This Week I Learned #14
Wealthy: Podcast interview with Elad Gil exploring investing and operating in startups. Two interesting concepts of note in the interview. 1) Rule of 3 - All markets will eventually result in 2-4 market leaders forming an oligopoly and it's about investing in the right companies that will be able to stand on top but you don't have to be stressed about investing in the best horse because rarely is it a winner take all monopoly. This has commonly been the case in my observation of drug stores, convenience stores and packaging goods companies and investing in roll-up businesses that stand out as the best capital allocators have been an effective thesis. 2) Rachleff's law - Named after Andy Rachleff of Wealthfront and Benchmark, it's about the power of the market. Rachleff says if you have a) great culture + bad market = company dies, b) bad culture + great market = company does well, c) great culture + great market = company does phenomenally. It's looking at the market's readiness to support the company instead of going all-in on a founding team during the early-stages of the investment. There are many companies that only did well thanks to the market and did well despite implementing weird cultural quirks rather than being successful thanks to them. http://investorfieldguide.com/elad/
Wealthy: A rare interview with Charlie Munger in 2018. Another eloquent interview where I just can't help but admire Charlie's holistic view of global capitalism. Living in North America, home-country bias has everyone thinking the US market is the major market every company should look to enter or fight for but Charlie reassures the interviewer that Chinese companies don't need to come to the US when the Chinese market is big enough on its own. Charlie also eludes to the value that Todd and Ted bring to Berkshire and how they played a material role in Berkshire's investment in Apple. Charlie continues to emphasize the value of having younger minds have the freedom and autonomy to make such contributions and it's only shocking that most institutions still rely on the old guard to lead with their biases, which they package as "experience". "All intelligent investing is value investing". Amen. Value can be found in many different forms. It's not always cigar butts or net-net investing. Bitcoin is immoral. Why incorporate a payment system where the value of the coin can materially change day by day? It's as if people want to experience Germany post-WWI when the cost of a loaf of bread in the morning is 1/10 of the cost at end of day. A must see. https://www.youtube.com/watch?v=YqAMVmtlMtk
Wealthy: "To avoid criticism, say nothing, do nothing, be nothing." - Elbert Hubbard; Always a choice.
Wise: Interview with Richard Hughes-Jones, ex-Deloitte consultant + cancer-survivor + startup consultant, on the value of coaching and it's underlying premise. As someone who is exploring ways to advise high-performing founders whilst being an investor this was a very enjoyable episode delving into the mindset of becoming a coach and the internal identity struggles. Found Jerry Colonna's reference to coaching as a way of "managing my own helplessness by helping someone else who seems helpless". It hits upon realizing the desire to coach may come from an internal insecurity that can only be managed by seeing the struggle of someone else. A coach should always strive to leave the client in an improved/new state where the coach is no longer needed. https://www.reboot.io/episode/35-everything-is-workable-with-richard-hughes-jones/podcast-35-richard-hughes-jones/
Healthy: A mental reboot in interview with Sharon Salzberg and Jerry Colonna. Nobody knows what they are doing. I know this, I've learned this but this interview just helped it click internally with myself. In the pursuit of trying to create an "occupation" that doesn't exist it's brought on large amounts of anxieties on whether I'm doing the right thing. Even more anxiety when I realized I went down a path that was wrong for me. Lot's of great insight in helping me continue to reframe my mindset on work. Jerry said it well when he described success at work as having a greater emotional experience. Actually using work as a way to experience full self-actualization where the focus is on becoming more aware of the emotional experience the journey produces. Sharon paraphrased what the Dalai Lama told her about success when he said in Tibet that something was considered wonderful or creative not based on the product or result but on the transformation the creator/producer went through. It is a focus on who you are moment to moment to moment. Wonderful. https://www.reboot.io/episode/does-anyone-really-know-what-they-are-doing/
Wealthy: Reading through Ray Dalio's Principles and really enjoying his autobiography section as a nice historical lesson on the economy. A neat segment was his depiction of supply and demand. He spoke about the importance of looking at demand as the dollar amount spent instead of using quantity as a way to compare against supply. It's true, supply and demand are commonly looked upon by comparing quantity instead of price to quantity. Price can tell a lot more about the nature of the demand and will prompt further investigation into who is the buyer and what the motives for the buyer are.
Wealthy: A quote on how difficult it is to play the markets. It's not for the faint of heart. "If you are ready to up everything else and study the whole history and background of the market and all principal companies whose stocks are on the board as carefully as a medical student studies anatomy - if you can do all that and in addition you have the cool nerves of a gambler, the sixth sense of a clairvoyant and the courage of a lion, you have a ghost of a chance." - Bernard Baruch