"[Music] hi i'm jim o'shaughnessy and welcome to infinite loops sometimes we get caught up in what feel like infinite loops when trying to figure things out markets go up and down research is presented..."

"thanks for joining us now please enjoy this episode of infinite loops jim o'shaughnessy is chairman and co-chief investment officer of o'shaughnessy asset management where jamie catherwood is an assoc..."

"the anonymous 10k diver on as a guest and let me just step back and tell you why this guy just amazes me so first off he does some of the best threads i've read on issues that are sometimes really dif..."

"the strength of his work alone 200 000 followers on twitter people don't really care too much about who you are they want to care about what you can help them with or what you can teach them and my gu..."

"website completely and i'm like this guy could be like the top dog at goldman sachs and it turns out by the way that jesse has gotten unsolicited job offers just off the power of his work so we're no..."

"thank you so much jim that was such a fantastic introduction and very very warm introduction thank you so much for it it's my pleasure you are such a high output a high signal this is a debate i often..."

"curate aggressively but i don't really block people or mute them or do things like that too much the reason i don't like to mute people is well a lot of the time when someone says something that you d..."

"to tony demelo at least are to look at what annoys you and other people and one of the things that you can also find that if somebody calls you something that you are pretty certain does not apply to ..."

"the mortality argument that you made and those things are great because a very few people are thinking about them b they just align so well with step by step how do i think this out properly like i lo..."

"i do say so you may put that on your resume yeah jim o'shaughnessy says that i am a polymath that should be good enough for most people [Laughter] but tell me in all seriousness your interests are ver..."

"talk a little bit about the volatility tax and if you would for our listeners define what it is and i'm not going to ask you to go through the whole thread but what i am going to ask you is was it som..."

"okay the first reason a lot of people don't get it is because it's not really a tax in the traditional sense of that tax when you call something a tax people's minds immediately jump to something that..."

"there's a 50 chance that the stock will get cut in half so if the stock is at 100 today it could be at 200 one year from now or it might be at 50. so if you sort of take the expectation of this so mos..."

"return sort of quote-unquote and this is what's called an arithmetic return the problem happens when we try to compound this over a period of time so we just buy the stock which is at 100 right now an..."

"what happens is that you don't get anywhere close to the 25 return in expectation and why is that because if you think about it a doubling and a halving sort of cancel each other out so if a stock dou..."

"of halvings are going to be roughly similar to each other and all those doublings and halvings are just going to cancel each other out and the most likely return that you will get over a long period o..."

"can be very different when you have a volatile stock or a volatile asset and the idea is that for people who want to sort of leave their money in this talk and then try to compound with it over a long..."

"so that difference between the arithmetic and the geometric expectations that is basically what is called the volatility tax and people don't understand this very well because it's a probabilistic con..."

"will have to be some amount of memory i mean what is a price the price of something is just there is a buyer and a seller and they're negotiating with each other and then wherever they end up in where..."

"surprising indeed so i don't fully understand the math of fractals and so on it's something that i've wanted to read about for a long time it's on my list of topics that i have to learn more about and..."

"crashes and i think that they are very linked to the way humans evolved and so maybe i'll put you on the team because you would figure it out i'm too lazy as you probably know if you follow my twitter..."

"something like that yes and so that's another thing that i'm a huge believer in is as much history data as possible because ultimately they say well why does that matter well it matters because market..."

"if you wouldn't mind briefly just describing what you went through which again listeners if you really want a class a insert mba from some ivy just read these threads he does an excellent job on these..."

"of people who identify with the fire idea but one of the tenets that many of these people believe is this four percent rule of course there are some people in the fire community who say that four perc..."

"so that is the four percent rule and what i thought was interesting was most people stopped there and one of the things that really bugs me and one of the things that i think that social media actuall..."

"and that's why i bring so much psychology into this and i've long said that markets change second by second human nature hasn't changed millennia by millennia arbitraging human nature is the last sust..."

"well because if you can keep your head will all of those around you are losing theirs i mean that's the additive of doing well i want to move on a little bit to mental models i hate the term because e..."

"when making decisions either in investing or other aspects of your life and with that question what five skills did you develop to make those models more and more effective that is a wonderful questio..."

"extraordinary evidence basically that is the idea behind base rates if you think a particular company is going to grow at 20 for the next 50 years or something like that well how many companies have d..."

"consequences and that's basically what probability is it just gives you a systematic way to think about these things and since i love probability i use probability a lot in my decision making and i tr..."

"then write all of the things getting you not x and the results and what made itself very apparent to me as i did this more and more and more i mean i have one around here i'll actually put one of the ..."

"are two completely different things and it's very hard to tell if i'm working towards financial independence or something like that trying to figure out how much money i need so that i can call myself..."

"so the real jesse livermore who our colleague as an osam research partner uses his name the real jesse livermore killed himself in the netherlands men's room in the 1940s because he had made and lost ..."

"fraction of people would you say are very special and unique how likely is it that you are in that fraction i always put up when somebody's going on and on about how brilliant they are or how they don..."

"no all joking aside yes i do have access to a super large gift library and if you want to know the real secret the real secret is this i've got 30 years of cultural history that you don't have so i ca..."

"and b i'm voraciously curious so i also love current culture i think it's fantastic so i find myself now bringing up like very contemporary things with people in my age group and they just look at me ..."

"you're the editor too and so one of the things that i'm always looking for is i was made by nature to be voraciously curious and there's no cure for it now i can tell you're exactly the same way what ..."

"basic thing is if i tell you that restaurants last seven years on average you take all the restaurants and figure out how long they stay in business and take the average they last in business for abou..."

"the point that i think you actually do make in your piece and my immediate answer would be when i was looking at that piece and now granted i've just trained myself to think this way but when i was lo..."

"talib gets an enormous amount of pushback on this idea simply because people don't understand it they don't understand that it's a probabilistic statement and not everything has to follow this particu..."

"so i think the point that well i don't want to put words in talib's mouth so let me say i think the point that i got out of it is when you try to apply this principle to businesses and things like tha..."

"that sound that new app what's whatever yes it's called calling yes the name of the app is call-in yeah they're pitching me and the idea is people just call in their team is pitching me on joining the..."

"if you have a dagger that is constantly pointing at you from the steering wheel you're going to drive very very carefully but the first pothole is going to kill you you're dead it's this whole idea of..."

"deep level and i'm really delighted that i have this audience who seems to like what i'm doing so i have this engaged audience and it's a lot more fun to be a writer when you have that audience than i..."

"all right this has been absolutely phenomenal i will definitely have you back on because i didn't even get to have the stuff that i wanted to ask you about i'd love to be back on sorry i have a tenden..."

"principles if you want to find a company's return on capital or something like that look at its earnings think about its business look at how much capital it needs and then take the ratio and see what..."

"something that i would do i love both of them and you would also have a much happier life in my opinion well tell us how we can find you on twitter and elsewhere you've already told us about the new c..."