Enter the Labyrinth

I’m very excited to share my conversation with William Green (@williamgreen72), the author of RICHER, WISER, HAPPIER: How the World's Greatest Investors Win in Markets and Life. It’s one of my favorite investment books this year because it is so much more. William called it a “stealth spiritual book” and I put a sticker on my copy: “This is not a book about investing.”This conversation was a about William’s own journey, his search for worldly wisdom in everything from Zen Buddhism to Stoicism to the Kabbalah, and the many lessons he learned from great investors. You can find the full highlights and a full transcript on my substack. Highlights:2.00: Introduction, William’s journey to the book.7.00: William’s study of everything from Zen Buddhism to the Stoics to the Kabbalah. “Tell me about what you're reading and why and how it's influenced your life?”"I dip into the Zohar almost every day"24.00: Sometimes life has to burn down?“We can get subtly misaligned and feel that we're going in the wrong direction, but you keep going. Sometimes you need it all to fall apart in a fairly dramatic way, whether it's a marriage or a job health, a career or reputation, you kinda need it to collapse.”William’s own setback and dealing with being laid off during the financial crisis.31.00: How did he pick the subjects and ideas of the book?"One idiosyncrasy of this book is that I’ve focused almost exclusively on investors whom I like and admire."43.00: “I write at some point in that epilogue, I say there is as great honor in the simple virtue of perseverance. And I don't say that lightly. I think that really deeply, I mean, there's something, one of the things about writing is that when, when you really simplify and distill things, you're always worried that people will see how banal your mind is and how trivial you are.But, actually truth is pretty simple, I think. And so for me, when I'm condensing it down to that, I mean, I said there are two great lessons for me from Miller's Miller's downfall and recovery, because his recovery has been equally spectacular. One of them is about the simple virtue of perseverance and [00:44:00] one of them is everyone suffers.”48.00: How do I regain sort of control or semblance of control of, of the inner game or if my mind? Is reading enough?58.00: “And, and so I'm not super impressed just with the ability to make money and not live a more thoughtful life. I think I was more impressed with that when I was younger. I liked that aspect of the [00:58:00] game of just being able to outwit the crowd. There's something about that, that I found very, very appealing.”59.00: What is it like to write about people who are very successful financially? Is there a downside (envy)?“Why their lives resonated with me, whether it was a Bill Miller or a Nick Sleep, or a Monish Pabrai or Charlie Munger, in some ways they were all outsiders who had diverged from the crowd. And they were thinking in a very, in a very free way, they were questioning conventional opinion and they had constructed their lives in a way that was very true to who they are. So that resonated deeply with me because I could see that I was also an outsider who at least in my own mind who didn't naturally want to go with the crowd.”1.11.00: Self awareness and lessons for non-professional investors. “Stumbling” into the right strategy.1.20.00: Writing a substack vs. a book. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.enterlabyrinth.com/subscribe

“Life is a big craps game. I've got to tell you, it's all been fun.”This is a companion piece to my writeups of Kerkorian's story (part I, part II). Kirk Kerkorian was a self-made billionaire, aviator, entrepreneur, casino developer, and investor. It's one of my favorite rags-to-riches stories. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.enterlabyrinth.com/subscribe

I'm reading my latest piece, Gratitude, Desire, and a Money Paradox.“Desire is a contract that you make with yourself to be unhappy until you get what you want.” –Naval This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.enterlabyrinth.com/subscribe

Hello everyone.I’m very excited to share my conversation with Sebastian Mallaby, the Paul A. Volcker senior fellow for international economics at the Council on Foreign Relations and author of several books including More Money Than Good, The Man Who Knew: The Life & Times of Alan Greenspan, as well as an upcoming book about the history of venture capital (The Power Law). I’m a big fan of More Money Than Good and tweeted about the gems in its footnotes. This conversation was an absolute treat and I hope you will enjoy it as much as I did.You can access it here: Spotify, Apple, Google, RSS, anchor.I’m still learning about editing the audio files and dealing with all the logistics. Happy about any feedback🙏Disclaimer: this podcast is for entertainment purposes only. It does not constitute an offer to sell or the solicitation of an offer to buy any securities mentioned or discussed. Seek your financial, tax, legal, accounting, or other advisor’s advice before making any investment decisions. Do you own work. I am are not your fiduciary or advisor.Conversation highlights:* 2:00: Sebastian’s journey to the book and topic (hedge funds, also Alan Greenspan)* 5:15: How to gain access and build trust. * “The key was to do an unreasonable amount of preparation work.”* “You win people's respect by doing a ton of homework. It shows that you're serious and you're not wasting people's time by asking the obvious questions.”* 7:44: How to decide what questions to ask?* “What you really want to know from them is specifically what their thought process was around a particular important or interesting trade. How did they make the call? How did they develop conviction? How did they hold onto the position during the inevitable hiccups and adversity? So it's that reconstruction of the case study.”* “I often show up with very detailed notes where I've reconstructed a timeline. And I'm able to say that, ‘I know from your investor letter that in this month you made a profit on dollar/yen. I know that dollar/yen had a big move on the 15th and 16th of that month. … I really tried to kind of prompt them as much as possible.”* 11:00: Where to look for information? “The answer is you've got to look everywhere.”* 12:20: Finding memos in which Greenspan “described the creation of the Federal Reserve as one of the historic disasters in U.S. history.”* 15:00: George Soros who joked "I can only remember the future."* “When you ask him about the past, he's not much help.”* Learning the division of labor in the Soros team and the Thai Bhat trade.* 20:00: “The culture within an investment company matters almost as much as the analysis that the company does of the market or of the trade.”* 21:00: The Korean bank trade.* “On the walls of these offices they have these tombstone announcements, underwriting such and such deals. And he sees that these Korean financial institutions announcing in these framed plaques on their walls, that they've done these financings for Thai real estate companies. And of course he knows, because he was there, that all these real estate companies are bust, they’re gone, finished.”* 23:00: “The South Korean reserves are fictitious, the government is lying. And when you see that as a currency trader, you know that if you go short the currency, they're not going to have the reserves to defend it, and you're going to win. It will be the Sterling trade all over again.”* 27:00: Different cultures and investment styles, contrasting Soros, Druckenmiller and Robertson.* 31:30: Culture at Tiger and the Tiger cubs.* “That's sort of the DNA of Tiger, as far as I understand it today, that you've got people who don't mind hustling, who don't mind getting on a plane, flying to another country, meeting the manager, and building a very personal network. And that continues to generate good returns.”* 34:00: Julian Robertson outgrowing his original strategy and the loss of “supercharged incentives.”* “The other thing that went wrong for junior Robertson in the late nineties was that he had diversified out of stocks and into macro. He was doing currency trades and he had a dollar/yen bet. They went extremely wrong and that was the beginning of his losses. When he also got hit by the NASDAQ bubble, it was sort of a double whammy.”* “It's not so much that people can't adapt over time. I think they actually can. It's more that when you diversify from one type of hedge fund strategy into another one, that's the risk. It's the mission creep thing.”* “It's that supercharging of incentives that really focuses the mind and makes people perform at their best.”* 39:30: Can investors evolve and adapt?* “Sometimes the competitive advantage of a hedge fund manager is precisely the ability to adapt. George Soros used to say, ‘I don't play the game. I look for changes in the rules of the game.’”* 42:00: Mindset and personality.* “The value investing mindset almost disqualified Robertson from mastering macro.”* “I think a big thing that people don't necessarily understand when they're outside the hedge fund world is that it's not just about being right in trading. It's about the sizing of the trade and the fact that you can be wrong more often than are right, but if you size those bets when you were right bigger, you will still make money. And that I think is sort of like the key insight about someone. Paul Tudor Jones.”* 47:45: Understanding Paul Tudor Jones.* “Genius does not always understand itself.” Vic Braden* 49:00: Jones tried to replicate his system with a quant.* 52:00: The Lehman Brothers 2008 trade.* 55:00: “If you see that same 50:50 chance in the way that a trader like Paul Tudor Jones does, then you realize that the Hank Paulson view was crazy. And it's crazy because in a world where there's a 50% shot that it would be a flat outcome for Wall Street, but then a 50% shot that [the market] will tank, every sensible macro trader with a Paul Tudor Jones mindset will be massively short because you can't lose. It's an asymmetric bet. If you perceived their symmetry, then in a way it's no longer 50:50, it's like a hundred percent it’s going down.”* 56:50: Jones’s process and his ‘market scripts.’* “Sometimes causation in human actions works in a weird way.”* “I remember him saying this to me when I went to see him. Sitting in the evening when the markets were closed and thinking through what might happen the next day, thinking about the different scenarios that could arise, thinking what he would do. If option A was to transpire, he would do trades one and two. If option B happened, he would do something else. And he kind of thinks through all these things through in advance and that quiet reflection when the markets are closed makes his faster when the markets are open. Cause he's kind of been there in his head.”* 59:45: Reflecting on the industry and book from today’s perspective, a decade later.* 1:03: Rise of quantitative trading.* “Because of those high barriers to entry, you tend to get these concentrated pools of excellence in a few big quant shops and the survival rates for quants are higher. So this all changes the game. It's less of a kind of Darwinian competitive adaptive ecosystem, which is what I saw in the discretionary trading world.”* “On the other hand, human traders are good at interpreting the arrival of new paradigms. What does it mean for markets when you have a pandemic or what does it mean for markets when you have a pandemic and then an unprecedented fiscal and monetary stimulus. And so this is like when you have unknown territory and the past patterns in markets won't necessarily repeat themselves. You need people who look into the future. You don't need machines to look into the data from the past.”* 1:08: Sebastian's upcoming book, The Power Law.If you enjoy my work, please consider sharing it with friends who might be interested. It would mean a lot to me and help me turn this into a sustainable effort. 🙏 This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.enterlabyrinth.com/subscribe

I’m very excited to share my conversation with Sebastian Mallaby, the Paul A. Volcker senior fellow for international economics at the Council on Foreign Relations and author of several books including More Money Than Good, The Man Who Knew: The Life & Times of Alan Greenspan, as well as an upcoming book about the history of venture capital (The Power Law). I’m a big fan of More Money Than God and tweeted about the gems in its footnotes. This conversation was an absolute treat and I hope you will enjoy it as much as I did.Disclaimer: this podcast is for entertainment purposes only. It does not constitute an offer to sell or the solicitation of an offer to buy any securities mentioned or discussed. Seek your financial, tax, legal, accounting, or other advisor’s advice before making any investment decisions. Do you own work. I am are not your fiduciary or advisor.Conversation highlights: 2:00: Sebastian’s journey to the book and topic (hedge funds, also Alan Greenspan) 5:15: How to gain access and build trust. “The key was to do an unreasonable amount of preparation work.” “You win people's respect by doing a ton of homework. It shows that you're serious and you're not wasting people's time by asking the obvious questions.” 7:44: How to decide what questions to ask? “What you really want to know from them is specifically what their thought process was around a particular important or interesting trade. How did they make the call? How did they develop conviction? How did they hold onto the position during the inevitable hiccups and adversity? So it's that reconstruction of the case study.” 11:00: Where to look for information? “The answer is you've got to look everywhere.” 12:20: Finding memos in which Greenspan “described the creation of the Federal Reserve as one of the historic disasters in U.S. history.” 15:00: George Soros who joked "I can only remember the future." Learning the division of labor in the Soros team and the Thai Bhat trade. 20:00: “The culture within an investment company matters almost as much as the analysis that the company does of the market or of the trade.” 21:00: The Korean bank trade. 27:00: Different cultures and investment styles, contrasting Soros, Druckenmiller and Robertson. 31:30: Culture at Tiger and the Tiger cubs. 34:00: Julian Robertson outgrowing his original strategy and the loss of “supercharged incentives.” 39:30: Can investors evolve and adapt? 42:00: Mindset and personality. 47:45: Understanding Paul Tudor Jones. “Genius does not always understand itself.” Vic Braden 49:00: Jones tried to replicate his system with a quant. 52:00: The Lehman Brothers 2008 trade. 56:50: Jones’s process and his ‘market scripts.’ “Sometimes causation in human actions works in a weird way.” 59:45: Reflecting on the industry and book from today’s perspective, a decade later. 1:03: Rise of quantitative trading. 1:08: Sebastian's upcoming book, The Power Law. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.enterlabyrinth.com/subscribe

Disclaimer: The following content is provided for educational purposes only and does not contain investment advice. It is purely subjective. Always do your own due diligence.Hello everyone.I am so happy to share my conversation with Dominique Mielle (@DominiqueMielle), author of Damsel in Distressed. Dominique was a partner and senior portfolio manager at Canyon Partners, one of the largest distressed and credit hedge funds.We talked about her experience during the telecom bust, the airline bankruptcies, and the financial crisis, how to deal with losses and stress, distressed as a chess game, the difference between generalist and sector specialist models, how to pitch and build an asset management business (she built Canyon’s loans securitization business after the crisis), and the hedge fund industry in general. I had a lot of fun and learned a lot during our chat and I hope you enjoy it as well. I realize listening in the substack can be a bit cumbersome and spent a day setting up additional channels. I might also add audio versions of my longer pieces there if that’s of interest (someone told me yesterday that they listened to all of Packy McCormick’s writing on Spotify🤔).* Spotify* Apple/iTunes* I also submitted it to Google but apparently it takes a few days to be processed or approved😪* RSS feedI’m still learning about editing the audio files and dealing with all the logistics of these conversations. Happy to hear any feedback in the comments or via email or Twitter DM🙏We talked about:* 3:00: The WorldCom bond trade.* 6:30: Dealing with a losing investment.* 9:00: Importance of expertise and networks in distressed investing. Distressed investing as a game of chess.* “Skill in distressed is to be able to think about different scenarios and to anticipate what the adversary is going to do with his pieces.”* 11:40: Distressed investing as an apprenticeship business.* 14:15: Generalist vs. sector specialist model.* 17:30: Hertz bankruptcy.* 20:40: Airline bankruptcy investing and Equipment Trust Certificates. * 28:00: How distressed investing changed over the past decades. “It's more competitive. It's harder to to beat the market. It requires a lot of expertise, a lot of conviction. A lot of creativity maybe more than before.”* 32:00: Navigating the financial crisis in 2008* 35:00: Mental resilience and losses.* 38:00: Losses are unavoidable.* 39:20: The business of investing: building a CLO business, raising capital.* 40:59: Pitching, fundraising.* 45:00: Women in hedge funds. “In 20 years, I only met one other female partner who was doing distressed. And she's a friend of mine.”* 48:30: Implications of hedge funds as a mature industry.* 51:25: Pitching and communicating ideas.* 53:45: Managing a team of analysts.Enjoyed this piece? Let me know by hitting the ❤ like button.👇 Thank you!If you enjoy my work, please consider sharing it with friends who might be interested. It would mean a lot to me to reach (and teach) more people. 🙏 This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.enterlabyrinth.com/subscribe

Dominique Mielle was a partner and senior portfolio manager at Canyon Capital, a $25 billion fund, where she worked for twenty years. In this episode we discussed her career in the world of distressed investing, her book, and the hedge fund industry in general. 3:00: The WorldCom bond trade. 6:30: Dealing with a losing investment. 9:00: Importance of expertise and networks in distressed investing. Distressed investing as a game of chess. 11:40: Distressed investing as an apprenticeship business. 14:15: Generalist vs. sector specialist model. 17:30: Hertz bankruptcy. 20:40: Airline bankruptcy investing and Equipment Trust Certificates. 28:00: How distressed investing changed over the past decades. 32:00: Navigating the financial crisis in 2008 35:00: Mental resilience and losses. 38:00: Losses are unavoidable. 39:20: The business of investing: building a CLO business, raising capital. 40:59: Pitching, fundraising. 45:00: Women in hedge funds. “In 20 years, I only met one other female partner who was doing distressed. And she's a friend of mine.” 48:30: Implications of hedge funds as a mature industry. 51:25: Pitching and communicating ideas. 53:45: Managing a team of analysts. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.enterlabyrinth.com/subscribe

Hi all,This is my conversation with David Clarke who spent many years researching Floyd Odlum’s story. You can find an outline of his work and efforts here.I own a pdf copy of his work and was blown away by the amount of information that David unearthed. While still incomplete, it was a pleasure to dig into the book and I look forward to the day when I can buy a printed copy. In the meantime, it is possible to contact David about purchasing the pdf at davidclarke56@hotmail.com.I asked David about how he found the story, his research process, what he uncovered that was different from the official narrative, and how Odlum rose and fell.Unfortunately, we had a few glitches with Zoom. I did my best to clean up the audio but there are still a few fragments here and there. Nevertheless, I hope you enjoy the conversation as much as I did.Enjoyed this piece? Let me know by hitting the ❤ like button.👇 Thank you!😉 This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.enterlabyrinth.com/subscribe