0:00
Hi, I'm Jim O'Shaughnessy and welcome to Infinite Loops.
Search this video
0:29
Sometimes we get caught up in what feel like infinite loops when trying to figure things out.
0:34
Markets go up and down, research is presented and then refuted, and we find ourselves right back where we started.
0:41
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.
0:59
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.
1:16
And through these discussions help you not only become a better investor, but also become a more nuanced thinker.
1:23
With each episode we hope to bring you along with us as we learn together.
1:28
Thanks for joining us, now please enjoy this episode of Infinite Loops.
1:34
Disclaimer: Jim O'Shaughnessy is chairman and Co-Chief Investment Officer of O'Shaughnessy Asset Management, where Jamie Catherwood is an associate.
1:42
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.
1:50
This podcast is for informational purposes only, and should not be relied upon as a basis for investment decisions.
1:56
Clients of O'Shaughnessy Asset Management may maintain positions in the securities discussed in this podcast.
2:01
Jim O'Shaughnessy: Well, hello everyone.
2:06
It's Jim O'Shaughnessy with yet another Infinite Loops, and today, I have a person, a personage, a very famous person in Canada.
2:17
That's like being famous in Minnesota, right, Dave?
2:19
Dave Chilton: It's very similar.
2:20
I have to agree with you.
2:22
In fact, Minnesota's very similar to Canada, to be honest.
2:24
Jim O'Shaughnessy: Well, I'm going to tell that story in a minute, but ...
2:27
So Dave has been a friend for 26 years.
2:32
He is the original gangster of personal finance books, writing The Wealthy Barber in 1989, when you were like 20-whatever? Dave Chilton: Yeah. Very young.
2:43
Jim O'Shaughnessy: And also a TV star on Canada's version of, what's the name of the show here?
2:52
It's Dragons' Den up there.
2:53
Dave Chilton: Shark Tank.
2:54
Jim O'Shaughnessy: Shark Tank. That's it.
2:56
Dave Chilton: Shark Tank in the States, and you guys stole it from us and you took Mr.
2:57
Wonderful and Robert Herjavec and brought them south of the border, and it's been a huge hit on both sides.
3:03
Jim O'Shaughnessy: We do that shit all the time, man.
3:06
We took Jim Carrey from you. Dave Chilton: You did.
3:08
Jim O'Shaughnessy: We took Second City.
3:10
Dave Chilton: Celine Dion. You took Celine Dion.
3:12
Jim O'Shaughnessy: Celine Dion. Dave Chilton: Yes.
3:14
Jim O'Shaughnessy: It's like, so many very, very famous Americans are actually Canadians.
3:17
Dave Chilton: Well, a lot of the Saturday Live people over the years.
3:20
Jim O'Shaughnessy: No, I know. I know. It's amazing. Dave Chilton: Yeah. It's amazing. They're Canadians.
3:26
Jim O'Shaughnessy: It's amazing, so- Dave Chilton: Well, we're all so funny.
3:28
We're all very funny and very charming people. All 37 million of us.
3:30
Well, actually, there's about seven or eight that aren't. Jim O'Shaughnessy: Yeah.
3:33
Dave Chilton: So 36,999,994 are very solid people.
3:38
Jim O'Shaughnessy: I know that now, because I've met those seven.
3:41
Dave Chilton: What a coincidence.
3:43
Jim O'Shaughnessy: So Dave, I'm going to let him tell the story, because he's a better storyteller than I am, but I've known Dave, like I said, 26, 27 years.
3:55
And it was through just a cold call that Dave made to me, which resulted in a fantastic partnership with the Royal Bank of Canada, with getting to know Dave as a good friend, as he worked with us for a while, but welcome first of all.
4:12
And then, let's talk a little bit, because we'll get into The Wealthy Barber yet.
4:16
I reread parts of it and it's still fresh. Dave Chilton: Yeah. Thank you.
4:20
Jim O'Shaughnessy: Let's talk about how we met.
4:21
Dave Chilton: Well, it is a crazy story.
4:23
I was down in Chicago speaking for Harris Bank, and I had flown down, and people aren't going to believe this, but it's true.
4:30
I was flying so much and was so tired, that when I got there, opened my suitcase, and there was nothing in it.
4:36
I'd taken an empty suitcase to Chicago.
4:39
And I had to phone the woman who'd hired me to come in for Harris Bank and explain the things.
4:44
Of course, she's regretting her decision immediately, thinking I'm some sort of Canadian idiot.
4:47
And I said, "You need to take me to a mall to buy a suit."
4:50
And while they were tailoring the suit, after purchase, I ended up going into the bookstore and I found What Works on Wall Street.
4:57
And over the next two days, I read the entire book and I said, "These should be turned into funds in Canada.
5:03
And I'm going to talk to a few of the banks."
5:05
And I was well connected at that point.
5:07
And I remember I phoned TD Bank first.
5:09
And they didn't really get it.
5:10
They thought, "I don't really get it."
5:13
They don't really get the whole strategy indexing and all these different types of things.
5:16
It didn't go particularly well.
5:18
But then I went to see Simon Lewis at Royal bank after their chief economist had heard the idea through me sitting beside him on an airplane.
5:25
So there was so many coincidences- Jim O'Shaughnessy: I know. Dave Chilton: ...
5:28
and they immediately saw the potential.
5:30
They thought that it was different, they thought that it had merit, they knew that you were very marketable and that my brand would help, and off we went, and of course, the rest is history.
5:38
The funds became huge successes at Royal bank and I enjoyed my partnership with you.
5:42
And in fact, it's a great memory.
5:44
I can't believe it's that long ago.
5:45
I mean, over a quarter century ago.
5:48
And you look exactly the same by the way.
5:51
It's because you looked 61 then, by the way.
5:53
It's not because you haven't aged.
5:55
Jim O'Shaughnessy: Exactly.
5:56
Dave Chilton: You looked 61 at that point. So you nailed that.
5:58
You got ahead of the curve, as they say, on the aging.
6:01
And I think that was very prudent.
6:02
Jim O'Shaughnessy: I tell you, when my wife was ...
6:02
When I was launching my career, and she's like, "Well Jim, you're 28 years old.
6:08
No one's going to take you seriously."
6:10
Because I had already started losing my hair.
6:13
And I'm like, "But, as painful as this is, losing my hair, you don't have any idea what an advantage will be in dealing with people.
6:25
Because they're going to think I'm older than I am."
6:26
And it just worked perfectly.
6:30
So Simon Lewis, a prince of a man, loved him.
6:36
You talk about that length of time, right?
6:38
It also, at least in my mind, highlights how many things have changed, and not always for the better Simon and his team came down to Connecticut for a day. For a day.
6:51
We showed them what we were doing, we showed them all of the data, we had a really nice lunch, and I still remember this.
6:58
We're on Greenwich Avenue, and he had to get to the airport, and he looks at me and he goes, "Yeah. So I love this. Let's do it."
7:06
And I'm like, "Let's do it?" And he goes, "Yeah."
7:09
Reaches out, shakes my hand, deal was done.
7:13
I mean, obviously we papered it afterwards. Dave Chilton: Sure.
7:16
Jim O'Shaughnessy: But we did that deal on a handshake.
7:18
Dave Chilton: No, and you're right. Very different times.
7:21
And he's that kind of person.
7:23
But obviously, over the years, all firms have become more bureaucratic, I think, less risk oriented, and they all have all of their checklists, et cetera, but we did move very quickly there.
7:34
But again, he's a very thoughtful guy and he did come up with some good angles on it. And it was a lot of fun.
7:38
It really was taking it to markets and getting to know you and your team.
7:42
And a lot of your team members are still there, of course, which is amazing, and speaks highly of you, it really does.
7:48
It's not easy to keep people that long.
7:49
And then through you, I got to know Patrick and what he was up to.
7:52
And obviously, I'm a huge fan of his. It's funny.
7:55
This sounds odd, but your son has always reminded me of my father.
8:02
They are very similar people. They are so curious.
8:06
They're always trying to learn, always trying to grow.
8:09
And yeah, they have a lot of things in common.
8:11
I have great respect for your son.
8:13
I think he's a very fine man, and I think he's always looking to add value in whatever he does, to make people's lives better, to make them more interesting.
8:20
He's a great interviewer.
8:22
He's just a very clever guy.
8:23
Jim O'Shaughnessy: Thank you. Thank you.
8:25
Yes, I'm obviously- Dave Chilton: Well, your kids in general.
8:27
I mean, it's pretty impressive what you and ...
8:27
Your wife must be amazing, for them to have overcome you and gone on to the heights they have.
8:35
I mean, really, no, honestly, your kids, it's very impressive stuff.
8:38
And it's the biggest accomplishment in life, of course, is to raise kids that you're proud of, and kids that treat others well, and show character and show kindness and look to add value.
8:47
And so you truly should be very proud. I'm not surprised.
8:50
You're a great guy, and you too are extremely curious.
8:52
In fact, I remember one of the first times I met you, you started firing trivia questions at me about world war I and world war II.
9:00
And I remember that vividly.
9:02
You're asking about Ferdinand Archduke and all that stuff.
9:06
You remember, we were going through all of that and yeah, no, it was a lot of fun.
9:09
And are you still a big history buff?
9:11
Jim O'Shaughnessy: Oh, totally. Yeah.
9:14
And I do think I asked you at that time, "Tell me why the Treaty of Versailles, ending World War I, was actually the cause of world war II." Dave Chilton: You did.
9:23
Jim O'Shaughnessy: And I remember looking at your face, your look at your face was, "This guy is fucking bat shit crazy."
9:27
Dave Chilton: Well, the funny thing is, I knew the answer.
9:29
I just couldn't really relate it to what we were doing.
9:33
But again, I think that it was a sign of the kind of curiosity and passion.
9:35
I mean, your energy's never waned.
9:37
I follow you on Twitter, obviously.
9:39
And I listen to the podcast and you're the same guy.
9:42
You love life and you're always trying to grow, and I think Patrick's picked up a lot of that obviously from you, and your wife's got the great artistic side.
9:49
And I think he brings both sides to the table.
9:51
He is got the math skills and that type of thing, but he does tend to look at things from different perspectives.
9:56
That's one of the reasons he's had so much success with his podcast.
9:59
I mean, his podcast, to some extent, is the podcast, the trailblazer, in terms of that whole business model.
10:06
And so again, he should be very proud of that.
10:08
And I know so many people who listen to his podcast.
10:12
And I got to you something, Jim, and I think that your listeners will find this interesting.
10:16
I've had more comments from my interview with Patrick than I've had from all of the other podcasts I've done added together. Jim O'Shaughnessy: Wow.
10:24
Dave Chilton: Now that's interesting.
10:25
And I've done 100 podcasts.
10:27
But that podcast has so many listeners, and they actually listen.
10:32
So when they talk to me about the podcast, they'll ask me specific questions about points I made. So good for him. Very proud of him. I'm sure you are too.
10:40
Jim O'Shaughnessy: So first off, is your secret strategy here to make it so Jim is so speechless because he's just so pleased with what you've said that I can't say anything at all?
10:52
But first off, thank you.
10:53
It means a lot to me coming from you.
10:56
I'm proud of all three of my children, and I'm the luckiest man in the world.
11:03
I say that every day when I wake up, and I say it every evening when I go to bed. I really, really am.
11:10
Not only are they so accomplished, my three kids, Patrick and Kate and [Lael], in their field, completely different fields- Dave Chilton: Yes. Jim O'Shaughnessy: ...
11:20
but, my wife has got a bestselling street photography book and we're just lucky, man. And so, thank you.
11:28
Obviously, I know I'm biased, but it was funny- Dave Chilton: You know what jumps to me about your wife?
11:34
Is, when you and I would go for those dinners in the early days, and we're fine tuning the deal and figuring out the marketing plan, it always jumped to me how highly you spoke of your wife. And I love that.
11:46
And I don't like when people badmouth their spouses or even for that matter, their ex-spouses.
11:50
I never think people look good doing that.
11:53
And you always spoke so positively of your wife, glowingly, in fact.
11:57
And that really did jump at me.
11:58
I remember that quite vividly from our time together.
12:01
Hey, whatever happened to your lawyer?
12:03
Is he still a part of your life?
12:04
Jim O'Shaughnessy: He absolutely is. He absolutely is. Dave Chilton: Good. Say hi to him for me.
12:08
Jim O'Shaughnessy: I certainly will.
12:09
Hillary Miller, who, we're going to do a little inside baseball here.
12:14
Hillary can be very exacting. Let's put it that way.
12:18
And one of the reasons why I, again, knock wood, rarely been on the bad side of a deal.
12:27
And so when he was dealing with you, I remember, and God, I so wish I had kept these voicemails, because I would've put them on the end of this podcast, man, because they're funny.
12:39
Dave Chilton: I'm so glad you didn't. I'm so glad you didn't.
12:41
Because you remember how mad I got at him the one time?
12:44
Jim O'Shaughnessy: You were so mad.
12:45
Dave Chilton: Oh yeah, I was going to kill him.
12:46
Jim O'Shaughnessy: And I know.
12:47
And what's so funny is, it's so against your general nature. Dave Chilton: Yeah.
12:52
Jim O'Shaughnessy: You are such a positive, very funny guy, really learned it about stuff.
12:58
You never stand on laurels.
13:00
I love you for all those reasons, but this series of voicemails, I mean, so priceless.
13:06
And I remember the first one is, "Hey Jim, it's Dave. Hey.
13:10
So this Hillary guy, and first off, weird that his name is Hillary." You hadn't met him yet.
13:19
You go, "You tell that so-and-so when I meet him, I'm going to punch him in the face and throw him in the lake."
13:26
Dave Chilton: And then we ended up getting along great, of course, and [inaudible] pictures.
13:31
Yeah, no, he was a really good guy and ...
13:31
But you're right, he was exacting and tough. He was tough. Jim O'Shaughnessy: Yeah.
13:38
But the fact is, when I told him that, he broke out laughing and he goes, "You were right.
13:43
I am going to like this guy."
13:44
So- Dave Chilton: Yeah, those were good times. They really were.
13:50
And I didn't mention, you remember how I got involved in all this initially was, I had a TV show on PBS.
13:55
Jim O'Shaughnessy: Right.
13:56
Dave Chilton: And it was called The Wealthy Barber.
13:58
And it was a funny story because I did the show at Detroit.
14:00
Detroit and San Francisco where the sponsoring cities.
14:04
And we thought it wasn't going to be a big hit, it was just me in a barbershop set, giving advice wrapped in humor.
14:08
Jim O'Shaughnessy: I've seen the whole thing.
14:09
Dave Chilton: And it was a huge hit.
14:10
They turned it into a pledge vehicle.
14:12
Well, there's only one thing in the world worse than watching PBS beg for money, and that's helping PBS beg for money.
14:21
And I had to go out three times a year, three weeks, each nine weeks a year, and do all the pledging all over the country.
14:27
But here's what it led to.
14:28
The second Wealthy Barber special was strictly about 401ks.
14:32
And it became a much bigger hit because so many companies brought it into their HR departments and aired it.
14:38
And it was the Harris Bank seeing that and saying, "Hey, can you come down and give the 401k speech to a lot of our big owners of companies?"
14:47
And that led to me flying down, led to me forgetting the luggage, led to me partnering with you, and us being friends all these years later.
14:53
Twitter does a lot of that now, of course.
14:55
No one knows that better than you, is you meet so many people through Twitter when you put a tweet out and somebody likes it, shares it, and all of a sudden, you're direct messaging, and you build friendships through Twitter.
15:06
We always hear the negative aspects of the platform, but there's so many positives, especially in our field, in the investing in financial field, a lot of us have gained tremendously from the insights of others.
15:16
Jim O'Shaughnessy: Totally agree.
15:18
And I have said in the past, and I will say it again.
15:24
I honestly believe, and putting aside the whole Elon, is he going to buy it or not?
15:29
And if he does, what's going to happen?
15:31
I think that Twitter, despite it's fumbling nature, I think that Twitter is right now emerging as the world's first realtime global intelligence network.
15:46
And as you point out, especially germane to people in finance. Dave Chilton: For sure.
15:50
Jim O'Shaughnessy: And I was talking to an asset allocator, and Twitter came up, and he goes, "My, how times have changed." I said, "Well, why?"
15:59
And he goes, "Five years ago, if you had a Twitter account, you were eliminated from consideration."
16:04
He goes, "Now, if you don't have a Twitter account, that's a really bad look for you." I'm like, "Wow." Dave Chilton: I agree.
16:12
It's how you learn, it's how you grow, it's how you connect.
16:13
And yeah, you have to put up some nonsense.
16:15
There's no doubt about it.
16:16
There's a lot of [inaudible], a lot of criticism, a lot of negativity, but there's a lot of knowledge being shared.
16:21
It's incredible how open some people are.
16:23
If you go to the small business space and you're looking at buying small companies, some of the best buyers out there are willing to walk you through what they do in the due diligence process, where they've made mistakes, et cetera, et cetera.
16:34
Whether it's something like storage units or pure real estate plays in apartments, et cetera, et cetera, there's a lot to be learned.
16:40
And again, the openness and the sharing that you see, of knowledge on that platform and through direct messages, and through friendships developed through both those things, it's quite astonishing in a lot of ways.
16:51
A lot of the people you're most well connected with now in finance, you got to know them through Twitter.
16:56
Jim O'Shaughnessy: Absolutely.
16:57
And in fact, my entire staff that works with me on Infinite Loops was through Twitter.
17:03
And- Dave Chilton: Yeah, that's unbelievable.
17:05
Jim O'Shaughnessy: And so I think that COVID pushed some trends along, some by maybe five or five plus years.
17:14
And one of them was this idea that geography doesn't matter.
17:18
And two of my guys are in India, one's in Romania, and then Jamie Catherwood, who was the one who bugged me until I started this podcast, we met him through Twitter too.
17:30
And now- Dave Chilton: What a great guy to have involved. Jim O'Shaughnessy: Yeah.
17:33
Dave Chilton: I mean, he's so knowledgeable, and a lot like your son.
17:36
Very curious, always trying to grow his knowledge base.
17:38
I have a lot of respect for him as well.
17:40
And I think that is right, exactly what you said.
17:43
No limits around geography, you've got people all over coming together for a common cause, a shared passion, and we all win, as corny as it sounds, when that happens.
17:50
I mean, did you get to know Brent Beshore through Twitter initially too or was that through one of Patrick's podcast?
17:55
Jim O'Shaughnessy: So I think that that was through Patrick's podcast.
18:00
He will correct me of course.
18:01
But Brent's a good friend now.
18:06
We raised his first fund, and Patrick talked him into taking public money.
18:12
Brent did not want to take public money, because he thought that the whole structure of private equity was misaligned, and that can stand over here.
18:23
He reimagined private equity and it became the name of his company, Permanent Equity.
18:31
And he and his people are amazing.
18:33
I'm going later this month to the second capital camp, which he and Patrick put on, which are ...
18:38
You know I hate conferences, right?
18:41
This conference is actually fun.
18:44
And when Patrick was telling me- Dave Chilton: Well, just the people there, you, Patrick and Brent, I mean, that's worth the price of the mission in all seriousness.
18:50
And I mean, you've tried to associate over the years, and again, I'm paying you a lot of compliments, but they're all sincere.
18:56
Well, you've tried to associate with nice people.
18:59
People who handle themselves well.
19:01
I mean, you're not handling a lot of jerks in your life.
19:04
You just have stayed away from that.
19:05
And Brent Beshore is a gentleman. He really is.
19:08
And again, you talked about sharing, when he's on podcasts, he's incredibly open about how they do what they do.
19:14
And he's [inaudible] a lot of people out there spying small businesses now, as to what to watch out for and so on and so forth.
19:19
And you're right, together with Patrick, they reimagined the model.
19:22
I think that the old private equity approach is misaligned to some extent, with buying businesses between three and 10 million in EBITDA, because they are looking to flip, et cetera.
19:31
And I think the way he's done it is interesting, not just the long term timeframe, but even how he's compensated.
19:36
They've got an unusual structure in there that's not the typical two and 20 that neither you nor I is a big fan of.
19:42
So I think he's done a wonderful job, but we go back to what we were talking about earlier, Twitter, podcasts, all the connections, all the knowledge sharing.
19:50
There's so many positives coming from this, and it's easy to lose sight of that in all the criticism that these platforms are taking.
19:55
Jim O'Shaughnessy: Totally agree with you.
19:57
And I think your career is another great illustration of the power of being kind, the power of not being an asshole.
20:08
Just don't be an asshole. Dave Chilton: So true.
20:11
Jim O'Shaughnessy: It gets you so far in life.
20:15
Not putting on airs, not any of the shit you see a lot of people doing. Do the opposite.
20:21
Like you did- Dave Chilton: Exactly. Jim O'Shaughnessy: ...
20:23
like I try to do, like Patrick certainly does.
20:27
I mentor a lot of younger people, mostly in finance, but also in tech and some other areas.
20:34
And the consistent thing that I hear from them is, they really get the value of the learning in public.
20:42
But they're fairly young-ish, and they're a little afraid. I get that.
20:48
As you get older, one of the things you get to ...
20:48
I remember when I was young, I remember the first review for my first book, and that's the best.
20:54
It was not a good review. And I was crushed. I was crushed.
21:00
I was like, "Oh, my God." Now, it's like, "Huh."
21:05
As you get older, that goes away.
21:08
And so I love the quote is, "Don't worry about what other people are thinking about you, because they're not thinking about you at all."
21:15
Dave Chilton: It's so true, isn't it?
21:17
Jim O'Shaughnessy: Right.
21:18
Dave Chilton: And even when they are, it's fleeting.
21:19
Jim O'Shaughnessy: Exactly.
21:20
Dave Chilton: It is fleeting.
21:21
My first review, Bruce Cohen, a great guy.
21:24
I haven't seen him in years, but he ended up doing a lot of revisions to the original Wealthy Barber.
21:28
But he wrote, I think for The Post, at that point, in Canada.
21:29
And the review started, "I hate this book." Okay.
21:34
It's not going to get a lot better. You know what I mean?
21:37
When it starts, "I hate this book," you're not in good shape.
21:39
But to his credit, he said, "But the public doesn't."
21:43
And obviously, the formula he's using with the story is drawing people in who otherwise wouldn't read a financial book, so I thought he was fair, to be perfectly honest.
21:50
But yeah, it's never easy taking criticism, and reviews are tough. I mean, they really are.
21:55
I liked your books, if it makes you feel any better.
21:57
Jim O'Shaughnessy: Thanks. Thanks.
21:59
Dave Chilton: I still have my copy of Invest Like the Best.
22:00
I still have my copy of What Works on Wall Street.
22:03
So I'm on your side all the way.
22:04
What Works on Wall Street was a classic book.
22:07
Jim O'Shaughnessy: Thank you.
22:08
Dave Chilton: Yeah, it's really [inaudible].
22:09
Jim O'Shaughnessy: I have all your books too, Dave, and I actually want to shift gears a little bit and we're going to talk about you and what a great guy you are, because you've been pretty healthy with the compliments here.
22:22
I sometimes joke, as I'm listening to you, I'm like the old Mark Twain quote, "The more Dave went on about me, I could hardly wait to get up and hear myself talk."
22:33
So back to that first review, you did something really pre-internet, and I want to really underline this for everyone listening or watching. You broke a mold.
22:46
And the mold was, financial books are dull.
22:50
Financial books are filled with jargon, or charts and graphs, or whatever.
22:57
Financial books talk down to the reader.
23:00
And I remember when you first called me, and my joke was, "Who is this wealthy baker guy?"
23:07
Dave Chilton: That's right.
23:08
Jim O'Shaughnessy: But so I went out and got the book, and I'm like, Missie was saying, my wife, was like, "You are just engrossed in that."
23:16
And I'm like, "I think that this is the future of teaching personal finance." It's not what I do. I'm in asset management.
23:24
But there are very few good personal finance books, and I finished your book in one day and I'm like, "No wonder."
23:34
They're commonplace now, and we have the Morgan Housel who are ...
23:34
Morgan sold a million and a half copies of his Psychology of Money, and- Dave Chilton: On my compliment train, I'm going to jump in here and say, it's one of the best books ever written.
23:46
I mean, Morgan's book was fantastic.
23:48
He captured so much good information, presented it extremely well.
23:52
And there's not an investor out there who wouldn't benefit from reading that book.
23:55
Jim O'Shaughnessy: Totally agree.
23:56
Dave Chilton: Good for him.
23:57
He's another guy that seems like a high quality person. I haven't met him.
24:00
I know you know him well, but I love the book, and I think it's exceptionally well done.
24:03
Jim O'Shaughnessy: I tried to hire him like six or seven years ago, and what was cool about it was, he was very kind in his answer.
24:12
He's like, "That's very flattering, but I already know what I want to do."
24:17
And I'm like, "But you could probably do much better if you did this, this and this."
24:23
And he is like, "Yeah, I don't care."
24:26
And I'm like- Dave Chilton: Yeah, he seems like that type.
24:29
I loved him on the podcast.
24:30
Going back to The Wealthy Barber, I think that the listeners will find this very interesting.
24:33
I actually started out writing another book called The Ultimate Guide to Losing money.
24:37
And it was, I looked at all the mistakes we make with our money, and how not to do them, but wrapped up in a little bit of a different approach. Very, very short bites.
24:46
More for the ADD society we have today than we did 30 years ago.
24:49
And again, wrapped in humor.
24:50
And then one night, I was watching cheers, and I got the idea to use a fictional approach.
24:56
In fact, the original title was The Wealthy Bartender, but then I had alcohol flowing and I had prostitutes in book and it got so confusing that I dropped it, and moved into the barbershop.
25:06
And the funny thing, I tell this story, people laugh, but it's 100% true.
25:10
My dad is exceptionally bright, smartest guy I know, but he has no business instincts at all.
25:15
He's always wrong when it comes to investing.
25:17
So I drove over and I said, "Dad, what do you think of this Wealthy Barber idea?
25:20
I'm going to create it this way and blah, blah, blah."
25:22
And he said, "I don't like it.
25:23
I don't think it'll work.
25:24
I immediately went home and started working on it."
25:26
And he's the great negative indicator.
25:27
And of course, it went on to do well.
25:29
But one of the things I did that really matches up to the current lean approach to developing software businesses, et cetera, I did a lot of testing.
25:37
And most non-fiction authors don't do that.
25:40
So I gave the book to all the guys on my slow pitch team, all kinds of female friends in my life. Do you like it?
25:46
What would you do differently?
25:47
What questions do you still want answered?
25:48
And I started taking their feedback and incorporating it into the book.
25:51
By the time the book hit the marketplace, I knew it was going to work.
25:54
I didn't know it was going to sell millions and millions and millions and copies like it did, but I knew it was going to work because of the testing.
25:59
I'm surprised more authors don't do that, to be honest.
26:02
It doesn't take that much time, and it's a really good way to make sure the book is on the right path. Jim O'Shaughnessy: Yeah.
26:08
And for people who don't know, is it still the best-selling book?
26:13
And you outsold the Bible in Canada, right?
26:15
Dave Chilton: No, I did not outsell the Bible.
26:18
That's bad long-term planning.
26:19
I hope I didn't outsell the Bible.
26:21
But at one point, they used to say it was the top-selling book in Canadian history.
26:25
You know what I heard that's funny, is somebody told me that 50 Shades of Gray may have passed it by.
26:31
And I thought, "Oh, well, I'm going to come back with The Horny Barber, a sequel, and I'm going to beat it for sure.
26:35
Jim O'Shaughnessy: You absolutely will.
26:37
Dave Chilton: And the US version of The Wealthy Barber did very well too, but as you know, I was too tired.
26:43
It's so well over a million, the PBS show was going well, but that was all travel intense.
26:47
There was no zoom, there was no podcast.
26:50
You had to go everywhere to do all the interviews.
26:52
And I had young kids at the time, and I didn't want to do that.
26:55
And so after a couple years of success in The States, I pulled back and started working more in Canada.
27:00
In fact, I took a few years off and I homeschooled my kids for three years. Jim O'Shaughnessy: Wow.
27:04
Dave Chilton: At that time.
27:05
And they never did recover, by the way.
27:06
Yeah, that did not go well. That did not go well.
27:10
I taught from grades five, six and seven.
27:11
That was 20 years ago, and they're in grade nine now.
27:14
So there's been a problem for sure. But I did it.
27:18
I enjoyed the US traveling immensely.
27:20
And I love the audiences down there.
27:22
I used to make a lot of US jokes and the audiences handled all those extremely well.
27:26
And so, nothing but good memories. Jim O'Shaughnessy: Yeah.
27:30
Well, we were talking before we came on, and because of RBC, this American has been to more Canadian provinces than I think many Canadians.
27:42
The only one I haven't been to are the Northern territories. Dave Chilton: Right.
27:46
Jim O'Shaughnessy: And I remember when we really were getting there at Great Groove, you would go, everyone loved to come and see you, and then I would go and talk more the logistics of the fund and why they work. Dave Chilton: Yes.
27:59
Jim O'Shaughnessy: And so I was given this talk in a suburb outside of Toronto, and several people came up and they're like, "This is fantastic.
28:07
How come you moved to America?"
28:09
And I'm like, "Because I was born there."
28:15
And they're like, "You're not a Canadian?"
28:19
And I'm like, "No, I'm an American." "Where are you from?"
28:21
I said, "Well, I'm from Minnesota." And they're like, "Oh.
28:24
Well, that's a good Canadian province." Dave Chilton: It is.
28:27
Jim O'Shaughnessy: And it really kind of is, right?
28:30
Dave Chilton: Well, you're a gifted speaker too, which obviously really helped Royal Bank on the marketing front.
28:35
They would let you just go up there and use your humor and tell the background story.
28:39
Plus, you knew the data so well from your own book and were able to quote it.
28:42
But I'd forgotten you were from Minnesota.
28:44
And Minnesota really does share a tremendous number of similarities to Canada, weather obviously included.
28:50
And I used to get down there a tremendous amount, and they're one of the PBS affiliates that aired the show.
28:54
And again, I have good memories from all of that, but you remember how much flying we used to do?
28:58
I haven't been on a plane in two years right now.
28:59
Jim O'Shaughnessy: It's crazy, man.
29:00
Dave Chilton: Because we got shut down up here.
29:02
As you know, in Canada, you more or less couldn't fly until relatively recently.
29:05
And because I'm busy with the new business right now, I haven't been on a plane.
29:07
But in the old days, you and I were going to airports 100, 150 times a year.
29:12
Jim O'Shaughnessy: Living in them. Dave Chilton: Yes.
29:14
Jim O'Shaughnessy: And so, the ability to do this stuff on podcasts and everything is really a blessing for many people.
29:20
But so we're referring to your new business, and I want to talk about that a bit, because it's very Dave, right?
29:30
What I love about you is, you don't think, "Hey, maybe I should do this." You go and do it.
29:36
And that's what I really, really love.
29:37
And- Dave Chilton: Sometimes, that doesn't work too well, but it has for the most part.
29:41
Jim O'Shaughnessy: Well, exactly.
29:42
But that's the whole point, your whole mental attitude, which I admire intensely, is just what you just said.
29:50
Sometimes it doesn't work.
29:52
Well, welcome to the club, right?
29:54
Sometimes it doesn't work.
29:57
And you just learn from that.
29:58
Oftentimes, your biggest, what other people would view as a failure, can teach you so many amazing lessons- Dave Chilton: No question. Jim O'Shaughnessy: ...
30:06
that it just makes you better as you go forward.
30:08
So your new business, and I want to come back to the books too, because I know you're writing a new one, and it has to do with a story your dad told you, which I love.
30:17
But right now, what led you into deciding to ...
30:17
You've got a great quote.
30:25
It's something like, what you want to do is, you want to make small businesses with great exits.
30:32
So essentially, you started at a M&A firm, right? Dave Chilton: I did.
30:37
Jim O'Shaughnessy: And- Dave Chilton: I'm not sure I should have.
30:40
It's gone spectacularly well.
30:43
So I think our clients would say that we've done a wonderful job, we've had a great close rate, but I'm old.
30:49
And working 12 or 14 hours a day is something I've forgotten about, to be honest with you.
30:55
I stopped that about a decade ago.
30:57
And also for the first time, even though I'm a hard worker, I don't control my own schedule.
31:01
You've got to be there at the beck and call of the buyers.
31:04
And so we've done very well and I've loved it, but I'm not sure I'd stick with it.
31:08
You know why I got involved in this one, is all from Brent Beshore.
31:10
I was watching what Brent was doing in the states, and I decided I'm going to do some of that in Canada.
31:16
And I've always invested a lot in private companies.
31:17
In fact, at one point, I had 40-something private company investments.
31:21
So I started thinking, I'll go and manage some outside capital and do the Brent route.
31:24
But I got so frustrated with the M&A firms and the brokers, and how poorly they were handling some of the deals.
31:30
I thought, "I'm going to start a firm and compete with them."
31:32
And again, we've done very well, but I'd forgotten how much work it is.
31:35
And so I haven't loved that aspect of it, but it has got me thinking again, I might go back to the buy side and invest in private companies again, something I've had good success with. I may just write again.
31:47
I've got one other business idea I'm contemplating.
31:48
But when you get to be 60, I think you're about the same, you're 61-ish.
31:52
I don't know how many employees I want to take on.
31:54
At a certain point, you don't know if you want to have a staff of 10, 20, 30, and one of the ideas I'm pursuing, I probably have to grow to be a fairly big employee base, and I'm grappling with whether that's what I want. I may want to golf more.
32:06
Although if you see me play, you may argue, "Start the company with 20 or 30 employees."
32:10
But there's always new ideas.
32:11
The one thing I haven't lost at all is my energy.
32:13
I'm very lucky I have the same energy now I had at 25. Jim O'Shaughnessy: Yeah.
32:17
You absolutely- Dave Chilton: And I still grind it out, and I'm very fortunate that way.
32:20
Jim O'Shaughnessy: Yeah, you absolutely do.
32:23
And it's like, Missie, when I told her I was coming to talk to you, her eyes lit up to you.
32:29
"Oh, you're going to have so much fun.
32:30
Dave Chilton: Absolutely.
32:31
Jim O'Shaughnessy: Just because it's, I love your energy, I love your enthusiasm, but you're also, come on, man, you're very skilled.
32:38
Dave Chilton: Oh, thank you.
32:39
Jim O'Shaughnessy: You're very skilled at understanding people.
32:43
Like one of the things on your website is, Dave Knows Everybody, which made me think of the Sam joke. You know that one. Dave Chilton: Yeah. Yeah.
32:52
Jim O'Shaughnessy: So you do know everybody in Canada.
32:55
You know a lot of folks down here too.
32:59
So you looked at Brent's model, you got fed up with the M&A guys and the brokers up there.
33:08
Did you sit down and write a manifesto Jerry-McGuire-like, or how did it [inaudible]- Dave Chilton: A little bit like that, Jim, to be honest. I did.
33:16
I talked to people like Brent, I read about people online and their complaints about the M&A industry and the broker industry.
33:23
And on some of the smaller deals, let's say deals of 10 million in market cap or lower, how you can't get a data room access early when you need one, and all those different types of things and thought, "Okay, let's listen to the marketplace, and let's give the buyers, the buyers' representatives, what they're looking for so you speed this process up."
33:41
One of the huge problems with this space is, a tremendous number of deals fall apart. They really do. How do you avoid that?
33:46
Well, better communication, open communication, earlier communication.
33:48
All of those things are pivotal.
33:52
So we really emphasize those.
33:53
And I'd like to think we set a good example for a lot of the other firms out there, and you're going to see more and more take that approach.
34:00
And there's parts of this I really like.
34:01
I mean, you're dealing with entrepreneurs all the time, but I think I'm more suited to the buy side.
34:06
Not buy side advice, but actually buying the businesses.
34:09
Because I like growing things, and I like creating things.
34:13
And this is more transaction based, and it's the attention to detail aspect I like, but again, I don't know if I want to work these kinds of hours.
34:20
I found what it did was it squeezed out all my other involvements too.
34:23
And some of the private company investments I have, I've given them promises that I'm going to help them on occasion and make introductions and ...
34:27
You mentioned how many people I know, I'll tell you a funny thing about that.
34:33
I got to know a lot of these people, including a lot of famous people, because they all found me, in the last 25 years, about book marketing.
34:41
And so celebrities all over would find me and say, "Hey, how did you sell so many books?"
34:47
Or, "How did you sell books into those different arenas?"
34:50
And so you had Avon selling books, you had Sephora selling books, you had all these different kinds of deals.
34:55
I still get those calls almost every day, and walk through people the way we think about it.
35:01
Not the conventional publishing approach at all.
35:02
There are some very strong people in conventional publishing, but let's be honest, marketing tends not to be the strength of that industry.
35:09
They're not particular good at creating the buzz and building momentum.
35:12
In fact, corporate sales, where we've done so well, going out and matching up with big companies on the bulk sales, the vast majority of them don't even try.
35:18
And so that's what I hear from a lot of these people over time.
35:22
So the Brent Beshore of course puts out The Messy Marketplace and we'll answer a couple questions there, and I've spoken to Patrick and ...
35:25
These people find you and ask you questions. And I still enjoy that.
35:32
I'm very passionate about publishing.
35:33
I don't have any involvement in publishing anymore, but I still return every single call I get from authors.
35:39
The only thing I say is, I'd rather help you when you've written the book, because so many people never finish it.
35:44
So you give them hours of your time, but then they never finish the book.
35:47
And so now I'm more or less saying, "If you've got the book done, I'll help you out for free."
35:51
Until the book is done, I'm a little guarded.
35:53
Jim O'Shaughnessy: So my daughter, my middle daughter, Kate, is an accomplished author.
36:00
She writes middle grade fiction.
36:02
And you did an amazing web-based series on how ... Is that still available?
36:08
Because- Dave Chilton: It is, and I'm very proud of that.
36:10
I made no money off that.
36:11
I donated all that content- Jim O'Shaughnessy: I know. Dave Chilton: ...
36:14
to the distributor, and I did that selfishly, because I couldn't keep filling the questions. All the calls coming in.
36:19
And I meant to do it over a month or two, and it became a labor of love.
36:22
And I ended up creating 175 videos and it's called The Chilton Method. I didn't name it.
36:26
I have not become an egotist.
36:29
And it went over gangbusters.
36:30
Thousands and thousands of people have used the course to help them develop the book and learn how to market it.
36:36
And so I'm glad that it's gone so well, and it was fun putting together.
36:39
And my son was involved in helping me produce, and it was nice working with him on something.
36:43
Like you, my kids are both entrepreneurs.
36:44
Nobody will hire a Chilton.
36:46
None of us could get a job.
36:48
So we all had to work for ourselves.
36:49
Jim O'Shaughnessy: We're all unemployable. I mean [inaudible].
36:51
Dave Chilton: Yeah, we're all unemployable. Exactly.
36:54
So we all work for ourselves, but I was thrilled the course went over well and I can push people to it now, but I still love the book industry.
37:00
And it's a tough industry, obviously.
37:02
The media's fragmented now and distribution's more challenging to by, and you're competing with so many other options out there.
37:09
I mean, podcasting, by the way, changing the subject, that's another tough industry.
37:13
Because you have to get the listeners.
37:16
And it's very difficult to do.
37:17
I've never seen an industry where the top 1% have such a huge percentage of the overall listenership.
37:23
I think it's something like 97.
37:23
5% or something, is the top 1% of podcast.
37:27
And even when you throw out the top two or three, the Joe Rogans of the world, it's still 93 ... It's nutty how big.
37:33
Now, your son has cracked through it as one of them.
37:35
But in general, it's very, very difficult.
37:37
Jim O'Shaughnessy: It's a Pareto distribution.
37:41
And I saw a stat that I just found it really hard to believe.
37:48
The majority of people who start a podcast, they do like two episodes.
37:52
I don't have it in front of me, I'm doing it from memory.
37:54
If you get to the 20th episode, you're in the upper 5%, right?
37:58
Dave Chilton: I think it's the upper 0. 5%.
38:01
Jim O'Shaughnessy: Right. Right.
38:03
And so- Dave Chilton: I really do.
38:05
Jim O'Shaughnessy: It's a funny story, when I was, when Jamie Catherwood, he was the guy who talked me into doing Infinite Loops.
38:10
And I'm like, "I don't want to do a podcast.
38:12
I don't even listen to podcasts."
38:14
And he's like, "Well, you listen to [inaudible]."
38:18
And I was like, "Yeah, of course I do. No, of course I do."
38:23
But anyway, so he just keeps at me and at me and at me.
38:27
He's very persistent, which is good.
38:30
And so I tell Patrick, and he is like, "Dad, why do you want do a podcast?"
38:37
And I said, "Because there's so many things I'm interested in, and I'm lucky that people will take my call." Right? Dave Chilton: For sure.
38:46
Jim O'Shaughnessy: And he's like, "Okay, but give me some of the subjects."
38:49
And then I went through a list at that ...
38:49
A lot of finance, but a lot of not finance too. And he goes, "Oh, okay." So My Dinner With Andre.
38:59
I don't know if you remember that movie. Dave Chilton: Yeah.
39:03
Jim O'Shaughnessy: And I said, "Exactly.
39:05
My goal with this particular podcast was, I'm never going to monetize this.
39:09
At least I'm not going to. I mean, if it gets ...
39:10
I learned that we had a million downloads the same time everyone else did, because one of my guys put it up on Twitter.
39:19
Because one of the thing- Dave Chilton: That's very cool though.
39:22
Jim O'Shaughnessy: One of the things that I just refuse to do, because you know, you've known me forever, I am a competitive person.
39:29
And I didn't want to look at any of the metrics, because I knew even, if I swore up and down that I wasn't going to change the way I did things, it would change the way I did things.
39:38
And so- Dave Chilton: For sure. Jim O'Shaughnessy: ...
39:41
if I saw something I was really interested in, I love talking to the person.
39:47
And then, oh yeah, that got no listeners.
39:50
Your wife didn't even listen. I'd be like, "Oh, fuck. That bums me out."
39:55
And it would've changed my behavior. Dave Chilton: Yes.
39:58
Jim O'Shaughnessy: Like for example, one of our most popular podcasts is about an esoteric religion that the author, who's a brilliant guy The Religion With No Name is the name of his book. I'd read it. I was fascinated by it.
40:16
He himself is incredibly well spoken, erudite, he took a degree in ancient Greek ... On and on and on.
40:26
And he did this 12-year project, and all about how, too long, didn't read, the way Greeks got people to join their religion was, they put psychedelics in the wine.
40:36
And they had the greatest tagline.
40:40
Their tagline was, "Come to the cult of Dionysus and talk to the gods."
40:46
Dave Chilton: That's very good.
40:47
Jim O'Shaughnessy: Hello? Hello? Dave Chilton: Yeah. That's very good.
40:51
Jim O'Shaughnessy: Anyway, I loved it.
40:52
I had him on the podcast.
40:53
He's incredibly well spoken, super bright.
40:58
And I always mix up his name, Brian Muraresku.
41:02
He said, "Don't worry, I'd mispronounce it too."
41:05
But anyway, we do that and, even people who know me well, they're like, "So you think that that one's going to be popular?"
41:13
And I said, "I think it should be.
41:15
Because it's so interesting."
41:16
And well, long story short, it remains one of our most downloaded podcasts.
41:21
Dave Chilton: That's very interesting.
41:23
Jim O'Shaughnessy: And I never would've figured that.
41:26
And so I have this enormous luxury, and I know it's a luxury.
41:33
As you know, I love marketing.
41:35
And by the way, at the end of the day, everything is marketing, kind of, right? Dave Chilton: For sure. No question. No question.
41:42
Jim O'Shaughnessy: In everything.
41:43
And coming back to the Chilton method, when I was watching that, I just kept thinking, I was taking notes too, and I'm like, "This is about books, but you can apply this to anything."
41:56
Dave Chilton: Patrick used to couple the tips in his everyday life.
42:00
Jim O'Shaughnessy: I know.
42:01
Dave Chilton: Which I thought was really cool.
42:02
But you know him, he knew more about that course when he finished it than I did, and I did the course.
42:05
He's so good at learning and in diagramming things and connecting it all.
42:09
I mean, the guy's way sharper than we are.
42:11
Have you ever interviewed your kids on Infinite Loop?
42:14
Jim O'Shaughnessy: So, so I have not yet.
42:19
I am going to, ultimately.
42:20
Dave Chilton: [inaudible].
42:21
Jim O'Shaughnessy: I was at dinner at Patrick's last night, and I was saying, "By the way, come on, man.
42:29
You've had me on your podcast.
42:31
You got to come on mine."
42:32
And I said, I also want Kate and Lael to come on, too. My daughter Lael.
42:37
So Kate is an incredible author, she writes middle grade fiction.
42:41
Brilliant woman- Dave Chilton: Lael's a great comedian. Jim O'Shaughnessy: Yes.
42:46
Lael is, as she points out, is that is the weak tether that is holding me in the real world.
42:55
When she was here last, you know I have the Oculus? Dave Chilton: Yes.
43:00
Jim O'Shaughnessy: The funny thing is, I don't use them very much.
43:03
I love trying new things and all that kind of stuff, but ...
43:03
So she saw him, and her husband was a great guy and a comedian too.
43:10
Saw him and he's like, "Oh, can I use these?" I'm like, "Yeah, sure. Go ahead."
43:16
And anyway, at dinner that night Lael is, she's absolutely side-splittingly funny.
43:22
And again, of course, I'm going to say that about my daughter, but there's external information that proves that. Dave Chilton: Yeah. She's on YouTube. Jim O'Shaughnessy: Yeah.
43:31
And Just for Laughs, right? In Montreal? Dave Chilton: Yeah. The biggest of the big.
43:35
Jim O'Shaughnessy: The biggest of the big, she was the first person ever picked on her first submission of material.
43:41
Dave Chilton: Good for her.
43:42
Jim O'Shaughnessy: And we went up and it was fun, it was really great, she was on, but what's so funny is, when we're together as a family, it's like she just directs all of it at me.
43:54
And she goes, "Dad, you're just such a target-rich environment."
43:58
Dave Chilton: Now, does she use a lot of Irish humor, does she use family humor? What's her focus?
44:05
Jim O'Shaughnessy: Her focus is, I would say, eclectic.
44:11
She's very careful to, like you say, A/B tests.
44:16
She A/B tests all the time.
44:17
And- Dave Chilton: Most stand-up comedians, if you look at Chris Rock, he tests everything.
44:21
Jim O'Shaughnessy: So does Jerry Seinfeld.
44:24
So does basically all of the greats.
44:28
And so, I remember one time being out with her, and literally, she's just zinging these jokes at me.
44:37
And she does a lot of self-deprecating humor- Dave Chilton: Of course.
44:41
Jim O'Shaughnessy: It always works. It always works.
44:44
I personally, I mean, she takes me down so hard.
44:49
You know that gift wrecked, horrible, totally ...
44:49
That's, Lael when she turns her attention on her father.
44:58
And I love it, of course, because she's so damn funny, but yes, I would ultimately like to have all three on.
45:04
I'm trying to get my mother-in-law, who's 95, has every marble she was born with.
45:12
We moved her out here to the East about eight years ago, and she is such a wealth of information, in a world that no longer exists.
45:25
We have her for dinner two or three times a week, and I'm just like, "Terry, will you please just come on my podcast?
45:31
If you don't want me to release it, we'll just have it for the family."
45:35
But so that's- Dave Chilton: I think you should get her to come on with my father.
45:39
Jim O'Shaughnessy: Exactly.
45:40
Dave Chilton: They'd be quite the duo.
45:41
My dad is such a character.
45:44
Last year, he is walking across King Street in Waterloo with my niece.
45:47
And she says, "Let's get some ice cream."
45:49
And then she says, "Oh, Grandpa, you can't get any ice cream because you forgot your mask.
45:53
We can't go in the shop."
45:54
And he goes, "Oh no, there's one."
45:55
And he grabs a used one off of King Street and puts it on.
45:58
This is a guy who's not particularly concerned about COVID.
46:02
But he's probably the happiest guy I've ever met.
46:05
I mean, he's, again, a lot like Patrick.
46:06
He's curious, he's driven to grow, he still thinks he's going to get his golf game back at age 90.
46:11
He hasn't played in eight years.
46:12
A few years ago, he says me, "I'm taking a golf course."
46:15
I said, "You haven't golfed in years."
46:17
"I know, but I was watching Jason Day chip, and I like the way he chips with his hands forward.
46:24
And I want to learn that."
46:25
I said, "Dad, you don't golf."
46:26
He goes, "David, I don't want to die a bad chipper.
46:28
And I always wanted to learn how to chip properly. I'm taking lessons."
46:32
And this is him on a daily basis. So he never changes.
46:35
Jim O'Shaughnessy: I love it.
46:37
And so tell the story, because you're going to tell it better.
46:41
Your dad was with your son in Paris, and you got a message.
46:46
Tell, our audience- Dave Chilton: Yeah.
46:48
The day before coming back, my mother gets a voicemail from my father.
46:51
My father's 81 at the time, my son's about 20-ish.
46:55
And my dad says, "Marjorie, you won't believe it.
46:58
We've been pick pocketed on the train. Unbelievable.
47:02
We lost all our money, our passports, it's all gone.
47:05
They did an unbelievable job. Marvelous.
47:09
These are immensely talented people.
47:10
I have great respect for what they've pulled off here. What an adventure.
47:14
We're off to try to get money from the bank."
47:16
This is his attitude about life.
47:17
Now, I spoke to him about it after and I said, "Dad, I would've freaked out."
47:20
And he said, "Look, I could have reacted that way and ruined the trip, ruined my day. But why?
47:25
I mean, the bottom line is, the money's gone, the passports are gone.
47:28
Let's enjoy all that Paris has to offer here and fix the situation."
47:31
I've never seen anybody who gets to acceptance on things more quickly than my dad.
47:37
He's just wired to say, "That's what happened. Let's get to acceptance.
47:41
What's the most positive way we can handle it from here?"
47:43
I mean, if he could teach that, if he could bottle it and get all of us thinking that way, the world will be a much better place.
47:49
They're also, my parents are incredibly giving people. They really are.
47:53
They got a lot of joy of life of helping friends, helping their community, doing all the little things.
47:59
I've said to many, many people over the years, my parents did it right.
48:02
They were kind, they were nice, they were gracious, they were classy.
48:06
All the things you want people to be.
48:08
That's how they handled themselves.
48:09
It's not a coincidence they ended up being extremely happy in life, and didn't define themselves at all by stuff or anything along those lines, and they just enjoyed life immensely.
48:18
My father recently stopped driving, by the way.
48:21
And that was a very good thing for all of society.
48:26
Much relief on the 401 in Canada, that my dad is now no longer behind the ...
48:26
He was a bad driver when he was 30. He's driving at 89? The guy was a disaster.
48:35
So he still argues with me and says he should be driving, but we said, "No, Dad, really."
48:40
The RCMP has asked us to get involved, to keep him from getting behind the wheel of a car.
48:47
Jim O'Shaughnessy: My dad made it to 97, and we took the keys away from him after following him from a dinner at a country club. He said he was fine.
49:00
He had one drink, I think, so he was under the limit, and so my sister gets this idea, "You know what? We should follow Dad. Just to make sure." And so we follow him.
49:10
Right through red lights, the whole thing.
49:13
And he makes it home, and my sister Eileen and my other sister's like ...
49:13
They do the intervention.
49:20
It's like, "Dad, you can't drive."
49:22
And he was not a happy camper.
49:24
Dave Chilton: No, [inaudible].
49:25
Jim O'Shaughnessy: I want to go back to your dad, because I love that story about your dad, because it is, I mean, talk about a life lesson in a paragraph.
49:37
So as I was getting ready to talk to you, I'm reading it, and I was like, I got to just say, this is like, it shows you what happens when you don't get crazy about sunk costs, right?
49:51
Dave Chilton: That's right.
49:52
Jim O'Shaughnessy: In other words, it's like, it's gone.
49:54
and your dad is ready to move on.
49:56
Do you know how rare that is in human beings?
49:58
I mean, it's extraordinarily rare.
50:01
then the other thing I love is, he reframes it instantly. Dave Chilton: Instantly.
50:06
Jim O'Shaughnessy: I love the instant reframing Of, "These guys were so talented."
50:13
And it's just like, I love that, and then the very stoic attitude. It's like, "Okay.
50:21
So I can let this external event that I probably had a little bit of control over, because they pick pocketed off me, but they were pros.
50:33
I can let this ruin the entire event, the entire trip, I can sit and sulk, and that's not going to get you anywhere."
50:42
And so, his ability to change so quickly, as you say, to acceptance, I mean, you're actually thinking about, or are actually writing a book that this event spurred on, Yeah?
50:56
Dave Chilton: Yeah, it is.
50:57
I'm taking a collection of the things I learned from my parents, and again, wrapping them in humor and all the stories.
51:02
And I've been testing the book as I've been going along.
51:05
It's probably the best thing I've ever had in terms of getting results.
51:08
But yeah, my father's ability to do that is almost shocking.
51:11
Now, it's a practiced skill.
51:12
Jim O'Shaughnessy: Oh, yeah.
51:13
Dave Chilton: He wasn't born that way, and he learned to get that way, but again, it's increased his happiness tremendously, because he's not living in the past.
51:20
He's always thinking about the moment.
51:22
Living in the moment or, what's next?
51:24
But it can come across as a little cold.
51:26
My mother passed away five or six years ago, and my father's grieving period was quite short, despite a great marriage.
51:33
60 years together, but again, he gets to acceptance on it.
51:36
In fact, at the visitation, he said, "Hey, now I can go to Dairy Queen all I want.
51:39
Your mother's not going to put the [inaudible] on that."
51:41
So there's a positive in everything, and he finds it, and off he goes to Dairy Queen, his favorite establishment.
51:48
But no, my mother was the same way.
51:50
I mean, there are a lot of teachings there too, and I was very lucky to step into that.
51:55
We talk about white privilege, we talk about all these different things.
51:58
I think parent privilege is one of the biggest blessings.
52:02
I stepped into two very fine parents.
52:04
People who cared, people who taught well, the opposite of helicopter parents in the case of my dad, my mom did my laundry until she passed away at age 81.
52:13
So I definitely can't say that to her, but my father was not a helicopter parent at all.
52:17
I don't think he ever went to a parent-teacher night.
52:19
He would say to me, "Well, that's ..."
52:19
He goes, you're the one at school, take care of it."
52:23
And he was a high school principal.
52:24
And he was a brilliant man.
52:25
But he was like, "That's your job. I've got my job.
52:29
And you go out and become a good student."
52:30
And my sister and I both did, because they put that pressure on you.
52:34
One time I was backing out of our driveway, I'm driving my dad's car, and I'm backing out way too fast on the way to something, and he's pulling in and I smash both his cars in one accident.
52:44
I smashed both them one accident.
52:46
He gets out and looks at me and he goes, "Hot date?"
52:49
And then he walks into the house.
52:50
Never says another word about it. Doesn't get mad.
52:53
In fact, I've never heard him raise his voice. Can you imagine that?
52:55
I've never heard my father raise his voice.
52:58
But you knew that it was your job to fix those cars.
53:02
You were the one calling the insurance company.
53:04
You were the one getting the tow trucks.
53:06
You were the one doing it speedily so he had a car to go to work the next day, et cetera.
53:10
You were handling it, whether you were 16 or not.
53:12
You were the one taking charge.
53:13
I don't think I would've written a book at age 25, 26, had it not been for the approach he took along those types of lines.
53:20
I mean, you couldn't really rattle the guy.
53:22
I mean, he was just unbelievable that way.
53:25
I remember one time I said to him, "Dad, no matter what Susan and I did," and we were both on occasion a little wild, "nothing ever rattled you.
53:32
We'd come and we'd tell you all about the events of the weekend and all the things that had gone wrong.
53:37
How did you stay so calm?"
53:39
And he looked at us and he said, "Frankly, I wasn't listening."
53:43
And I said, "Okay, there you go.
53:46
Didn't hear a word you said."
53:48
I got to tell you one more classic.
53:49
I was only 12 years old in grade nine at the start of the year.
53:53
I'd started school a year early and skipped a grade, and my sister was supposed to take care of me in Kitchener one weekend.
53:58
My parents had gone back to their hometown of Sarnia, two hours away.
54:01
My sister takes off, of course, unreliable- Jim O'Shaughnessy: Naturally.
54:04
Dave Chilton: I'm alone at the house. I'm 12.
54:06
I phone my parents up, my dad answered the phone at my grandma's and I said, "Hey, Susan took off, I'm alone for the weekend. What should I do?"
54:12
And my dad says, "Well, I'd have a party."
54:16
That was the end of that conversation.
54:18
He's not really going into panic.
54:20
He's like, "Don't burn the house down."
54:22
And he reminds me a little bit of Charlie Munger sometimes, in terms of taking a very common sense approach.
54:29
I think Charlie Munger's brilliant.
54:31
I love listening to him on Mental Models, but I think his biggest value add has been drawing attention to the fact there's certain things you don't do.
54:38
Jim O'Shaughnessy: Right.
54:39
Dave Chilton: Don't marry a bad person.
54:40
Don't get involved in addiction.
54:42
I mean, stay away from the big four or five don't dos, you're probably going to have a pretty good life.
54:46
Jim O'Shaughnessy: Exactly.
54:47
Dave Chilton: And my dad very much along that camp.
54:49
And one of the things he very much was, treat people with kindness.
54:52
Whether it's your waiter, waitress, whether it's your boss, whether it's ... It doesn't matter.
54:57
Always treat people well.
54:58
And I think that my kids have been very, very lucky to have had the exposure to my parents they did, because they've grown up very, very polite as well.
55:06
Jim O'Shaughnessy: I love your Munger example.
55:12
My friend, Chris Williamson, who's the UK king of podcasts, he's got a great thing, which is, don't multiply by zero.
55:21
And then he gives all the examples and it's like, "If you just don't multiply by zero, you're probably going to do okay."
55:27
Dave Chilton: That's so true.
55:29
Jim O'Shaughnessy: It is.
55:31
And I love your dad's example.
55:33
Missie and I were very young when we had Patrick, we were 24. We got married at 22.
55:39
But we talked about it a lot. I was lucky.
55:43
I'm the youngest in my family by seven years, so I was changing diapers when I was 11.
55:48
And so I had all these nephews and nieces [inaudible]- Dave Chilton: You cut out there.
55:53
Did you say you were wearing diapers at 11? You cut out.
55:56
Jim O'Shaughnessy: Oh, of course. Yeah. Yeah. I was wearing them. It's one of my habits.
56:01
It doesn't get in the way. I'm wearing them now.
56:03
Dave Chilton: I'm not going to say anything.
56:04
I knew you're heading there though.
56:05
Jim O'Shaughnessy: But the point is, I really wanted to, both of us, really wanted to, "What's our goal here with raising our kids?"
56:15
And essentially, what we decided on was, raise great adults.
56:22
And if you think about that, that precludes most of the really bad parenting.
56:28
You can't say, "Because I said so."
56:31
You can't say, "My house, my rules."
56:35
You have to actually engage with the child.
56:37
Dave Chilton: And that's a very good point.
56:39
Jim O'Shaughnessy: And then the other thing was, my kids would come to me, prior to Google, as you know. I know a lot of trivia.
56:46
I have a- Dave Chilton: You are the kind.
56:48
Jim O'Shaughnessy: I have a fairly adapted memory.
56:51
And so they'd come there writing their school report or anything, and they'd come, "Dad, what is the significance of 1066 in Europe?"
57:00
Dave Chilton: Battle of Hastings.
57:01
Jim O'Shaughnessy: Yeah, I knew you'd know. In Europe.
57:05
And so we have a huge bookcase here, and I always said, to all three of my kids, the same answer, look it up in there.
57:13
And they get pissed, and they're like, "Dad!"
57:17
But it was all those simple things, then the other thing that I really insisted upon, and Missie did too, all of their accomplishments and failures, are theirs.
57:35
So Patrick has covered himself in glory, I'm immensely proud of him.
57:39
I'm immensely proud of all my kids.
57:41
But they achieved what they achieved.
57:43
They didn't do it because of me or because of Missie.
57:47
They did it because of themselves.
57:50
And I'm a huge believer in, if the other thing ...
57:50
Like your dad is a perfect example.
57:57
What your dad was doing to you when you, "hot date," but you've got to fix it, what he was doing was like, "Hey, you know what, David?"
58:07
We all fuck up, but you got to fix this."
58:10
In other words, he'd left your agency with you, right?
58:14
Dave Chilton: No question.
58:16
Jim O'Shaughnessy: And there's just so many pretty simple things that you can do, and miracles. It's not hard.
58:25
And then finally, the courtesy.
58:28
My mother beat manners into me.
58:35
How hard is it to treat everyone the same?
58:39
My mom used to say, "You should treat the gas station attendant the same way, if you ever get to meet the president of the United States, treat him the same way."
58:48
But then she added a dark Irish thing.
58:51
"Until they prove otherwise."
58:53
But- Dave Chilton: I couldn't agree more with all of that.
58:59
And my son is so polite, I'll take ...
58:59
He's 32, doing well on his own.
59:03
I'll buy him something at McDonald's, he'll phone me that night and say, "Thanks a lot for that." That's how polite he is.
59:10
One thing I do with my kids, I'm not the parent my parents were, I wish I was.
59:13
But one thing I did that was quite effective.
59:16
We would get in the car, and they were around during the internet era, of course, I wouldn't let them listen to music in the car.
59:22
When we were in the car, going to baseball, going to whatever, driving to Sarnia. We talked.
59:27
We talked about life, we talked about world events, we talked about politics, but we talked.
59:31
Initially, I had a lot of resistance, and on occasion, it jumped back in.
59:34
But for the most part, they embraced it.
59:37
And it's one of the reasons I think we're all so close.
59:39
We had all that communication.
59:40
And I've told lots of my friends who have younger kids, do the same thing.
59:44
Don't let them get involved nonstop in their devices, make sure you're connecting and conversing.
59:48
And I think it's a great idea, and it really did make my relationships with my kids much stronger. Jim O'Shaughnessy: Yeah.
59:55
Again, what's so funny about this is, these are so simple to at least understand.
1:00:04
And you just sometimes wonder, why aren't people doing ...
1:00:04
I mean, these are like, you're getting asymmetric returns from being polite. That's absurd. That's absurd.
1:00:17
For years and years and years, that was my litmus test when I was hiring somebody.
1:00:21
I would intentionally take them to a public restaurant.
1:00:25
And if they were rude to the staff, that was it.
1:00:27
I don't care how smart they were.
1:00:28
Dave Chilton: Couldn't agree more.
1:00:29
Jim O'Shaughnessy: I'm not hiring you.
1:00:32
Because you're going to kiss up and kick down.
1:00:34
And I don't want anyone like that.
1:00:36
Dave Chilton: Me neither.
1:00:37
Jim O'Shaughnessy: And those simple litmus tests, I think one of the reasons why you and I are so simpatico is, we have that same outlook about life.
1:00:45
And when you have that outlook, life is so much fun, right? Dave Chilton: It is.
1:00:50
It sounds corny, but I'm still excited every night when I go to bed, about the next day.
1:00:55
Jim O'Shaughnessy: Same with me.
1:00:56
Dave Chilton: [inaudible] two or three things I can hardly wait to get at.
1:00:58
In fact, I've had times in the last year, at my advanced age, where I've had trouble sleeping, because I'm pumped about the next day. Jim O'Shaughnessy: Same.
1:01:03
Dave Chilton: Like [inaudible] Christmas. Jim O'Shaughnessy: Yep.
1:01:05
Dave Chilton: And so, I know, we're both lucky.
1:01:07
By the way, you mentioned the Battle of Hastings in 1066. My father's like you.
1:01:11
My kids never Google, they just gramp it.
1:01:14
And when he watches Jeopardy, he's the only guy I know who they'll say, "Well, when was the battle of Hastings?"
1:01:18
Not, not phrased that way.
1:01:19
My dad will say, "Well, they're going to say a 1066, but recent archeological discoveries placed closer to 1067."
1:01:25
The guy's arguing with Jeopardy for heaven's sakes.
1:01:28
I thought he should have replaced Alex Trebek.
1:01:30
Except, he would've just talked.
1:01:32
He would've given one answer and went, "Just to expand on that," and tell you how that came to be.
1:01:37
And he'd start speaking Latin and all this different type of stuff.
1:01:39
But no, I think you are very much like that. You love trivia.
1:01:43
Now, did you play the Canadian game, Trivial Pursuit, a whole lot when it first got popular?
1:01:47
Jim O'Shaughnessy: Of course, absolutely.
1:01:50
I'll tell you a really funny story.
1:01:51
So in our family, you're talking and being together without devices, we did that a lot, and we played, my kids loved the trivia game.
1:02:03
And the thing was, I had to come up with all the questions.
1:02:07
And so, anyway, Missie would not play, my wife. She was the judge.
1:02:13
In other words, if I asked a question that was too hard, that was not counted.
1:02:19
Because if Missie couldn't get it, it was too hard. Right? Dave Chilton: Right.
1:02:23
Jim O'Shaughnessy: And so we were with my daughter-in-law, before she was my daughter-in-law, my son, Patrick, my daughter, Lael, my wife and me, in Ireland.
1:02:33
And they just loved this game.
1:02:36
And we ostensibly pay for with money, which never changes hands.
1:02:41
And so Lael, my youngest is like, "Dad, let's play the trivia game." And I'm like, "Okay.
1:02:47
And so we're doing it, and we're in a bar after dinner, or pub, and there's lots of people around.
1:02:54
And we notice it getting more quiet. And we just keep going.
1:03:01
So anyway, I asked Patrick, I think it was Patrick, it could have been Lael or Lauren, a question.
1:03:10
It was Lael, because this is the punchline.
1:03:13
She goes, "I think it's this."
1:03:19
And she gave a wrong answer.
1:03:21
And a guy sitting at the bar says, "That's all right, lass.
1:03:25
I've been playing along with you the whole time, and you've gotten double the amount I got."
1:03:30
And so- Dave Chilton: There's a natural love of trivia.
1:03:34
Jim O'Shaughnessy: Oh yeah.
1:03:35
And Ireland, obviously I'm mostly Irish, and so I'm an easy mark for this, but the Irish, we were just talking about him last night with a friend of the family.
1:03:45
I mean, if you'd never been there, you would've loved the Irish.
1:03:49
Because you know what happened after that guy piped in?
1:03:52
He came over and joined us. Dave Chilton: For sure.
1:03:54
Jim O'Shaughnessy: And played, and I learned something new. That's what I love.
1:03:58
Because his first question, he sits down, and he goes, "My name's Mike and it's great to meet you and everything."
1:04:04
And we love listening to the whole thing.
1:04:06
And we go, "Well, the honor is yours, Mike. Give us a question."
1:04:10
And he goes, "Why is the Irish flag the colors it is?"
1:04:15
And I'm like, "Oh, I should know that. And I don't know it.
1:04:22
It's orange, white and green."
1:04:27
So I took a bad guess, totally wrong.
1:04:30
And he's like, "Huh, all right." Do you know why it is? Dave Chilton: No.
1:04:35
Jim O'Shaughnessy: Because orange represents the Protestants, green represents the Catholics, and the white is the peace they came to. Dave Chilton: Wow. I did not know that. That's very interesting.
1:04:47
Jim O'Shaughnessy: Nor did I.
1:04:47
And it's like, I knew, for example, that the South Korean flag is made up of all of the Yijing symbols.
1:04:55
And I was talking to a Korean, and I'm like, "Man, I love your flag because it's all the Yijing symbols."
1:05:04
And he's like, "It's what?" Dave Chilton: "It is?"
1:05:06
Jim O'Shaughnessy: Well, listen- Dave Chilton: Remember when you and I went out for dinner, one of the trivia questions I brought up, and you got it right except that the 99% of people don't know it, is the capital of Australia.
1:05:21
And strangely, Canberra, most people don't know that.
1:05:22
And of course, they guess everything else.
1:05:24
And these include good trivia players.
1:05:25
I don't know how that piece of knowledge has escaped so many people.
1:05:29
Now with Netflix, there's a lot of Australian TV series. Jim O'Shaughnessy: Yes.
1:05:32
Dave Chilton: And therefore, they see it going back to the capital city.
1:05:35
Are you a big Netflix guy?
1:05:36
And if so, have you been watching Ozark lately, et cetera?
1:05:39
Jim O'Shaughnessy: So, not a huge TV watcher.
1:05:43
I tend to watch it later in the evening, and my wife and I are together, and we just want to zone out a little bit. I love Ozark.
1:05:53
Most of the shows that I am watching are on Netflix.
1:05:55
I just saw this incredible documentary about this Polish artist I'd never heard of.
1:06:00
I'm not going to even try to mention his name, because it's like this long.
1:06:04
But I was absolutely transfixed.
1:06:08
And it's up on Twitter, I recommended it.
1:06:10
And his work was literally monumental.
1:06:14
And you know I'm an art collector and I'd never heard of this guy.
1:06:18
And so, obviously, his work got marred by, he was a megalomaniac.
1:06:23
He definitely was that way.
1:06:26
He was an anti-Semite, which kind of negates you.
1:06:29
Dave Chilton: Yes, for sure.
1:06:31
Jim O'Shaughnessy: But then the great irony was, the Nazis came in and destroyed all of his sculptures.
1:06:38
Because he was a real Polish nationalist, except he lived here for most of his life, oddly, in America.
1:06:47
So I just happened upon that.
1:06:49
That's what I love about Netflix.
1:06:50
So the other thing that I just was recently watching are The Andy Warhol Diaries, on Netflix.
1:06:57
So I have been absolutely fascinated by Andy Warhol for years.
1:07:01
Dave Chilton: Your art collection must be doing well right now.
1:07:04
Jim O'Shaughnessy: It's doing okay. Yeah.
1:07:06
Dave Chilton: Now, do you ever sell any of it or do you buy it and hold it for the very, very long term?
1:07:10
Jim O'Shaughnessy: For the most part, for the very, very long term.
1:07:14
I joke to my kids, "You get to sort it out as to how good we were in terms of art."
1:07:24
We have sold a couple of pieces.
1:07:27
Most of the time, we will loan liberally.
1:07:31
So like if a museum wants a piece of ours for the show, yeah, sure. And so we do that.
1:07:38
We've sold a couple of pieces.
1:07:39
Our original intent, when we started collecting in 2004, was that we ...
1:07:39
Missie was getting her Masters in Art History.
1:07:53
Patrick was born, and she decided to get her masters in being the best mother in the world.
1:07:58
And anyway, what she was transfixed by was this idea of patronage.
1:08:03
Factor in The Renaissance, most of those greatest artists had patrons.
1:08:09
The Pope or the Medici in Florence.
1:08:14
And so our original brief was, we only want to buy living artists.
1:08:19
So that- Dave Chilton: Interesting. Jim O'Shaughnessy: ... we can make an impact.
1:08:22
Now, we still do that mostly.
1:08:26
We haven't succeeded entirely, but it was fun, because we actually did change some people's lives, which is just such a great feeling.
1:08:34
Because we didn't know that we were going to.
1:08:36
Dave Chilton: That's cool.
1:08:37
Jim O'Shaughnessy: And it really is cool.
1:08:41
So yeah, that's- Dave Chilton: Did you try to get the word out about what artists you were gravitating to, and spread that among your friends and colleagues, or no, pretty low key? Jim O'Shaughnessy: No. Very low key.
1:08:51
Because you know me, I try to quant everything.
1:08:55
And so I'm like, "I bet we can quantify the art market."
1:09:02
And by the way, you can quant the wine futures market.
1:09:06
I didn't come up with it, but there's a brilliant paper, which essentially will tell you which futures you should buy. It's a formula. It's an algorithm.
1:09:19
And so, that was one of my lifelong quests, was to quant the art market.
1:09:23
Pretty much you can't do it. Dave Chilton: No.
1:09:25
Jim O'Shaughnessy: I can tell you that all of the value of art is pretty much in the network.
1:09:29
A famous example- Dave Chilton: I totally agree. Jim O'Shaughnessy: Yeah.
1:09:34
Famous example was Basquiat.
1:09:37
What I didn't know was that he had a partner, when they were just doing the spray can art in New York city.
1:09:46
And his partner and his style were so much the same, that you literally couldn't tell who had done it.
1:09:55
And there was a joke made that even they, if they came back to the work later, even they couldn't.
1:10:00
Dave Chilton: They couldn't distinguish.
1:10:01
Jim O'Shaughnessy: So Basquiat got adopted, essentially, by Andy Warhol, became enormously famous, enormously rich, because his painting sold for so much.
1:10:13
His partner said, "Yeah, you're selling out. I don't like that."
1:10:17
And so Basquiat, internationally famous partner, same skillset, nobody knows.
1:10:22
Dave Chilton: [inaudible], isn't it?
1:10:23
But I agree with you about the network. Jim O'Shaughnessy: Yeah.
1:10:25
Dave Chilton: And I think certain artists are made by people because they decide to make them, in essence. Jim O'Shaughnessy: Yep. Absolutely.
1:10:32
Dave Chilton: And it's very difficult to say it's necessarily the quality of the art.
1:10:34
And have you played the collectibles field much at all?
1:10:37
We looked into it very aggressively.
1:10:39
The problem with it is, the amount of fraud is overwhelming.
1:10:42
I mean, in sports and in movie-related memorabilia, it can be as high as 90 and 95%.
1:10:48
And distinguish between the genuine and the fraudulent is very difficult to do, to be perfectly honest, and often not worth the expense and the time.
1:10:55
So we ended up not pursuing it too aggressively.
1:10:57
I have a few things I've collected over the years, but nothing incredible.
1:11:00
But one thing I do have, that I love, is we have the original model sheets, the original drawings of the Jetson characters.
1:11:07
Jim O'Shaughnessy: Oh, wow. That's very [inaudible]. Dave Chilton: Yeah.
1:11:11
So that is the one thing we've got that I think is super cool.
1:11:14
And I like stuff like that.
1:11:15
Like I have a Mark Twain letter where he turns down a speech, and he basically uses the same excuses I often do if I turn down a speech.
1:11:22
And so I like that kind of thing, a piece of history.
1:11:24
But not a big collector at all. And I love art.
1:11:28
I don't collect art, but I really enjoy it.
1:11:30
I still love going to museums when I'm in town and you go into Boston or whatever else and checking all of that out.
1:11:36
But it's good that you got involved in collecting that, and what an asset class it's become, obviously.
1:11:41
And you've got funds out there now for everything from artwork to farm land, and it's crazy now.
1:11:47
I don't know, does the podcast ever glean, or do you talk about current markets?
1:11:51
I mean, obviously, we're in a very tumultuous time right now. Jim O'Shaughnessy: Yeah.
1:11:54
So in keeping with my infinite time horizon, I have had many people that I was very interested in, and we talk markets.
1:12:09
Especially young people who I see, who are really brilliant.
1:12:12
I like to be able to give them a platform, because I'm blown away by their intelligence like Lily Francus ...
1:12:17
I'm saying her name wrong. Dave Chilton: Yeah. She's brilliant.
1:12:22
Jim O'Shaughnessy: She's brilliant. She's beyond brilliant.
1:12:24
Dave Chilton: Yeah, I just saw her on Real Vision and I thought, "Okay, she's way smarter than I am.
1:12:28
I'm going to have to pay a lot of attention to her.
1:12:30
Jim O'Shaughnessy: Yeah, no kidding.
1:12:31
And I had her and an OSM research partner, Jesse Livermore, not his real name. Dave Chilton: Yes.
1:12:39
Jim O'Shaughnessy: And I recorded a podcast with them and it was just the easiest podcast I ever had. Because I just, "Okay.
1:12:46
So explain to me why ..." and then they did.
1:12:48
Dave Chilton: No, and those are two brilliant ones.
1:12:51
I follow the Jesse Livermore account on Twitter but your son asked a little while ago, recently, last couple weeks, "Does anybody out there have an indicator?"
1:12:59
They follow a single indicator that they think is very helpful.
1:13:03
And I was busy, I was driving, so I couldn't respond, but I want him to know, and your listeners to know, I have the ultimate indicator.
1:13:10
And that is my assistant of 30 years, Marine, who you've dealt with whenever she does do the opposite.
1:13:16
And you'll be unbelievably wealthy.
1:13:18
Anybody who says you can't time the market is wrong.
1:13:21
She has timed every single market perfectly by getting it exactly wrong.
1:13:27
About two months ago, she walks into my office and she goes, "Hey, you know what I did it on Friday?" I said, "No."
1:13:33
She goes, "I bought some Altcoins.
1:13:34
I got into some Altcoins." I had two alt coins.
1:13:38
I sold them, Jim, within 20 minutes.
1:13:42
I've seen this story play out before.
1:13:45
Mo is the nicest person I know, but she's a little on the boring side. She's right here. She will confirm that.
1:13:51
By the time the news of an investment reaches Mo, that's the peak.
1:13:56
Jim O'Shaughnessy: That's it, you're done.
1:13:57
Dave Chilton: She's the last person to hear about these.
1:13:59
So yeah, Patrick's looking for the best of the indicators.
1:14:02
She's right here in my office- Jim O'Shaughnessy: I love it. Dave Chilton: ...
1:14:05
he's welcome to call her anytime.
1:14:06
In The Wealthy Barber Returns, I had a piece in there that was quite interesting about how, back in 2006 and 2007, a lot of Canadian teachers started borrowing money to buy equity funds.
1:14:18
And I was getting asked about it on stage all the time.
1:14:21
And I thought, "This can't be a good sign.
1:14:23
Conservative investor group, not only coming whole hog into equities, but doing it with borrowed monies.
1:14:29
This has to be near the end."
1:14:30
And of course, it was near the end, the market ran into all those problems.
1:14:34
And I think that kind of sentiment indicator, I've benefited from over the years.
1:14:38
In fact, you know what's interesting, in this world of big data and algorithms and all the types of things you do, I think a lot of my investing success is because I'm a good gatherer of anecdotal information.
1:14:49
I talk to so many people and I tend to pay attention and put it all together.
1:14:54
And it's really helped me.
1:14:55
It's helped me in the Canadian real estate market in the last five or 10 years when a lot of people thought it was peaking.
1:15:00
I thought it was going to keep going, it has, although it's run into some turbulence now with the higher interest rate environment.
1:15:05
One of the reasons I thought that was, I could see my parents' friends were not selling their houses at the normal age.
1:15:12
They were not moving down. They were staying.
1:15:14
By the way, they were staying because wealthier baby boomers, but also, they wanted a place for their grandkids to stay when they came over.
1:15:21
In fact, they were adding swimming pools, for heaven's sakes. Jim O'Shaughnessy: Yep.
1:15:25
Dave Chilton: These are 65 and 70-year-olds putting in pools.
1:15:26
Well, that suddenly changes the demand and supply curve.
1:15:30
And then you look at the immigration vigors, but again, you're talking about a lot of anecdotal evidence. It's helped me.
1:15:36
My last story along that line, I think you'll like, back in 2007, 2008, right at the peak of the insanity down in the US market, I came down to Naples, Florida, a friend of mine, Gary Dory.
1:15:46
And we were out a couple nights having dinner.
1:15:48
Everybody we were meeting was down there buying condos.
1:15:50
We met a dentist from Cleveland, and he had bought nine condos in Naples in the preceding three or four days.
1:15:56
But he said something interesting to me.
1:15:58
I said, "Oh, do you get a property manager to handle the tenants?"
1:16:00
He goes, "No, I don't bother rent them.
1:16:02
Too much of a hassle to rent them.
1:16:03
I'm just going to hold him and flip them in a year and not bring any income, and I'll cover the costs out of pocket."
1:16:08
I honestly said to Gary, "We're at peak."
1:16:12
When people start buying real estate and not even caring whether they get rental income for a year, because they're going to ride the capital appreciation up, and it's a learned dentist, a pretty sharp person, we're at peak.
1:16:24
And of course it was right after that that it started fading.
1:16:26
And so it's funny because again, we're in the days of big data and algorithms and AI and everything else, but a lot of my investing success has come from just paying attention and watching.
1:16:36
I'm not timing markets on an ongoing basis. Nobody can do that well.
1:16:39
I'm not saying they can't.
1:16:41
I tend to use a lot of long-term index funds, et cetera.
1:16:43
But when I have moved in and out, it's more or less because of casual conversations and gleaning kinds of insights from that.
1:16:49
Jim O'Shaughnessy: No question about it, and it's something that I've been very interested in recently, which would sound odd for a quant, but it's this idea of, you've been there so often, and you've seen it and heard it so often, you have a saturated intuition.
1:17:07
And you are able to synthesize all these things that we can't articulate in AI, right? Dave Chilton: Yes.
1:17:14
Jim O'Shaughnessy: And that's what's working here.
1:17:16
And I had it working myself, but because I was such a quant, I ignored it.
1:17:22
It's like, during that same time period, I was a Bear Stearns, and I was literally walking around saying to any other SMD, "If I could short my house, I would."
1:17:33
And they're launching funds, investing in CDOs and I'm telling ...
1:17:33
I get called on the carpet, man, they're like, "Shut your fucking mouth, O'Shaughnessy, because this is a great fund.
1:17:45
And I'm like, "I don't know about that.
1:17:48
Leveraging highly illiquid instruments could be problematic."
1:17:52
But that's saturated intuition.
1:17:56
I don't know that we're ever going to be able to duplicate that. Probably at some point.
1:18:00
Dave Chilton: And I love that expression.
1:18:02
And I think, unfortunately for us, it really does come when you get older, and you've seen a lot of this before.
1:18:08
In fact, recently, when you look at some of the valuations in the tech sector, even among the companies I most like, if you've been around a long time, you are looking at them going, "No, it's not going to have a happy ending.
1:18:19
I'm not smart enough to know precisely when the decline's going to come, but the declines going come." Jim O'Shaughnessy: Yeah.
1:18:25
You never can know the exact.
1:18:27
I- Dave Chilton: You know Jeremy Grantham, of course.
1:18:31
He's been interviewed by your son, I think a couple times. Jim O'Shaughnessy: Sure.
1:18:34
Dave Chilton: And I enjoy listening to him.
1:18:35
And he was talking about the bubble nature of the markets with Patrick once, about six to eight months ago.
1:18:40
I really saw it here in Waterloo with Shopify, a fantastic company.
1:18:44
They treat their employees well, good culture, et cetera.
1:18:47
But it got to be the point where its biggest fans, including people with great backgrounds in investment, couldn't have cared less what the valuation was.
1:18:54
You could talk to them about the price/sales ratio being 80, they didn't even care.
1:18:56
They'd say, "It doesn't matter."
1:18:58
"What do mean, "It doesn't matter"?
1:19:01
Valuations matter at some point."
1:19:02
And again, you could almost see that this had to happen, and the speed it's happened with right now, it's quite stunning.
1:19:08
I mean, you've got a lot of these stocks down 75%, 80% and 85% from their peak in six months. It's happened quickly. Jim O'Shaughnessy: Yeah.
1:19:15
And before we started recording, I was telling you about a guy I met on Twitter, good friend now.
1:19:22
He's a doctor in Manhattan.
1:19:24
And he had the greatest phrase for it.
1:19:28
We were together in Manhattan, and we were talking about markets.
1:19:33
This is about, I don't know, six months ago, maybe even nine months ago.
1:19:38
And so he looks at me and he goes, "So what do you think?"
1:19:41
And I'm like, "Well, I mean," what you just said, "Valuations ultimately matter." Right? Dave Chilton: Yes.
1:19:48
Jim O'Shaughnessy: "And nobody believes that right now, but they do."
1:19:52
And he looked at me in with a twinkle in his eye and he goes, "So you're not a big fan of the price-to-magic ratio?" I loved that.
1:20:01
And it was just the perfect encapsulation of ...
1:20:01
He's a doctor, he's a very analytical thinker, he is brilliant.
1:20:16
His little rule of thumb is basically like your assistant's, when it gets that ...
1:20:16
He runs a business around the medicine, and he has a lot of people working for him.
1:20:28
He used the same example. And it's like, I know.
1:20:32
And he had a woman who'd been with him for years and years and years, but she just is not interested in investing at all.
1:20:40
She teases him about it like, "This is boring.
1:20:42
Oh, my God, I can't believe you listen to this or watch this or read this."
1:20:47
And he said, without fail, whenever she says, "Could you tell me whether this is a good idea?" He's like, "I'm out." Dave Chilton: Exactly.
1:20:57
Jim O'Shaughnessy: Well, listen, man, this has been so much fun.
1:21:00
I hope when you're next in New York or I'm next near Waterloo, we could get together, because we always have such a great time. Dave Chilton: We do.
1:21:09
I wanted to close by showing the audience on YouTube something, and I wanted you to see it.
1:21:14
I still have the Blackberry.
1:21:16
I still use it every day. Jim O'Shaughnessy: Wow.
1:21:18
Dave Chilton: That's I've had when you and I knew each other. Oh, yeah.
1:21:20
I've got lots of boxes full of blackberries in the file cabinet behind me, and I'll continue ...
1:21:25
When they shut down the Blackberry operating system, the CBC, Canada national network, called me right away, and said, "We know you're the most well-known Blackberry user."
1:21:33
And I said," I'm going to put two tin cans on a keyboard before I give up my Blackberry. So I've still got it.
1:21:39
You contact me any time you want on my Blackberry. It never stops working.
1:21:42
Jim O'Shaughnessy: I love it.
1:21:44
As you probably know, Patrick had the, what is the kindest thing somebody had ever done for him.
1:21:52
And so I couldn't use that, but I like mine too.
1:21:56
And mine is, we're going to create David Chilton, Emperor of the World, for one day. You can't kill anybody.
1:22:04
You can't put anybody in a reeducation camp, but what you can do is incept them.
1:22:09
You've seen that movie, I would guess, right, where- Dave Chilton: No.
1:22:12
Jim O'Shaughnessy: Okay, so inception is creating, in a dream state, a suggestion that the person thinks is their own. Dave Chilton: Okay.
1:22:19
Jim O'Shaughnessy: So what I'm going to tell you is, I'm going to give you a magical microphone, I'll even make it a Blackberry, so that you'll know how to use it- Dave Chilton: Good. Jim O'Shaughnessy: ...
1:22:28
and you are going to be able to either type or speak into it two directives, two thoughts.
1:22:35
And everybody in the entire world is going to wake up the next day and think, "I've just had the greatest thought." And you got two.
1:22:46
What are you going to make everybody think and start to do?
1:22:48
Dave Chilton: Well, the first one I think is pivotal.
1:22:51
And that is, I would tell everybody out there to get on the Dave Chilton diet of black licorice every day.
1:23:00
It's the single biggest reason I'm happy.
1:23:03
I eat my black licorice, it motivates me, it excites me, gets me that sugar rush coercing through my body, and I believe it's really been the major contributor to my success.
1:23:13
The second one- Jim O'Shaughnessy: There you go. Dave Chilton: ...
1:23:15
less important, but still one I want you to focus on, is I believe again, duplicating a lot of what we spoke about earlier with my father's qualities, my mother's qualities, be curious and be kind.
1:23:27
You cannot go wrong with those two.
1:23:30
Those two working together, lead to happiness.
1:23:32
And really, that's what it's all about at the end of the day. Is, are you happy? Are you content? Are you adding value?
1:23:37
And curiosity and kindness will light the path towards that.
1:23:40
I've mentioned your son to me is one of the greatest examples I've seen of that.
1:23:44
So off the top of my head, those are the two I would come up with.
1:23:47
But the licorice obviously being the more important of the two.
1:23:49
Jim O'Shaughnessy: Absolutely.
1:23:50
I mean, that goes without saying.
1:23:52
But what- Dave Chilton: You guys don't have butter tarts in the states.
1:23:54
Jim O'Shaughnessy: No, we don't.
1:23:55
Dave Chilton: That's the strangest thing.
1:23:57
They're the greatest food ever invented, you don't have them in the states.
1:23:59
Jim O'Shaughnessy: It's unbelievable.
1:24:01
And- Dave Chilton: I'm bringing them down there. That's my next business.
1:24:05
Jim O'Shaughnessy: Perfect. Bring them down.
1:24:07
Dave Chilton: Wealthy Barber Butter Tart King.
1:24:09
Jim O'Shaughnessy: You know what?
1:24:12
I would never short you, David.
1:24:13
I think if you do that, you will succeed.
1:24:16
Listen, this was great [crosstalk].
1:24:17
Dave Chilton: Great seeing you, please say hi to the family for me, and I'm looking forward to doing this again at some point.
1:24:21
Jim O'Shaughnessy: As am I. Cheers.