Invest Like The Best

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

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

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  

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, b

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 betwe

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 N

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 c

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 Blu

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 fai

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 bon

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 certa

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 menta

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,

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 a

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

This week's conversation was especially fun. I have a long history with my guest, Dave Chilton, but this was the first time we'd met in person. I'd heard stories about him from people I work with for twenty years, so getting to finally spend time with him was a real treat. I'll let him reveal the connection. This episode will also be fun for listeners in the US, as Dave is one of the best-known people in Canada because of his famous book the wealthy barber and his more recent stint as a dragon on Dragon’s Den, which is Canada's version of shark tank. I called this episode the human blitzkrieg because of Dave's relentlessly positive style and curiosity. He has dabbled in many parts of the business and investing worlds. He is one of the most successful authors in history, has invested in dozens of interesting businesses, and is a Jedi master in the long-lost art of the phone conversation. We discuss business, investing, and writing. If you enjoy this conversation and have any aspirations as a writer, I highl

My guest this week is David Salem. David was the founding president and CIO for The Investment Fund for Foundations, which served 800 endowed charities under David’s 18-year tenure. He's now the CIO of the Windhorse Group, which focuses on long-term, value oriented investing. This conversation wanders into and explores many different areas of investing and life. The theme is how to think about asset allocation and investing holistically--from first principles--but we talk a lot about motivation, incentives, human behavior, and the fear of missing out as key variables in money management. We discuss the history of the Yale and Harvard endowment models and how their success has affected the asset management world for better or worse. I had never heard such an interesting take on two very important institutions. I also can't stop thinking about David’s "Mt. Everest" question, which we explore early in our conversation. I'd love to hear your answers to that question, so email me or message me with your thought

My guest today is Michael Mauboussin, who is the head of global financial strategies at Credit Suisse and is on my short list of must read writers on all things investing. If you read his entire catalogue, Howard Marks's memos, and Buffett's shareholder letters, you be sitting pretty. Michael was also a big reason for the early success of this show appearing as my second guest and now my 37th. He and his team have been prolific in the last six months, publishing several long research reports on the most interesting aspects of the investing landscape. In this conversation, we talk about business moats, industry analysis, and how to combine man and machine when building an investment strategy and portfolio. As I tell Michael at the end, you won't be able to listen to this episode at two times speed, because we go deep quickly. For comprehensive show notes on this episode go to http://investorfieldguide.com/michael For more episodes go to InvestorFieldGuide.com/podcast. Sign up for the book club, where you’ll

This week’s guest is Will Thorndike, an author and investor whose book The Outsiders is an all-time favorite of mine. Our conversation is in two parts. First, we dive deep into the lessons of his 8-year research project studying CEOs who were master capital allocators. These CEOs include Henry Singleton, John Malone, Tom Murphy, Katherine Graham, and Warren Buffett. We discuss how these CEOs tended to be contrarians on topics like dividends, buybacks, acquisitions, and the use of debt. As we go through each of the tools in the capital allocators toolkit, you’ll hear several useful lessons for running or evaluating a business. In the second part, we cover Will’s career in private equity. Will founded and continues to run Housatonic Partners, investing in buyouts, recaps, and search funds. Will has been one of the most active search fund investors for decades, and given how much time I’ve spent in past episodes on the searchers or operators in the micro-cap, permanent equity space, it was great to get the pers