that one thing we can do, and it's using the technology we have available in the same way that Martin Luther used the printing press, the technology was available to him to create his reformation.
55:58
Remember what was at the core of Martin Luther in the reformation, it was two things.
56:06
One was, we're sick and tired of...
56:10
Jim O'Shaughnessy: Indulgences.
56:11
Ben Hunt: Indulgences, transactions, where you can buy your way into heaven.
56:16
That was one, transaction narratives.
56:18
The other was, again, someone telling you how to think about the world.
56:25
The truth of salvation in Martin Luther's case was then told to you by the priestly caste but you couldn't figure it out yourself.
56:34
You had to be told how to think about your life.
56:41
The printing press helped Martin Luther enormously.
56:44
I think there are technologies that can help us enormously for our secular version of this.
56:49
What I mean by that is, and this is the big project I want to have in mind, I call it a Narrative Early Warning System, NEWS.
56:57
It's a browser app that identifies in real time the linguistic structures of those transactional narratives, of those tribal narratives, so that when you're reading that Buzzfeed article online or you're reading the Facebook posts from MACCA-Central, it'll just highlight for you, "Hey, you know what?
57:26
What you're reading right now is a transactional narrative."
57:29
Jim O'Shaughnessy: Are you actually developing that app?
57:32
Ben Hunt: Yeah, I'm actually developing that right now.
57:35
Jim O'Shaughnessy: Okay, that seems very cool to me.
57:38
I certainly don't think we differ on the hopes of this nudging class.
57:51
I personally probably have a lot more faith in what's emerging now in terms of the largest variance amplifier that the world has ever seen, the internet, and the ability of people of talent to use it as a lever, Archimedes-like. I'm not all positive. It's good.
58:16
I think we're moving from a world that was designed by institutions for the 68% in the middle of the bell curve and I think we're moving to a Mandelbrot, chaotic distribution pattern where the middle is very peaky and the tails are very long.
58:37
I think a lot of great things are going to happen to people on the right side of the tail.
58:42
I'm not worried about them.
58:43
It's the people on the left side of the tail that I'm worried about and that I think we collectively need to think a lot about, because it's also the first time in history, and it's best as I can tell, and I love history and I've read a lot of it.
59:01
It seems to me that this is the first time in history where people, and I'll use your dot, through no fault of their own, are going to not be able to make use of this new variance maximizing machine adequately.
59:31
I very much believe that...
59:35
I completely concur with your, the nudging state, the nudging oligarchs, the nudging CEOs.
59:42
The only thing I might say is, well fuck, they've always been that way.
59:48
Edward Bernays, fucker kid number one, the way he got women to smoke was calling them torches of liberty.
59:58
You can't make this shit up.
1:00:01
Ben Hunt: The difference today though, Jim, is that there's no exit, to use a Sartre play. There's no exit.
1:00:12
I can't give up my smartphone. I can't give it up.
1:00:15
I tell myself, "No, I have to have," but it's, I'm addicted to it.
1:00:25
There isn't up-and-to-the-right-arrow for technology, so we can't uninvent a smartphone.
1:00:33
What I'm describing is that we have to find a way, I think of.
1:00:37
Jim O'Shaughnessy: Counter measures. Ben Hunt: What's that?
1:00:41
Jim O'Shaughnessy: Counter measures.
1:00:43
You are trying to- Ben Hunt: Yes.
1:00:45
I'm trying to do two things.
1:00:46
I'm trying to, you do things, Jim.
1:00:47
One is the counter measure.
1:00:50
The other, this is going to sound weird but I'm going to say it anyway, is to be like the Irish monks in the dark ages.
1:00:59
Jim O'Shaughnessy: Have you seen the book How the Irish Saved Civilization?
1:01:05
Ben Hunt: Yeah, this is what I'm talking about, and it's true.
1:01:10
When the world collapsed, those men, we're talking about monks in a monastery, wrote down all the old stories, all the old books, and preserved them for a time when they could be available for everyone.
1:01:34
That's the other big project I have in mind, Jim.
1:01:36
I think that what we have today is a world where the universal stories of empathy, of love, of sacrifice, of self-reflection and self-knowledge, I think those stories are being either directly pushed out, say in a Chinese state regime, where you can't read
1:02:11
certain things and these small-L liberal words of wisdom are not available to you, but they're also not available because I think they're also crowded out and pushed aside by, I'll pick on Disney narratives, narratives of transaction and tribalism. So the other project I have in mind, Jim, is that to make these texts and these stories,
1:02:31
So the other project I have in mind, Jim, is that to make these texts and these stories, A, inviolable, put them in a blockchain, create a protocol where they can be archived.
1:02:51
It's an ark, an ark for stories.
1:02:53
Jim O'Shaughnessy: I love it.
1:02:55
Ben Hunt: But here's the flip side of that coin, Jim, I also want it to be able so that we can also communicate those stories, so that you can have a device that is not being able to be jammed or blocked by a great internet wall, like in China, or by a great transactional capitalist wall, like we have here, not a hard wall for your access to the texts that make us human.
1:03:34
That's the counter measure that I think can really change things, Jim, because it is our birthright as human beings to have access to all of these universal stories, many of them found in great religious text, but also found in great secular text too.
1:03:51
It's not trying to say this one's good or bad, but it's saying this is what makes us human and they must be, A, preserved and, B, available to all.
1:04:03
I think that's the antidote.
1:04:04
Jim O'Shaughnessy: I fucking love that.
1:04:08
That's one of my missions too, really, is to show people there are lots of different ways and lots of different things that you should experiment with that you should read, you really need to read, and so I understand that I am fighting a Sisyphus battle here, but wasn't it Camus who said, "Imagine Sisyphus happy?"
1:04:33
Ben Hunt: Yeah, "You must imagine Sisyphus happy."
1:04:38
Jim O'Shaughnessy: Well, because the point there was, we are larger than transactions, we need purpose that's right for us.
1:04:49
We need purpose and those stories lead us, sometimes haltingly, but many times rapidly into understanding, and I'm sure that it's apocryphal because we say that Mark Twain said everything, or him or us for well.
1:05:06
I remember it as a Twain quote, he said, "The two most important days in your life are when you are born and the day you figure out why." Ben Hunt: It's the why. Jim O'Shaughnessy: Yeah.
1:05:23
Ben Hunt: It's all about the why, Jim. Jim O'Shaughnessy: Yeah.
1:05:27
And Ben, what you're saying is, the second project, the first project sounds like a pretty neat investing app.
1:05:34
Ben Hunt: Mm-hmm (affirmative).
1:05:36
Jim O'Shaughnessy: The second one though, that would be the one I'd be more interested in it.
1:05:42
Now I'm going to ask you why.
1:05:47
How are you going to make that available to everybody?
1:05:52
Ben Hunt: I don't know, Jim.
1:05:58
Jim O'Shaughnessy: That's okay. Ben Hunt: I don't know.
1:06:00
Jim O'Shaughnessy: That doesn't disqualify.
1:06:01
Ben Hunt: I know parts of it.
1:06:03
I know what needs to happen.
1:06:05
In a few weeks we'll be announcing a large gift by family, a pack member, as we call them here at Epsilon Theory, to a large research university to set up a research center for narratives.
1:06:23
Jim O'Shaughnessy: Oh, that's great.
1:06:24
Ben Hunt: And as part of that, I really want to pursue these two projects I mentioned, the idea of narrative early warning system, an app that can actually alert you, say, "Hey, you're reading something...
1:06:35
By the way, your brain is being stimulated right now to- Jim O'Shaughnessy: They is fucking with your head. Ben Hunt: They are.
1:06:44
That's right, and seeing becomes believing because otherwise it's the water in which we swim, Jim, we don't ever see it. It doesn't register.
1:06:51
That's project number one.
1:06:55
Project number two is, I'm good at acronyms, so the acronym is NOAH.
1:07:02
It's a Narrative Omni Archive for Humanity.
1:07:06
And the first step is to literally collect all the stories, those finite number of stories that we have in humanity, collect them all. Jim O'Shaughnessy: Yeah.
1:07:16
Ben Hunt: Now it's the technology we have, this natural language processing, we can see the connections between all those stories is what makes us human.
1:07:26
And then the next step, we'll slab it.
1:07:29
We want to design a blockchain protocol so that they are inviolable.
1:07:35
It really is an ark of stories, not an arc of animals or the arc of seeds, like they have up in Iceland somewhere, but an arc of stories.
1:07:45
Then it's the big task, how do we make those stories available to every human in the world, as their birthright.
1:07:55
Jim O'Shaughnessy: I love it.
1:07:57
Ben Hunt: Is it a device that can't be jammed by control of the...
1:08:06
That's what I don't have the answer for, but by God, that's what I'm playing for. That's the purpose.
1:08:13
Jim O'Shaughnessy: Listen, Ben, I love that. I absolutely love that.
1:08:15
And as you move closer and closer, please keep me in mind.
1:08:21
I would be delighted to be involved in something like that.
1:08:25
Ben Hunt: You got it, Jim.
1:08:26
Jim O'Shaughnessy: Especially the ability to make it ubiquitous and worldwide, and that can't be stopped. I love that.
1:08:36
Ben Hunt: Exactly, it can't be stopped by either like the Chinese government, and it also can't be stopped by Disney.
1:08:45
Jim O'Shaughnessy: Well that's absolutely... That's a very...
1:08:52
I know I'm going to piss off some of my listeners here, but Disney butchers pretty badly in many respects.
1:09:01
These are classic fairy tales, originally, and it's gotten worse with, as we come closer and closer to where we live now, if you watch old Disney stuff, it was not word for word, but it was pretty close to the original fairy tale that they were recreating.
1:09:25
And the reason that Disney is a good company to use is because they're there ostensibly to entertain. Ben Hunt: Yeah.
1:09:41
They've domesticated the stories, Jim.
1:09:43
Say you read some of the old Brothers Grimm stories, those aren't kids stories.
1:09:53
Those are cautionary tales.
1:09:54
Jim O'Shaughnessy: Oh yeah.
1:09:56
I was just reading a piece this Sunday about Irish fairy tales. They ain't fairy tales. Ben Hunt: No.
1:10:06
But I get it and I don't begrudge Disney doing what Disney does.
1:10:11
What I'm saying is, there needs to be an alternative.
1:10:13
Jim O'Shaughnessy: Right.
1:10:14
And I should insert here, I do not either. I do not [crosstalk].
1:10:19
Ben Hunt: I know you don't. Jim O'Shaughnessy: Yeah. Ben Hunt: Exactly.
1:10:23
No, I think they're brilliant at what they do.
1:10:24
We need to be equally brilliant though at preserving our humanity, which is a physical metaverse.
1:10:32
It's just invisible, we can't see it, but it's all of these quadrillions of nerve cells, the neurons that we have across billions of brains.
1:10:41
And just because it's organized in this networked way that we can't see, like I can see you and you can see me, doesn't make it any less real, any less biological, and I think once we recognize that we get on such a better foundation to do all sorts of cool things, Jim.
1:11:03
Jim O'Shaughnessy: I think Ben, this is awesome.
1:11:05
I think that you're absolutely right.
1:11:09
People who are what I would call 100% materialists, if they can't see it and refute it thus, like Samuel Johnson tried to, they're just getting in the way, because if I gave you some infrared glasses, "Oh my God.
1:11:23
Look at all these light spectrums that I didn't know I was surrounded by." Ben Hunt: Exactly, Jim.
1:11:29
Jim O'Shaughnessy: It is the world of the interconnectedness. I love that.
1:11:34
I've been studying that forever.
1:11:38
I want to get involved on that second part because it's such a thumb in their eye that I love it. Ben Hunt: That's right. Jim O'Shaughnessy: Yeah.
1:11:46
It's just like, "You know what? You, fuck you. Fuck off.
1:11:49
Go away," to the raccoons. Ben Hunt: Yeah.
1:11:51
Jim, this has been the greatest thing for me, the most personally gratifying thing for me in writing Epsilon Theory and then having tens of thousands of people all over of the world who come together around this. We're not alone. Jim O'Shaughnessy: Yeah.
1:12:10
Ben Hunt: We're not alone, Jim, I got to tell you, when I started Epsilon Theory, I was feeling pretty darn alone because these aren't things that it's easy to talk about with the person maybe in a cubicle next to you or what have you.
1:12:27
But there are so many of us, Jim, who want to put that thumb in the eye of the nudging state, the nudging oligarchy, not just for the point of burning it the fuck down, not just for the point of sticking a thumb in someone's eye, but for the point of preserving and building our humanity.
1:12:51
Jim O'Shaughnessy: Listen, I love that.
1:12:55
I'm sure that I have many disagreements on the sub-levels, but that's okay. Ben Hunt: That's okay.
1:13:02
Jim O'Shaughnessy: If we're up here at...
1:13:05
I was thinking, because one of the quotes that I loved that, if we had more time, I was going to read to you because it was so great was, I'm going to read it to you anyway, "The US treasury is the Eye of Sauron," not from Tolkien, "A gigantic panopticon that sweeps the world with its unblinking gaze." I love that.
1:13:31
Ben Hunt: And it has the advantage of being true.
1:13:34
That is what the treasury is.
1:13:36
Jim O'Shaughnessy: Of course, it is.
1:13:39
I used to have a very young physical therapist and he had been educated just in that.
1:13:49
So history, all of that, he hadn't taken many of those classes and so he would be there working on me for like two hours.
1:13:58
I'm Irish, so I can't shut up, and so I'm talking to him and he asked me a question and I'm like, "Oh, you need the progress, if you will, of humanity."
1:14:13
What it became was explaining to him how the original gangsters were the Romans.
1:14:22
The Pax Romana, there was a reason why there was peace, because they were nasty motherfuckers to anyone who killed a Roman citizen.
1:14:34
They would march to that town, they would find his relatives, they would kill them, they would hang them from the trees, they would burn his house and his farms to the ground, and they would salt the ground so it would never grow again.
1:14:50
And I said, we told the story all the way up to, who is the current OG? Well, America is. Ben Hunt: Yeah.
1:15:03
There's so much there because... But you're right.
1:15:05
I mean, our word decimate, because it was not just that.
1:15:08
That was the punishment for their own allegiance, 1 out of every 10 men was executed.
1:15:14
If you disobeyed or did something wrong, that's decimation, 1 out of every 10 was killed. Jim O'Shaughnessy: Yeah.
1:15:22
Ben Hunt: These are also part of the old stories, Jim, and this is part of the human condition and what we have to acknowledge about ourselves.
1:15:38
But I think it's only by that our better angels can emerge.
1:15:46
That's what this is all about.
1:15:48
You know, John, I want to raise one more thing because you mentioned this earlier about disagreeing on different aspects of all this, thank God that we disagree, but here's how we can disagree, Jim, because I know that when I disagree with you, you disagree with me, we're approaching these questions with a full heart.
1:16:16
Jim O'Shaughnessy: Right. Sure. Ben Hunt: We're not...
1:16:19
Jim O'Shaughnessy: We have no agenda.
1:16:23
We're not trying to monetize them. Ben Hunt: Exactly.
1:16:26
It's not a transaction, Jim.
1:16:28
We're not treating each other as a means to some end.
1:16:32
Jim O'Shaughnessy: Right.
1:16:34
Ben Hunt: We're treating each other as autonomous human beings with the ability to think for ourselves and to differ and disagree on.
1:16:45
And we may disagree on a lot of things. Right?
1:16:48
Jim O'Shaughnessy: Absolutely.
1:16:49
Ben Hunt: And very vehemently. Jim O'Shaughnessy: Sure.
1:16:51
Ben Hunt: But it's okay, and that's the phrase.
1:16:56
When we talk about the old stories I can see old folkies, like you and I are, we're old guys, we don't want to be these grumpy grandpas, "Ugh, you know [inaudible]..."
1:17:07
Jim O'Shaughnessy: Back in my day...
1:17:12
Ben Hunt: "Read your [inaudible], young man," but what I'm talking about is the old stories you can hear in Friday Night Lights, which is a great book and a great TV series.
1:17:27
What is the catch phrase there? Clear eyes, full hearts. Can't lose.
1:17:31
Jim O'Shaughnessy: Can't lose.
1:17:32
Ben Hunt: That's what we're talking about.
1:17:33
Clear eyes see the world as it is.
1:17:36
Full hearts treat others as you would have them treat you. And we can't lose. We can't lose, Jim.
1:17:43
Jim O'Shaughnessy: I'm going to have you back on because I think we have another podcast length conversation that you've jogged in my mind.
1:17:54
Unfortunately I have to go, but this one is going to actually be super fun for me because, at the end of every podcast, I ask my guest, I'm going to make you the emperor of the world for one day, you can't kill anyone, you can't put anyone in a reeducation camp, but you can...
1:18:15
You've seen the movie Inception, yeah? Ben Hunt: Yeah.
1:18:18
Jim O'Shaughnessy: Okay, so what you can do is I'm going to hand you a magical microphone and you can speak into that microphone and the entire population of the world is going to be incepted with the two things you say into that microphone.
1:18:36
The next day, they're going to wake up, they're going to think they thought of it themselves and they're going to pursue it with vigor.
1:18:43
What are the two things that you're going to give me?
1:18:50
Ben Hunt: First thing is going to be, read. Jim O'Shaughnessy: Oh.
1:18:56
Ben Hunt: Same command the angel Gabriel gave to Muhammad. Jim O'Shaughnessy: Yep.
1:19:00
Ben Hunt: And the second's going to be, touch the earth.
1:19:02
Jim O'Shaughnessy: I love that. That's fantastic.
1:19:04
Ben Hunt: Which is the secret of the Buddha, to understand how to move forward in this crazy world, read, touch the earth.
1:19:14
Jim O'Shaughnessy: I love it. Those are both perfect.
1:19:18
Well, Ben, thank you so much for your time.
1:19:23
I will invite you back after I've digested all of this stuff.
1:19:26
Ben Hunt: Fantastic, Jim. Thanks for having me.
1:19:28
Jim O'Shaughnessy: Thanks for coming. Cheers, Ben.