Chris Begg is the founder and CIO of East Coast Asset Management and an Adjunct Associate Professor at Columbia Business School, where he teaches Security Analysis in Ben Graham’s seat. This is one of the most original and wide-ranging conversations I’ve had on this podcast.

Read the full written distillation: whatgotyouthere.com/the-distillation-of-chris-begg

In this conversation we go deep on graph theory as a general principle for identifying the greatest compounders of the next 30 years, a word Chris coined called “Compressence” (compressing something to its essence), the simplicity on the other side of complexity, how Chris and his team built an AI analyst called Faraday in six weeks, his framework for navigating clouds of uncertainty, Value 3.0 and where the frontier of value investing is heading, the danger of putting circles around things you think you understand, three-month immersive deep dives as a learning method, right brain and left brain integration through the work of Ian McGilchrist, Lila and the Sanskrit concept of eternal play, how Chris designs his life around freedom and spaciousness, the hare over the wave and what Egyptian hieroglyphs taught him about renewal, why the best investors are also artists, and why duration is a design principle.

Chris also discusses David Whyte and the pilgrim’s path and how that inspires his new music project he wrote inspired by the Camino de Santiago.

Chris Begg Episode Transcript

Sean DeLaney Chris it’s so good seeing you and I thought a fun place to begin would be around this quote by the poet Rumi that you and I have been connecting a lot on recently. And this is the quote he said, let the beauty of what you love be what you do. There are a thousand ways to kneel and kiss the earth. Why does that quote resonate with you?

Chris Begg That and thank you, Sean brought me a book on Rumi that I get to go through this. So beautiful gift. Yeah. I think the thing that comes to mind when I hear that quote is Lila You know, Lila being this concept of eternal play and discovered that whatever you’re doing, whether it’s your craft, your career craft, your hobbies, your family, like it, it should feel like play when it feels like play. It’s joyful. It’s a it’s not happiness. It’s something different. It’s an expression of an eternal dance that’s happening. And so even when things are challenging, I just think about this having a very playful attitude toward toward it. And that’s always been kind of a guiding principle of mine. We’ve talked about Zen and the motorcycle maintenance, and of course you cycle with Lila Lila And that there was a thread that he pulled on in a lot of his writing, probably the most important thread. And it does feel like a guiding principle for so much of what I try to orient toward people I try to orient with.

Sean DeLaney When did you feel your relationship with that idea starting to form? And what I mean by that is I’ve seen a lot of people don’t follow that internal orientation towards Leila or things that light them up and make them come alive, and they get caught up in the, the external chase as opposed to listening to that internal orientation. And one of the things I’ve always appreciated and admired about in you is you have found a way to tap into to listen and follow your own internal guidance system so well. So I’m curious how that started for you and how you’ve been able to trust that and stay true to that over time.

Chris Begg I love this quote by Cantor, George Cantor is the essence of mathematics, license, freedom. And I kind of expanded on that. I said the essence of every anything that grows lies in its freedom. So the sense of autonomy that you can express this, this principle, right? So I think early on, I wanted to have freedoms, freedoms to think, freedoms to play. So I didn’t want to be have very strict guardrails about what I was doing in my career. I was trying to express something that could then organically evolve and probably it started quite early. I was lucky, you know, I started my career as in a space where I could actually control a little bit of my, you know, my reading, my, the orientation of the strategy. And my father was an entrepreneur as well. And he had his own business. And I just saw how he was navigating. And I’m like, you know, a ton of me was something and freedoms were, were something I really wanted to prioritize so that you could align yourself to be a little bit more playful in where you were directing your work.

Sean DeLaney Talk to me about the word itself a lot between you and I in our conversation. Spaciousness. How does spaciousness enter into your life? Yeah, when you look at time. Time is by far the most valuable resource we have. And who you give your time to. Will will set the set where you know, you’re giving, you’re giving that resource away, right? And so when I look at my calendar on a weekly basis, that’s a good indication of when I said yes to things that are really getting excited or say yes to things that are a little bit like I wake up and I’m like, oh, I don’t really want to do that. So I’ve really tried to prioritize, you know, time allocation around things that really get inside it. But the spaciousness of not having a lot of a lot of times to do things that are creative or things that are interesting at the moment, or you have an organic conversation with someone, you just want that to, to lengthen over the morning. This morning we got to enjoy a surf session. And you know, the waves are good. You’re like, oh, let’s, let’s lengthen the session to an hour and a half instead of a fixed set. So, uh, spaciousness is just so, so beautiful. Dear friend of mine I was with yesterday, has a great expression. He calls it linger longer. And so he has this. It’s a mantra pattern that can linger longer in this, in these moments.

Sean DeLaney Do you ever feel the internal pressure around the clock during those times that you’re trying to linger longer? Uh, what I’m trying to do is I’m trying to put myself in someone who’s younger shoes, you know, think about a twenty eight year old and they’re thinking, how do I linger out there surfing a little while longer with all of the the external pressures that I have, and I’ve always admired how beautifully you think about and navigate this. So I’m curious what it’s like inside your mind, inside your inner world during those times.

Chris Begg Yeah. So, you know, work is really, really important. And, and you have a responsibility around people that you’ve made promises to and whatever the craft is. so for me. You know, I give my most valuable two hours a day to. To really productive time. And that’s usually before the kids get up. Right. We’ve talked about that window for me is four thirty to six thirty. And that’s. You know, whatever I need to do during the day that I think is, is. Requires my hottest cognitive abilities can be creative work. But if it’s, if it’s something I’m really thinking about, it’s an investment idea. I’ll journal or, or think about that or work through that in that time period and a pre, pre direct about that time allocation. It’s it’s nice. Family’s not awake yet. And I had places I go so that that time is really valuable. But then there’s family window and then there’s the usually the morning activity window and then there’s the desk time or you’re, you’re at your desk, you have scheduled meetings, you’re, you’re interacting with your team that can take through, you know, late afternoon. So there’s a bit of scheduling that that kind of helps to invite the, the real productive work with the playful work.

Sean DeLaney I really like that word invite. And that word makes me think of a line, you know, that I love by the composer Sergio Celbidache. He says, we do not create music. We create the conditions. So she may appear. So I want to talk to you about creating the conditions. So that two hour time block is really rich, and I want to get an understanding of what it’s like during that time. What are the conditions you’re trying to create during that time window?

Chris Begg That’s right. Little immersively into geography. So it depends the time of year, but the. But the window is the same and it’s usually always with a journal. It starts with a journal. And what happens, I think overnight in kind of your deep REM sleep, is that if you’ve submitted a question or things you’re working toward, there’s, there’s a real period of time where the unconscious can flow onto the page. So I want to give a free form way for pen in hand for some of those ideas to surface. And usually if you read my journals, they’re not they’re not literal journals. They’re very like symbols and, and some sketching and just free form. And then what comes out are usually something that can work with that I can build some construct around and understand. So that’s generally how it starts. And then it gets into much more specific. Sometimes I’ll do the computer and kind of be working through, you know, a model. If it’s if it’s an investment thing I’m thinking about or if it’s qualitative, I’ll start writing it up in a narrative form. But that’s how it usually goes. It goes from unstructured work to structured work. And then some days I just feel like being creative and I’ll just be playing in the journal, and maybe it’s writing something that’s not work related, but it’s more a creative expression.

Sean DeLaney You mentioned symbols. We’re at your office here in Costa Rica, and there’s a number of symbols that are surrounding us and that have been meaningful to you over the years. Talk to me about your own idiosyncrasies, your own unique ways of working, and how and why have symbols been so important, valuable, and impactful for you?

Chris Begg Yeah, I think, you know, we think about the way our brains work. It’s, you know, the left part of our brain is a, is a is where language happens. It’s, it’s the non-creative part of our brain. It’s also where we’re kind of collapsing an idea to a word or a sound and symbols, I think, carry over to something quite different where there may be multiple definitions to something. Um, and so like Egyptian hieroglyph, which has always been something I’ve, I’ve loved is, is because they, they share both a phonetic alphabet, but they also have that very symbolic. So a personal symbol of mine that I have everywhere is this hair over the wave. And that is a phonetic sound w n. But it’s also for when it. The hair goddess. But it is also meant something very different. It ultimately meant the essence of life. And it was such a beautiful way that they. They communicated through the hieroglyphs and in both a symbolic way and a phonetic way. I love having art around. I love having these symbols because they’re expressing something that’s just not linguistic. It’s something deeper. I think it bridges over into that right brain context.

Sean DeLaney You creatively talk to me about right brain. Left brain. I know you’ve grown close with Ian Mcgilchrist the last few years. Describe and talk through what? His ideas, what his books, what his work, what they meant to you, and how they’ve influenced your thinking. And not only your thinking as a whole, but I’m almost wondering practically how his ideas around left brain, right brain influence your approach to your craft of investing?

Chris Begg Yeah, it’s probably one of the more important bodies of work that I have discovered. And it’s now been a just a beautiful contributor to not just my thinking, but I bring them into the classroom every year. And, um, I’m able to share his, his work with the students. I think we are inherently tilted toward one side of our brain. So the left side of our brain is kind of the focused work where you kind of something’s there and you’re focused on it, but you miss the bigger picture, the whole picture, which is the right, the right brain, which gives context to the world. And so we know through stroke victims that when you lose your left side functionality through a left brain stroke, you might lose your ability to speak. A right brain stroke is actually more problematic because you lose your context with the world, your relationship with, with, with things and people and ideas. The human species has actually been languaging the world so much is that we become left brain tilted. So we’ve atrophied our right brain creativity. And so you’ll see people, I’ll see them right away. I’m like, oh, you’re, you’re more right brained. But on average, we’re, we’re kind of tilted to the left. So when I think about this, I say whatever, whatever, what side you might be a little deficient on. Are there habits that you can nurture to bring more of that out in your personality, in your. And so nurturing habits around right brain thinking might be creative work, or maybe journaling and maybe drawing or painting or seeing, you know, trying to figure out how to see the hole where left brain nurturing might look like just doing really deep work over a period of time, so you can become more fluent in a subject versus just knowing it a little bit, just a surface level understanding. And so historically, I had been a little bit more left brain deficient. So I developed habits around, you know, doing, having periods of time where I did really, really deep work on a certain subject, set a time limit, and then move on to another subject. And so I continued that. That’s a kind of three month learning interval that I’ve now done for about fifteen or twenty years.

Sean DeLaney I’ve really admired how you’ve been able to take your natural orientation towards right brain and bring more of the left brain orientation into your work and how you approach your life. So just talk more about that.

Chris Begg Yeah. And now that I’ve developed a few of the habits around nurturing left and right brain activities and flow of time allocation, it feels really balanced. And now I really enjoy that time in both. Yeah. And, you know, I look at someone like a character like Leonardo da Vinci who’s this incredibly whole idea of personality, right? He was so creative, but had this, like, incredible focus. You look at his journal, the detail of that and the drawings, but his ability to be so broad in his understanding. But I think when people talk about first principles, thinking, you know, first principles approach to is very much a right brained contextual right. You’re trying to see it from every single angle, that whole totality. So critical thinking. First principles thinking. Holistic thinking does capture this. Using a post about the creativity with the. The deep analytical. So our craft of investing. It’s really fun to play in both and to know, you know, on our team, you know, our analysts tend to be a little bit left of center right. They’re going to have this analytical rigor where a portfolio manager has to have this right brain ability to see risk. Ability to see the whole how do we position size? How do we think about how this fits into the overall picture where an analyst, some of our best analysts are. You kind of almost sometimes want them to be very elegant and not have this very creative expression. So I think it’s a, it’s just it’s a toolkit. There’s, you know, like the toolkit of just knowing how this the brain works. And Ian’s work has just been a real gift. And to really understand it and work with it.

Sean DeLaney Hearing you talk about that makes me think about your concept around infinite refinement and the Piper mindset. But I know when you first graduated college, your dad gave you a book and he said, here you go. This is going to be one of the most important books you ever read. And it’s called shabu shabu.

Chris Begg Oh, yes. Written by a ghost. The name was Trevanian. Wrote a couple other books, but this one’s just I want to give this book away. It’s really on the surface. It’s a fictional book. It’s like International Assassin who has. But there’s a couple pages of the book, particularly the definition of shabu, that just stuck with me. It really articulated where the kind of Please. I want it to end up. And so should we. Means the state of like elegant simplicity or refinement and what I would call. Now the simplicity on the other side of complexity. And there’s a beautiful passage in the book where where they’re describing the word, it was almost like a beacon for me of where I wanted to, to be both in my the way I thought, the way I wanted to build an architect life. So it’s been with me. We have this little skiff that we use in the summer. I’ve had it for twenty five years, never upgraded it. And so the boat name is Q.bui and it’s this wonderful little craft. And every time I like, I would never get rid of it. It’s like, it’s like, you know, just perfect. It’s almost like the, the simplicity of the boat is the simplicity of like, what I, I’ve always tried to aspire to. MM.

Sean DeLaney So you read the book. It resonated with you. You felt that pull internally to go that direction, like this visceral, internal feeling of that’s what you want to be about. Even at that young age.

Chris Begg Yeah. I mean, it was one of those things that just like, I didn’t know, I didn’t know. It just was when you sometimes read truth and it just hits you and you’re like, I don’t know, I don’t know what to do with that yet. And it feels like a beacon. It feels like a thread. You’re just trying to following along. When you do find a truth that just you feel in your heart that’s with your partner. It’s like friends that you have. It’s just that instant understanding. So the simplicity on the other side of complexity has been very much something that’s defined where I’ve the way I try to think, the way I try to build something that that feels feels joyful.

Sean DeLaney Hey guys, it’s Shawn. Just a quick note and then we’ll jump right back into the episode with Chris Begg. So I want to tell you about what I do outside the podcast. I’m an executive coach who works privately with a small number of CEOs, founders, and investors. The stuff I help with is the stuff that doesn’t have a playbook. It’s those things you can bring to your board or your spouse or your team or your LPs. So if you’ve been looking for someone who can sit in it with you one on one behind closed doors, go to Sean Delaney coaching dot com and let’s have a conversation.

Sean DeLaney So how do you navigate that feeling when things are getting a little too complex, where you haven’t simplified it down enough? I’m just curious what that process is like for you and take it whichever way you want. This could be around a relationship dynamic or how you guys are approaching an individual investment idea. I just want to know what that looks like.

Chris Begg I think where people look at Its simplicity is they stop at the simplicity on this side of complexity. Oh, it’s really interesting is when you move through it. So like all the great investment ideas we’ve ever had is it’s, it’s not an easy thing to navigate. We have to navigate through the questions by doing the deep work, by understanding that the natural inclinations to want to avoid this area where there’s a lot of uncertainty, a lot of fear, a lot of clouds. But can you work through the questions? What are the most important questions? Can we work through them and then get, can we get to the other side where we have understanding? And that’s what’s really interesting. I think anything, whether you’re taking on an art form like surfing or you’re taking on a painting or making music, you got to go through it through the hard work, you got to put the hard work in and then you can refine it and it becomes. It looks like flow. It looks like effortless perfection in a way, like effortless movement. You can’t start there. Yeah. You know, that’s what makes it really fun. Yeah.

Sean DeLaney This makes me think of a quote I pulled from your latest year end letter, and I want to read it. It’s a rather long paragraph, but I think it encapsulates this so well. And this is what you said. This in many ways is the essence of what we’re doing. We are not searching for complexity. We are searching for unrecognized simplicities. The greatest mistakes come from overlooking what does not fit our expectations. We overcomplicate. We overtrade. We convince ourselves that insight must be exotic, and that success must come from constant motion. And yet the greatest outcomes come to share the same pattern. And this is my favorite part. A small number of exceptional things identified early, understood deeply, held patiently and allowed to compound over decades. And this is the key part. The simplicity in hindsight is almost un comfortable. Love that.

Chris Begg Wow. Yeah, that says it all right there. The simplicity in hindsight is almost uncomfortable. Yeah, I like that. Why is that so? Looking backwards, it’s always easier to. Oh, you’re in the middle of it when you’re in the middle of a cloud. So today’s cloud in markets is AI disruption risk in software. And it’s scary if you own a software company today and you see all of the AI. You see AI coming. Software multiples that have collapsed. Stocks are down thirty to fifty percent, and these were two years ago were considered the most exceptional assets you could you could own. You know, you build a software and you could sell it in very high margin, very high returns on increment capital. And now it’s being questioned. What’s the term of a multiple of a software business. If in the world do they have. It’s scary. So fast forward five years from now. We’ll look back and we’ll oh gosh, that was so simple. Like the world was thinking accident and it ended up being y. But right now really hard. It’s a really hard problem to solve. And getting to the simplicity on the other side, complexity. It should be easy. It should be really hard. Yeah. If you’re going to truly have differentiated insight and you have a high probability, differentiated insight. And so that’s a problem that we’re working through today. But when we look back, it’ll be the simplicity would be so uncomfortable because you’d be like, oh my God, like constellation software, the timing of the software business is now, you know, on sale by fifty or sixty percent. And you should have done something. Maybe not, maybe not. So that’s, that’s, that’s what makes the, it makes these problems so fun, playful, you know, it’s a, it’s a high consequence play. Yeah. Particularly in a concentrated portfolio, like looking back as I was twenty twenty.

Sean DeLaney You said we’re in a hard period now. There’s lots of clouds. What is it like for you and the team during those periods? And what I’m trying to get at is, I think During harder periods, people seem to add layers of of pressure, complexity and stress, and that actually inhibits the team’s ability to think originally or think outside the box or develop new ideas. And so I’m curious what you do specifically at East Coast and then even by yourself to navigate some of these harder periods.

Chris Begg I think we’ve refined our process and philosophy to an extent where we have a lot of reps around these periods feel like, okay, and we look for clouds. We ask ourselves, where are the clouds today? There’s almost an embodied sensation that you have when you’re working in one of those clouds. Okay? You know, experience and time to be able to then have that. Oh yeah, you feel it and you feel it being uncomfortable. It should feel that way. Remember how many years it took to start to feel. That took a while. Yeah. You know, because now we have, you know, so many where we didn’t get a concentrated investment in those things and allow those clouds to disperse and solve the value creation on the other side. So now you have an embodied sensation and intuition, which can then lead to an insight doesn’t mean look wrong, but because some of the sensations are are really instinctual, their survival run the other way. So we don’t just want to run into a burning building every time. What we do want to understand where where those clouds are just temporary and there’s a time horizon arbitrage. And so what you’ve seen in software is everything’s conflated to, to one thing. So this is what tends to happen is there’s a binary, you have the, the whole wave function collapse to this binary outcome, yet good or bad. And so In reality, it’s meant to be a spectrum, a spectrum of truth. And so we try to deconstruct it from first principles to say, okay, if we didn’t conflate everything to this binary, what does it really look like? What are those modes that are more sustainable system of record businesses that have these key deep layers of mode? And, and then have more nuance into, into really deciding where we want to work. Can you even elaborate thinking of some of the questions you and the team are tossing back, how you’re examining that, what that just looks like? Yeah, we have a limited amount of time, right? So if we’re working in a space that has clouds, we’ll usually look to our universe to call our grove of Titans. And, you know, do we have completed work on anything that’s in the space? Okay, that’s the best place, right? If, you know, we spent six months building a model and the quality of understanding of the business. That’s a good place to start. And those have been usually where we extract the most alpha. Okay. Because we had this body of work, but then from time to time in, in that cloud environment, there may be a new company that we need to come up to speed with, with very quickly. Okay. And so we’re doing both today. We have two businesses in this cloud. One, we know really, really well. We’ve owned for a better part of a decade. We didn’t own it going into this. And then we have one that’s a lot of the same patterns, different vertical. Okay. And so allocating team time to coming up to speed. The more we do, the more we like it. Actually, we just purchased that yesterday where the other one, we were able to buy it much earlier because our, our work was done when we went into Covid. We had very little aerospace investments and we had a lot of work on our aerospace parts companies. And so you kind of reach into your grove there, completed work and, you know, pulled out trends. And we are able to make very, very quick decision in a period of really severe dislocation. But that’s generally how it works in practice. Mhm. Yeah.

Sean DeLaney So let’s stay with this idea of looking at the companies you’ve already done the work on. And it makes me think of another great Rumi line. And he says, you’re searching in the branches for what can only be found in the roots. So when you’re exploring some of those companies that are in the grove of Titans, are there things you’re doing to see them with new eyes to uncover the roots? Yeah.

Chris Begg The three pillars that we look for qualitatively are is there a moat? What are the layers of that mode? Are there secular tailwinds that are being expressed in the business of the industry? And then what’s the history of allocation and operational excellence. So those three things drive us, and we actually have begun to numerically value every business on a score of fifty. So five for each of the three pillars. And then you’ve got something that’s a thirteen or fifteen in that range. You value it. What’s our ten year IRR on this investment from today’s price. That’s how we rank ordered the whole a whole universe over real time. That should be informing where you see high twenty percent IRR investments in our growth. Those probably should be we should be spending time on those, particularly if they’re high qualitative rankings. They’re in the fourteen or fifteen category. So that informs a lot of how we behave. And certainly those. Twenty IRR that that surface every once in a while. There’s clouds. That’s why they’re there. And then that’s the work that’s required to understand, okay. Is the is the moat weakening? Is this business going from a qualitative fifteen to a ten? And that was Google a year ago. And there was a lot of clouds and we had to work through that. And as they dispersed throughout the year, we had a value appreciation moment there. That was material. And the investment had in previous solutions. Very similar pattern that we experienced over the last three years. Yeah. We need more of those.

Sean DeLaney Is there anything that keeps you up at night? And I don’t necessarily mean keep you up at night, but are there things is there something that you spend more time analyzing? And you’ve noticed there’s patterns to this over the years.

Chris Begg It’s always the moat. It’s always the moat. And you know, that’s that’s where you can get hurt. We have thought about eight layers of moat that we’re really looking for, for our business to be durable over time and what you come up with. Um, they’ve always been there, but we really deconstructed them about five, six years ago. Okay. When you’re talking about the layers about network effects because, you know, you just rattle them off and you’re like, mm, I think there’s a systemic pattern here that we could really understand. And now it’s much more clearly defined. And we think about it a lot. And what we want there is we want all of them. We want all eight. And once in a while you find something like sometimes six out of eight. Okay. But what the layers do is it provides this, this protection against the natural course of entry, the natural course of, of gist competition, someone coming in and doing a cheaper, better, faster, safer. And we’re now what keeps me up at night is what keeps everyone up. Right now we are in a phase transition moment Moving into a world where AI is going to be the most important human innovation of all time, and we can’t overemphasize that enough. It is an enormous change in the way we do everything, and that will have consequences socially will have consequences for current business models. There’s likely employment issues that were we’ll have to navigate as you’ll have layoffs and companies just doing what they do. And, and that natural course of being more efficient and more profitable, benefiting shareholders might mean twenty percent less workers. And where do those workers go? What’s the consumer spending look like in that world? We’re going to cross the chasm and that crossing the chasm. And I don’t think we’ll have a social safety net in place to catch it all right away. And that that worries me. So we try to hold multiple truths at the same time. We have our understanding of the business, the moat, all of these things. We also have an understanding of. These one off systemic risks that are present in the world. I want to dive deeper into AI. Yeah, a lot of your thoughts around it, but let’s just start. How are you using AI today? So over the last six weeks, we’ve deployed our first AI agent as an analyst. And so I think a lot of people have been experimenting with large language models as kind of a research tool. That’s obvious. And those have been helpful over the last five years as well. For years, I guess It’s great to always up on your desk. Your. You’re querying in it. It’s not that useful from a qualitative assessment of a business. It’s more just kind of another tool for information gathering. What we’ve done over the last six weeks is we’ve we’ve built an agent called Michael Faraday, which is the father of a field that eventually led to Maxwell figuring out Maxwell’s equations. And so I love Faraday. So Faraday’s started out we use, you know, obviously cloudbot as an AI kind of layer. We communicate with Faraday by way of communication to a telegram. So the team now is communicating on a layer where now we have an AI that’s in there with us and we can test. And so Faraday is brain is an LLM use cloud for that. And the soul is, is our operating system. Operating systems are everything we’ve written about. Yeah, there’s a mode. That’s his sole. So he’s now interrogating the research process. By way of tests. So it’s just been an addition to the team. We’ve been experimenting with it. I think it started out I remember the first week I’m like, this is probably the utility of a seventh grade injury. And now we’re probably fast forward six weeks. This is a six or seven year seasoned analyst because it’s tasked with our operating system. So if we have a company reporting yesterday, what I might do is first guys is have ferry run a full overview based on the way we think on those earnings and read the transcript from the call. Right. Contextualize that for us. We’ll get that feedback. Doesn’t replace us actually listening to the call of that. But if it’s if it’s company in our growth that we we may not have the time to look at right away. We get that context immediately. Okay. Within 20s contextualize with our process. Extremely useful. So I’d say our utility in the last six weeks continues to get better and better and better to the point where now, you know, this agent is actually adding value. We have tasks throughout the day that Faraday will get with Morning Briefing. There’ll be a philosophical update later in the day. We’ve incorporated some just some activities that give us some structure and imagine the next four weeks we’ll likely provision one more, which I think that will be much more. We can discern tasks. So one h. It might be idea generation and so we can start to build them. The other thing I want to experiment with is having personality archetypes, As part of the conversation and on different brands. So the model will choose different models. Then the orchestration layer from agent to agent to us is we now have multiple perspectives that can then check and also check customisation, things like that. Okay, so it’s been fun. We, I love tinkering, I love tinkering in. If I’m trying to understand something from first principles is to use the tools and experiment with the tools, tinker in the tools. You and I had a great conversation earlier with, I think one of the, the top AI scientists that I know personally, and he’s deploying many bots for a scientific objective, as was talked about with Ella and sharing those insights with others outside of investing, what do they learn and what are they using? How are they helping this orchestration layer? How are they creating security and reliability in their systems? And in that shared information has been really fun. Yeah.

Sean DeLaney Chris, do you believe that in this emerging world with AI, a buffet like approach and style can still work? Or do you have to evolve your methodology, your toolkit, your use of AI to.

Chris Begg Break that down a little bit? Seek the timeless principles of value investing are timeless about their eternal right. It’s. How do I buy something at a discount for what it’s worth? And it’s just understanding how to value the asset has evolved, right? I think what Ben Graham laid down in security analysis, intelligent investor, was it the principles, the tools for a time that existed now? Railroad assets. Financial service companies. When you value a technology company, it’s a different toolkit, right? The value a software company, it’s a different toolkit. It’s a value. Amazon. So what Buffett and Munger did is they took Grant’s principles and said, isn’t it better to buy a great business at a reasonable price that we could own for and hold for a long time? It’s a it seems to make a lot of sense. I call that value two point naught and two point out is very much alive. We’re looking at companies today earning ten percent free cash flow yields good businesses and they’re attractive price. You don’t need a ton of growth from those businesses to get to decent, higher Rs ninety three point zero is where the optics of what you’re valuing me. You know, you have to do something to the earnings. There’s an add back. So you have to understand oh there’s this. This is the value creation that’s that’s at work. And these are some of the most exciting companies. And, and so we’ve expanded the toolkit to understand how do you value businesses that are creating enormous value in that they have very large reach by way of a distribution graph or an innovative technology? So we’ve written talked a little bit about Tesla today. You know, Tesla is rolling out two very, very important businesses over the next one, two to five years that are going to transform their industries. You know, one is autonomy in the form of robotaxi. Yeah. And the other is Optimus in the form of a humanoid robot. And those will be profound value creating an opportunity. So value three is how do you value that? How do you look at grant through the lens of grant, through the lens of Buffett? Munger to value something that is on the leading edge of value creation? That’s that’s a fun challenge and an exciting. It’s something that is, you know what? I haven’t seen Berkshire Orient enough in some of the technology value creating creation investments. You know, the last decade and there may be a little bit of technical debt from that mindset. And maybe, Greg, you know, taking over just just published his first annual letter can look with new eyes on on this subset. I gotcha so the principles are still alive. I do think this value one, two, three is is a helpful framing. It’s been helpful to us.

Sean DeLaney Is it value three point zero or value three point one four three point four.

Chris Begg I love it. Um, yeah, the three one four is kind of seeing things holistically from every angle. Yeah. No blind spots. I love that. Good memory. Talk to me about that because you said you’re navigating new terrain right now. Yeah. And I’m thinking about where their blind spots you had to become aware of and let go to allow this mental flexibility to see some of these companies and these situations unfolding as they are. Yeah. So remember what Siska near studied, it ultimately comes down to entropy. So entropy is that natural course of of just decay. And so anything that reduces entropy creates value. More information can flow through that system. You create value. So what we’re ultimately looking for is where’s the largest concentrations of entropy reduction in the universe. Okay. That’s where I want to see. On the other side of that is going to be value creation. When you see the entropy reduction happening and there’s an emergent graph at the same time, noted edges coming together. Even more interesting when that emergent graph is altruistic in a way. It’s virtuous and there’s a flywheel in place. Even more interesting early days, Amazon. This was this is what we saw. We saw a form of a new logistics distribution system that was cheaper, better, faster, safer than what Walmart’s doing. We saw it with AWS. So ultimately all value creation, all this value creation is in the form of reducing entropy from what is being done today. Okay. And so that construct is very helpful. And it’s very helpful when we look at pockets of something that’s been done for a very long time in a certain way, and you see a new technology emerge. You’re like, oh my gosh, this is going to be transformational. Yeah. Because you see, you see on the other side of just what they’re working. You know, this existing cost structure is going to be so much more improved from this. For this innovation.

Sean DeLaney Walk me through everything you’ve just been discussing. And talk to it. Walk me through everything you’ve just been talking about. But do it through the lens of Tesla. I’m curious how you’re thinking about the next two, three, five, ten years and what the evolution of that looks like with Tesla.

Chris Begg So Tesla, you know, we kind of talked about there’s, there’s five businesses really, when you start to break down Tesla, you have that core EV business, which is a great business, you know, cheaper, better, faster, safer electric car versus what was out there. That is not the thesis of owning Tesla today. Yeah, it was a means to what they’re creating now. You have the second business. They built an autonomous platform in the form of full self-driving. And the iterations of full self-driving have gotten so good. Now that we’re almost at a. I would call this. This next iteration will likely be the, the iteration iteration that solves self-driving, meaning unsupervised self-driving. Okay. But the second business is, can I sell to our fleet of eight million vehicles? The full self-driving solution for subscription. Yeah, that’s a very profitable business. Only twelve percent of Tesla owners actually subscribe to FSD today. Only twelve percent. So it’s enormous. And all it needs is a one hundred dollars a month, two hundred dollars a month. And as the utility increases and people become aware that probably ninety percent of my miles driven today are full self drive supervised, full self driving. But I see enormous utility in the form of children like my my children not getting carsick on a long drive, just the smoothness of it. It’s really beautiful technology. Third distance Tesla energy. Building out an incredible array of megapacks. So we’re going to experience a grid transformation going from grade one point oh to two point oh. Two point zero will have a lot more solar. There’ll be a lot more battery storage. And what people really misunderstand is Tesla is providing a really important infrastructure layer into where the grid is evolving to a much more efficient grid with software, with the ability to have more battery storage. And they’re on the leading edge of this. And so it’s important part of the thesis, but four and five are really going to move the needle. And you know, that’s the full robotaxi platform. We’re in two city. They’ll probably be in twenty cities by the end of the year. This is going to ramp very quickly. And it’s something that I think the world is is is not aware of. You know, if you’re if you’re following this closely, you see it. I think ninety nine percent of the world don’t go to the technology exists and that it’s really happening. It’s really out there. And I think it’s going to scale very quickly. The question I kept asking a lot of my guests this fall is what percent of miles driven in ten years will be autonomous miles. And my own students, their answer was when I asked this at the beginning of the semester, they were like, hands went up. It was about five or ten percent of total global miles driven will be autonomous in ten years. And then we’d ask our guests every, every guest. We just kept asking the question. It was fun because we get answers, right? And the real technology forward guests that we had, some of the answers were in the ninety percent range, ninety five percent range. Now some people that are close to the technology, my answer is that I think over seventy percent of miles will be autonomous miles. That’s a S curve that we’re about to experience here, and there likely will be a winner take most platform. Okay. That will deliver those miles at a very, very efficient way. There’s only one general solution that’s up there and it’s Tesla’s solution. So the next two, three, four years will be very interesting. Yeah. What are you watching? What are you keeping your eye on to see if that holds true. You know, the the miles between accident and intervention. okay, are really going to determine the speed at which they roll out. City. City. Because eventually what this becomes is how many lives will be saved. And if you’re going to go into a city and the city that pushes back, the state that pushes back is willing to sacrifice lives, safety of their citizens for for what that will be. It’ll be measured in the data on how much safer this is. You won’t be able to argue against it. Yeah. It’ll be so obvious just how much better than a human driver the the technology is. So the fifth business is the humanoid robot. We’ve just shut down factories that were producing the model S and the model model X, and we’ve converted those to optimize factors. So Optimus V3 will go into production sphere and it’s It’s going to be, as Elon says, the most important consumer product launch ever. Yes, you believe that too? Oh, yes, one hundred percent. And there’s three things you have to do to get this right. You have to have a real, real world AI capability, which Tesla has been doing this really the most important part of the humanoid is dexterity of the hand. For task management and actually have a much more universal tool. You know, the ability to search. And this comes down to the degrees of freedom that a hand has. And this will match very closely your human hand. So that’s a an advantage they have. And third, which is the one that people don’t appreciate because they never manufactured any scale is the scale manufacture. You look at any of the prototypes that are out there that are. You see a video on on X or YouTube. No one has actually built a million units. And the first one to build a million units and have those nodes out in in those nodes are learning in their sharing. The flywheel goes so fast, and that is why Tesla’s being early with the best product, with the dexterous hand, with the real world intelligence. And then those nodes learning and feeding the feedback loop create an enormous, um, competitive edge.

Sean DeLaney Talk to me specifically about Elon. I’m so curious about how you think about him, what you’re impressed by. Where are your question marks? I would love to know what your evolution and thinking about Elon has looked like over time.

Chris Begg Yes. When I, when I first started looking at Tesla, it was over two years ago now and I had a lot of foregone conclusions about who Elon was. He was uninvestable was my conclusion. And why was that at the time? I just thought he was erratic. I’d see these posts. You know which way I can make sense. I’m just. That’s easy for me because I’m just going to ignore it. You want to put it over in the too hard pile, whatever it is, right? And then, you know, I tell the story that I, I was participating in a, you know, retreat with some, some who are now my favorite investors in the world. It was a global portfolio manager retreat in Switzerland, and I wanted to record something for the class. So I said, I’d love to record something. Moderate. A panel of about two people want to talk about Tesla. Will you moderate the Tesla? And I’m like, I don’t know anything about Tesla. So in the preparation, in the time spent in that setting, I left being I said, I have to do my own work. Yeah, I, I admired these investors that had this different conclusion in me. Let me go back. And what I did is I started to read every single post that Ellen unpacks, any reply. And what I came away from that experience of actually going to the source is I started to build a completely different view of who this was interesting, what he stood for, and I would never have been able to get that if I were consuming what others told me he was or that he did, or he said yeah. And granted, it was hard when he stepped into the political arena. That said, there was a very tough time because it was such a polarization of people’s views on who he was supporting or what it was, but he was a person and how he thinks and how he builds. It’s very admirable. He cares deeply about humanity and he wants to make a difference.

Sean DeLaney You mentioned being part of that panel. Kind of shook up your thinking and even suspended your judgment for a moment. And so do you bring any more of that into your process? That ability to step outside your own thinking, to suspend your judgment in case there are other companies that you’re looking at, similar to how you looked at Tesla, where you’re looking at it in the wrong way one hundred percent?

Chris Begg Yeah. Whenever you put a circle around something, you should always challenge yourself. Like even more about it. That’s your best at all times. Put a circle around technology. That’s something. It’s too fast moving. I don’t have to. I don’t have to think about that. I could put it over here because it doesn’t fit my criteria of what a mode is. What? And there are a lot of companies that were in this technology bucket that were probably ignored, Google and so forth. So that’s a reminder to me is like, what am I doing? What have I circled and say I don’t need to think about? And it’s lazy thinking. It’s the way our brains work, right? We care a lot about intelligence. For what? And we try to filter so much information. And so when I try to step back and say, what am I filtering? What am I circled? What have I said I can ignore? When it’s so obvious, staring me in the face, the simplicity is going to be so uncomfortable in hindsight, you know? And then sometimes I’m wrong to spend the time like I. I spend time thinking about Bitcoin. Uh, earlier this year. Not saying it’s not interesting to think about it. I was kind of late to the game, but I know I had circled it. Okay, I circled it, put it over there. Yeah. So I said, I want to spend some time. No, I understand it from first principles. I’m going to invite in the classroom, which is my laboratory. Yeah. And I invited in the conversation to say if I, if I, if I learned anything about it that was different from where I started. So I tried to challenge myself to do that from the Tesla example and others that that come up. And it’s fun when you kind of like, oh, wow, how did I do that? And again, I’ll go to the classroom in a minute. Are there any things that come to mind for you about Elon, specifically how he operates? What do you see out of him that is such such an n of one type? Throughout history are so remarkable. So it’s it’s one hundred percent the cadence of learning. If you if you look under the hood on on how a Tesla business is, is learning and iterating, it is completely different than any other organization. In fact, it is so fast. They’re iterating so fast. They think bigger. The scale of what they’re operating is. That’s what I can say is breathtaking. You know, you go into a space X facility, you look at like Starlink satellite production. The the thing that Elon will talk about is when something goes from, say, V1 to v2 to v3. And I wrote about this in the year end letter is v3 is like an order of magnitude improvement, sometimes a couple orders of magnitude improvement and so on. This iteration cycle is when they’re learning and then you’re applying those learnings and then you get this huge leap. And V3 is usually the, the model that can really scale a lot of production. What’s interesting about a lot of the Elon companies is we’re experiencing almost a cascade of V3 happening all at once this year. We have v3 optimism that v3 Starlink satellites going into orbit v3 Boring Company v3, Neuralink, a lot of this businesses are coming into this V3 moment, and you’re likely going to see a lot of them kind of connect in many ways. Like we saw with space X and X merger is that there’s connective tissue between ngoguide. A lot of these companies as they as they scale. So it’s, it’s exciting. And sometimes when you, you go from that pace of learning and you have an organization that you like has layers about, I think you’re just like, oh, I feel like we’re doing this slow motion here. You know, talk to me about that, that slope of what is happening behind the scenes under the hood to allow that level of learning that is used, that is breathtaking. Yeah, it’s, it’s really assessing. One thing Ellen does really, really well is assess the bottleneck. Yeah. And he goes and focuses on removing that bottleneck. Okay. What is the thing getting in our way of, of achieving, you know, a goal that’s way bigger than anyone could imagine. Yeah. And then just to work on that. And so you see him go and this is where he’s just so good and just, okay, this is where we need to focus and just be obsessed with that thing, removing the bottleneck onto the next one. So one of the bottlenecks that are for autonomy was it was the compression algorithm. And that was the part that I had spent a lot of time understanding how they were compressing a very large model for autonomous driving and having that ability to run it in a vehicle on a single chipset. So I spent a ton of time, like working through that compression algorithm, if it was possible. And they had a number of innovations that solved that in a very unique way. The the heat shield problem is a bottleneck for Starship V3, and I think did have huge innovations there. So that that can now be Starship space will be a rapid reusable rocket that will be able to deliver enormous space. You know, so even investment in space through a company called EchoStar, which we made at the the fourth quarter of last year. So we’ve been, you know, spending a lot of time understanding the spaces ecosystem and, you know, coming up the curve here quickly. What has you excited about the space ecosystem? So. SpaceX has built one of the most extraordinary innovations that has existed in humanity to have a transport vehicle that can deliver an enormous amount of payload at a, at a low cost to space. It’s going to open up. The best thing I can compare this to is the App Store. Okay. You know, they, they basically built the App Store, which is Starship. And think of all the businesses that can be built. What apps can be built down in space? That wasn’t possible before. So now we can get, you know, kilograms to space in an efficient price. What’s that mean for space based data centers? There’s a much better place to update the centers, you know. So it’s going to be an interesting time. And if you think of like the new world, we’re entering this new world, which is everything that’s off earth. Imagine when you. The discovery of the new world and you had one transfer vehicle going over there that got to, you know, deliver all of the goods and services to the new world. That’s going to be Starship for the foreseeable future. And so it’s exciting. Starlink is basically rebuilding the entire internet space, which has enormous implications for connectivity and safety broadband. And that’s how we got access to our our space investment is EchoStar had very, very valuable spectrum that they’re now using for direct to cell communication. So here in Costa Rica, if I’m in a, an area, I could use my phone. There may be no towers nearby, but I’m now connecting to a space satellite. And so that’s happening all around the world. And that’s a very valuable constellation. Faster and faster. How different does this time period feel compared to any other time in the two decades plus in this in space or in just general overall feel markets? Yeah. So AI, AI and space and robotics all converging at the same time is really exciting and, very transformational. So it’s going to change the way we do, so much so that I’m quite optimistic. I think AI is going to be ultimately virtuous. I think the natural evolution of the human species and the machines we build are to make things cheaper, better, faster, safer. There are vectors where things could go wrong, but I think the the high probability vector is that AI will improve the lives of many, many people. That will be a space civilization in multiple places. And I think a moon, a moon in our lifetime is highly likely. Yeah. And it’s kind of exciting. I’m excited about that. I’m excited about my children growing up in a, in a time where you start to see the implications of some of this innovation and how it how it changes our perspective on everything. We had a nice conversation with my friend Eli this morning, who’s now using AI to, to really try to change the perspective on science. Yeah, this is a golden era of science ahead of us, understanding the universe in a way that we never thought possible. Probably new physics. And that is pretty cool. Really cool. Super exciting. I think you even did the head explosion during some of the days that Eli said this morning. I want to hear about though, how are you navigating the amount of time spending on trying new tools, new models, versus some of the timeless things you’ve done? So just walk me through time allocation, how you think about what are the timeless principles I want to stay true to around my investing crap. I know this is a big one. I’m just curious how you navigate situations like this. Yeah. I mean, yesterday afternoon I was looking at a company that ten percent free cash flow yield. It’s going to grow like six or seven percent top line. They make industrial laundry equipment good business. It’s a duopoly globally cheap. But there’s something interesting on it. And and then you’re all of a sudden playing in space. You’re playing in autonomy and robots. So it’s all relevant. It’s all relevant. The the thread that we always hold on there is like, where are the IRR? And that’s ultimately from an investment perspective. It’s going to drive our, our returns and our and our alpha over time. And we’re really trying to underwrite things to a fifteen percent or better IRR over a ten year hold. Okay. So that defines all of our work. And if we can’t answer that definitively, well, high probability And that’s asymmetric, which is most important. And to concentrate carefully. Then we just pass. So we just want to be allocating our time to the really high probability symmetric ideas that we think are going to be driving those types of returns. Okay. And, you know, over seventeen, eighteen years now, you’ve been compounding at rates that are exceed where we’ve been underwriting. And we just want to keep interrogating that process. Okay. Go further into the asymmetry, how you think about that. You said it’s most important. So I’m curious. So eight to twelve companies is usually where we end up in our concentration. So we can never invest in a company where we think there’s a probability to zero. So when I talk about asymmetry it really has to be no vectors to zero. Okay. Like if it’s if things didn’t go well with autonomy for Tesla, things were delayed. Like we had a number of vectors that were would have been like, it would have been a subpar investment, single digit IRR. And that’s how we think about it. How do we use like we’re always thinking about how can we lose? And if there are vectors where we can lose and those are not non-zero probabilities, then usually we move on quite quickly. Okay. That’s why we spend so much time on understanding where the vectors giving us a lot of favorable outcomes. Moated companies, eight layers of secular talents, not headwinds, great capital allocation history. These are all stacking our deck to vectors that and then we want to have lots of like what people call free call options, but there’s lots of like happy accidents that can happen in companies that are iterating that you would never have it in your model. Yeah, exactly. You know, and that’s where the looking for companies that that they’re innovating so much that, you know, one hundred percent, you can never model what will eventually happen. Okay. Because of the iteration, the cadence of learning, innovation, innovation, capital allocation, but you want those vectors. Yeah. And those are pretty exciting. Yeah.

Sean DeLaney Are there any other founders, any other operators operating at a level similar to Elon in terms of how steep his learning slope is? I’m just trying to get another example in my head that that people can start to see and find the commonalities that that you’ve seen, that you’ve watched, that you admired.

Chris Begg You know, the one that comes to mind just because they started from such a small base is a perimeter solution. Okay. And what’s interesting about perimeter. You know, here’s a company that Was put together by one of the best games of all time. So Nick Howley ran Transdigm. We understood Transdigm quite well. And Nick with Will Thorndike who wrote The Outsiders. Keith and Corey, who is a former analyst with a New York based hedge fund, keen to get in right. Can we take the Transdigm playbook and do it in other versions? Are there any anythings that would fit these same principles that we look at in the aerospace, but in other markets? And they put together, you know, kind of this Spac to, to kind of go look for an asset. And they found it was in fire retardant and the fire retardant business was to get this, it kind of looked a lot, you know, sole source. You have these things that you can make it more efficient. And they’ve done that. They’ve done it so beautifully that the business has been transformed. And now they are starting to add the next. sprint. The next sprint. And what I love about that is like, I don’t know what Perimeter’s going to look like in five years. It’s going to be very different than it is today. But I know what I understand. I understand the playbook. I understand the capital allocation discipline. I understand the players, the area of work. And I think this business, you know, we started investing in this company a billion dollar market cap. Is it fifty, you know, ten years from now? All the things that I can’t, I don’t know. Yeah. But there are things that I, that I know for sure is how they, how they’re going to behave. And, and that’s kind of a, an interesting one because I think a lot of people will try to, oh, you know, we’re going to pass on that because of this. You know, I’m not sure about this acquisition. I still find it to be one of the most interesting companies that we own.

Sean DeLaney I want to go back to how you’re thinking about and using AI specifically. You’ve told me before that you learned the importance of not outsourcing judgment from Todd Combs, and I think I’m seeing a lot of people lean too heavily on the AI tools and they’re outsourcing their own judgment. So I would love to hear how you are navigating this and what are the timeless toolkits that you’re focused on, because they always stay timeless.

Chris Begg Yeah, it’s a great question because even though we’re experimenting with lots of different tools, they’re, they’re not vital to the process. Right? So the process is still pretty. It’s you’re sitting down with a 10-K, you’re sitting down with a transcript from a call. You’re sitting down and thinking in a corner with a journal. That’s where the word work is happening. It’s it’s not like lm tell me this. Yeah, that I don’t know. it’s time to come that way. The first time, like certainly, you know, you have a couple different LMS up at any one time. You’re just getting information that way. But it’s not high probability insights that we’re getting. The agentic AI is, is the first time where I started to see real value coming from it. And I think anyone that’s using these tools, like, like I am like on the leading edge and they’re new are blown away. Yeah. And so for the first time in the last couple of weeks, I said, wow, Faraday is getting pretty good, you know. And so what is he doing though? He’s doing his operating system is us because we’ve trained him to understand the three pillars, how to value how we think about a ten year free cash flow growth rate. Like so there is some value to getting some context around something that we don’t know well. Quickly, based on how we think we have our operating model. And so if you ask me this a month from now, and I may say we have two and the two are doing doing something, they’re talking to each other. We’re starting to draw different insights. And so it’s evolving very quickly. But up to having agents that are actually helping. It is a tool. Not that not that helpful. Yeah. And what are the main two lines I’m hearing is that the amount of work you guys have done previously, stress has that over time years to allow that. Hey through this lens I think is the critical takeaway for me. Yeah. The soul of the agent is a very simple operating system that we’ve derived over lots of thousands of hours on a universe of companies that we understand. The Grove is probably two hundred and fifty companies globally in a very large universe. So that all of that is, is making, it’s narrowing down like how we’re orienting the work. Yeah. That day, I can help us with something like as simple as looking through, say, the X system for news things on certain things. We care about insider buying and selling, some of these things that just pick up by way of pattern recognition. And I think an AI tool can be useful there. So we’re, we’re just trying to systematize some of that stuff. So we have, you know, a twenty four over seven, an analyst that can maybe derive some insights that, that we might, might have missed. Yeah.

Sean DeLaney Talk to me about the uniqueness of your inner circle. Your orbit is pretty fascinating. One moment you could be sitting down with a leading AI researcher, the next it could be, you know, someone studying how whales communicate. The next. It could be a great artist, the next it could be a musician, then another legendary investor. And I’ve seen you come alive around all of these different people. You know, we talked in our first conversation about the Renaissance man, the polymath. You are someone who gets energized, who can hold so many different conversations in their head at one time. And you do this in such a beautiful way where it feels like play every time you’re engaging and conversing with them. So just talk to me about how you think about the people you spend time with and that you’re engaging with.

Chris Begg Yeah, the thing that I’m so attracted to curiosity, I love surrounding myself with, with people who are curious that are learning in there they’re sharing their learning. And so where we’re sitting today, it’s a beautiful space where I don’t think there’s any investment people in the space, which is great. But it’s curious learners who have chosen to build and be closer to nature and do interesting things. And, and we had a, a lovely group of people coming through and, and from poets to philosophers to AI experts. And so I tried to just surround myself with people who have this abundant spirit and won’t share it. And the classroom, which we talked about is it’s an extension of that, you know, it’s how do we use that time with the students to, to advance thinking about subjects that are, are very important. And if I was sitting in those students seats, what would I want at that time to be spent thinking about, you know, tying those principles, but also very relevant examples. And just in that multidisciplinary framework, it could be a neuroscientist, it could be a poet, but you can extract some of this, some of that insight. And it can, it can really create a rich fabric of your own understanding. You know, we had David White visit us about three weeks ago, probably, I think, the best Latin poet today in my opinion. You know, David did a talk on the Pilgrim. The pilgrim in all of us, the, the pilgrim, the, the journey that we’re all on. And it’s this beautiful talk, you know, steps from where we’re sitting and that friendship, you know, I’ve learned so much from David over the years. And he’s been, you know, the way he shares his words, his insights and how to, you know, applying those to how we think about whatever we’re doing, our family, our, our hobbies, how we’re living our life and to be able to extract that Share this one. Yeah.

Sean DeLaney We were talking about David. This was about a week ago. And you had your own poetic line describing him. You said, Sean, he is the manifestation of the words with which he writes. And I thought that was just beautiful. So talk to me about. What it’s like after spending time with him and then going back into your craft of investing, do you feel more of him with you as you engage with your craft?

Chris Begg Yeah, I mean, the big takeaway from his talk, which kind of left me kind of stunned, was he said, whatever, whatever you love will break your heart. And we are not supposed to have our heart broken. So it was like a. It was just a realization that, you know, we want to have these experiences in life that that really bring us open. So whether it’s having children or aging parents. So yeah. Yes, sometimes it’s business related. Sometimes it’s just like it’s beautiful.

Sean DeLaney What do you think has changed for you over the last few years? You mentioned a few of those elements, you know, children, business, aging parents, aging parents. You have a few more years under your belt and a few other obligations. There’s been changes. I’m curious, what are the main things and have they changed for you and what has stayed the same? What’s most important to you at this stage in the game?

Chris Begg Yeah, I think you opened it up earlier. It’s like spaciousness. You know, I think that the idea of spaciousness to have not be hurried, not to be in a rush to try to get some, get to some destination. That you may or may not be important. You know, it’s like we’re all in a hurry to do something, to get somewhere. And we forget to live and forget to, like, linger longer in these friendships or these, these moments. So I think organizing and maybe, maybe your, your desire should be, should be less so that you can add a little bit more, a little bit more spaciousness to it to enjoy it.

Sean DeLaney I want to read to you, and I know this is an important quote for you from Jonathan Livingston Seagull. And this is the quote. You will begin to touch heaven, Jonathan, in the moment that you touch perfect speed. And that isn’t flying a thousand miles an hour or a million, or flying at the speed of light, because any number is a limit and perfection doesn’t have limits. Perfect speed. My son is being there. What does that mean to you?

Chris Begg It’s one of my favorite lines of all time. Yeah, perfect. Speed is being there. You know, I’ve been writing music for the last couple of years, and so I just finished a music music project on the Camino de Santiago de Compostela. And the the final song of that was that reminder is it’s not it wasn’t about it was it was never about getting to Santiago. It was the the being being on the path. And being present in the experience. Yeah. So that was the that was the big takeaway. And Jonathan Livingston Seagull says it perfectly in there. Yeah. The entire research project was a set of songs. And so the album is an arc that goes from the call to do the pilgrimage to, you know, to take this walk. And whether you’re walking a part of the, the, the path or you’re walking all eight hundred kilometers. David White kind of planted the seed for me about the pilgrimage. And I’m like, oh, we’d love to do that walk. But then I started to think about what is the journey? What is the hero’s journey of the call to starting to each of the moments along that the Camino that you would have had this felt experience, you would have had a moment of breakdown, a moment of, of doubt, of forgiveness and having this incredible journey and then getting to the finish line. But it was wasn’t about the Santiago. It was about the full experience of being in the moment at present, stripped away of any of the tendency we all have to have be thinking of the future to be thinking the past. Right? So yeah, it was a fun aperture to, to kind of think about that quote in a different, different form.

Sean DeLaney What did you learn about yourself in the process of writing those three pieces? Are there certain things, ideas that you just hadn’t gone deep on before? And then all of a sudden you say something that you didn’t even know was in you when you were staring at the blank page.

Chris Begg Yeah, I think, I think one of the interesting things about creative, creative, whatever you’re trying to create, if you can narrow your aperture, you can become much more creative. You know, if I told you you could only write about this little plant and you could only describe it. You could have the most rich experience with this little. And so that’s what it was with the Camino, is I was able to actually narrow it down to just this journey, this journey that people have been taking for thousands of years. And, and then feel the pilgrim. What did it mean to begin? So the first song, you know, West or West is about the tall. Right? And then the gate is like the beginning. And then you’re on the French, the French path. You go up through the French Pyrenees called the Napoleon Ridge. And like you’re right away, you’re broken down. But it’s like, what is the general universal experience that the pilgrim is having in the moment of being on that trip, of being in that, and then you’re here and then you’re in the next spot because the it was narrowed. I was able to bring in my own biography about the similar feeling, but also what is the universal feeling that would be present in that moment? And so the and the nice thing about the Camino is that it should be the most transformational experience of your life, as it should be. That’s the whole purpose of it. And so going through that arch, going through the felt experience and allowing that, you know, if you saw this as a, as a compression of, of emotion experience, it’s compressed to something you can carry with you. Whether it’s three to six minutes of poetry that expresses that, that is the beauty of what a song is. And the form factor of a song is, is so exquisite. I often thought it was only available to a musician. I was like, oh, we can write these songs. You can hear the songs now through some of the AI tools that are available to us to write into a genre, to write into a style that elicits what you want to compose. And so that has been, you know, for the last two years now has been probably one of the biggest creative expressions that I’ve had in, in my life, really. You know, and because a few of these albums now have this theme that you can work with. It’s kind of been an interesting way to, to share kind of an entire journey. Yeah. Talking about the word, you used a number of time compression. Now that you’re about what is being an impressionist mean to you? Yeah. You know, when we think about intelligence and intelligence is, is compressing knowledge into something that you can. Do something you can predict. You could understand the world. The famous one is Einstein’s e equals MC squared. It’s an enormous amount of complexity that is simplified into a compression. To really understand the world, it’s that simplicity. On the other side, effects to be right. Is there a compression to someone that can do this in the most beautiful way? And I’m such a unique way. So a great songwriter is a compression is a great scientist. The greatest scientist of all times are the compression. You know, Bach was a compression when it came to to understanding the architecture, music and Feynman and these just heroes of mine, I realized we’re we’re just great compression. And today we’re we’re compressing. That is what AI is. It’s compressing it. Everything we know about the world into a model that we can, we can query. We can carry it with us on our on our phone. We can we can carry them all out. How to drive and, and express that compression in our car, right? If we’re in a humanoid robot. So when I was really understanding the compression algorithm for the humanoid, for the, for the autonomous vehicle, it really started to, to think a little bit more keenly that this was a very much a universal general principle. And I started to see compressions everywhere. These are depressants. When you compress something to the essence, when you compress something further than the essence, it loses fidelity. If you haven’t compressed it enough, it’s noisy. But when you compress, something to its essence is in its perfect form. It’s a form factor which is high and compression is is is working with compresses in many ways. I love that word compressions. And I’m like, oh, it certainly must be a word. And of course it wasn’t. And you see it sporadically, but not the way I define it. And uh, trying to find the domain name, compress it. I was going to ask you if you own the domain. I still have no idea. I have some, you know, some of my colleagues, like usually it’s like, I’ll just send a text and be like, can you, can you try to buy this domain name? It’s just a collection of domain names. I have no idea what I’m going to do with them. It’s like edge node. An edge node is, you know, graph theory is something near and dear to just how I see the world. And the two primitives of graph theory are node and edge. And a node and an edge could be static. But when the when the node on the periphery of the graph is autonomous, It has freedom. It has accountability to the graph. It’s learning and feedback. It’s it’s an edge. An edge node is an intelligent. And so what we’re seeing today is a is an emergent amount of edge nodes. The humanoid robot is an edge node. It’s not it’s not just out-a. It’s learning and sharing with the collective fear. And a whale is an edge node. You have a whale of your network, but it’s an edge node, right? It’s singing a song, it’s iterating, it’s hearing the song. It’s, it’s sharing the song with the park and the collective. So an edge node is something that will we’re moving more, we’re accelerating into in a beautiful way and we’re becoming much more connected, intelligent nodes in the graph just the way the whales did it. Yeah. Talk to me more about whales. Yeah. You know, it was probably four years ago where I started to. I’ve always been in awe of what else. And I think the thing that clicked with me when I started thinking a lot more about oils was they were the first geocentric species on the planet, meaning that they were the first ones to understand and resolve a way to communicate around the terror. So, you know, if you looked at the mycelium network, which is a terrestrial graph, you can’t you can’t go from continent to continent, but the whale is actually pod to pod and connected by song. They figured out a way to create the first internet or way to to transmit information over long periods of time. So the song is the edge and then the pod is the node. And so they’re very special about the intelligence of a whale and the way they operate. If you were to see a whale beach themselves for some reason, what generally happens is the entire pod will beach themselves because they don’t have an awareness of otherness, like there’s a oneness to someone in need. We go. So it’s this. It feels like a very evolved species, an evolved species that that we could learn from. And it’s probably, it’s a project that’s on my desk right now that I wrote a small directory dossier on a, on a documentary I’d love to do called the whale wrote. So stay tuned for on site on.

Sean DeLaney What’s going to get the attention. Where are you going to place that?

Chris Begg Yeah, like this one. I just had to be a long flight home and it was something that has been like a thread. I’ve been kind of walking along and finally I was like, okay, I’ll just. I’m just going to write this down. And, um, cinematic theatrical documentary feels like the right form factor for the story I’d like to tell. It takes an intelligence. It takes in Wales. It takes in a number of characters that I’ve met over the last twenty years that somehow are all converging into this question, you know, from whale biologists to AI experts. And and I shared it for the first time this morning with a director who’s a good friend of mine is finishing editing his his first full feature film. And I said, if you want to take a break, read this. And and immediately he’s like, Chris, this is really good. So, uh, it’s an idea. It’s an idea that in the right hands could be could be fun. Oh, what’s nice about a good idea is you don’t have to bring that idea to fruition. You can just share it. Yeah. And see where see where it goes. Yeah.

Sean DeLaney Talking about good ideas in the right hands, I had the immense pleasure of sitting in one of your classes this fall. Mitch Rales was there. Talk to me about what you’ve learned from Mitch over the years.

Chris Begg Mitch is one of the most incredible system thinkers that you’ll that you’ll have the ability to learn from. So you really get Danaher business system or any of the business systems that he’s developed. It’s about creating standard of excellence and, and then improving on that standard constantly, persistently. Yeah. Persistent incremental progress, eternally repeated is at the heart of what a business system that they learn from Toyota’s production system. And then they modeled a lot of those, you know, Kaizen methods. But it’s one thing to say it and nothing to do it. And we see Mitch, it’s, it’s it’s his culture. It’s, it’s the cultural baseline of everything he does within the company or in his museum or in his life. He’s now doing that. The commanders. And it’s just fun to see how. Oh, it works here. You can work here. And he works here. So I love putting that. Putting him and putting his ideas in front of students because they’re. They’re timeless, you know, and just the way he does it with a good spirit and. And high integrity is. It’s admirable.

Sean DeLaney Who else would you hold up there with? People who have timeless insights, but they do it in an admirable way, and I want. To add one other word or dimension here, and it’s one that you’ve brought up again and again, and that’s beauty. And so the foundation I’m laying here is there’s a way that you approach life. There’s this way of being you have that incorporates the playful, childlike spirit, the the curiosity in search of truth and those timeless principles. but you do it in this harmonious, beautiful way. And I get to watch that. And I admire that, and I love and learn so much from that. So I’m curious for you, someone who embodies that, who are the people that you look toward?

Chris Begg MM. Yeah. I guess there is a anyone that’s invited into the class. As chairman, he has this those characteristics, right. That there, you know, we, we end up having like twenty five speakers in the classroom by the end of the semester. And if there’s a thread running through all that, they’re good people and they have something to share that’s altruistic so that you’re learning from us, Moses, about, about what quality is by seeing quality. And it’s hard to you understand it in hindsight. Like, you know, I have the students write a reflection at the end of the semester and it’s always, oh, that surprised me, I didn’t. I didn’t know that would be the takeaway. And they’re all unique about what they’ve learned. You know, taking something from the Mendelsohns at Hiko or it was Josh Tarasoff, whoever it might resonate with, they have a connection with. But everyone chosen kind of has the things you would describe as being part of their makeup. And I guess what I’m trying to do is create some role models for them to say, oh, I could do it like that. So we can create a win win construct and do well versus having to think scarcity or win or lose, which, you know, in New York City business school, there tends to be a lot of impetus to be in a hurry. You know, taking some time off from my work, everyone’s running faster than me now, you know, and they just want to get out and they want to run really fast. So I try to get them to think about running. Maybe what looks slower, but better. Yeah. As I was telling you this morning.

Sean DeLaney Guys.

Chris Begg Out on the water surfing. With that said, even the best advice I could have got. Slow down. Breathe, relax. And it was just like the mantra. That’s what that’s where we kept going. And it’s hard to lose sight or it’s easy to lose sight of that. And so I think when you hold up these pillars in the classroom as modeled ways of being to remind them that let’s slow down. And yeah, that the temperament that you approach a craft, particularly if it’s a sport where the playing field is changing. It’s like, I don’t know what, I don’t know what kind of weight you’re going to get out there. And so what you can approach with the temperament, you can bring your temperament to their surfing is such a great teacher for so many things. I was on the water as well as, you know. And, uh, and today seems, were those days. That was like it. It taught me so much about patience. It taught me a lot about about the word wave. And it was it was fun. It was like, I only call for one way. And there were lots of waves that were like, that’s a good one. That’s a good one. I was like, you know, today’s the day might just be one way. And it was like patience and temperament to just be content with that. That was kind of a, that was part of the teaching, uh, that the ocean had for me today.

Sean DeLaney Speaking of temperament, just before I got down here, I was working on a piece I’ve titled Beautiful Tone, Beautiful Heart. And that’s a phrase the, the, the violin teacher. But I consider a philosopher Suzuki. He used to say to the children that he was teaching. Beautiful tone, beautiful heart. If the heart’s beautiful, if your internal way of being is beautiful, The tone that you play will be beautiful. And there’s this vibration that comes from you. And I’ve just thought about that again and again. You know, how am I going to enter the ocean? How am I going to be on the surfboard? How are we going to sit together during this time? Beautiful tone, beautiful heart.

Chris Begg Wow. Yeah. I wrote a song called The Cello Knows. That’s one of my favorite songs. And, you know, I was thinking a lot about Stradivarius, and no one’s been able to duplicate what came out of that workshop. Yeah. You know, we use the same woods. What was different about Stradivarius? That you could be looking at it and not be able to create the same sound that comes out of that file or that cello. And and there must be something that was breathed into that. Instrument. Yeah, right. According to the song, the way it was expressed with the heart. Yeah. As well as with what we can reconstruct in the atoms. And that’s why, like, a live performance is so special. You know, when you see it and it’s, uh, being able to do this on a zoom where you can feel the human experience. It’s a good reminder. Thank you.

Sean DeLaney Uh, I’ve got to share something. There’s this chef. She’s a Zen monk. Her name’s Jong Kwan, and she was on a Netflix chef table. And I saw it. And her way of being, the way she carried herself, the the food she made, which was simple with simple ingredients, but just blew people’s mind. I fell in love with her on that chef’s table, and she recently has a two part series that came out on Netflix. And so I was watching it And one of the really interesting things that I took away was when she was working with the vegetables. There’s these massive hot pans and she has the vegetables, and she said most people would just grab a spatula or whatever tool they would use to mix it. And she goes, you have to use your fingers. And she’s saying this after having spent a lifetime of work in this craft, and she says, you got to use your hands even in the hot pan. And what you want the vegetables to feel is the life force coming through your fingers. Now, that could have just been a throwaway line, but I knew that she was capturing the essence of something, of breathing life into the food. And she was doing that by allowing her life force to come through her fingers. And I think there’s, there’s a reason that people who approach their craft, whether they’re building a cello or they’re cooking. There’s a way of being that creates something so unique for other people.

Chris Begg I think another with food, because I talked to a French chef, and the way that they prepare, the way they breathe life into where did this come from? How did this where did this come from? They know the scores on that. They’ve learned to trust the source. How that source it’s going to. How is it going to taste or feel on the plate? It’s such a beautiful expression of that. I want to round out here. I want to hear about you mentioned when you first heard the term showroom that directionally that’s a place you want to go. How are you thinking about directionally where you’re trying to go now? What are you working towards in terms of a life, a way of being? How? Do you hear a lot about purpose and meaning, you know? And, uh, I think when I observed people that have got to be that got to Santiago and the, their destination, and then they lost track of purpose and meaning and, and even I saw this in my, my father and he, he lived a life of purpose and meaning because he served, he served his clients. But then there was a moment that ended in. And then the purpose and meaning disappeared. So I think what I’ve been trying to cultivate is, is a, is an awareness that the, the Camino, the path is the destination. And so how do we produce. And through these things we do for our, you know, what are the, what are the, the friendships you want forever, like the hobbies you could do forever. The, hawk. You can hear from her. Yeah. And it’s building those those things into your into everything. And I think what I’ve observed as I was with a friend, we went to Egypt a couple weeks ago and he’s, he’s runs a very successful investment firm in New York City, and he’s been wearing his tie to work every day. And he takes the subway and he’s like, I designed my entire life to retire at this age. He was like, I can’t wait, can’t wait. And I said, well, of course. I mean, I’d be wanting to retire too. I mean, you put a tie on, you’re going to the subway every day. But if you left your craft, like the geography has to be as important. If you’re if you care about longevity and if you care about the, the duration with which you could do the craft, you know, so part of our recent spent hours apart and three or four months in the jungles. It. It becomes playful space to to do your craft with purpose and meaning for a long time. Yeah. I think these, these art forms that we take on, like, can we, can we play with them for a long time? Like surfing, which you’re going to be an expert surfer after this trip? Yeah. So I, I, I think a lot about that and, and kind of crafting a lifestyle that doesn’t feel it’s looking toward a destination, but it is the destination.

Sean DeLaney Perfect speed is being right here. Thank you. This is beautiful.

Chris Begg Thank you. Yeah. That’s great to have you here. Thank you.

Stay Connected with Sean

🌐 Explore more at WhatGotYouThere.com
📚 Get my latest books, tools & coaching SeanDeLaneyCoaching.com
📩 Reach out or connect with me directly [email protected]

If this resonates, share it with a friend who’s walking a similar path.

TikTok

YouTube

Twitter

Instagram