Howard Marks: 79 Years of Investing Wisdom in 55 Minutes

alright here's what i said i said describe howard marx in two hundred eighty characters here's what it gave you howard marx as a legendary investor and cofounder of oak capital known for sharp memos contra concurrent thinking and risk focused approach he made billions zig when others zag especially in crisis when he writes wall street listens pretty flattering pretty pretty good yeah i feel like i could rule the world to know i could be what i want to apartment at all in it like a days off on a road less travel never look me okay well i i think the best place to start is that kinda z while others zag so i wanna ask about the s and p because you don't know much about us but the the short version of of the guy you see across from me there sam is sam's entrepreneur sam builds his company he sold his company and he took the money that he made and he said look i worked hard for this money now i want this money to work hard for me but i needed to be safe and so sam went into a a mostly you know best practice low cost index funds in the s sap p five hundred and time i sam i'm about his strategy or i tell him dude you gotta buy bitcoin in ethereum if you gotta buy this get put some money over here because i'm i'm like you know if sam is vanilla i don't even know what i am some flavor off in the side that's how about strange two f fruity the two fruity over here and i'll keep trying to pull him over here but he says no i like vanilla and so he he basically just says the long term average asp p five hundred is ten percent if i just hold this for fifty years i'm gonna double you know this many times i'm good very very boring very boring yeah he repeats that like on loop like he's he's one of my kids toys you push the button they just keep saying the same line but you know i do get a little wary when anything seems too safe for two two certain i guess two taken for granted that this ten percent number over the long term will be the be what it'll be i guess what would your message be the say sam as sam just you know is he right is he wrong would you give them a caution of warning if if he was your nephew he looks like he might be in your nephew if he was your nephew what would you be telling him well on the one hand sam you're right because if if you have more money than you need to eat the first person first purpose of your money should be to make you comfortable it doesn't make any sense buffet says don't risk what you have a need to get what you don't have and don't need it does makes no sense for somebody with a surplus of money to make their daily life less pleasant by going to investments that put them under pressure but there's gonna be a butt on your statement it sounds like but on the other hand the risk is thing in the world is the belief that there's no risk the risk in the markets does not come from the companies the securities or the institutions like the exchanges the risk in the markets comes from the behavior of people and it's that for that reason that buffet says when others are imp you should be prudent when other people are care free you should be terrified because their behavior un raises prices and makes them precarious when other people are terrified you should be aggressive because their their behavior suppress prices to the point where everything's a giveaway so i don't i mean look in the long run you're right about the s and p and over the over the coming years american companies on balance are going to produce prosperity what what's that defined as long term in this well i would say a twenty or more is is is the is the real long term and i'll tell you in in a minute how i get there but my favorite cartoon i have a file of cartoons from over the years my favorite one there's a guy he's got his is a car pulled over to the side of the road the guy's in a phone booth so you know it's an old cartoon because there on no more phone booths and there's a as a factory going up in the background and he's screaming into its telephone i don't give a damn about prudent diversification sell my fe chemical in other words prudent diversification calls for certain investment positions and a variety of them in a certain composition reality says i see fe chemicals burning to the ground get me out and you have you can't ignore reality now what what's reality in this case for you reality is recognizing where things stand and jp p jpmorgan published the chart around the end of twenty four and it was a scattered diagram showing over the years if you bought the relationship between the s and p five hundred ad purchase and the return of the annual return over the next ten years and it looked like this on this axis we had return and on this axis we had pe ratio and it was a it was a a negative correlation which means the higher the pe ratio you pay to lower the return you should expect makes perfect sense and it showed there was a number here twenty three on the pe ratio axis and it showed and which is what the pe ratio on the s and p was at the time and it showed that historically if you bought the s and p when the pe ratio is twenty three in every case there were no exceptions in every case your annual return of the next ten years was between two and minus two so all you have to know and what what are we today what what is it today twenty three twenty four twenty four twenty five because why because the prices have risen now maybe the outlook has risen so maybe it's still twenty three but i think let's say i think twenty four so you can say the s and p has returned ten percent a year on average for a hundred years i i'm happy with ten i'm in or you can say it doesn't always return ten by the way one of the most interesting things about the s and p if you do the research and i did it for a memo on average it has returned ten percent a year for a hundred years but do you know that the annual return is almost never between eight and twelve think it it kills it or it died floyd yeah think about what that means the the the the norm is not the average but the the issue for someone like me so a lot of our listeners of i'm one of them you know i i fortunate i had a business i i made a a relatively large of money at a very young age but i'm at an investor yeah like i don't know anything about public markets and so when i hear you say that i think well i don't have an alternative well you you do have an alternative you could figure out an algorithm to rebalance your position based on relative price and you could put it on autopilot i don't recommend you know making judgments about the future and the appropriate of today's price for the future you perceive but you can do that and and there are ways to do these things even if you just use common sense what what would you be rebalancing into so say s and p pe is high what would be the second best for the sort of non full time active income okay so i i've tried to suppress my tendency to talk my book until now but but i i think an alternative is is bonds you know and in nineteen i joined citi bank in the investment research department in nineteen sixty nine as an equity analyst and the bank did so horribly that in seventy eight i was banished to the bond department and the bond department was the equivalent of siberia the good news is that at that time american corporation pretty much gave lifetime employment so i didn't get sacked but i'm in the bond department and i get a phone call from the head of the bond department saying that there's some guy in in california named something like milk and he he invested in something called high yield bonds can you figure out what that means and i said yes and i became a high bond investor and and you know what when you buy a bond there's a contract that says the borrower will pay your interest every six months and give you money back at the end and you can figure out the return that is implied by that contract and if they if the borrower doesn't keep that contract over general overs simplifying the creditors get the company through the bankruptcy process so the borrower has a lot of incentive to pay you and they almost always pay i've been involved in high yield bonds for forty seven years and i can tell you they've almost all paid so today you can buy higher yield bonds whether it be the us or europe or variations on that theme what we call low grade credit and you can buy buy it to get yields of seven to eight now seven to eight is pretty close to ten so that's that that's a good thing the bad thing is you have to pay tax every year on the on the income that's a bad thing but for those of us who are cautious like you and me we might say i'll take you know eight which in the long run will give me four after tax as opposed to ten which after capital gains taxation will give me seven or maybe i'll mix them maybe i'll own a little s s and p and a little more debt because i'm that's what i do now yeah because i'm worried it's not all or nothing then that's why i when i'm on tv shows and they say well is this a sell or buy is this risk on or risk off i resist that formulation because it's never one or the other it's it's a mix and the only question this relevant is what makes i think the way when you manage your portfolio the the operative continuum to think about is the continuum that runs from aggressive to defensive and i think about a a speed bomber in the car so zero is no risk a hundred is max risk a hundred percent aggressive you should have a sense for your appropriate normal posture and it sounds to me like sam you're a little conservative guy you've made so much money you can't believe it but you don't wanna give it back so so i would say that you're you're a sixty five and especially given your you with you may be a fifty five for your cohort so i and and i think you should figure out every every listener every investor should figure out the right place for them and try to stay there most of the time we need to get a couch here and you could just yeah i'll call you doctor marks and you thinking know what i wrong i once wrote a memo called on the couch because i think that once in a while the market needs a trip to the shrink hey let's take a quick break you know hubspot help tumblr solve a big problem tumblr needed to move fast they were trying to produce trending content but their marketing department was stuck waiting on engineers to code every single email campaign but now they use hubspot customer platform to email real time trending content to millions of users in just seconds and the result was huge three times more engagement and double the content creation if you wanna move faster like tumblr visit hubspot dot com alright back to the show i went back and i read a bunch of old memos and the one that stood out to me was the bubble dot com one so you wrote this back in two thousand and i i actually have a few of these where i feel like there's been moments in time maybe two thousand two thousand eight twenty twelve twenty twenty where it seemed like consensus was going one way maybe it was max greed and you went the other way or as max fear and panic and then you you were actually very aggressive you did the thing where buffett says be fearful when others greedy and greedy when others are fearful cool to say but it's hard to actually do and i thought it it'd be fun if you could kinda walk us through a couple of those moments and i don't know like you know not to go too far down memory memory lane but just you know take us back to you know the the one in two thousand what you see what you do did you know how did that play would you learn from that take us through a couple of those because i think that's your superpower first of all what one of my sayings is we never know where we're going but we sure as hell to know where we are and at oak tree we loudly pro claim our inability to make macro forecasts and our non reliance on macro forecasts but if we wanna do the right thing vis a vis the macro we should be able to figure out what's going on at the present time and what that implies for the future yeah it may not happen the thing you think it implies but it probably has a higher chance of happening than not happening if you're logical and and understand history and patterns and i wrote a book called mastering the market cycle which was published in eighteen and i i always say it's the cheesy title but it wasn't my idea the publisher wanted that title because they thought it would sell more books but i like the subtitle and the subtitle says getting the odds on your side and i believe that where we stand in the cycle determines what probably is gonna happen and how likely it is and understanding that can improve your odds it can't make you a sure winner but it can improve your odds and that's the best we can do in an uncertain world be set by randomness so you know i i don't know if you know that i started writing the memos in nineteen ninety bubble dot com on the first day of two thousand was the first one that ever garnered a response i went ten years not only did nobody's say hey that was good nobody even said i got it and and and and so one of the mysteries is why i can who are you sending them to to our clients how many crickets well you know in nineteen ninety a hundred okay you know and by mail of course i wrote bubble dot com january the second of two thousand and it had two virtue it was right and it was right fast if you're right slow it it doesn't look like you were right one of the great sayings in our business is that being too far ahead of your time is indistinguishable from being wrong so the the the answer is i was not too far ahead in in the fall of ninety nine i read a book called devil take the behind most it's a it's a history of financial speculation were you looking for books about that because you had a hunch or you just randomly read this no i i don't remember why i read it the idea comes first not my books my memos are not research based they're based on ideas that resonate with me and so i'm reading this book oh i am interested in financial speculation i'm interested in cycles i'm interested in in the extremes of financial behavior so that's probably why i read it but i'm reading this book and it talks about all these crazy things that people did especially in something called the south sea bubble britain had this big national debt and they concluded that they could pay it off by starting a company called the south sea company and they granted them a license to trade with the south sea by which they meant not samoa but brazil and and they would charge them a a license fee and that would pay off the debt and it was one of the one of the great bubbles and so i'm reading in the book about what people were doing in seventeen twenty and you know people were quitting their day jobs and hanging out in ale houses to trade the shares of the south sea company etcetera etcetera and i said that's what's going on now in the tech bubble people you may recall that people are quitting their jobs becoming day traders people with no money could trade stocks as long as they didn't carry any balance overnight and and and young people were quitting mba programs because they had an idea and if they're waited until they graduated somebody else would take it so so it just resonated and one of the quotes i used the most now is from mark twain who said history does not repeat but it does rhyme there are certain themes that rhyme from generations generation and cycle to cycle because they are embedded in human nature and so they recur and so and when you when you get older in our business you know obviously one of the things i has to point out is there is no such thing as knowing something about the future and if you don't know about the future and you wanna figure out the future there's no such thing as analyzing the future it doesn't exist and the only thing you can do to get a handle on the future is look at the past and look for the repetition of patterns as twain said and try to figure out if they apply today so this was very easy so i wrote this memo bubble dot com and it said what they were doing people are doing today and i point tried to point out the fo of what i saw going on companies with no profits and no revenues were being highly valued maybe no product just an idea and that is the epitome of a bubble so i wrote the memo as i say january the second sometime around mid year the detect bubble started to collapse so as i said in the introduction to one of my books after ten years i became an overnight success did you actually bet against it or did you just preserve capital by not funneling into every you know tech company basically like what what was the what was the win of that for you first of all we're not involved who were basically not involved in the us stock market and we're not involved at all in technology so we wouldn't have a chance to apply that but i think what we did is we recognize recognized and and by the way things don't happen in isolation uniquely so when you when you see something like i described in the tech bubble you should realize that maybe there are ramifications in other world parts of the world and we figured out that people are engaging in optimism not pessimism greed not fear cr not skepticism risk tolerance not risk aversion and when as buffet says about prudence when nobody's afraid un otherwise deals can get done easily simple as that and the people who buy that stuff it usually ends badly the way that you explain it i think everything makes sense and i totally buy into it but that's actually quite challenging to understand this like macro environment and to say this is where we are yeah well you have to be clinical you have to observe and and without emotion understand what's going on and what the what the implications are and of course the what we call what i call emotion is part of what's called human nature if you succumb to human nature it tends to get you to do the wrong thing at the wrong time i came across a great quote within the last year from a guy who's a retired trader when the time comes to buy you won't want to and and that that that that encapsulated encapsulates so much wisdom because what is it that causes the great moments to buy it's probably the point of lowest consensus but when most people don't believe would be the time that the price is gonna be the lowest it writes it's the time with either the most uncertainty or the most pessimism or the most fear most conservatism so you also wanna be all those things what causes those things you're talking about you're talking about the manifestation what's the cause bad news i don't know about bad news bad events bad news either either exogenous or geopolitical or or in the economy fa corporate fortunes declining stock prices widespread losses and a proliferation of articles about how terrible the future looks so the point that's why you don't wanna buy at the low who would wanna buy under those circumstances right and so you you talk before in your introduction about zig when others zag the only thing i'm sure of is if you zig when they zig you're not gonna outperform alright this episode is brought to you by mercury they are the finance platform of choice for over two hundred thousand companies shouldn't be surprised because i use it myself for not one not two but i have eight different mercury accounts i have seven for different companies that i a part of and then i have my own personal account because now they have personal banking which is really cool feature i highly highly recommend it like i said i use it myself the reason why is because the way that mercury works is beautiful it's very intuitive and you could tell that it's actually made by a starter founder it's an entrepreneur you could tell it's made by somebody who used other banking products in the past and didn't like all the different rough edges and and annoy and decided to you know actually fix it himself and really any type of entrepreneur you are let's say you're at agency well one of the things every agency has to do is be able to send invoices easily create them send them to customers and stay current on your balances with all your customers you can do that inside mercury and so i think that mercury is great highly recommend you check it out and thank you for sponsoring the show for more information check out mercury dot com mercury is a financial technology company not a bank check show notes for details do you still feel that fear you know the of you like when you know you're supposed to buy do you still feel fearful or do you feel like nice hello my old friend i love this emotion this is what i'm supposed to right i mean it's not easy but you have to know you have to do it you have to know that if that that what what makes buying opportunities and if you think about it the fortunes of companies and the outlook for companies doesn't change much what and i'm i'm writing a memo about this that'll come out one of these days and what changes is how people think about what's going on and think about the future and c so what changes is the relationship of price to what i'll call value sometimes they hate them sometimes they love them when they love them too much you should expect them to probably go down that sounds like a bull market or a bubble and when they hate them too much you should expect them to go up that sounds like a bear market or a crash and so you have to do the opposite and and the the same developments in the environment that that affect everybody else will affect you you're subject to them you feel them you read about them you hear about them everybody tells you how dire the outlook is and you know it's hard to ignore them but you have to do the right thing in the face of them nineteen ninety eight we had the russian rub devaluation the debt crisis in in southeast asia and the meltdown of long term capital management and one of our portfolio managers who who was young came to me and he said i think this is it i think we're gonna melt down i think it's all over i'm terribly pessimistic i said tell me why he went through his reasoning i said okay now go back to your desk and do your job a a a battlefield hero and i don't wanna compare what we do to being a battlefield hero but a battlefield hero is not somebody who's una afraid it's somebody who does it anyway and that's that's the way you have to be can i i can i ask let me ask you about that because so it's funny interesting enough even though i'm the conservative one i'm actually way more emotional sean's like a more mostly is is is a pretty stable guy emotionally i go up and down which i think is actually closer to the average for average folks you said something really you said a bunch of stuff about emotion in the past i think you said to be a good investor you better be able to invest without emotion or at least act as if you don't have a lot of emotion has there ever been anything like a mindset shift or a practice or something that you've had to use in order to learn to be less emotional when investing no these things are not intentional on my part you think you're born like like i was born on emotional by the way and and i wanna point out here because my wife's downstairs having lunch that that i i wrote in my book that it's really important to be on emotional and investing not so good to be une emotional in life in in arenas like marriage so there it's not an advantage but no for me it came naturally i don't have to i don't have to say oh there i go again i'm getting emotional i have to rest retrain that blah blah blah it and and and my partner bruce ka who who's been my partner successfully for thirty seven years he's pretty much the same so that makes it easy i don't have to rest constrain him we we've guessed you up about some of your your best moves what's the worst mistake you made due to an emotional mistake where you you didn't control your temperament properly and you made a mistake my worst mistake is not and i know you're talking about a point in time my worst mistake is that i have always been too conservative my parents were traumatized by the depression i always say the question is not whether the parents were alive during the depression but whether they were adults my parents were adults they were born in the nineteen arts and so in the depression they were in their thirties and they were to you know and the depression was really traumatic nobody knows what it was like and it ground on for over ten years and and so you when you grow up with parents of the depression they say things like don't put a lawyer your eggs in one basket saved for rainy day you know that kind of stuff and i ended up too conservative and if i if it wasn't conservative i'd be richer today i'm not sure i'd be happier because what's an example what do you mean you were too conservative like i guess like what what makes you say that what would you have done differently had that not had that wiring not been done in you well i mean i i don't know i wanna i might have gone to an into an a more aggressive asset class than credit like equities i might have become a venture capitalist or you know like my son andrew or a private or a leveraged buyout investor but you know the reason i was talking about the appropriate of credit for sam is because while the returns are a little lower there's much less uncertainty and downside so i i would say that if i i've been in this business fifty six years if i would've spent those fifty six years in less conservative asset classes i would've have made more money having said that it happens that i went into things like high bonds in seventy eight and distressed at in eighty eight and if i had not been a conservative person i probably wouldn't have had any clients because they would have been scared off by the risk so it served me well in in pioneering in those businesses but that was my i i mean i we never had a mistake like we were too defensive at a in a crisis or too aggressive in a bubble we just i just was too conservative all my life and that kinda makes sense because you i don't think you start oak tree until you're late forties right just short of my forty ninth birthday yeah and so well i i guess leading up to it were you already financially successful were were you a success leading up to that yeah and and so was it a big risk to start oak i was secure i i wasn't rich by today's standards and i may not have been rich by the standards at the time but i had i had a lot i had good money and i lived well so i started him running money in seventy eight i joined my oak founder partners in eighty five is eighty six eighty seven eighty eight we did a great job through a a variety of environments and we weren't worried about the ability to do a good job and we had enough money to eat so it it wasn't i mean but it it it i had to overcome my innate caution my wife had to give me a kick in the ass which he happily did i i may not have done it without her probably wouldn't know you you said you're you're too conservative but there's has been times when you've been very aggressive oh yeah yeah you know i think the sort of o seven zero eight financial crisis i read something that as the crisis happens you go raise ten billion dollars because you see the opportunity and you started deploying something like six hundred million dollars a week which is just sounds badass ass to be honest not doing maybe that's maybe that's not not not as crazy in the financial but it sounds crazy to me well it your your facts set is inaccurate in one regard we did not raise ten billion after the crisis hit because remember what i said about the guy who said when the time comes to investment want to you can't raise money in a crisis you if you went to people you say that world melting down we're gonna buy all this stuff we're it's gonna be a bona we're gonna get rich nobody give you money why because the same factors that influence the world influence the people you talk to and know everybody else stick their our hands their pockets and say maybe later after the after the dust settles and and light and a lot of people say you know we're not sure gonna try to catch a falling knife and i believe that you you make the big money catching falling knives carefully so what happened is we like i described about the tech bubble in two thousand we detected in o five six that the world was behaving in a in a care free manner and and i i would wear out the carpet between my office and bruce's with the wall street journal i'd say look at this look at this piece of junk that got issued yesterday there's something wrong if a deal like this can get done the world is exercising inadequate prudence specifically on mortgage is or just know bad mortgages mortgage i never heard a mortgage i never heard a sub i i don't think i ever heard the word subprime i don't think i ever knew what a mortgage backed security was it just seemed that the world was operating in a pro risk fashion and when people are pro risk they they they they permit bad deals and they pay prices higher than they should so what happened was on on the first day of o seven we went out to our clients and we said we think there's an opportunity we didn't i don't think we raised funds in o five or six for his distressed debt area but on the first day of o seven we went out we said we think there's a great opportunity coming and we'd like to have three billion the at that time the biggest distressed debt fund in history was our zero one fund which preceded the en run meltdown and so forth and it was two and five billion and so two and a half yeah around there so we went out the clients we said we'd like to have three that would be the biggest distressed fund in history so within a month we had eight and we said you know we can't do anything with eight billion it's it's it exceeds our ability to invest it wisely so we're gonna take three and a half billion and we're gonna close the fund but we would like to have the remainder of your interest in a standby fund that will implement if the stuff hits the fan so the first fund was seven and it was three and five billion and the next fund was seven b and by the time we finished raising money for it a year later it was eleven billion and with and we and fund seven got fully invested so we started investing gradually investing seven b in june of o eight it's sitting there on the shelf and by september eighteenth fifteenth it was no eighteenth it was twelve percent invested so just over a billion and le brothers declares bankruptcy and so the question which you implied was do you invested or not you sitting there with all that money but the it looks like the world's gonna melt down do you invest it very simple and this as you say i think this was one of our best moments because i reached a very simple conclusion if we invest it and the world melts down it doesn't matter what we did but if i don't invest it and the world doesn't melt down then we didn't do our job q you have to move forward i also wrote that it's hard to predict the end of the world it's hard to assign a high probability to it it's hard to know what to do if the world is gonna melt down if you do those things and the world doesn't melt down it's probably a disaster and most of the world time the world doesn't melt down that was the that was the sum of our analysis because there was nothing to analyze there had never been a global financial crisis before the the meltdown of the financial sector had not been anticipated since the a great depression and there were there was there were no past patterns to extrapolate so you have to resort to logic that was the logic so as you say we invested four hundred and fifty million a week for the next fifteen weeks in that fund which was seven billion and oak overall invested an average of six hundred and fifty million a week for the next fifty fifteen weeks how did that turn out so that's what you put in how what was the sort of result of that that investing during that time well it was great except for i mean we got good buys and we made good money but the fed mobilized very astute cutting interest rates to zero for the first time in history at the beginning of o nine and introducing q and those two things saved the economy so we didn't get the meltdown that everybody was afraid of and there were relatively few bankruptcies especially outside the financial sector that resulted from the global financial crisis so we had we've had some barn burner funds in crises this was very good but not a barn burner you've you you've you've done something that i love which is you well you you've quoted a ton of different people you've quoted mark twain a bunch of times you you've have all these quotes which like clearly shows that you retain information that you read and i imagine you read a lot can i you about your reading habits how do you pick what books do you read i i've never read any books about how to be an investor like you know multiply this by that and add this and subtract that and the books i've found most interesting have always been the ones about investor behavior and i mentioned devil take the high most nineteen nine one of the greatest books i ever read was before that john kenneth gal book called the short history of financial euphoria that was really pivotal for me and since i'm the slow reader i like the fact that it was only about a hundred pages and then you know back in back in seventy four i think charlie ellis wrote an article winning the losers game where he said that because you can't predict the future active investment doesn't work he was a believer in the efficient market so rather than try to hit winners like the tennis player you should try to avoid hitting losers and keep the ball in play and that has always find my investing style in fact i wrote a memo in the summer of twenty four or twenty three called fewer winners fewer losers or more winners and that's the basic choice of investing style there's a great luck i think like sort of math paradox that you've pointed out which is a you know a fund i don't if it was your fund but any fund it could be you know never above never in the top ten percent but sort of never in the bottom fifty percent and there's this strategy of just consistently being above average will place you right in the top five percent right it'll it'll place you in the top percent can you unpack that idea a little bit i just i just sort of put you in nineteen ninety the i wrote a memo called the route to performance and i had dinner in minneapolis with my client dave van ben and who ran the general mills pension fund and he dave explained to me that he had run the fund for fourteen years and in fourteen years the the equities general mills equity portfolio was never above the twenty seventh percentile or below the forty seventh percentile so fourteen years in a row solidly in the second quartile now if you said to the normal person not in the investment business so this thing fluctuate between the twenty seventh and the forty seventh where do you think it was for the whole period they would say well let me think probably around thirty seven the answer is fourth so if you if you can do well for fourteen years in a row and avoid the tendency to shoot yourself in the foot in a bad year you can pop up to the top at the same time another investment management firm had a terrible year because they were deep value investors and they were heavy in the banks and the bank suffered terribly so they were at the bottom so the president comes out and of course things people in the invest business are great rationalize and communicators and he says the answer is simple if you wanna be in the top five percent of money managers you have to be willing to be in the bottom well that makes great sense except that my clients don't care if i'm ever in the top five and they absolutely don't wanna see me in the bottom five so my reaction is the first guy's approach is the right one for me so that's why at oak tree we go for fewer losers not more winners yeah i love that because it's one of the un sexy ideas like i think any idea you can't you know make a movie out or won't make you sound really cool are generally undervalued ideas when they when they actually logically map out the way the way that one does and so i i sort of that was one that stuck out to me it's like nobody's gonna nobody's gonna give you a motivational video about being consistently above average and just never shooting yourself in the foot annoyed it's all about heroic greatness and huge risks you can take and you know being willing to do it and so you know that's all you hear but but you know the financial times of london every saturday they they have an article called the lunch with the f t and they take somebody to lunch and they write an article about the person the restaurant and the food and they did that with me in late twenty two and i took the reporter to my favorite italian restaurant near the office in new york where i go a hundred percent at the time if i have a lunch and i and i said to her eating in this restaurant is like investing at oak tree always good sometimes great that terrible now that to to me that sounds like a modest boast but if you can do that for forty or fifty years i think it'll compound to great results if you never shoot yourself in the foot and i think it's i think i don't know if the sec is listening but i think it's descriptive of what of what we've accomplished there's like this class of enough that's like kinda become like full hero you know like warren buffett it's an obvious one where the like a full hero sort of their high integrity that they make greatness seem achievable and relatable which is like the whole skill in itself and and you've become one of these like full heroes so you know and a lot of them they have in common where they like write a lot they write well they've got wonderful sayings they make challenging things easy to understand did you purposely try to become like this public figure well first of all you can ask somebody who did whether they did because they'll say no nobody will admit that nobody will say my my public persona is a facade with me and sam joking before this we were saying it's cool how it's interesting how i think when you started as an investor there was like no celebrity investors there's no like famous person who was doing what you were doing and then now you have whether it's buffett or mu there's like the investment guys are now like the philosophers yeah the tech ceo nerds are now like the power players of the world right podcast comedian are now like the new trusted media it's like this very strange shift on all fronts where you know influence has sort of shifted but i i find the like investment crossover life philosopher to be just like one of the really wholesome ones that i i personally really like you know right well you know i i hesitate to put myself as the same category but i think warren has always tried to just educate people and share his knowledge and and people say well why do you give away your secrets aren't your afraid that other people will emulate you and and and catch up with you but i i don't think so because you you know we can tell them all day long what what you should do but it's hard to do like we said at the beginning of the podcast friend of mine richard oil in london wrote a book once entitled simple but not easy i think the things we have to do are simple they're just not easy to do i think buffett makes investing seem simple because he boils it down to the essential ingredients by the way you said there were no favors investors i but i think buffett started around fifty three if not mistaken he just wasn't famous yeah but and and there were a few people who were famous in the investment business but i don't think anybody was would was famous in the in the what wider world oh it's interesting for like the normal guys like me and and sean is like we learn from you about hud to live life you just and you and and that's kind of cool and it's just like investing is just your way of like testing if you're way of living is true right well investing is a lot like life but but and and by the way i'm working on a book along those lines sam what's the call i don't know yet but but if you wait a a few years i think it'll be out well we appreciate you coming i i do wanna leave you with what it's a question for for for you so we've asked you a bunch of questions but i i actually think it it'd be interesting what question do you think people who listen to this should ask themselves what's a what's a useful question that you think people could ask themselves as a as a final final note here well i would think in terms of the mistakes that invest made and i would ask yourself whether you make them so what are the big mistakes investors make i i can think of three number one do you think you do you think you understand what the future holds and and do you reasonably think that's accurate number two i think the biggest single mistake that investors make is that they think the world will remain the way it is that the things that are working today will continue to work the things that aren't working will continue not to work that the trends of emotion will continue and that there won't be any new trends so do you use do are are you part of that and then number three is do your emotions rise and fall and get you to do what they want as opposed to what you should do so i think you just have to have a checklist you know in my first book the most important thing i had a thing in there called the poor man's guide to market assessment and and it it says on the left a bunch of things and on the right there's a bunch of things and and and it was half tongue shake or maybe more than half but i mean it says you know are is the market rising or falling or the tv shows about investing popular or unpopular if an investor goes to a cocktail party is he mobs or shunned or or the deals get done easily or hard the people rate our our our deals overs subscribe or left begging you know that kind of thing and you can tell you can figure out from that checklist whether the market is overheated and too popular or f and and and too shunned and this can tell you a lot of what to do if you're methodical and clinical well sean and i have have read your stuff forever we've listened to so many of your podcast podcasts it's been an honor we really appreciate you doing this is that i think the best part of our best part of our job is we have an excuse to hang out with amazing people who are way out of our leagues and this is this is one of those occasions so thank you so much well thank you sam thank you sean i've enjoyed two questions and let's do it again sometime alright do the best appreciate you bye bye i feel like i could rule world i know i could be what i want to put at all in it like a days off on a goal travel never look back my friends if you like m then you're gonna like the following podcast it's called a billion dollar moves and of course it's brought to you by the hubspot podcast network the number one audio destination for biz professionals billion dollar moves it's hosted by sarah chen spelling sarah is a venture capitalist and strategist and with billion dollar moves she wants to look at unicorn founders and fund and she looks for what she calls the expected leader many of them were underestimated long before they became huge and successful and iconic she does it with unfiltered conversations about success failure fear courage and all that great stuff so again if you like my first million check out billion dollar moves it's brought to you by the hubspot podcast network again billion dollar moves alright back to the episode