I run a hedge fund. We are very

different than others uh in many ways

and we like to deal

with a few things. One is finding the

inefficiencies of our business and

exploiting them. And then the second

thing that we like to do is finding the

problems that often people are not even

aware of and solving them. And both

these things give us an advantage on top

of the advantages that we have and helps

us accomplish our goals, right? Uh which

is make a lot of money for our partners

with as little risk as possible. Um, and

one of the problems currently popping up

in our business is,

uh, young people

no longer are trained like the boomer or

unk PMs that are out there, right? Um,

and the problem with that is the young

guys are they're very good at, you know,

they they they they are taught modeling,

uh, freshman and sophomore year in

college. They are taught the accounting,

they are taught all of that stuff. But

the problem, and by the way, they're

very good at it. I could never compete

with the current students that are in in

schools today. Um the other day I was at

my alma mater and I was looking at the

incoming crew of students. I'm like

these kids trance me intellectually.

Um but what do they lack? They lack what

we call analog training. And I'll go

into to to

uh what that is, okay? But first, um, we

have a problem. The problem is

Idiocracy. Now, I don't know if you've

seen this movie. It's a hilarious movie

from uh, I think 20 years ago. It's

about a guy that that in an army

experiment gone gone wrong gets put

uh

in a

uh

uh in a cell that stores his body for

200 years and then a couple hundred

years he comes back out. And even though

he was an average man in his current

time, he ends up being a genius 200

years from now because of how bad

society has deteriorated.

And one of the examples is crops are

dying because 200 years from now the

idea is to put Gatorade on crops to make

them grow. And he comes out, he's like,

"No guys, we should put water." And ends

up solving a famine crisis. Um now

you know this the picture on the right

says Idiocracy was just supposed to be a

movie not a documentary. There is a

certain element of of society becoming

idiocracy. Uh um and and by the way if

you think business and culture setters

are trying to help solve this problem

they're not. Um uh if you watch the

latest Joe Rogan, Matt Damon, and Ben

Affleck podcast, they talk about how

movies today

to be able to make money, they're making

them to deal with people that are

looking at two screens at the same time,

both the movie and the screen. So

throughout the movie, they put in scenes

that it reiterate what the plot is to

make sure that it's okay while you're

not paying attention that you still

capture what's going on. So instead of

making it you live up to the movie,

they're having the movie live down to

where current state of society is and

just in my opinion making it worse. Now,

I know I sound like a [ __ ] boomer,

and I I know I am, but we're seeing this

uh come in in the results of young

investors today and the the output and

the work that they do. Okay. By the way,

the other uh sign that this might be a

problem is a lot of Silicon Valley exe

executives don't allow their kids to use

the products they built. They don't

allow them to use cell phones till a

certain time. They don't allow them to

use iPads till a certain time. You know,

they're sending them to schools like the

Waldorf school that doesn't allow

computers. You know, it's just literally

using analog tools. There's a school in

Switzerland that I'm thinking of sending

my son to when he's a certain age where

there's no phones allowed, no computers.

All you do is read and write memos for

for a semester. That's very powerful in

terms of of of of

you know thinking under constraints and

the problem with modern tools today is

they don't have constraints and that's

very dangerous.

Hey, thank you so much for listening to

all open. If you want to be able to

attend talks like these live, sign up

for my substack below. I'll be posting

all future events there and I'm looking

forward to seeing you.

>> All right. You saw me talk about this

before. Uh this is the generational

battle. Now this is a global problem

that I just like the slide because it

shows it in the US. So so currently the

baby boomers have $76 trillion.

Uh Gen X, which is my generation, we

have $ 37 trillion in wealth. The silent

generation, so those are my

grandparents, your great-grandparents,

uh they have 19 trillion. And then

millennials have 13 trillion. And then

you have the zoomers, the baby zoomers,

sorry, the excuse me, the zoomers that

have, you know, we actually don't know,

but they're they're ramping up. What's

happening here is the first baby boomer

is reaching 80. Actually, he's reached

80 this year, right? And that wealth is

trickling down.

Okay? So, let me step back. We're very

thematic in our investing. It's not just

that we want great fundamentals, but we

want themes that are pushing those

fundamentals forward.

You know, it's one of the secrets of

investing is you want to be part of

great themes. Last night I had dinner

with a very strong PM,

probably one of the best PMs in the

world, and he was talking about his

analyst class from 1999,

and how all the ones that went into tech

are worth 50, if not 100 times the ones

that went into other sectors, despite

the the in his opinion, the IQ's of the

guys that were in the other sectors were

way better. And why is that? Because

they were part of the the right rising

tide in terms of wealth creation. There

are reasons why technology was the right

sector and theme to be pushed in. Um now

is it going to be the right sector and

theme to be pushed in in the future? I

don't know. But but still it helps to

have the best weapons, right? So

thematically we look for themes like we

call this the boomers to zoomers theme

that what is happening with wealth as it

trickles down to Gen X then millennials

then baby zoomers. But one of the things

uh that you'll see is the Gen X guys

were the last generation to be trained

with analog tools but really know how to

use digital tools as well. Whereas the

millennials and the zoomers were more

trained with digital tools. And the

problem with that is they lack the

thinking under constraints that we had

when we were reading, writing, you know,

using things like, you know, these like

notebooks, right? Um and it it

constraints are powerful because they

force you to to to break them. Uh and

thinking without constraints uh can be

very dangerous. And and by the way, um

to use the analogy, the way you train

special forces in the military

is you don't give them the special

weapons that can shoot around corners,

the goggles where you can see all your

teammates are at night, the infrared

goggles and all these things from day

one. No, you drop them in the jungle

with a knife that they have to hold in

their mouths and you say, "Dude, see you

in two weeks." And the guy's like, "I

don't have any food." Work it out. By

the way, we're going to be messing with

you in these two weeks. So, you better

learn how to survive. You first learn

how to survive with your mind first.

What we call in our in our business the

10K and a pencil approach. I want you to

be good enough that you don't need any

of the tools.

You have a 10K. You read it and with a

pencil, you're able to hammer out what

is this business worth? What are the

three things that matter and where do

you think is going to happen in the in

the next 18 months to three years?

That's it.

Very very hard for the new school kids

to do that by the way.

Okay. So, we talk about this a lot in my

firm. Uh it comes from

my background as a professional gambler.

Um,

I never looked to play against

professionals.

That was a waste of time and money. You

looked to play when you were gambling

against rich people with big egos that

did not know how to gamble as well as

you did, right? Same thing matters in

business. Same thing matters in the

military. You know, there's a saying in

the military. um if you find yourself in

a fair fight, you haven't planned your

mission properly,

right? And one thing that you'll see in

what we call internet 3.0, and I learned

this from a very talented PM called Doug

Douglas Schwarz, uh he was teaching me

about internet 1.0,

internet 2.0, internet 3.0. And internet

1.0 And it was like Yahoo,

Geio Cities and the the first internet

sites which was disrupting traditional

business but not really. Internet 2.0

which was Amazon, Google, Facebook that

really disrupted a lot of businesses.

Think about traditional ad agencies,

traditional advertising, newspapers,

yellow pages. I mean do you guys even

know what yellow pages are? You know,

these are all businesses that were

disrupted by internet 2.0. And then

internet 3.0, which is AI and blockchain

enabled internet, in our opinion, is

going to be even more disruptive, but

more importantly, internet 3.0 is going

to eat out internet 2.0 and most likely

crush them as well. Um, and what you'll

see is whenever you study a business,

it's just like an ecosystem. You have to

study who are the predators and who are

the prey,

right? Who are the companies that are

literally going to wipe out

um uh the other other companies? When

you study an ecosystem, it's always

predator prey dynamics, right? The top

predict like a pond where there's like

big fish, mediumsized fish, small fish.

The big fish sometimes prey on the

mediumsized fish. So medium sized fish

sometimes bring a small fish. It's

really interesting, by the way, when you

introduce another predator to a pond.

What usually happens is the top

predators try to fight the new predator,

but then they realize it's really

costly. So those guys turn on those

guys, the middle guys, and then the

middle guys then turn on the small guys,

and you get what's called a ecosystem

wipeout where everybody just wip start

wiping out each other until they

stabilize

u ecologically. Again, this happens in

companies. If you study, for example,

when Amazon when Amazon entered sports

retailing,

they fought Dick Sporting Goods first.

Then Dix was like, "Yeah, I don't really

like fighting this Amazon guy." So, what

did they do? They turned on everybody

else and literally started wiping out

guys. Um, so one thing you'll see in the

age of AI is that the predator prey

dynamics are amplifying and

accelerating.

Okay, take a look at what's going on

with SAS software today,

right? Where the AI companies supposedly

are wiping out these businesses. By the

way, in some cases it's unclear if

they've impacted them, but they've

impacted their narratives which impact

their multiples and people perceive then

that they're being impacted and then

that might impact seeks uh that they

sell. It might impact consumption. It's

actually unclear if there is going to be

an impact. We think in certain cases

there are by the way but

what's clear is that the predator prey

dynamics are amplify and accelerating

okay and it's happening across business.

There's also

um there are other things that drive

predator prey dynamics. Uh by the way

very important book to read is the book

on this. It's called From Predators to

Icons, exposing the myth of the business

hero. By the way, was written by a

French academic and then translated by

another academic. So, you have to be a

bit careful. It's also fairly clear, you

know, to me that these guys might be

socialists

um or at least maybe perhaps not

socialist, but perhaps French. uh but

they describe

how the best entrepreneurs start out as

predators and then eventually

redo their their history to look like

icons. So we see them as today as iconic

and then we're like we have to behave

like they do but we forget that what got

them to be to become who they became was

they became like predators, right? And

it's and again predator pynamics are

amplify and accelerating. Okay, so just

just recall that.

Then we have uh master naan. So there's

a Chinese uh master called master naan.

I I had to study him when I was a kid.

um because my parents uh had me study

him and he's brilliant and you can read

his books and uh Joshua Ramo mentions an

anecdote

uh from master non in his brilliant book

called the seven sense which is about

power fortune survival in the age of

networks um

genius book also you should read uh the

age of the unthinkable in my opinion the

best strategic book uh uh ever written

for a bunch of reasons uh especially in

modern times. But Master Nun uh has an

anecdote. He says the disease of the

19th century

was the flu. Why? because it was the

first time people were coming from rural

area and to cities and

people were not used to these cities and

being packed all in one place we had the

disease called the flu.

Right? And then he says the disease of

the 20th century is cancer. And the

reason why is we created all these

ingredients and labs that our bodies are

not used to and put it into our food

into our environments and our bodies are

rebelling and it's causing uh cancer.

Right? But he says the disease of the

21st century is going to be madness.

And the reason why is because we're

being connected

because of modern communications tools

to cultures, philosophies,

societies even that we're not really

supposed to be connected to as humans.

And we actually don't know how to deal

with that. And that's why the disease of

21st century is going to be madness.

Already you're kind of seeing signs of

that. things that pop up and down, pop

up and down in society. Um, and it's

happening very fast and unbelievably

it's as if people are like have the

memory of a goldfish. They believe in

things and they stop believing and

almost forget the fact that they

believed in it. And part of the reason I

think is the the digital

uh uh uh intoxications that are that are

happening.

All right. Now, I talked about this in

your last

uh thing. It's very important to know

how to compete with AI. Um we call it

competing with the machines. Imagine a

world James Cameron world where you have

a bunch of Terminators running around.

How would you compete with them and even

defeat them? And and and AI in many ways

uh us for example in my firm, we don't

use the AI tools. We've decided they are

extremely dangerous to use. Part of the

reason we think they're dangerous to use

is

AI tools

we believe are portfolio management

tools. They're not analyst tools. An

analyst needs to operate under

constraints. You know, when you

suboptimize an analyst, you actually

optimize the performance of a fund.

Whereas, if you overoptimize an analyst,

it makes them lazy and less creative,

right? Creativity is driven by a lack of

resources, not an abundance of

resources. Right? That's actually a

principle of our business. We call it

sidelor.

uh creativity is driven by a lack of

resources and and when you look you give

AI to an analyst you ask questions it

almost gives them a sense that oh I

answered the question no

all it does is gets you to the consensus

point of view faster

right whereas if it took a week to have

a consensus point of view before today

you get to a consensus point of view

within a day with AI but The problem

with that though is that it's in the

friction while you're thinking about

something that you come up with the

questions that you really have to

answer. It's when you're in the field

talking to a customer that you come up

with the the the right questions. It's

when you're testing out a product that

you come up with the right insights, not

when you use the AI tools. Okay? So, an

analyst has several investment skills.

recall of past patterns, mental

visualization of a business within the

feedback loop of its ecosystem, reading

between the lines. So, what reading

between the lines is a CEO says in a

transcript, this is what is happening.

And you read between the lines and

you're like, uh, yeah, that's what he

says, but here's what his incentives,

his culture,

and and what they're not saying is,

right? As an analyst, it's very

important that you have to you read

between the lines. Uh make leaps of

judgment. A leap of judgment is when you

analyze a business and you're like,

"Wow, they have a problem with their

sales department."

And then you say, "Oh, they have a

problem with their sales department

because there's something wrong with the

board of directors."

Right? you just you you think the the

location of the problem is not where the

solution of the problem is right and

when you when you study by the way it's

very important to study systems thinking

complexity chaos theory ecology that

kind of shows you that systems like

companies behave in very strange ways

you try to solve something at the part

of the system where the problem is it

doesn't fix it often you have to fix it

somewhere totally different like for For

example,

um I used to have a problem with my knee

and I go to the knee doctor in America

and the American doctor is like, "We

we're going to cut open your knee and

cut and shave this so that your knee can

work." And then I'm at my acupuncturist,

which happens to be a Chinese doctor.

And he's like, he looks at me, he's

like, "What's wrong with your knee?" I'm

like, "It hurts." And he's like, looks

at me, he's like, "It's not your knee,

it's your hip." I'm like, "What do you

mean?" He's like, "Well, your hip is

weak." So the the muscle is taking the

bone your your your your thigh bone and

actually shifting on top of your knee

and now your knee is hurting. So I'm

like what do I do? He's like just do uh

a hip exercises strengthen the muscle.

Two days of those exercises my knee pain

went away. So which do you prefer? Knee

pain or $35,000 surgery and three months

of recovery the American way? you know

let's let's let's go towards fixing it

the Chinese way right so so again a leap

of judgment you know that's a very

powerful analytical uh skill okay and

then synthesize putting everything

together where you're like okay you

study competitive strategy you study

valuation you study governance of the

business and you're able to synthesize

all of that and insight as to hey it's a

long or dude everybody's wrong it's a

short, right?

Our insight about AI is that AI tools

inhibit or dull all of these skills,

especially in rookies, especially in

young young analysts. Okay.

All right. Very important to read our

freestyle future in uh in this book by

Tyler Cowan. It's a chapter on freestyle

chess. Freestyle chess is when uh

tournaments are between humans

or human plus computer teams or computer

teams and everybody is just freestyling.

You can use whatever you want. And the

inside is human plus computer ends up

being both human and computer which is

interesting. So, it's a combination of

analog thinking, human and digital

thinking.

That's going to be the combination that

we think wins. If you were to only pick

one in my opinion, I would just pick

analog for a lot of reasons. And by the

way, frankly, you know, to be to be very

open, for reasons that competitively

we cannot disclose publicly, we've

actually found flaws in the digital

tools that make people make catastrophic

mistakes. And for competitive reasons,

I'm not allowed to say it, but trust me,

they're there. Look for them. One of the

places you'll find it is in this chapter

if you're going to read it. Since the

young people don't read anymore, maybe

you'll never find it, but read this

[ __ ] chapter. Trust me on this.

One of his insights is that in a analog

plus digital way, both secrecy and

deception go up. That's interesting,

right? Why is that? And is that also

happening at companies?

Important question to answer.

All right. Young people don't read

anymore. This is a quote from Henry. Uh,

and I'll read it out loud because I

think it's important. It says, "Reading

books require you to form concepts, to

train your mind to relationships. A book

is a large intellectual construction.

You can't hold it all in your mind

easily or at once. You have to struggle

mentally to internalize it. Now there is

no need to internalize because each fact

can instantly be called up again on the

computer. There is no context, no

motive. Information is not knowledge.

People are not readers but researchers.

They float on the surface. This new

thinking erases context. He's talking

about computer thinking. It disagregates

everything. All this makes strategic

thinking about world order or by the way

on companies nearly impossible to

achieve. Reading books requires you to

form concepts to train your mind to

relationships. A book is a large

intellectual construction. You can't

hold it all. Sorry, I just realized that

I'm repeating this twice, but forgive

me. Okay. What does Henry mean? Well,

it means that

when you're thinking about a book, not

only are you absorbing the intellectual

capital of the writer, you know, it took

him two years to write it, you can read

it in less than three days. For me, I

always thought that was magical that I

could take all that knowledge from

somebody and took it to me in a couple

days. But it allows you to imagine

what's not written. You see, companies,

the things they do that give them an

advantage, especially when they're

crushing another company, they're not

going to put that in a 10K or 10 Q.

Neither will a hedge fund manager that

has competitive advantages. He's not

going to put in his memos or his

letters, this is what we're doing to get

an edge. No, they don't have to disclose

that. I wouldn't disclose that if I was

them. But when you read the questions

you'll ask will more or less find what

those advantages are if you're looking

for them. Okay. So it's very important

to read

have to remember to disagregate this

quote later. All right. Other problems.

So we talked about it. Do you have a

question Ethan?

Okay. Uh other problems. We talked about

artificial intelligence. Here's another

problem. By the way this is our term for

it. I don't know if it has a term in the

investment business, but we call the

junior senior problem.

Hedge funds are realizing that they

don't need to hire junior guys anymore.

And the reason why is a lot of AI tools

are as good as the junior guys now,

right? And the other problem is when the

portfolio manager ask a junior guy, hey,

that's great. Congratulations. You tell

me that it's a long, it's a short, but

this just happened. What's the CEO

thinking right now? The junior guys have

a hard time explaining that. Whereas the

senior guys that have seen a lot more

reps, that have read all the books, that

have read uh all the memos, they're

like, "You know what? Here's what I

think the CEO is thinking. I may not be

right, but at least you give the

portfolio manager some options as to

what the the the CEO of the company or

what might be happening that is not in a

10K or 10 Q or even a press release,

right? And what the the the PMs are

realizing is I don't want to hire junior

guys anymore. I want to hire just senior

analysts, people that have seen a lot

more reps. One of the ways you see rats,

by the way, is reading. Okay. Another

problem. There's a mental health

epidemic going on. This is a serious

serious issue. We see people that are

self-sabotaging

left, right, and center right now. It

It's happening more and more. And not

only that, they don't know how to deal

with uh this mental health problem.

There's too much hyper stimulants.

There's too there's a lack of the

nutrition is freaking terrible. No one

it spends time on recovery activities.

Spiritual practices are on the downside.

It uh the there's all sorts of mental

health problems that are popping up. You

know, there's a comedian Sebastian

Maniscalico. He's blaming it on the

internet because he says if you know if

you were crazy 50 years ago, you didn't

really find other people that were crazy

like you. He's like, "Today,

if you like to dress like a baby, you

can find people on the internet and get

together at the conference of everybody

that likes to dress like a baby, you

know, and and it's hilarious, but it's

true, you know. The internet can be very

dangerous for for for for that stuff."

Um, okay. Other problem, the millennials

and zoomers have the attention spans of

gnats. Okay. Very dangerous. Very very

dangerous. fertility is crashing.

It's a catastrophe. Meaning the the

ability to having kids and it's

happening globally by the way where

people have less and less kids on a on a

yearly basis. It's even been happening

in my country where I'm from where in

Haiti where we literally [ __ ] like

rabbits but for somehow le we're having

less and less kids every year. Right.

Okay. Talked about master nuns disease

of the 21st century. And then there's

something else that is happening which

is when you talk to an analyst

he hasn't read all the books about the

historical context of our business. So

he looks at a situation and it doesn't

remind him of a past period, right? It

doesn't remind him of, hey, this is

actually what happened in the late 90s

with this group of stock. That can be

very helpful by the way to for for

judgment.

Okay?

But there are solutions to all these

problems. This is my mentor Peter

Kaufman in my opinion. Uh me and a group

of guys, we all call him Uncle Peter.

Um,

I am forever grateful

for the things that Peter has taught me

and to this day I'm like, "Wow, they're

probably in my opinion

definitely in the top five of investment

teachers out there. I put him on top

with

Charlie Mer, Warren Buffett, Peter

Kaufman, Michael Moeson, and I would put

Peter Theel in terms of people that I've

learned so much for investing. I mean,

there are others as well, by the way.

Some that don't like to be named, but

Bill Miller, you know, people that I

think I've learned a lot from uh on

investing

um or being a great person. And there's

these quotes that Peter loves and he's

he gives you these pens with these

quotes on them. And one of them is what

the pupil must learn if he learns

anything at all is that the world will

do most of the work for you provided you

cooperate with it by identifying how it

really works and aligning with those

realities. If we do not let the world

teach us, it teaches a lesson.

Teaches us a lesson. And he says, "Most

geniuses, especially those who lead

others, prosper not by deconstructing

intricate complexities, but by

exploiting unrecognized simplicities.

I actually believe that analog training

is powerful for for for these for as an

unrecognized simplicity, but also to

help us find the ways to align how the

world works.

All right. Here's one of the first

tools, analog tools I'm going to teach

you. Um, frameworks.

So, what a framework is is

it's a list of ways of thinking that you

look at an investment through,

right? Or a life situation. So, for

example, um for relationships,

the five languages of love is a great

book for relationships.

Not everybody's loves the same way or

not everybody experiences love the same

way. And you if you're with a friend or

a boyfriend or girlfriend and you don't

know their love language, you might be

having communication issues. Your love

language not the same. That's a

framework that helps you. the pro it's

not always correct but the probability

of using that framework and it being

very powerful is is very helpful to

judgment and decision- making and also

results right so here are some of the

frameworks there's many more than this

but here are some of the ones I like

right now so Mike Maples who runs a VC

firm and has had very successful

investments

uh some 100 baggers

um uh he has these frameworks one of

them is when he's looking at a at a

company, he asks, "Hey, have they

stumbled on an insight?"

So, do they know something or have an

insight that the world doesn't realize

yet?

Right? And then another framework he has

is did the company harness an inflection

point? So, it's one thing

for Uber to exist, but what was the

inflection point that Uber or Lyft, by

the way, uh Mike was an investor in Lyft

and actually made a lot of money in

Lyft. What was the inflection point that

Uber leveraged? Well, it was the

creation of the iPhone,

right? the iPhone enabled all of these

different

uh uh uh businesses to exist.

Right? So that's what he means by an

inflection point. And the third one

which by the way I think is very

powerful is he calls it founder future

fit. And that's his f favorite framework

where the founder that he's investing in

he wants him to already be in the

future.

So he gives the example of Eric, the

founder of Zoom, our current host, and

and says if you look at Eric when he

created Zoom, he had already been

working at Cisco on on on

web a video conferencing for 10 years.

So when he created Zoom, it was already

a product that was of the future. We

just hadn't used it yet. The saying by

the way comes from uh found the future

fit comes from this the saying the

future is already here it's just not

evenly distributed yet right and that's

a very powerful

uh uh uh way of thinking because when

you invest in a company are they doing

things that you know it's like what it's

like everybody's going to have this

eventually it's it's the guy is the

founder future fit if you look at a

founder that has found their future fit

by it's Elon. Elon clearly is living in

a in the future and we're just like it's

just not evenly distributed yet, but it

will be. Okay. You have standard equity

frameworks. So value stocks,

there's things that matter to them. Do

you know them? That's a framework. It's

a frame that allows you to work, right?

Growth stocks, restructurings,

turnarounds, events, spin-offs. By the

way, in the early odds, there was a

group of investors that said, "Okay, the

best value investments in the world.

Let's study all of them and find out

what they have in common." Same for

growth, same for turnarounds. And by the

way, when they were the only ones that

had this approach, it was very powerful.

They made a lot of money. Part of the

mistakes they made is they taught it to

everybody else. Now, everybody has it.

And then that that approach actually

started declining in results. Same for

shorts. What have been the best frauds?

What do they have in common? And

whenever you look at another fraud, do

they do does it also apply? Same for

fads. Same for failures. Failures is

stuff like um a bankruptcy, right? Uh

what have been the fakes? So fakes is

when I I call them fake value. Fake

growth is something that looks like a

growth company, but it doesn't have the

return invested capital and eventually

it's going to crack. Same for value,

fake turnarounds. We love when a

turnaround is failing and we love to

short those. Uh, by the way, we do short

stocks in my firm. We love shorting

stocks in my firm and we're pretty good

at it. Uh, let me, you know, touch wood

because the market goddesses are

listening and this is when you're being,

oh, you're good at it. Watch this [ __ ]

Boom. And they hit you, you know. So,

so, so it's something that we look to be

very good at. uh the short side because

I love running money long short. Right

now, for example, I don't know what's

happening in the market. I haven't even

looked at the opening yet, but I know

that the market's going down. My shorts

are protecting me. So, Peter Lynch and

One Up on Wall Street, he has a list of

final checklist page uh chapter 15. Must

read. By the way, those two books that

you see, you can be a stock market

genius and one up on Wall Street has

created more sention and billionaires

than probably any other book. Should you

be reading them? Yes, you should.

Very important to study and read mental

models. My mentor, Charlie Mer. Uh

Charlie Munger is everybody's mentor at

this point. Uh I miss him dearly.

um a very wise man. By the way, I'm very

much into elder culture and it's

something that we're missing that

younger people miss today is they don't

spend enough time with their elders. You

see an elder, he has the battle scars.

He's made the mistakes. If you go and

ask them, hey, I'm thinking about doing

X. What do you think I should do or how

do I go about it? very often he'll give

you insights and he's like look when I

tried to do that here's what happened

and let me show you the scar on my back

right for for when I [ __ ] up when I

did that and and I think a lot of

younger people are losing elder culture

you know they're they're they've made

the mistakes before you know they have

insights go talk to them very important

uh uh but mental models Charlie says you

got to take the best mental models from

economics, psychology,

philosophy, physics, evolution, biology,

and and and

have them in your mind because when

you're looking at a situation, very

often it's those different tools that

are going to help you. Oh, here's what's

happening. And mental models help your

memory. So, so people, they've done

studies on this. people that use mental

models remember more because when you

look at something or you read something,

the mental model is like the hook that

in your mind, whatever you're reading,

you hang it on.

Right? By the way, u few things to

remember. One,

all models are wrong, some are useful.

That's not a quote from me. That's Mary

Galman, right? It's like when you're

looking at a reality and you're taking a

model putting on top of it, it's like

putting a map on top of the reality. The

map is not the territory, right? That's

actually a principle from NLP, uh,

neural linguistic programming, which if

I shouldn't include a slide on this, god

damn it. Um,

sorry, one second.

And I will. So NLP

um is a science from the 70s. It's more

or less been forgotten for a bunch of

reasons. There's still a darance to it.

I was trained in it. Is how do you take

the best and study what they do and be

able to replicate that? It's actually

there's a science for it. It's called

NLP. And one of the things they say is

whenever you're looking at somebody's

map, you have to understand that the map

is not the territory that it represents.

that if it was really the territory that

it represents, the map wouldn't be the

map. It would be the territory. There's

things that are missing and you have to

to understand that. And and and then the

last thing is

mental models. Uh

uh one example of them is paro

distributions,

right? The 8020 rule by the way. So one

of our best insights

came from applying the 8020 rules. I did

a a series uh it's on it's on YouTube.

You can watch it actually. It's called

idea ingredients. What makes great

ideas? And I listed 20 things. And my

business partner said, "Look, you have

20 things. If you run a 2080 rule to it,

right? 20% of those 20 things are going

to give you 80% of your results. So what

do you look for an idea that are the

four things 20% of 20 is four that are

the most powerful things in an idea and

that alone has multiplied the value of

our business right so just the 8020 rule

and applying that um uh in your life is

is extremely powerful you know so if you

make a list of 20 things to do say hey

what are the four things and give me 80%

of the results and only focus on these

things. If you look at a company, very

often a company u uh 20% of their

products give them 80% of the

profitability. Right? So those are all

things that you can do to to study. All

right. Art of war principles very

important to study those. Uh there's a

great the the principles. So if we look

at a company, we always look at the

company through art of war principles.

We say okay how does the this company

attack its competitor's strategy

right the reverse of that how does a

company protect and amplify their

strategy

right how does a company disrupt the

alliances

of the competitor so for example uh uh

we love companies that go and all right

they have a great sales guy let's try to

hire

Oh, really? The their their CFO just

quit. He was really good, but he quit

for political reasons. Okay, let's hire

him. Disrupt the company's alliances.

You see, the hidden part about business

is the predatory behavior of businesses

on top of each other. They're never

going to put that in a 10K,

right? So, it's very the the and it

happens, by the way. They just never

talk about it unless it's like inside

baseball stuff. Third principle, attack

him where he is weak. Use fourth

principle, use the environment against

your enemy. And a fifth principle,

fornowledge and spying. You know,

corporate spying, corporate

intelligence, in my opinion is as big as

countries spying on other countries. In

fact, there's one country where shall

rename Nameless, but their entire spying

apparadice is on literally spying on

American companies and stealing the best

secrets. By the way, um but anyways,

okay, another principle, have time on

your side when you're investing.

Do you have time as an ally that the

more every day goes by, the value of the

business increases?

have time on your side could also mean

do you have timing

right so when we're investing I always

say to myself hey if I hold this thing

one week one month does the business get

better

as the passage of time happens do I have

an advantage

very important I know it sounds like to

you guys what the [ __ ] is talking about

but trust me dig into it one from Peter.

Where there's mystery, there is margin.

Very important.

When there's mystery around a company,

often there's very high margins at the

company. When there's mystery around a

way of doing things, there's margin,

there's profitability.

Another one, it's one of our favorites.

I learned it from

uh

actually a bunch of investors that don't

like to be named. It's better to observe

than to predict. Everybody wants to

predict in the investment business, but

very few people actually observe.

You cannot predict that a moat of a

business is expanding.

Maybe if you're good at it, but you can

observe, wait a second, their mode just

got better. They made this acquisition.

This is going to increase their

bargaining leverage. Like for example,

um

am I allowed to talk? No, we can't talk

about current holdings. But but there's

a company

they are

they weren't vertically integrated

before. they were just allowed to buy

another company that allows them to

vertically integrate

and it's giving them such a competitive

advantage that we believe they're going

to go from 6% market share to 30% market

share in the next 5 years. And if that

happens,

we think it's going to multiply the

value of the business and we're already

observing

that it's doing so. And in fact, one of

the uh uh our senators came out with a

letter talking about how this company is

going to be a dominant player and the

FTC should not allow it the deal to go

through. And the letter reads like a

bull case

on the company. It's that good. In fact,

we took that letter and attached it to

our memo. So, we're like, that's how

good this thing is if it's allowed to go

through. Um, and again, can you observe?

We predicted that it's going to happen.

We're already observing that it's

happening, right? Invert, always invert.

If you say, "Hey, Elise, how do I

succeed at this?" I'm going to invert

that question and have you ask, "Hey,

how do I fail at it?" You got to know

how to fail at something before you win.

Inversion. If you say, "Hey, how does

this company

uh uh take market share?" I would say,

"Well, how does this company lose market

share?" First, you know, you want to

invert things. And this, you know,

Charlie Munger, this was one of his

favorite principles.

Double down on what is working.

Something is working for you, do more of

it. The nine emotions.

Uh we love businesses or even in our

writing and our content creation, we put

in the nine emotions. Vanity, greed,

lust, fear, relief, addiction,

nostalgia, envy, novelty, right? Think

about Instagram. Well, I mean, what is

this? An iPhone.

Vanity, greed, lust, fear, relief,

addiction, nostalgia, envy, novelty,

Instagram.

Vanity, greed, lust, Google, vanity.

It's literally all the nine emotions,

right? Whenever you invest in a

business,

does the business have the nine emotions

embedded in it? Right? Uh uh I mean,

excuse me, let let me rephrase that.

Does the relationship between a customer

and a business is it based on the nine

emotions?

Like for example, what's an airline?

I mean, relief maybe. None of these. And

that's why airlines are terrible [ __ ]

businesses. Terrible.

You know, the only thing that makes

money from them is literally the points

on the airline. And that's not the

airline. That's a credit card company

that they're mixed with that you get

these points. And that's literally greed

really, right? Airlines are terrible

businesses. There's, you know, the the

there's no emotion. It's literally your

your relief that you get off of it. uh

unless you're fine private by the way uh

uh uh where you come at it and you're

like yeah this is great um but anyways

okay last principle the question is the

answer uh whenever somebody's wants an

answer I'm like focus on the question

much more important it's a Buddhist

apherism but it's very true

I want you guys we're hitting up on time

so I'm going to speed up I want you guys

to learn stress and recovery activities

ities.

Part of analog thinking

is happens mostly when you're in

recovery, not when you're in stress,

right? It's when so stress activity is

like brain exercises, endurance

activity, physical exercises, you're

stressing yourself. And people that stay

in stress too long, that's when mental

health problems get triggered, anxiety,

and all that stuff. Whereas if you're

actually recovering, it allows your

subconscious and your conscious to go

and learn the lessons and extract on

them. So recovery activities like

acupuncture,

massage, uh by the way, if you're a risk

taker,

it's very important that when you wake

up, you don't do anything that is even

more stressful. So a lot of people first

thing they wake up they go work out or

they do something like get on their

phone and it's something that

immediately stresses you. It's very

important when you sleep you wake up you

do something that deepens the recovery

of you having slept. And the other

reason why you want to do that is as a

risk taker when you're an analyst or PM

while you're sleeping your subconscious

goes to work on all of the positions you

have on all the risks you have on. So

you wake up kind of stressed,

right? And that stress over long periods

of time not only stress your days but

stress your years. And that's what

causes um burnout. It's what causes uh

um people leaving our business. You see,

there's a very high attrition rate in

our business. You know, there's a lot of

guys, we remember the guys that have

made it, but we don't remember the guys

that have failed and have left the

business, right? It's like the guys that

tell me, "You got to concentrate your

book." And you say, "Why do you

concentrate?" And the answer always

comes to, "Well, Charlie and Warren

survived the 70s when they char I think

Charlie was down 70%. Warren was down

60%."

But I'm like, "That's Charlie and

Warren. Tell me about the hundred other

guys that concentrated and we don't hear

about those. Don't don't cite to me the

survivorship bias. Right? So, so again

going back one of the best things you

can do as a risk taker when you wake up

get a massage.

Seriously, twice a week if you have

money. Twice a week I have a masseuse

come 6:30 in the morning, 90 minutes

massage.

It distresses you and gives you a lot of

energy throughout the day. If you don't

have that, get a Rumble roller. It's a

It's a It's a foam roller with nubs on

it. It looks like a torture rack. Uh uh

roll your entire body. It distresses

you. Get a theraun. A theraun. You can

get them. They're they're decently

expensive, but they're worth it. And you

literally use a vibration all over your

body. It distresses you. Same with a

zillion. It's a massage pod that

replicates jatsu shots massages and it's

been one of the best gifts. You lie on

it and it massages out of you. Now, it's

unbelievable how often you're doing a

recovery activity and you untense

and then that's when an insight

that you've been trying to generate on a

business or a stock, a stock or an idea

comes to you. So, recovery is very

powerful because while you're tense, you

won't have an insight. It's a second you

get rid of the tension that your

subconscious is like, "By the way, you

know that problem you've been trying to

figure out? Here's a solution."

sauna.

Very important to do sauna. Okay. The

data now is is you can't argue with

anymore. All cause mortality drops uh

stress recovery

uh uh uh uh improvement. Um but also as

we talk about next, it's a great way to

deal with your hyper stimulants. Okay.

Cold therapy. Now, I'm not a big fan of

waking up and then dudes are like

dunking in ice and literally causing all

sorts of health problems to themselves.

But once a week,

uh, you do cold therapy after you've

warmed up, after after a workout, and

you dip yourself into the ice, stay as

long as you can, come back. It's very

it's it's it's it is very powerful, but

don't do it more than once a week

because it takes about three to four

days from your body to recover from it.

If you do it every day, you're just

stressing your body out and it's

actually causing harm. You you need

recovery. It's like you do a very

powerful workout. If you do that every

day, you're going to break down. But if

you wait a couple days, you do recovery

in between, it's very powerful. Same for

when you're stressing your brain. By the

way, hot cold showers and naps. I'm a

professional nap taker. I went through a

period last year where without realizing

I stopped taking naps and I all sorts of

health problems started popping up every

day, 20 minutes to an hour, put your

head down, sleep, just rest your head.

Very, very powerful.

Uh, okay.

How to deal with hyper stimulants.

This is I think is one of the causes. Uh

guys, excuse me one second.

Hyper stimulants are a big problem in

modern society. sugar, porn, social

media, nicotine, caffeine, aderal,

cannabis, recreational drugs. These are

things that are extremely extremely

powerful. Uh, and mess with your brain

in all sorts of ways. Um, by the way,

I'm not talking a big game. I'm as

addicted to some of these things as as

everybody is. I'm pretty sure I'm

addicted to Instagram uh uh in a in a uh

uh in a big way and I have to literally

do digital detox uh all the time. Uh I'm

addicted to caffeine.

Uh you know, I go on and off caffeine.

Uh I'm back on it right now and it's

like I go to this restaurant. It's owned

by a friend of mine and the corporate

chef happens to be a coffee Jedi.

Okay. Like you you you like have one sip

and you get taken to this dreamland. I

love coffee, okay? But I'm an addict. I

have to get off of it every once in a

while because hyper stimulants, they

make your highs higher

and they make your lows lower.

So in our business, you're constantly

dealt with ass kickings.

You know, you own a stock is down 50%.

When you're on hyper stimulus, you don't

handle it as well. It's very important

to to know how to wean yourself off of

it. One of the most powerful hyper

stimulants today happens to be social

media AI and and and just digital

avalanche. You have to learn how to deal

with that. Learn how to detox from it.

Hydration and sauna is very powerful way

of weaning off of hyper stimulants. If I

start wanting to get off of caffeine and

want to get the effects of caffeine away

from me, I try to do 20 25 minutes of

sauna every day for three four days.

Right? One of the best rehabs uh in the

country.

Uh what they do is for to people get

people off of drugs is massive sauna

sessions. Hours and hours per week in

sauna because you literally sweat out

the gunk and the the residues of the

hyper stimulants. Very important. Okay.

Cycle on and off of it. I have one of my

mentees right now that secretly has been

taking Adderall without us uh knowing

and it's starting to have an impact on

him. Okay, very important to know how to

weed yourself off of these things.

Digital detox. This is obvious. Uh one

thing I like doing it Friday to to

Saturday for 24 hours. No phone, no

computer. It it's it's very restful. Uh,

I do physical exercise, spend time with

my family, play board games with my son.

I review my last week, I plan my next

week. It's a very powerful 24 hours.

One, this is probably

one of the most powerful spiritual

practices I can recommend to you because

this trains every single analytical

skill without you knowing that it's

being trained,

including visualization. So what yoga

nidra is is you lie down as comfortable

as possible. You don't move and you

listen to a script of an individual

bringing you through visualization

exercises where you visualize body parts

that you have

and you go through all of them. And in

doing so it brings you to a state of

relaxation that is between being awake

and sleeping. You're not sleeping.

You're not awake, but you're in the in

between. And that in between happens to

be where insight generation comes, where

you can visualize,

where you can recall past patterns,

where you can read between the lines,

and when you can make leaps of judgment.

25, 30 minutes. You should do it once or

twice a week. Also, people that do it

stronger immune systems,

recover from all sorts of mental health

issues. It's extremely powerful as a

spiritual practice. Now, by the way, you

should be doing other spiritual

practices. Prayer very powerful.

I don't recommend meditation.

Everybody's like, "You got to meditate,

bro." No. Be very very careful with

meditation. Meditation is too powerful

for people to do it when they don't know

what the hell they're doing. Especially

if you've had childhood trauma.

So a lot of guys that meditate have bad

trips. And the reason why they have bad

trips is while you're meditating, if you

have childhood trauma you haven't dealt

with and you haven't thought about it

for a while, the childhood trauma comes

back and it's like surprise [ __ ] and

then boom, you get hit with it and you

don't know how to deal with it. So, a

lot of these meditation coach, by the

way, it's worked for them. They teach

you how to meditate, but then they've

never dealt with somebody that's had a

bad meditation experience and they don't

know what to do. And when you go to

meditation retreats, there's a reason

why sometimes in the halls there are

people that are crying. They literally

have breakdowns. And the reason why is

whatever's wrong with you tends to pop

up in the meditation. I happen to be

lucky that I don't have any of these

issues, but I know people have had

meditation is very dangerous. If you do

it, you got to do with somebody that

knows what the hell they're doing,

right? Don't just do it. And then, but

one of the problems also lack of

vulnerability is people uh meditate,

they have problems, they never talk

about because they don't want to make

seem like I have a problem. No. be very

careful with meditation.

Uh Josh's MIQ process. So Wadekin has a

process. It's an analog process that I

love. If there's a So for example, one

question we're struggling with today is

how do I become better at position

sizing?

So I brainstorm on that. Right? But what

he recommends you do is you brainstorm

before a break. So you're about to work

out. brainstorm on the question and

while you're working out, forget it. And

then afterwards, take your journal out

and then brainstorm on the question

again. And he says that, and he's right,

there's actually a great book on this

called the breakout principle. I have it

somewhere where

while you're working out, your

subconscious goes to work on the

question you were trying to answer. Very

powerful and it's true. uh uh and that

process of journaling, taking a break,

answering the question, getting into the

habit of that, weights says that that's

how you generate insights. Um and he's

right. He's right. The I I don't do it

as religiously as I used to. Uh, but I

do do it every once in a while when I'm

struggling with stuff like how to be a

better PM, position sizing, trading

acumen, exposure management, uh, and

idea selection. Um, very powerful

process.

Board games and card games, use them as

personal laboratories. So, my personal

lab has always been back and poker, but

Jin and chess, go, bridge, other board

games. We like Settlers of Katan. Uh

these are Monopoly. These are all games

that have a lot of business lessons in

them. If I learn a principle like when I

was learning uh the art of war uh by

Sunsu as as principles, I used them

those principles in my back and in my

poker and it improved both my back and

in my poker. Right. So board games are a

great place to go test stuff out, test

out a mental model, test out a

principle, test out a book, and then see

if it adds value to your investing. And

the reason why you need a personal lab

like Tony Stark, he has Jarvis in his

personal lab is in your lab, the risks

are very small, but if you learn

something that gives you high reward,

you can then apply it to your investing.

Right? The first time I learned the

concept of Moes for example from from

Warren, I applied it to back gam and it

was like literally staring me in the

face like oh the concept of Moes is all

over back which is interesting

reading setup.

Don't just read

take a book uh

you know and just start reading. Set it

up for success. Especially if you're a

younger person and you have the

attention span of a nap. If you got to

be alone to read, be alone.

[clears throat] If you get energy from

being surrounded by people, be in an

office, read and or a cafe.

Put your phone away.

Turn it off if you have to. Put it on.

Do not disturb. You don't need the

distractions. Use earplugs. Okay? Don't

use electronic

uh noise cancelling first. It's too

expensive. An earplug, you have to

charge it. Earplugs, you put it in, it

blocks all the sound out. Um I have the

attention span of a nap myself, by the

way. So I have to put earplugs on. Use

pomodoros.

Uh I I take a timer, put it for 90

minutes, and I know that for 90 minutes,

it gives me the freedom to just read. I

can focus for 90 minutes, right?

Start reading. It takes you 15 minutes

to concentrate. If you get distracted,

it's okay. Recognize a distraction like

a meditation. Go back to to what you

were reading. Even if it was a really

good idea, let it go. It's okay.

Do not highlight while you read. If a

passage is interesting, put a check

mark. Problem. The highlight is it takes

time, right? And then also all you're

doing is mentally training. I have to

keep this. You're training your

endowment effect bias, your your loss

aversion. I don't want to lose this. And

odds are you're going to highlight it.

You're never going to review it anyways,

right? But make a check mark on it.

Review it afterwards. And at the end of

the reading session, write down and the

book if you like what you learned. And

this will train your recall. Very

powerful.

For people that have real attention

spans while you're reading on Kindle,

listen to the audible.

Hey, that's actually been a very

successful sometimes if my mind is too

frayed, I'll do that. I'm reading a

book, listen to it. So, you're both

reading and listening. Uh, it's helper

retention. It's a modern digital tool to

solve the analog problem

learning projects. Now, I recommend you

do digital deep dives on all of these

different topics. These are the ones

that I've spoken uh that that I've

chosen. Phil Stuts, uh, this guy in the

middle here, who in my opinion is one of

the wisest human beings that's ever

lived. Peter Theel, uh, you should watch

all of all of Peter's interviews. You

should read all the essays he's written.

You should read the books on him. Uh, he

has mental models that are very, very

powerful and can help both your private

investing, your public investing. Rory

Sullivan, who in my opinion, if you want

to learn how to deal in the age of AI,

you have to read Rory's mental models.

And then in my opinion, the greatest

competitor that's ever lived, uh, Tom

Brady. Uh, I happen to be a Brady fanboy

and I've learned more from him than

probably any investor I've ever studied.

Analog. Learn public speaking.

learn selling.

Uh we just did a study

um wealthy families

that

keep their wealth across generations.

But in studying that we found a lot of

wealthy families that have lost their

wealth across generation.

And what did the wealthy families that

kept their wealth have in common? Is

that though the founder knew how to

sell, the second generation,

often never learn to sell because they

never needed to or even worse look down

upon it.

And when you stop selling,

you stop getting wealthy.

Wealthy people tend to be great

salesmen. We've been taught as society

to look down on sales. No, take it very

seriously. Learn how to do it. And then

last, writing. Learn how to write. Very

powerful

mental exercises from the CIA. So these

are the two books given at the CIA to

train analysts. There are others.

You can literally buy them or find them.

It's actually unbelievable to me that

they publish this [ __ ] but they do.

Maybe it's because they publish the old

stuff and the new stuff.

uh is even better. But this old stuff is

pretty good. There's some exercises in

there like timeline analysis. You have

to learn how to do it. And then AC,

analysis of competing hypothesis. Very

powerful way to lower your biases and

solve the mental problems that you have.

Okay,

we're coming up to the end.

Here's the advice. I always give this

advice. I gave this advice in your the

last pod that we did together, Ethan.

Mentor and teach. This is an analog

process. Use coaches. You don't know how

to do something, find a coach. Pay him

if you have to. If you can't afford it,

find a mentor. Do stuff for him so that

he teaches you the stuff for free.

Watch out and prepare for your 40s and

your 50s. Midlife crisis dynamics are

real.

I've warned you. You guys are not

dealing with this stuff now, but it's

coming. And when you're dealing with it,

remember told you, right?

build leverage into your personal and

business life. Uh I talk about this a

lot. Capital leverage, code leverage,

content, community, contractual

structural leverage, conditional

leverage. I have a YouTube on that. Go

watch it. Um very powerful successful

people or even you know people that have

not even like accomplished great

success, but you'll see leverage in

their lives like oh he did this. It it

was a form of leverage. For example,

creating content, what Ethan and I are

doing now, is a form of leverage. It's

going to help us accomplish our goals,

right?

Actually, let me talk about this for a

second. I have three goals

for my business. I want really smart,

wealthy people to invest in my business.

I want a very smart analyst or PM at

another shop to be like, hey, we need to

call El leaks and share our best ideas

with him.

Third, I want a very smart person to

say, I want to work for this guy.

When you create content, at least when

we create it, it helps us accomplish all

three of these goals.

That's leverage. You create it once and

it's out there working for you forever.

Very powerful. Have a spiritual

practice. Have thought partners and

confidants. There are people you need to

share it with. There's a lack of

vulnerability in our culture right now.

You know, there there's this uh meme

going around where somebody is is like

guys don't talk about their feelings.

They don't talk about their problems.

Like are people interested? you know,

it's like no one, you know, we we have a

a I have a group of friends. We're like

a male support group because we share

this stuff with each other and and

people when they hear like, "Wow, like

can I join?" And part of the reason like

we're all fairly healthy people is like

we share this stuff. You need thought

partners. You need confidants. And by

the way, one of my problems with

therapy, even though I do think it

serves a purpose, is that you have a

conflict of interest, right? the longer

you go, the more the person gets paid.

So there's almost not a solute uh uh uh

a way for you to solve your issues. And

also great therapy

I don't think changes you at the therapy

level. I actually think it changes at

the spiritual level. So that's why Phil

Stuts, which is uh this guy teaches you,

the the bald guy here. Um read all his

books, okay? Read uh the tools. Read

Coming Alive. Read uh read everything.

Watch the documentary that Jonah Hill

did with him. Very important. Okay. And

then know how to build the right

rituals. So I talk about this a lot

where every day I wake up and I did it

this morning even. I read three letters

from other hedge funds or investment

firms that are public.

I go through the 13F of a manager that I

respect and I go through the companies

and I read an idea memo every day. It

takes me about 90 minutes. Okay, you do

that every day and then it's an analog

process and it feeds you. Anyways,

that's it. There's more I could say, but

I had to fit it in an hour and 20

minutes. Let me know. Do you have any

questions? We can start with you, Ethan.

Yeah, thank you so much. Um,

you talked about the parto principle and

I want to do something similar for this

cuz there's a lot of ideas you said. Um,

if there's one thing that's what is the

single most important thing out of

everything you've mentioned and how

should a young person implement it

within their own life? Um, you know, as

early as now?

>> Read. Okay. Take a book

and you can only do this with

non-fiction.

Um,

and do do inspectional reading.

Have we talked about this?

>> I don't think so.

>> Okay. So, inspectional reading is

there's a great book. It's called How to

Read a Book. And chapter 4 on

inspectional reading gives you a process

that you should do before reading every

nonfiction book.

And what you do is this. Take the book

and you go to the table of contents

and you read it.

Just read it. Then you go to the back of

the book

and read the index.

It literally says page 365, keys to

success,

right? and you you read it and you write

down the things that interest you and

the table of contents and sorry and the

index. Then you go back to the front and

you read the introduction. In this case,

the preface and the prologue. It's like

five, six pages.

Then you go to the back of the book and

you read the last chapter,

the conclusion,

right? Then you go back to the first

chapter and read the first and last page

of the chapter.

Then do it for every chapter. Oh, I

forgot. Um, so after you read the table

of contents, after you read the index,

go to the middle

where there's pictures

and look at and study all the pictures.

And the reason why you have to do that

is when you read something

uh we remember visuals 99.9% of the time

whereas we remember words much much less

percentage. But when you know a picture

it allows you to put the words onto the

picture and your memory actually goes

up.

And then after you've read the first and

last page of every chapter,

if there are uh let's say graphs, go

back and study all the graphs.

And what you'll see is that by having

done that,

you'll get the 20% of the book that

gives you 80% of the value.

And then you can determine, do I really

need to read this [ __ ]

If it's a good book, odds are you will,

right? Very, very powerful

analog process to do. I personally do

it. I try to do it three, four times a

week. Uh I try to read a book a week.

More often it's like a book every two

weeks. Uh my son and I have a a

nighttime ritual where we read together,

you know. So, he's reading right now um

this graphic novel series, which

actually looks really cool. I'm reading

one of Phil Stutz's books uh lessons for

daily living, and it's literally wisdom

after wisdom after wisdom. Uh but

generally, you get a book, I just got

given one actually, and you want to read

it inspectionally. Like for example,

this book,

um I'm writing about it. only the

paranoid survive. There are key concepts

for surviving in the age of AI and this

book you know Ank wrote this in the 80s

for god's sakes you know but yet this is

this is going to matter a lot in this

age by the way this book is actually not

about paranoia everybody's that hasn't

read it what they talk about it's like

it's about being paranoid no it's about

strategic inflection points

yes you should be reading about

strategic inflection points you know so

So I would say that that would be the

most important of the things. But

listen, there's never only one thing.

Okay?

Practice some of the things that I

talked to you and try to incorporate

them in your life. Uh somehow uh it's

part of the the the analog training. Uh

but reading reading is going to be the

the the most powerful thing I recommend

you do. But hold on. Once you've read a

book

and you liked it, what should you do?

Book reading helps you create content.

Take your notes, share with your

friends.

Uh, call friends to discuss the book

that have read it. If you love the

writer, cold email the writer. Say,

"Here's what I liked about the book. Can

I ask you some questions about the

book?" If you're a student, invite the

writer to come speak to you and your

classmates. You know, this is a piece of

leverage.

Know how to leverage books. A book, a $5

book can make you millions of dollars.

It's insane to me that people will

[ __ ] It's insane. Insane.

But thank God. You know why? Because I'm

going to compete with them and we're

going to crush them because they don't

read. Thank God. And by the way, so

you know, imagine the the the

generational uh battle,

right? Where, excuse me,

you know, the young people, you guys are

about to inherit money.

You're not going to know what to do with

the money. In fact, pe the some of the

the financial businesses are realizing

that education, financial education is

paramount today. Why? Because we have

some of the youngest, most financially

literate people that we've ever seen.

And in that predator prey dynamic

between Gen X and the Zoomers, who do

you think is going to win?

You know, if I were you, I would set up

for you to be the Predator. the way we

see it now. Gen X is the predator,

right? So, very important. Read, please.

And by the way, why am I telling you to

read

if competitively it's bad for me? Well,

a lot of the I actually believe that the

market isn't just a zero sum game. I

actually believe it's both. It's a zero

sum game and a positive sum game, too.

If I teach a lot of people how to make

money, somehow it's going to come back

to me and help me make money, you know,

already, you know, Ethan, the last

podcast, it's kind of crazy how good a

following you have, the young people

that have come to me and given me ideas,

given me ways of doing things, you know,

it's it's very it's it's very powerful,

right? So, read.

It's a great book, by the way, if you

haven't read it. I used to be obsessed

uh by this guy. It's uh Tycoon, the life

of Sir James Goldmith. Uh I used to play

back gammon at a club in Paris in the

90s. Um

and Sir James was a member. He was the

first guy to ever look at me and be

like, hey, you should be in investing.

Uh and I was like, why? Uh but uh he had

a a business partner called Roland

Franklin. And Roland was the other guy

was like, hey, you know, you should go

into stock trading or something with

stocks. Um, and I end up reading a lot

about Sir James. Very important. I even

read about his best friend, a guy called

John Aspenol. Uh, an amazing book.

Actually, I have his book right here.

Uh,

the passion of John Aspenel. I love

John.

Love John. But anyways,