Invest Like the Best with Patrick O'Shaughnessy

My guest this week is Saifedean Ammous, author of the book the Bitcoin Standard. This was one of the more interesting conversations I’ve had in the world of cryptocurrency, primarily because we don’t talk about Bitcoin or Crypto until 25 minutes into the talk. Instead, we focus on history, economics, sound money, low time preference, and gold—all interesting topics. Saif’s thinking on cryptocurrencies other than bitcoin—which is that they are worthless—is unique and thought provoking. His reasoning around why gold shouldn’t be compared to the returns generated by assets like equities was also compelling. If you’ve followed my Hash Power episodes, this is a new a differentiated interpretation of Bitcoin as a technology for the store of value use case. Please enjoy our conversation. Hash Power is presented by Fidelity Investments   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   Show Notes 2:10 - (First Question) – Explain Sound Money 4:25 – Examples of hard vs easy money 7:36 – the even money trap 9:36 – The benefits of hard money vs today’s standards 14:05 – Why this interests him             14:16 – Gold Wars: The Battle Against Sound Money As Seen From A Swiss Perspective             14:56 – Democracy – The God That Failed: The Economics and Politics of Monarchy, Democracy and Natural Order 16:17 – Correlation between time preference and people’s ability to succeed in life 19:59 – How money markets worked in the late 18th century vs today 27:57 – How he came across Bitcoin and how he thinks of it as a digital gold 35:42 – How will the world transition to a sound money standard 42:15 – The impacts of hyperinflation on crypto currencies 45:04 – The idea of a orderly upgrade of the world currency 48:20 – His thinking on alternative coins 54:05 – What it takes to compete with bitcoin 1:01:43 – How he diversifies 1:04:35 – Stalling bitcoins demand 1:06:11 – Does he apply his thinking of lower time preference elsewhere in his life 1:07:09 – Kindest thing anyone has done for him   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

Jeremiah Lowin, a former statistician turned founder of Prefect, discusses machine learning in investing. He addresses data workflows, friction between data scientists and engineers, deploying machine learning in investing, the importance of data and error minimization. The conversation explores applications in finance, model testing, label formation, and the significance of interpretability in machine learning.

This week, to mark the two-year anniversary of the podcast, I offer a quick summary looking back and forward.

My guest this week is Kathryn Minshew, the co-founder and CEO of the Muse, and the co-author of The New Rules for Work: the Modern Playbook for Navigating Your Career. I’ve learned in business is that the quality of people and the culture they create dictate outcomes. Having made plenty of mistakes hiring, and having had many enormous successes, I am always interested in best practices for finding and successfully recruiting the right people. Given that Kathryn runs a jobs marketplace and has written a book on the topic, she is the perfect person to explore some the core concepts around pairing people with the right positions. We discuss how companies should market to prospective employees, how employees should represent themselves to employers, and the most common mistakes she sees across the hiring landscape. Please enjoy our conversation. 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   Show Notes 1:31 - (First Question) Largest changes in the nature of work and how people approach finding the right job for them 3:27 – Can this work be jammed into a formula 5:18 – What strategies is she sharing with employers when it comes to hiring 8:31 – How long should the process take 9:33 – Biggest mistakes employers make in this process 10:39 – Besides the usual stuff, what can perspective employees do to bolster their chances 12:50 – How much more efficient will matching technology get in the years to come 16:00 – What will be the largest changes to work itself 19:09 – Will we move away from full time work into parsels of work units 20:50 – Most successful piece of content or content strategy the Muse has employed 22:34 – Advice for early stage entrepreneurs 26:24 – Kindest thing anyone has done for Kathryn   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 intentionally avoid the world of quantitative investing on this podcast. The whole point of this format is to learn about many different fields, and the vast majority of my time is already spent in quant world. Occasionally I’ve broken this rule because of something unique, including this week’s conversation with Richard Craib, the founder and CEO of Numerai. If you listen to the podcast often you’ll have heard me reference Numerai, a hedge fund which blends quant investing, cryptocurrencies, crowdsourcing, and machine learning — talk about a PR company’s dream. One important note: Numerai is both incredibly open and very secretive. You may sense a bit of frustration on my part, but that is only because, as a fellow quant who loves details about data and modeling, we couldn’t go deeper into the details on the record. We discuss how Numerai has created an incentive structure to work with data scientists around the world in an attempt to build better investing models. The idea of having data scientists stake cryptocurrency in support of the quality of their models is fascinating. Like many hedge funds, Numerai doesn’t share its track record, so we don’t know if this works—but I hope you, like me, use this conversation as inspiration for how different technologies can intersect. Hash Power is presented by Fidelity Investments Please enjoy my conversation with Richard Craib.   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   Show Notes 2:32 - (First Question) – How he came up with Numerai and how its related to his background 4:08 – How he works with and models the data for his system 5:24 – Describing machine learning as it relates to his work, and specifically linear regression 7:11 – The important stages in his sequence 8:46 – How the scale in the number of data scientists they use is different from other areas 11:30 – Which is the most important aspect of creating alpha; their data, algorithm work, proprietary ensembling of those algorithms. 14:30 – The idea of staking in blockchain 17:30 – Does the magnitude of the stake matter in blockchain 19:10 – Understanding the full incentive structure for both staked and unstaked work 21:07 – How is the prize pool determined 22:29 – Philosophy on how to source interesting data 26:11 – His thoughts on the crowd model and the wisdom of crowds 27:12 – The size of stakers for Numerai 27:51 – Interpreting the models and knowing when something is broken 30:03 – How they think about people not submitting their models 31:48 – Their model building 32:39 – Most interesting set of things they are working on to improve the overall process             35:38 – The Market for "Lemons": Quality Uncertainty and the Market Mechanism 37:11 – How people can come along with their own data 39:00 – His thoughts on the quantitative investment community 40:44 – What else is interesting him in the hedge fund world 44:03 – Building a marketplace and staving off competition 46:16 – Kindest thing anyone has done for him   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 has a fascinating background. He has a PhD in biology but has split his time as both an investor and an operator. As an investor, he’s involved in companies like Airbnb, Coinbase, Instacart, Opendoor, Stripe, Square, and Pinterest—not too shabby. As an operator, he helped both Google and Twitter scale their businesses, in the case of Twitter from 100 employees to 1500 over two years. He’s just written a book about these experiences called the High Growth Handbook.  Our talk centered on what makes for a good investment and more specifically how Elad identifies an interesting market. Operators and early stage investors will find lots of nuggets in this fun conversation. Please enjoy.  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   Show Notes 1:31 - (First Question) – Process for evaluating a young business             2:43 – Andy Rachleff Podcast Episode 3:09 – Data factors for evaluating a business 5:08 – Reference checks 6:42 – Advice for companies that are reliant on product cyclicality             7:01 – Where to Go After Product-Market Fit: An Interview with Marc Andreessen 7:31 – High Growth Handbook 9:30 -   Lessons learned from marketing and growing companies 12:09 – How do you hire the best people to improve your distribution 13:16 – How does he think about lifetime customer value vs customer acquisition cost 15:57 – Should companies just focus on the high margin power users 16:35 – Best ways to organize a company hierarchy 19:16 – His interest and background in the area of longevity research 21:52 – Changes he has made in his own life as a result of this longevity research 22:56 – Most effective use of a CEO’s time 24:58 – How he evaluates or identifies interesting markets for potential businesses 28:03 – Any markets that fit his criteria that are underappreciated by investors 30:02 – Worst practices for businesses 32:19 – Kindest thing anyone has done for him 33:20 – What would be the topic of his next book 34:40 – Biggest lessons he’s learned about markets   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

For the 100th episode, I’ve brought back my good friend Brent Beshore. Brent was the 10th guest on the podcast, after we met because of a mutual interest in capital allocation. I quickly learned that Brent was one of the most unique and thoughtful investors around. He was an entrepreneur from the moment he left school, trying many different things before finding a fit buying smaller business with the intention of owning them forever. What amazes me about Brent is his encyclopedic understanding of business and the nuances of different business models and deal structures. This comes from reps. He and his team have looked at about 12,000 deals over the years, at every kind of business that you could imagine. I’ve been with him when he goes through this process and it’s fun to hear what makes certain businesses stand out from others, which is largely the topic of this conversation. You all know transparency is key for me, so it’s important to know that my family and I are investors in a fund called permanent equity, run by Brent and his firm Adventure.es. To commemorate this milestone episode, I can think of no one better than Brent, because he exemplifies what has made this podcast so fun for me: learning from other people who are willing to share what they themselves have learned through fun, blood, sweat, and tears. Please enjoy our conversation, and thank you so much for coming along on this journey. I can’t tell you how much it means to me. 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   Show Notes 2:02 - (First Question) – How does he think about optimizing risk in terms of the capital stack when looking at deals 5:27 – What conditions would they add debt down the road after investing in a company 6:52 – What business sectors are most intriguing for Morgan to invest in right now             6:57 – Trent Griffin Podcast 9:34 – Why no HVAC businesses if it’s such an attractive sector 13:56 – thoughts on rolling up similar businesses and horizontal scale 16:04 – Another industry Brent would focus on 18:02 – Difference between property management in larger cities vs smaller metro areas 18:51 – What role does profit margin play when Brent is evaluating a business 22:46 – The appeal of a hyper cyclical business             22:52 – Brent Beshore Podcast Episode 27:27 – Favorite counter cyclical business 28:14 – How they judge assets, tangible vs intangible assets 33:58 – How does he think about wage inflation when considering the cost of a business 37:21 – His fascination with pet crematoriums 38:57 – History of the permanent equity fund and the changes by having a larger pool of capital 43:48 – Pitching investors on a new structure for the business 46:14 – How will this business model scale   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

Today’s conversation is a continuation of my discussion on applying the lessons of tracking animals in the wild to tracking in your own life. I encourage to listen to that episode first. In this second part, Boyd’s sister Bronwyn joins and offers perspective on business and life. Given that Boyd and Bron grew up in this wild place, their perspective on the world is refreshing and very different. We discuss a wide range of things, But the section on restoration near the end is just phenomenal stuff. Please enjoy part two of my conversation with the Varty family.   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   Show Notes 1:21 - (First Question) – Concept of shame and the role it plays in the lives of the people that visit 3:11 – Bron’s take on shame and if this is uniquely male issue 5:15 – How the Varty’s think about the concept of presence, and time with Nelson Mandela 13:34 – Selfishness as an impediment to presence 20:26 – Tending the cup 20:37 – Life is not a zero-sum game 23:15 – How they run the reserve as a business 30:18 – Importance of motivation as a business 33:55 – Cultivating a culture that makes a business a family 40:15 – How they help other family businesses 45:29 – The idea of restoration as a business and legacy 51:23 -Restoration model in investment 53:49 – The age of restoration will be born on the age of information 54:48 – Places that have given Varty’s deep connections (other than Africa) 1:00:46 – Kindest thing anyone has done for Bron   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

An interesting question that I think about a lot: how do you balance exploring the new with savoring what you already know and love? Most of the time I prefer to explore, but the best part of this podcast experience for me has been meeting people who become close friends. For episodes 99 and 100, I’m bringing back two of the most popular past guest who are both now dear friends.  This week’s episode is split into two parts, today and tomorrow. Today’s episode is with Boyd Varty and tomorrow is with both Boyd and his sister Bronwyn. The incredible Varty family hosted me in South Africa, so you’ll hear birds and elephants in the background as we talk.  This conversation with Boyd is about our shared experience called “track your life” which I couldn’t recommend more highly. We tracked animals on foot for five days, and learned a lot from the environment itself. While we discuss our time together, this is much more about how to live. My original conversation with Boyd had a huge impact on me, and this continues the exploration of Boyd’s idea that we should all be going our own way, in the right way, instead of simply following well trodden paths.  I hope you enjoy this conversation with Boyd and check back tomorrow for another conversation with the Vartys.  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   Show Notes 1:55 - (First Question) – Encounter with five wild dogs 10:19 – The idea of a perfect day on the track 15:59 – The importance of silence 19:42 – Why we could all benefit from the power of silence 21:37 – Side effects of being on the track 23:49 – Following the smaller paths 25:20 – How culture can keep us from forging our own path   29:34 – The stress he puts on the watch at night 33:34 – The power of going from alert to rest and back again             35:11 – Why Zebras Don't Get Ulcers 38:25 – Disconnecting from the modern world and reconnecting with your life’s purpose 41:42 – How much does skill play into finding your life’s calling 43:23 – Common objections to what they do 49:58 – Importance of end of day on the track 52:33 – Silence and feeling of thousands of years of time passing through hallucinogenic 56:22 – His experience with bees 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

Ryan Selkis - The Crypto Barbell and Token Curated Registries - [Invest Like the Best, EP.98] This week’s conversation is for those interested in the nitty gritty of cryptocurrencies and for those who, like me, are fascinated by that world but more than a bit skeptical of the investing prospects for the many cryptocurrencies now in existence. My guest is Ryan Selkis, who I met at an event hosted by Union Square Ventures and Blocktower Capital. At that event, in a crowd of many brilliant people, Ryan was consistently asking hard questions and raising counterpoints. I love his perspective because he is both passionate, but realistic, excited about crypto, but worried about many aspects of the ecosystem. We discuss many new topics like his barbell analogy for thinking about different kinds of coins, token curated registries, and the need to better transparency around decentralized projects. Hash Power is presented by Fidelity Investments Please enjoy our conversation.   March for the Fallen Want to meet other curious investors, get in good shape, and support a fantastic cause? Consider joining a great group to hike 28 miles in honor of those who have fallen in defense of our nation.  Learn more and sign up at alphaarchitect.com/mftf.    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   Show Notes 2:55 - (First Question) – how he best explains blockchain technology 4:12 – How does he categorize each cryptocurrency 9:11 – How Numeraii is valued 10:04 – Explaining token curated registries (TCR) 12:58 – How Token Curated Registries are being applied 15:05 – Innovations that will protect against nefarious actors in the crypto space 16:37 – How do you convince investors to commit to TCR’s 18:40 – Biggest headwinds to this industry 22:12 – What are the quality filters to root out the bad actors 25:42 – Thoughts on the ICO market as an alternative to capital raising 29:23 – Litmus test for who should use an ICO to raise capital 34:28 – What is unique about creation of a token vs the normal exchange of cash to determine if a company needs a token 36:21 – How many ICO projects are really necessary 38:28 – How should people form an investment opinion about this space 41:35 – Core mission of his company 44:28 – What are some of the reasons his goals won’t happen 49:30 – Lessons learned while working at Coindesk 49:58 – What is he most excited about for the future of this space 52:56 – Kindest thing anyone has done for Ryan   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