This week’s conversation is about artificial intelligence and interplanetary travel. Its about content creation, thinking from first principles, and death progress units. Its about brain machine interfaces and why it is crucial that you be a chef and not a cook.  My guest is Tim Urban, along with his business partner Andrew Finn. Tim is the most entertaining writer I’ve come across in years, who explains complicated and interesting topics to his millions of dedicated readers on the website “Wait, But Why.” As an example, Tim’s last post on Elon Musk’s neurlink venture is 40,000 words long, roughly the length of a short book. It explains almost all of human progress and our potential future using drawings and cartoons. Its impossible to stop reading. While this conversation is wildly entertaining, it is also chock full of metaphors and lessons that will be useful to anyone doing creative work or building a company. I hope this leaves you as energized as it left me. I called this episode Grand Theft Life because that is the name that Tim and Andrew give to their worldview, which I think will change the way you behave, too. Please enjoy my conversation with Tim Urban.   For comprehensive show notes on this episode go to http://investorfieldguide.com/urban For more episodes go to InvestorFieldGuide.com/podcast. To get involved with Project Frontier, head to InvestorFieldGuide.com/frontier. Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub. Follow Patrick on Twitter at @patrick_oshag   Books Referenced Superintelligence: Paths, Dangers, Strategies   Links Referenced The Cook and the Chef: Musk’s Secret Sauce Wait But Why Neuralink and the Brain’s Magical Future Wait But Hi YouTube Channel  Kurzgesagt – In a Nutshell   Show Notes 1:50 – (First question) –  Explaining his concept of planets 1, 2, 3 and 4 and understanding the human colossus 5:46 – Tim’s favorite idea of the human knowledge compounding 7:52 – Die Progress Units (DPU) 9:45 – Different stages of AI and the positives and negatives of each stage 14;04 – What happens when AI gains breadth and general intelligence 16:23 – The idea of a cook vs a chef and how Tim had the chance to interview Elon Musk 17:48 – Why you should reason from first principles instead of reasoning by analogies 25:19 – Why it’s possible to turn a cook into a chef 30:08 – Why being a chef is the safer route in a world with AI and what Tim has changed in himself as to why. 31:22 – Looking at the discovery process             34:39 – Superintelligence: Paths, Dangers, Strategies\ 40:01 – Being the person who creates the metaphor vs being the people who simply using them             43:41 – YouTube Channel  Kurzgesagt – In a Nutshell 44:54 – Most fun that Tim has had researching a topic 46:08 – Musk model for attaining your goals 53:43 – Why not caring what people think is one of the world’s best superpowers, grand theft life 56:50 – Neuralink – what is it and how did Tim come to research it 1:02:38 – Elon Musk’s concerns about AI 1:14:28 – What then if the Neuralink concept works out 1:18:02 – Kindest thing anyone has done for Tim   Learn More For more episodes go to InvestorFieldGuide.com/podcast.  Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub Follow Patrick on twitter at @patrick_oshag

In episodes one and two of Hash Power, we explored blockchain technology and cryptocurrency investing. In this episode, we discuss the current and potential future states of the crypto world. We cover new forms of cooperation, regulation, security and storage, and why blockchains allow systems to evolve at such a rapid pace.  Be sure to listen until the end, where we close with some advice about conducting ourselves in a new world where creativity reigns and repetitive jobs disappear—a trend that may only accelerate thanks to blockchain technology and cryptocurrencies. Hash Power is presented by Fidelity Investments   For comprehensive show notes on this episode go to http://investorfieldguide.com/hashpower For more episodes go to InvestorFieldGuide.com/podcast. To get involved with Project Frontier, head to InvestorFieldGuide.com/frontier. Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub. Follow Patrick on Twitter at @patrick_oshag    Show Notes 0:05 – Intro to episode 3 and what to expect  4:00 - Olaf Carlson-Wee, founder of Polychain, on how the funding and investing in cryptocurrencies could easily get out of hand  5:00 – How people are creating holding companies to fund cryptocurrencies protocols  6:45 – Decentralized Autonomous Organization (DAO) and how they will replace the aforementioned holding companies  8:32 – Could fully decentralized organizations replace other more traditional organizational structures, even outside of crypto currency  9:59 – How can DAO’s impact everyday lives  12:39 – Why your skills and accomplishments will become more important than who you are or where you are from             15:38 – Ready Player One: A Novel  16:09 - Naval Ravikant, CEO of Angellist, on the way humans cooperate and build new entities  17:51 – When people will demand oversight and regulation over crypto currency  20:42 - Peter Van Valkenburg, Director of Research at Coincenter on the current state of regulation  26:06 - Jameson Lopp on security needed to protect your cryptocurrency             26:22 - Glacierprotocol.org  27:51 - Ari Paul, co-founder of Blocktower, on how nail polish is used to protect their crypto wallet  30:03 – Juan Benet explains the Filecoin Protocol  35:52 - Muneeb Ali, co-founder of Blockstack, on how his team is plans to provide basic tools that will allow the broader developer community to build apps that the cryptocurrency population will use.  38:01 - Comparing blockstack to the analogy of creating a city  40:17 – How the blockstack token fits into everything  43:15 – Fred Ehrsam, co-founder of Coinbase, on forking in blockchains  47:52 – Naval Ravikant on how the idea of work will change in the future, and how that change helped to produce the idea of a blockchain in the first place.  49:31 – Why curiosity should govern what you do in life 53:22 - Naval’s framework for making money   Learn More For more episodes go to InvestorFieldGuide.com/podcast.  Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub Follow Patrick on twitter at @patrick_oshag

In episode 1 of Hash Power, we explored blockchains as a technology—how they work, why tokens (also known as cryptocurrencies) are an integral part of any blockchain, and how these new networks might change the world. In episode two, we spend time with the leading investors in the field. Like any frenzied asset class, there are countless cryptocurrency hedge funds popping up everywhere. But founders from three of the original firms—Polychain, Metastable, and Blocktower Capital—are our primary guides this week. As I speak, the total market cap of cryptocurrencies is $136B. There are hundreds of tokens currently available, but bitcoin and Ethereum represent 75% of the total market cap. $136B sounds like a big number, but its tiny relative to any other asset class—and I use that term with hesitation. To put it in perspective, that’s exactly the same size as the market cap of IBM. But IBM had more than $10B of earnings in 2016. Tokens have none. As you will hear, valuing tokens is a very hard exercise. In such a nascent world, we are seeing investing strategies take hold. Olaf Carlson-Wee, Josh Seims, and Ari Paul walk us through different takes on cryptocurrency investing, be it early stage, long term buy and hold, or more hedge fund style strategies. Hash Power is presented by Fidelity Investments For comprehensive show notes on this episode go to http://investorfieldguide.com/hashpower For more episodes go to InvestorFieldGuide.com/podcast. To get involved with Project Frontier, head to InvestorFieldGuide.com/frontier. Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub. Follow Patrick on Twitter at @patrick_oshag   Links Referenced Fat Protocols (Joel Monegro)   Show Notes 0:05 – Recap of part 1 and introduction to part 2 of Hash Power 2:58 – Ari Paul, CIO of Blocktower explains how he got involved in cryptocurrencies 5:23 – Why do we need bitcoin 7:23 – Polychain Capital founder Olaf Carlson-Wee on why the value of tokens accrue 9:23 – How main stream money is getting into this space 12:26- Useful comparisons when talking about ICOs when compared to IPOs 15:01 - Naval Ravikant, CEO of Angellist, is asked to explain the protocols of cryptocurrencies to platform businesses like Uber or Airbnb 17:43 – Naval’s interest in investing in cryptocurrencies 23:07 - Olaf Carlson Wee on the lifecycle of a token 24:02 – SAFT note, Simple Agreement for Future Tokens 25:31 – What is the earliest stage that edge is most present for investors in cryptocurrency protocols 28:12 – How do you mitigate the volatility that is present in blockchain 31:18 - Jeremiah Lowin, a risk and statistics expert, who runs risk management for a large private family office, talks about why he no longer owns cryptocurrencies  34:19 - Jordan Cooper, a venture capital investor, is optimistic about blockchains in general, but thinks there may be some overvaluations in current currencies 37:02 – How Jordan would value a single cryptocurrency 42:10 – Fat Protocols (Joel Monegro) 43:52 - Josh Seims, of Metastable, the value investor in blockchain? 51:15 - Ari Paul on the equivalent of listed stocks in the crypto currency world 52:33 – Understanding the concept of a coin in blockchain and how people are getting access to them 55:07 – The fairground analogy to understand cryptocurrencies 57:57 – What lessons from traditional markets can you apply to investing in cryptocurrencies 1:06:51 – Ari is asked to discuss some of the alternative cryptocurrencies outside of Bitcoin and Ethereum. He starts with Ripple 1:10:27 – What would help firms or traders create edge in investing in cryptocurrencies   Learn More For more episodes go to InvestorFieldGuide.com/podcast.  Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub Follow Patrick on twitter at @patrick_oshag

Welcome to the first episode of Hash Power, an audio documentary that explores the world of blockchain and cryptocurrencies with leaders in the field like Naval Ravikant, Olaf Carlson-Wee, Fred Ehrsam, & Ari Paul. Hash Power is meant to be an introduction, but really, it is an invitation to explore this emerging world on your own.  In the coming weeks, we will cover the technology, the power of decentralization, bitcoin, Ethereum, ICOs, cryptography and hashing. We will spend time with the leading active hedge fund managers in the field, and with outside investors who are both optimistic and skeptical. Episode one covers the big picture, and answers the question: what is blockchain and why might it significantly affect our world? If you enjoy what follows, you’ll still be very early in understanding this field. Most don’t. So help me spread it like wildfire, because the more people that understand blockchain, the better its impact might become. Please enjoy episode one, and stay tuned next week for episode 2, which explores investing in cryptocurrencies. Hash Power is presented by Fidelity Investments   For comprehensive show notes on this episode go to http://investorfieldguide.com/hashpower For more episodes go to InvestorFieldGuide.com/podcast. To get involved with Project Frontier, head to InvestorFieldGuide.com/frontier. Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub. Follow Patrick on Twitter at @patrick_oshag   Books Referenced The Sovereign Individual: Mastering the Transition to the Information Age Nostalgia for the Absolute   Links Referenced Bitcoin: A Peer-to-Peer Electronic Cash System Reddit User jav_rddt SHA-256 Calculator The BitCoin Model for Crowdfunding Fat Protocols #cryptotwitter   Show Notes CHAPTER 1 – Understanding the Concept of Blockchain (3:25) 4:30 – Jeremiah Lowin explains how blockchain is like a database 5:14 – Bitcoin: A Peer-to-Peer Electronic Cash System 5:46 – Owning a digital asset 7:14 – Naval Ravikant, CEO of Angelist on how blockchains can help to create personal networks and organize humans 13:33 – New coins popping up around data storage and utility needs like solar panels 14:57 – Permission vs permissionless networks 18:13 – Keeping track of scarcity and the introduction of tokens 18:51 – The Sovereign Individual: Mastering the Transition to the Information Age 21:55 – The role of blockchains in the informational age and the rise of more individual sovereignty 23:29 - Fred Ehrsam, co-founder of Coinbase, on the increasing shift to digital worlds led by incentive structures   CHAPTER 2 – Blockchain Technology (27:48) 29:09 - Reddit User jav_rddt 30:43 - SHA-256 Calculator 31:53 - Charlie Noyes, Pantera Capital, explains how SHA-256 was developed and what make its so special 35:48 – How miners create new blocks and the incentives to do so 46:54 – Ethereum, the “spiritual successor” to bitcoin 48:36 – How the Ether network is an ecosystem in which other tokens can sit 50:51 - Naval Ravikant on alternative coins or tokens 50:50 - The BitCoin Model for Crowdfunding 52:35 – Fat Protocols 53:22 – Blockchain as an experiment in distributed government 54:47 – How cryptocurrency is more than just technology, it’s a movement 54:50 – Nostalgia for the Absolute 57:27 - #cryptotwitter 1:00:58 - Peter Jubber, of Fidelity, on how huge institutions, like theirs, are getting into the cryptocurrency game 1:05:21- Olaf Carlson-Wee, first employee at Coinbase and the founder of Polychain, on the early excitement for cryptocurrency 1:06:56– Closing thoughts from Patrick Looking to work in this space - [email protected]   Learn More For more episodes go to InvestorFieldGuide.com/podcast.  Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub Follow Patrick on twitter at @patrick_oshag

My guest this week is David Tisch, who was instrumental in building and fostering venture capital investing in New York City. If you liked my conversation with Jerry Neumann--who, incidentally, introduced me to David--you are going to love this one.  David was a co-founder at tech stars, New York's answer to Silicon Valley’s famous tech incubator Y Combinator. He now runs the Box Group, a prominent seed stage venture capital firm, which has looked at thousands of startups and invested in more than 200.  We explore tech investing outside of Silicon Valley, the tech accelerator model, the evolution of early stage investing, and why the best companies may start coming out of non-traditional venture hubs.  David does a great job of explaining how things have changed for technology startups and why certain strategies--especially those for acquiring customers--won't work nearly as well in the future.  I learned a lot during this hour, and I think you will too. Please enjoy.    For comprehensive show notes on this episode go to http://investorfieldguide.com/tisch For more episodes go to InvestorFieldGuide.com/podcast. To get involved with Project Frontier, head to InvestorFieldGuide.com/frontier. Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub. Follow Patrick on Twitter at @patrick_oshag   Show Notes 2:16 – (First question) – Looking at David’s motivation and role in building up the venture capital tech investment scene in New York 6:14 – What David did to further the mission of fostering tech startups in New York, namely his work with TechStars 10:11 – What is Y Combinator and how does that differ from Tech Stars 13:02 – What is the procedure for getting into a startup incubator   17:08 – Most memorable applications 19:12 – What is the boot camp/incubator experience like 20:34 – What should future incubators be focused on to help develop the right ideas 23:46 – What aspects of the business should a start up be focused on in the beginning 26:46 – What got David interested in investing 28:47 – The challenges of launching new tech today and the colonization of identity 32:04 – Exploring David’s investing strategy 35:45 – Finding the consumer facing companies that can scale and provide a return for venture capitalists 38:03 – The problem of scaling up for start ups 39:20 – What business models does David prefer when making venture investments 40:53 – What’s important to look at when investing in other sectors, starting with Fintech 44:41 – Where does David think we are in the venture capital cycle 49:37 – How much does the exit strategy play into the initial seed investment 50:18 – David’s thinking on the portfolio of companies when picking an investment 52:48 – David’s biggest sin of omission 53:56 – Common personality traits among potential founders 55:24 – Is storytelling relevant for startups focused on the enterprise side of the business 56:07 – David’s story to convince founders to work with him 57:51 – biggest mistakes that David has seen 1:01:47 – What does it mean for our health that are time has become completely consumed by technology 1:03:58 – What trend has David most excited looking forward 1:06:44 – Kindest thing anyone has done for David   Learn More For more episodes go to InvestorFieldGuide.com/podcast.  Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub Follow Patrick on twitter at @patrick_oshag

The investment strategy discussed in this week's episode is diametrically opposed to my own value tendencies, but it still one that has done exceptionally well.   My guest is David Gardner, co-founder of the Motley Fool. He is unique in that he is both a pure investor--a true stock junkie--and an entrepreneur. His energy is remarkable. His positive vibes are something to behold. You'll hear it over audio, but it's ever more palpable in person.  Our conversation is about finding companies which are breaking rules in the right way and reshaping industries. David's goal is to find these companies early in and hold them forever.  If you love investing, you are going to love this regardless of your prior beliefs. Please enjoy my conversation with David Gardner on rule breakers. For comprehensive show notes on this episode go to http://investorfieldguide.com/gardner For more episodes go to InvestorFieldGuide.com/podcast. To get involved with Project Frontier, head to InvestorFieldGuide.com/frontier. Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub. Follow Patrick on Twitter at @patrick_oshag   Books Referenced The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail (Management of Innovation and Change) The New Penguin Dictionary of Modern Quotations Moneyball: The Art of Winning an Unfair Game The Motley Fool Investment Guide: How The Fool Beats Wall Street's Wise Men And How You Can Too The Wisdom of Crowds The Motley Fools Rule Breakers Rule Makers : The Foolish Guide To Picking Stocks   Links Referenced Totally Absorbed FANG stocks Henry Cloud (author) “I had a lover’s quarrel with the world” by Robert Frost As You Like it (Shakespeare) Invest Like the Best episod with Morgan Housel Don't Be a Dip: The 1 Thing You Need to Know About Buying on Dips Board Game Agricola Boardgamegeek.com   Show Notes 2:03 – (First question) – Among the experiments that David has run in his podcast, which one has he enjoyed the most 3:42 – A deep dive into the rule breaker mentality that David uses 4:39 -  The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail (Management of Innovation and Change) 7:22 – What helps you to not sell a rule breaker amid big drawdowns. 7:33 – Totally Absorbed 8:32 – FANG stocks 12:25 – List of criteria in picking rule breaker stocks…starting with top dogs and first movers 19:34 – Second criteria…visionary leadership and the traits David looks for in a leader 22:02 – Henry Cloud (author) 22:58 – “I had a lover’s quarrel with the world” by Robert Frost 26:16 – Third criteria – competitive advantage and moats 32:47 – The New Penguin Dictionary of Modern Quotations 32:49 – As You Like it (Shakespeare) 40:36 – Moneyball: The Art of Winning an Unfair Game 41:31 – The Motley Fool Investment Guide: How The Fool Beats Wall Street's Wise Men And How You Can Too 42:43 – Invest Like the Best episod with Morgan Housel 42:45 – The Wisdom of Crowds 43:33 – Back to criteria, the fourth one, price momentum 45:47 – Don't Be a Dip: The 1 Thing You Need to Know About Buying on Dips 50:03 – Last criteria, something being overvalued and weigh that against the idea of whether a product or service is important based on whether people would miss it 52:10 – The Motley Fools Rule Breakers Rule Makers : The Foolish Guide To Picking Stocks 1:01:21 – Looking at David’s process for finding a stock and analyzing it 1:07:38 – The importance of taking these criteria in concert and how you can see the power of overvaluation 1:10:39 - Board Game Agricola 1:10:54 – Boardgamegeek.com 1:14:38 – Kindest thing anyone has done for David   Learn More For more episodes go to InvestorFieldGuide.com/podcast.  Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub Follow Patrick on twitter at @patrick_oshag

My guest this week is Meb Faber, who started a podcast similar to this one right before mine and was a big reason I was open to the idea in the first place. Meb is a quantitative researcher whose firm Cambria has been behind many interesting investment strategies that break the Wall Street mold. We talk investing factors, dividends, angel investing, podcasts and more. This was a fun catch up with a close friend in the industry who has been in a leader in using data to explore the best active strategies in a variety of asset classes. Please enjoy our conversation, which begins with a factor draft.   For comprehensive show notes on this episode go to http://investorfieldguide.com/meb For more episodes go to InvestorFieldGuide.com/podcast. To get involved with Project Frontier, head to InvestorFieldGuide.com/frontier. Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub. Follow Patrick on Twitter at @patrick_oshag   Books Referenced Dr. Tatiana's Sex Advice to All Creation: The Definitive Guide to the Evolutionary Biology of Sex   Links Referenced Update on the Valuation Metric Horserace: 2011-2015 Jason Calacanis on Meb Faber Show Brent BeShore episode of Invest Like the Best Team Ritholtz episode of Invest Like the Best   Show Notes 1:55 – (First question) – Drafting quant factors             4:10 – Update on the Valuation Metric Horserace: 2011-2015 10:25 – Most interesting thing Meb’s learned over the past year                    14:05 – Jason Calacanis on Meb Faber Show             14:49 – Brent BeShore episode of Invest Like the Best 16:10 – What is Meb’s process for investing in private companies 18:35 – What part of the fintech landscape would Meb be most excited about 26:50 – What has been working well on the business front for Meb 30:34 – Looking at investor behavior and changing fee structures 35:54 – What has Meb enjoyed most about doing a podcast             36:26 – Team Ritholtz episode of Invest Like the Best 40:55 – A list of guests that meb would like to have on             41:27 – Dr. Tatiana's Sex Advice to All Creation: The Definitive Guide to the Evolutionary Biology of Sex 43:19 – If Meb couldn’t work in this business, what would he do 45:02 – Same question for Patrick 47:28 – Kindest thing anyone has done for Meb    Learn More For more episodes go to InvestorFieldGuide.com/podcast.  Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub Follow Patrick on twitter at @patrick_oshag

My guests this week don't need to be introduced. In celebration of the one year anniversary of invest like the best, I asked Josh Brown, Mike Batnick, and Barry Ritholtz to join me for a hour, during which I spent more time laughing than asking questions. I chose this team because they are the pioneers of mold breaking honesty and personality in our industry. They all figured out that just being themselves yields incredible results. This is a strategy that everyone should try, but very few do. Honesty and transparency require vulnerability, which is hard for most of us. I still struggle with it. But the evidence is in. The Ritholtz team has grown as fast as almost any RIA. Listen to this and tell me you wouldn't want to spend your career working with people this friendly, funny and open. Hell, I want to give them some money just so I have an excuse to drop by more often.  Thanks to everyone who has listened in the past year. We are past 1.25mm listens, and growing fast. You own this thing as much as I do, because the size helps me penetrate deeper and get the best people, which begets more listeners. This podcast is one hell of a discovery machine, and the first year was our warm up. We have a ton of new angles, formats, and events coming in year two. Stay tuned. But first, time to laugh in celebration of year one. Please enjoy my conversation with team Ritholtz For comprehensive show notes on this episode go to http://investorfieldguide.com/ritholtz For more episodes go to InvestorFieldGuide.com/podcast. To get involved with Project Frontier, head to InvestorFieldGuide.com/frontier. Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub. Follow Patrick on Twitter at @patrick_oshag   Links Referenced Barry @ritholtz on twitter a16z Podcast Scott Galloway and Aswath Damodaran on Bitcoin vs Gold Latest 'These Are the Goods' post   Show Notes 2:35 – (First question) – What stock best represents you  5:09 – How was this team assembled at Ritholtz  8:50 – Why larger asset management firms are slow to pivot on new technology  10:00 – The humor of Barry @ritholtz on twitter  11:48 – What technology channels are working best 13:08 – What would happen in a Ritholtz stock picking contest 15:19 – How do you keep investors from wanting to move money into or out of buzzworthy trades 20:23 – Pricing out the news and the value premium 23:41 – Why people want complexity and activity in their portfolios 29:51 – People always want to be a part of the next frontier, example bitcoin             31:08 – a16z Podcast 33:13 – Exploring research in action and living the investments 39:35 – Biggest argument against bitcoin could be the underlying utility and what will make it successful 45:13 – The Hindenburg Omen             46:34 - Scott Galloway and Aswath Damodaran on Bitcoin vs Gold 47:38 – How the relationship with clients has evolved 49:50 – Mike’s new book project that he is working on 51:41 – Why the Mark Twain chapter is the most interesting in his book thus far 53:32 – How a business should balance sales and marketing 58:09 – Who would they draft to the Ritholtz team             58:22 – Latest These Are the Goods post 1:05:18 – Kindest thing anyone has done   Learn More For more episodes go to InvestorFieldGuide.com/podcast.  Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub Follow Patrick on twitter at @patrick_oshag

My guest this week is Pat Dorsey, who was the longtime director of equity research at Morningstar, where he specialized in economic moats: sources of sustained competitive advantage that allow a few companies to deliver huge returns over time. Several years ago he left Morningstar to form his own asset management firm, Dorsey asset management, and build a portfolio of companies with wide moats like those he studied at Morningstar. And while moats are critical, equally important is how companies allocate the capital generated--or made possible--by the existence of the moat.   A special thank you to Brian Bares who introduced me to Pat, and to Will Thorndike--an earlier guest on the show. In the vast majority of conversations you hear on this show, I'm meeting the guest for the first time. I mention this to encourage you to connect me with anyone whose story or way of looking at the world might resonate. Always feel free to contact me with ideas.   Pat and I begin our discussion with the key differences between the sell side and the buy side, and then discuss all aspects of moats and capital allocation.    For comprehensive show notes on this episode go to http://investorfieldguide.com/dorsey For more episodes go to InvestorFieldGuide.com/podcast. To get involved with Project Frontier, head to InvestorFieldGuide.com/frontier. Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub. Follow Patrick on Twitter at @patrick_oshag   Show Notes 2:23 – (First question) – Transition from the sell side to the buy side and the biggest surprise  3:40 – What is a moat  5:16 – What part of the stock market universe has a moat  6:57 – Pat’s framework for identifying moat, starting with intangibles  8:32 – The power of brands  9:44 – what chance does an upstart have to come in and usurp a well-established brand    12:24 – Switching costs as part of the framework for identifying a moat  14:55 – The third component of identifying a moat, network effects, and what businesses should do to effectively build one  17:29 – Last component, cost advantages/economies of scale  19:29 – How do you analyze these four components into an investing framework that can be built into an actual strategy  21:13 – How does Pat think about this from a mis-pricing standpoint  23:37  – How does Pat incorporate current price of a company in consideration for future returns when pricing a moat  25:39 – How should a company with a moat operate to protect that characteristic, especially when it comes to their capital allocation  26:51 – Which characteristic of a moat does Pat find most intriguing  30:35 – What makes for good and smart capital allocation  35:58 – What is Pat’s process for identifying the best investment opportunities  38:38 – What are good economics when looking at a company  41:03 – If Pat could take any business, but have to swap leadership, what would he choose.  44:13 – Back to his process of finding investment opportunities  46:05 – Kindest thing anyone has ever done for Pat   Learn More For more episodes go to InvestorFieldGuide.com/podcast.  Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub Follow Patrick on twitter at @patrick_oshag

My guests this week are both veterans of the podcast, Jason Zweig and Morgan Housel. They are two of the best in the world at making the complicated simple, and in that spirit, I’ll keep this introduction short. Morgan shifted from public markets to the private markets a year ago when he joined the Collaborative Fund, so we begin with what he has learned about venture capital in his first year on the job.   For comprehensive show notes on this episode go to http://investorfieldguide.com/writers For more episodes go to InvestorFieldGuide.com/podcast. To get involved with Project Frontier, head to InvestorFieldGuide.com/frontier. Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub. Follow Patrick on Twitter at @patrick_oshag   Books Referenced The Devil's Financial Dictionary Modern Monopolies: What It Takes to Dominate the 21st Century Economy Thinking, Fast and Slow Shoe Dog: A Memoir by the Creator of Nike Life and Fate   Online References A Rediscovered Masterpiece by Benjamin Graham Rishi Ganti podcast Small Companies Are Gone, But Should they Be Forgotten (Zweig Column)   Show Notes 1:43 – (First question) – Morgan on why he got disenchanted with the investment industry and shifted to venture capital 4:05 – Jason’s thoughts about investing in the private markets             5:19 - A Rediscovered Masterpiece by Benjamin Graham 7:57 – Morgan’s thoughts on how private market investments differ from public market investments 10:24 – Exploring valuations of businesses and what they say about broader trends in the market 13:21 – How much does Jason think about individual companies when exploring the overall market trends             18:41 – The Devil's Financial Dictionary 19:28 –What does it take to be a successful founder 23:40 – How does Jason look at activities that are work related vs just for pleasure 25:33 – If Jason had to start a business, what would he do 27:22 – What business would Morgan start 29:18 – Problems with the financial planning industry 30:56 -  The role of stress in personal and business development             31:04 – Modern Monopolies: What It Takes to Dominate the 21st Century Economy 38:17 – Are there signs that let you know when to cut and run vs when to keep slogging along with something             42:02 – Thinking, Fast and Slow             44:03 – Shoe Dog: A Memoir by the Creator of Nike 44:20 – Principals to approach learning 50:10 – The idea of keeping your identity small in a world where social media encourages one-upmanship 53:56 – Last significant thing Morgan changed his mind about 55:23 – Why Morgan chooses passive investing with stocks, but as a VC, essentially is a stock picker in private markets             1:00:44 – Rishi Ganti podcast 1:02:14 – What major thing did Jason change his mind about             1:02:30 – Small Companies Are Gone, But Should they Be Forgotten (Zweig Column) 1:06:33 – What was the most interesting idea Jason and Morgan have been tackling and what data helped to spark that interest             1:09:32 – Life and Fate

This week's conversation is about performance. More specifically, it is about the ins and outs of steady progress and growth. My guest is Brad Stulberg who coauthored the book Peak Performance, which combines research from many fields into a description of how athletes, creatives and others continue to push boundaries in their respective crafts. As someone who is intermittently lazy, the growth equation framework that Brad and I explore has impacted me often since I first read the book several months ago. I hope you enjoy this conversation, which isn't about investing, but which is, at its heart, still about the power of compounding.    Books Referenced Outliers: The Story of Success Peak: Secrets from the New Science of Expertise   Online References Jool Health   Show Notes 1:32 – (First question) – How Vick Stretcher influenced the book, Peak Performance 4:32 – Looking at some of the preliminary research at the science of purpose 7:58 – The idea of a growth equation and the components that can lead to success 11:47 – How the introduction of stress can help in all sorts of creative and entrepreneurial pursuits. 13:39 – The ratio between physical and mental as an impact on this formula 14:56 – Just manageable challenges and the role that they play in the growth equation 18:06 – The idea of just manageable challenges through the example of an athlete 22:19 – Favorite example of a crazy feat of physical performance, stress on older athletes operating at high levels 23:30 – Thoughts about outside influences like mentors/coaches and how they help high performance individuals advance 25:51 – Describe catabolic and anabolic states and why anabolic is so important 29:13 – How the relationship of catabolic and anabolic states also helps the mind 30:47 – How does the idea of practice play into the growth equation 32:49 – Exploring the nuances of practice and why you don’t go all out             32:56 – Outliers: The Story of Success 33:00 - Peak: Secrets from the New Science of Expertise 34:24 – The idea of designing of a day 42:06 – What role can environment play on us 43:40 – How far is it healthy to run 46:25 – How does ego play into all of this 48:06 – The idea of camaraderie and study of Air Force Cadets highlighting this 49:28 – Fatigue and why it is believed to happen in the mind and not the body 54:00 – Most memorable day 55:43 - Method for finding purpose             56:29 – Jool Health 58:26 – Kindest thing anyone has ever done for Brad   Learn More For more comprehensive show notes on this episode go to http://investorfieldguide.com/brad For more episodes go to InvestorFieldGuide.com/podcast. To get involved with Project Frontier, head to InvestorFieldGuide.com/frontier. Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub. Follow Patrick on Twitter at @patrick_oshag

Several weeks ago my conversation with Leigh Drogen on quant investing proved timely and popular--because everyone in asset management is facing the rise of big data, and the use of data science in investing strategies. Because of the rise of quants, many are asking themselves how to survive and thrive in a changing industry. In short, how can traditional managers compete with quants? This second conversation with Leigh was set up to answer many of the questions posed in the first one. If quants are taking over, what should other investors do about it? Leigh proposes a method by which old school asset managers can restructure their thinking and their process to compete with and even beat purely quantitative competitors. The method involves pulling the best from both worlds and combining them into a hybrid structure. But it will be impossible without a wholesale change in mindset, which is where we begin. Please enjoy round two with Leigh Drogen.   Links Referenced Revenge of the Humans Part II: A New Blueprint For Discretionary Management   Show Notes 2:14 – (First question) –  What role will ego and mindset play for traditional hedge funds looking to transition into quantitative investing strategies 4:21 – Describes the traditional process that hedge funds use to make investment decisions and how the internal politics can hamper it 6:08 – What value has portfolio managers played at hedge funds traditionally as the quarterback of a fund 9:57 – A look at what Leigh has seen as he sits with teams 12:20 – A look at places that have tried to simply add quant to their firm’s strategies without “tearing it down to the studs” and properly integrating them into the process 15:00 – Leigh is asked to define the basics of a good investment firm’s strategies 16:57 – Strategies for writing down core beliefs, whether it’s for yourself or your firm 17:49 – Exploring the second step, finding a differentiating view and how to succeed with it. 21:43 – The importance of force ranking and structuring the unstructured 26:14 – Building factor models 29:42 – How the portfolio manager position should have less room for subjectivity than at the analyst level 33:44 – Is anyone integrating this kind of high level data at the portfolio manager level into the decision making the way Leigh describes 35:07 – What blind spots are created by systematizing their processes 36:18 – Why much of this applies more to shorter and structured periods 38:23 – Shifting to portfolio constructions and what Leigh would do to create the right mix 43:39 – Shifting to management structures in these firms starting with the role of the CIO 45:24 – Looking at the different quant roles that exist in a firm and what they should be responsible for; data engineers, data analysts, pure quants, and quantitative engineer 48:20 – If you are an undergrad or grad student right now interested in asset management, what are the roles you should be thinking about targeting 49:25 – Why communication skills are still so important, no matter what role you are in 50:25 – With all of the tools and skills that Leigh has at his disposal at Estimize, why not institute an active strategy 52:01 – What has Leigh observed in the dispersion of skill in the Estimized data set 53:47 – What is the relationship between specialization and accuracy among funds 55:29 – The pros and cons of the generalist 56:56 – A look at Leigh’s background into War Theory and what lessons that he still draws on today 1:00:19 – How the field of study around war and battle relates to the investing world   Learn More For more episodes go to InvestorFieldGuide.com/podcast.  For complete shownotes, go to InvestorFieldGuide.com/leigh.  Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub Follow Patrick on twitter at @patrick_oshag

My guest this week is a version of me—a funnier, cooler version who has a PhD and served as an active duty marine. Lots of you will already be familiar with Wes Gray, and those of you who are not are in for a treat. Wes is the founder of Alpha Architect, a firm which manages quantitative equity strategies for clients using factors like value and momentum. He also advocates for a more concentrated, pure approach to factor investing, which listeners know is music to my ears. While we share a lot of the same views on markets and investing, you will still find this refreshing. The conversation was easy to structure--I just took all the questions clients and prospective investors always ask of me and my firm, and turned them on Wes. These range from very specific questions on quant investing to big existential ones. I listened to this on a long drive home and laughed out loud in the car at least 5 times. You are going to love it all. I close this introduction by offering you an opportunity which is not for the faint of heart. On September 16th, I will be joining Wes and his crew on a 28-mile trek called “March for the Fallen” which is a small but important way of honoring those who have given their lives in service of our country. Wes and I invite you to join as well. If you are interested, check out the post on Wes’s site with all the details. I will link to it in the shownotes at investorfieldguide.com/wes. If you are still interested, then email me with the subject heading “March for the Fallen.” I told you Wes is a much cooler version of me, and true to form he will be doing the hike with a 40-pound rucksack. I will be doing the version without a rucksack. Either way, it will be a day of comradery and remembrance that we won’t soon forget. Join us.   Books Referenced The Devil Dogs at Belleau Wood: U.S. Marines in World War I Thinking, Fast and Slow   Online References The Limits of Arbitrage   Show Notes 3:07 – (First question) – Exploring the mindset that is ingrained into Marines 3:16 – The Devil Dogs at Belleau Wood: U.S. Marines in World War I 5:27 – Most memorable experience growing up in the mountains of Colorado 6:29 – What experiences in the military have transferred to what Wes sees in the public markets 6:48 – Thinking, Fast and Slow 7:51 – Wes’s first foray into stocks 10:51 – What was the transition into the quantitative investing space 12:29 – How Wes would describe quantitative investing and what the landscape looks like today 17:10 – What is the nature of the strategies Wes uses, like high-frequency and market-making, and what makes them stand out in those 20:57 – What about the human capital arms race in this space and how different firms are attracting the top talent 23:21 – What the approach is for Wes and what his research suggests is the best predictor of performance in stocks 25:36 – Wes’s approach to portfolio construction 33:19 – What is the thinking behind the number of and the size of names in the QVAL ETF 36:20 – Why the data suggests momentum is the better pick 37:36 – Why price-to-book sucks relative to other value factors 39:55 – What things worry Wes about the future of this strategy 44:39 – How does Wes think about research and what to explore next. 50:05 – Who would Wes have manage his money since he thinks Vanguard is not the best choice 57:01 – Exploring his firm Alpha Architect, how it started and has evolved since launch 57:39 – The Limits of Arbitrage 1:08:15 – How the influx of people to passive investments are impacting the overall market, especially for active investment strategies 1:13:13 – Wes’s most memorable day of his career both in the military and as an investor 1:17:19– Kindest thing anyone has ever done for Wes     Learn More For more episodes go to InvestorFieldGuide.com/podcast.  Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub Follow Patrick on twitter at @patrick_oshag

My guest this week is Rishi Ganti, who invests in what he calls esoteric assets. I'm not sure what to do other than laugh in amazement at his professional credentials -- PhD in economics, CFA, CPA, lawyer, speaks six languages, and so on. The best part is he isn't lording those over anyone and in fact casts some shade on the whole idea of credentials in our conversation. He just did it all because he's a learning fiend. Rishi's core idea about markets is this: avoid markets at all costs. As he explains off the bat, the minute there are multiple buyers for anything, prices get efficient very quickly and there opportunity to find alpha shrinks. Instead he searches for what esoteric assets: things without a market, orphaned assets that require high human capital and human touch. We explore several interesting examples, from charter school financing to A stark realization I had during he episode is how big the worlds asset base is. Almost all of our attention goes to the most highly refined ones: stocks and bonds. But there is a whole other world out there. The closing sections, on what Rishi would do if not investing, and his answer for the kindest thing anyone has done for him were among the best answers I've heard.   Show Notes 3:30 – (First question) – Rishi’s broad take on markets and whether or not he really likes them 5:30 – Defining esoteric markets 8:31 – Looking at the mountain of assets that are most impacted or made most efficient by markets and how Rishi describes each level of that pyramid 12:28 – Looking at an esoteric asset at the early part of Rishi’s career 16:23 – Why is there little competition in these types of investment opportunities 23:06 – How they created a market and turned an esoteric asset into a return opportunity, starting with the charter school funding example 31:54 – Looking at how this is done internationally 38:55 – What they consider a platform 41:08 – How they are able to provide their service and skirt the government, legally 44:18 – A simplified explanation of what Orthogon does 50:30 – What are the main reasons people don’t want to go down this road since it seems like an obvious choice 59:00 – Looking at the most memorable experiences in esoteric investing 1:01:10 – What value has Rishi found in his extensive education, credentials, and certifications 1:07:31 – Another topic that Rishi finds interesting and he’d want to lecture on if he could other than investing. 1:09:48 – What is the right formula and types of goals you should consider in planning your life 1:14:39 – Kindest thing anyone has done for Rishi Learn More For more episodes go to InvestorFieldGuide.com/podcast.  Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub Follow Patrick on twitter at @patrick_oshag

I am drawn to a group of investors that I call practitioner philosophers. These are people who have gotten their hands dirty in their respective fields, but despite being doers, they still often sit back and ponder the big questions in business and life. My guest this week is one such practitioner philosopher, NYC based venture capitalist Jerry Neumann. I came across Jerry's essays a year ago, and he is on a very short list of writers whose work I read without fail and almost always more than once. You can think about this conversation on business, investing, and venture capital as a big funnel. We start very broad, discussing where we may be in a large 70-year economic cycle. We then break down the so-called power law which seems to govern venture capital returns and business outcomes. Then we get even more specific, discussing Jerry's process for evaluating early stage companies, and the particulars of what might make a good venture capitalist. I say "might" because as Jerry explains often, nothing is certain, and luck may always play a huge role. I just loved this conversation. It is the type that without the podcast as an excuse would be a very odd and intense one if I were just meeting someone for the first time. You'll find no small talk or even medium talk here. This is a meaty discussion with one of the smartest and most straightforward people I've come across.   Books Referenced Carlotta’s Perez - Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages Thomas Hughes – Networks of Power: Electrification in the Western Society, 1880 – 1930 Frank Knight – Risk, Uncertainty, and Profit Jeffrey West - Scale: The Universal Laws of Growth, Innovation, Sustainability, and the Pace of Life in Organisms, Cities, Economies, and Companies   Links Referenced Deployment Age Oswald Spangler About Men; Corporate Man Howard Mark’s 2x2 matrix of superior investment results Michael E. Porter - How Competitive Forces Shape Strategy DJ Teece: Profiting from Technological Innovation Porter’s Five Forces   Show Notes 3:27 – (First question) – Start with Jerry’s essay the Deployment Age and a look at what it means for where we sit today (looking forward as investors)? 3:40 - Deployment Age 4:26 - Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages 9:28 – What time in history can you compare our current deployment age to and what does that say about the next 10, 20, and 30 years? 9:40 – Oswald Spangler 11:09 – About Men; Corporate Man 18:06 - Networks of Power: Electrification in the Western Society, 1880 – 1930 20:40 - What lessons should venture capitalists make from these deployment age cycles 25:27 - Risk, Uncertainty, and Profit 26:50 – Howard Mark’s 2x2 matrix of superior investment results 32:56 – Nassim Taleb: Powerlaw 42:31 – Venture Follow-on and the Kelly Criterion (Jerry's Blog) 44:34 - How have you have actually done this, Jerry? What is your process like and your focuses? 54:00 – Are there any circumstances where it is wise for friends and family to make venture investments? 59:20 - What is this idea of who profits from innovations? 56:12 - DJ Teece: Profiting from Technological Innovation 1:02:57 – Understanding complimentary assets 1:05:06 - Porter’s Five Forces 1:09:24 - Are Augmented and Virtual Reality interesting areas for venture capital and why? 1:15:28– What makes a successful venture capitalist? What makes you special? 1:26:03 – Kindest thing anyone has ever done for Jerry   Learn More For comprehensive show notes on this episode go to http://investorfieldguide.com/jerry For more episodes go to InvestorFieldGuide.com/podcast. To get involved with Project Frontier, head to InvestorFieldGuide.com/frontier. Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub. Follow Patrick on Twitter at @patrick_oshag

A future guest just told me, every band has a song about being in a band, so today I give you my version. I won’t do this often, and only do it this week in case listenership drops due to the holiday—I didn’t want any guest to have a smaller than normal audience. I have now been doing this for almost one year, and have learned a tremendous amount. Since the whole idea behind the show is to learn in public, I am going to share a few of the lessons I’ve learned with you today. I’ll shape it as a top ten list, which ends with a fun story about my recent dinner with Warren Buffett. You’ll notice that many of these are just good business and life lessons applied to something specific: a podcast. I hope you can pull the essence of one or more of these and change how you do things, especially if you create any sort of content as part of your job.

If you told me a year ago that I’d be learning critical life and business lessons from the founder of a ketchup company, and that thirty to fifty thousand people would listen to our conversation, well, I’d have told you that’s impossible. But the fact that it is true proves many of the points laid out by this week’s guest Scott Norton, co-founder of Sir Kensington’s which was recently acquired by Uni-Lever. Sir Kensington’s, which makes “condiments with character” is no ordinary Ketchup company, and Scott is no ordinary founder. We talk about the most elemental aspects of business: product, relationships, sales, marketing, and culture. I love that we can do so through the lens of such a seemingly simple product, something that we use all the time with our families at a BBQ. Scott’s observations on culture, the importance of relationships in sales, and competitive edge are all memorable. But above all, I’ll remember his line: seek to learn that which cannot be taught. And I will continually return to the mental image of the Temple of Poseidon. Oh, and as a bonus we also talk about biking around Asia, which like all of Scott’s stories comes complete with thought provoking lessons. Enjoy this unique conversation with one of the most interesting people I’ve met on this journey. We begin with the history of ketchup.   For comprehensive show notes on this episode go to http://investorfieldguide.com/norton For more episodes go to InvestorFieldGuide.com/podcast. Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub. Follow Patrick on Twitter at @patrick_oshag   Links Referenced They Call Me Supermensch: A Backstage Pass to the Amazing Worlds of Film, Food, and Rock’n’Roll (Movie)   Books Referenced Getting to Yes: Negotiating Agreement Without Giving In How to Win Friends & Influence People They Call Me Supermensch: A Backstage Pass to the Amazing Worlds of Film, Food, and Rock’n’Roll (Book)   Show Notes 2:40 – (First question) – A look at the history of ketchup 5:16 – The milestones of ketchup’s history in the US 10:26 – What were the early days like to compete in a market where the leaders have such a stronghold on the consumer 14:41 – Effective ways to negotiate 14:57 – Getting to Yes: Negotiating Agreement Without Giving In 16:32 – How may stages were there in the early products 19:04 – A look at kaizen and what it means to Scott 20:38 – Scandinavian business principles that they bring to the company 23:40 – As the company has grown, has Scott seen downsides to the stakeholder model especially when competing against larger companies that use the shareholder model 28:19 – How did they use outside capital in getting started 31:07 – What was the most memorable story from the early days of disrupting this legacy industry, especially as it relates to the sales of this product  33:30 – How to Win Friends & Influence People 33:58 – How do you create trust and show the benefits of your product in sales 37:48 – How culture started for the company, how it’s shifted since then and what competitive advantage the right culture creates 41:47 – Some of the best outcomes are the result of mindset and culture 43:28 – What new frontiers is Scott and the company looking at today 51:41 – The power of giving and how it will bring large returns, especially when you don’t expect them as part of the giving 53:04 – They Call Me Supermensch: A Backstage Pass to the Amazing Worlds of Film, Food, and Rock’n’Roll (Book and Movie) 55:37 – Look at Scott’s decision to bike around Asia and what he experienced during that time 1:02:49 – Best advice for someone in their early 20’s   Learn More For more episodes go to InvestorFieldGuide.com/podcast.  Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub Follow Patrick on twitter at @patrick_oshag

My guest this week is Andy Rachleff, who is the CEO of the automated investing platform Wealthfront. Andy was also a co-founder and long-time partner at Benchmark capital--one of the most interesting and successful venture capital firms in the world. We spend most of our conversation discussing venture capital investing and entrepreneurship. Andy coined the now ubiquitous term “product/market fit,” and has great insight into how investors and entrepreneurs should think about business. In that vein, we discuss both what we refer to as the value hypothesis: building a product or service that customers love, and the growth hypothesis: scaling that product or service to a large market. We finish our conversation by talking about Andy and his teams mission at Wealthfront, and this conversation is perfectly timed, as Wealthfront just released a new feature that allows investors to buy factor portfolios, similar to Smart Beta ETFs. Above all, I’ll remember Andy’s advice to “put the gun in the other person’s hand,” a strategy that we explore in the middle of our talk.   For comprehensive show notes on this episode go to http://investorfieldguide.com/andy For more episodes go to InvestorFieldGuide.com/podcast. Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub. Follow Patrick on Twitter at @patrick_oshag   Books Referenced The Four Steps to the Epiphany The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses Millennial Money: How Young Investors Can Build a Fortune Diffusion of Innovations Crossing the Chasm: Marketing and Selling High-Tech Products to Mainstream Customers   Show Notes 2:36 – (First question) – The partnership setup and how they came to be 5 equal partners 7:57 – Why benchmark would not take on the chairman role in companies they invested in 9:28 – What made John Doerr the greatest capitalist investor ever 11:59 – Looking at the venture process and what made it an attractive investment for Benchmark, using eBay as an example. 18:06 – If you are willing to help other people, without an expectation of return, it can create other opportunities 20:08 – Andy is asked to explain the idea of Product Market Fit, a term that he coined 22:18 – How does one go about finding a Product Market Fit             23:05 – The Four Steps to the Epiphany             23:19 – The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses 25:55 – What are the components of the Growth hypothesis 26:51 – Why you can learn more professionally from success vs failure 28:13 – What it’s like to shift from venture capitalist to operator/CEO 30:24 – The rate at which technology gets adopted and what will help Wealthfront             30:53 – Millennial Money: How Young Investors Can Build a Fortune             31:26 – Diffusion of Innovations             31:38 – Crossing the Chasm: Marketing and Selling High-Tech Products to Mainstream Customers 32:38 – What does it look like to innovate on top of current platforms 41:07 – Will platforms like Wealthfront help to democratize access to private markets 44:23 – Kindest thing anyone has done for Andy     Learn More For more episodes go to InvestorFieldGuide.com/podcast.  Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub Follow Patrick on twitter at @patrick_oshag

I’ve often joked that this show should be called “this is who you are up against,” because I am so often having conversations with brilliant people across the investment landscape who are effectively my competition and yours. This week’s conversation fits that description because it gives you an inside view into how things work among some of Wall Street’s most competitive investment firms. My guest is Leigh Drogen, who has worked as a statistical arbitrage portfolio manager and who founded and now runs Estimize, a data company which works with some of the world’s largest hedge funds. Our conversation centers on the massive shift from what we call discretionary portfolio management—basically stock picking—to a landscape that is increasingly dominated by quantitative investors of various types. We talk about how any investor might hope to earn alpha, and how doing so is harder and harder. There are so many great stories in this episode, told by someone with the perfect career experience to know how the system actually works. After many episodes where I’ve been learning on the fly about topics like venture capital, permanent equity, or health, this episode marks a return to my world of quantitative investing. I think you’ll learn a lot, and that you’ll likely finish with an even deeper appreciation of just the type of investors that we are all up against.  Books Referenced Revenge of the Humans: How Discretionary Managers Can Crush Systematics   Links Referenced The Undoing Project: A Friendship That Changed Our Minds Force Rank (App) Founder of Estimize Explains How He Plans To Disrupt The World Of Wall Street Research   Show Notes 2:45 – (First question) – A look at Leigh’s early career and how he got started in investing 3:13 – Revenge of the Humans: How Discretionary Managers Can Crush Systematics 8:04 – What happened when things stopped working towards the end of 2007. 9:35 – The proper dimensions to separate any sort of potential Alpha edge 11:15 – The traits that help a fund perform well 11:42 – The Undoing Project: A Friendship That Changed Our Minds 14:05 – Force Rank (App) 14:49 – How the scientific process plays into Leigh’s research strategies 19:18 – Explain what Estimize is and what it does 20:55 – How people are compensated for the estimates 23:33 – The scale of how many estimates they get per company 24:57 – Why you need to be part of this informational arms race if you hope to survive 28:30 – What happens if everyone buys Estimize data and the Alpha built into it goes away 31:04 – What has been the evolution in these hedge fund platform type companies 35:00 – If Leigh was designing a firm from scratch, what would it look like 37:25 – Understanding Numerai and crowdsourcing in funds 41:41 – What is an example of interesting data set that Leigh as come across 45:38 – What is the potential for a hybrid model between a quant only with a discretionary picker. 51:35 – How do you know when something is busted or broken? 55:33 – Exploring his most memorable individual day in his career – Flash Crash 58:16 – With all the algorithms and automation, will we continue to see more of these unforeseeable dislocations like the flash crash? 1:01:00 – Bloomberg article about passive investing rates 1:07:50 – What is Leigh most excited about the future 1:13:15 – Kindest thing anyone has ever done for Leigh            1:13:41 – Founder of Estimize Explains How He Plans To Disrupt The World Of Wall Street Research   Learn More For comprehensive show notes on this episode go to http://investorfieldguide.com/drogen For more episodes go to InvestorFieldGuide.com/podcast. Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub. Follow Patrick on Twitter at @patrick_oshag

This week’s episode is very unique. It is the first episode devoted to bonds, just not the kind of bonds you are used to. My guest is Ira Judelson, who is the leading bail bondsman in New York City. I met Ira through my friend and former podcast guest Danny Moses, who is also a part of this conversation. I have always had a passion for understanding how different businesses work. In this case, this week we are exploring a different business, but also a different world. Ira’s story is larger than life. He is as authentic and hard working as they come. In both his book and this conversation, there is a lot about family, loyalty, and hard work—principles which really resonate with me. You’ll emerge from this hour with an appreciation of hustle and what it takes to get ahead. I can’t stop thinking about our discussion on how sources of power in any career morph through time, a framework that can help anyone think about their work and where to apply effort. The conversation goes all over the place, but suffice it to say we discuss bond collateral, Dominique Strauss-Kahn, and DMX—and that is but one small fraction. Please enjoy my conversation with Ira Judelson and Danny Moses.   For comprehensive show notes on this episode go to http://investorfieldguide.com/ira For more episodes go to InvestorFieldGuide.com/podcast. Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub. Follow Patrick on Twitter at @patrick_oshag   Books Referenced The Fixer: The Notorious Life of a Front-Page Bail Bondsman   Links Referenced Rao’s Restaurant   Show Notes 1:55 – (First question) – The role that Rao’s restaurant has meant to Ira’s business and career   6:11 – A look at Ira’s bail bonds business and how that industry works             6:22 – The Fixer: The Notorious Life of a Front-Page Bail Bondsman   8:31 – The story of how a pizzeria was a bad piece of collateral   11:10 – How often does Ira deal with bail jumpers   12:10 – What is the size of the open liabilities   13:14 – How long will the open liabilities last   14:55 – Ira’s relationship with his clients and the importance of character in this business   17:46 – the amazing story of how Ira got started in this business   31:05 – His early years of being a bail bondsman and how important his wife was to his success   29:52 – How Ira balances family with this kind of work   32:22 – Ira’s ability to be amazingly efficient on the phone when in social settings and a work call comes in   33:14 – Ira is the fixer   36:40 – Exploring the “Sources of Power” and where the balance for Ira of who he knows vs who he has shifted in this line of work.      38:29 – The importance of intense reliability, consistency and empathy, and why Ira can trust his clients may be considered bad people   30:19 – Two cases where Ira got emotionally involved   47:26 – Why Ira is not worried about people coming after him   48:57 – When a bunch of detainees were wailing to wait an extra day in jail for Ira because his wife was pregnant with their first daughter   54:06 – Ira’s relationships with Ja Rule and DMX   58:32 – What does Ira enjoy most about the business still   1:01:51 – Will Ira ever stop?   1:04:02 – What advice would Ira give to someone early in their career just getting started   1:08:42 – The importance in having a willingness to fail mixed with the passion for what you are doing   1:10:11 – Ira’s health scare and what it taught him about appreciating life