#254 Guy Spier- Compounding Good Will and Capital

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Introduction

Today Sean sits down with legendary value investor Guy Spier. They have a wide ranging conversation discussing things like his lunch with Warren buffet, how he cultivates his environment to suit his investing style, how he’s compounded Goodwill by writing thousands of thank you notes. And what he’s uncovered on his inner journey, Guy is the founder and managing partner of the AquaMarine fund  and is the author of the book, The Education of a Value Investor.

Sean: Guy Spier, welcome to What Got You There. How are you doing today?

Guy: [00:02:21] I’m doing great. Sean, even better for talking to you, slightly nervous for talking to you, but it’s great to be here. 

Sean: [00:02:30] Believe me that the nerves are over here on this side. There’s so much we can learn from you and distill down. And this conversation I’m hoping is really going to be a lot about exploring the inner journey. I know you’ve studied different people and learned from so many. 

Playing The Finite And Infinite Games

Someone I want to start with actually, who unfortunately has recently passed is James Carse. He wrote this great book, Finite and Infinite Games. James Carse was a guest we were lucky enough to have on episode 182. His whole concept in the book, Finite and Infinite Games, I’m just wondering for you, what type of impact has the thinking about playing finite and infinite games had?

Guy: [00:03:06] It’s funny because it came up today. I was playing squash with a friend before I got to you, that’s why my hair is slightly wet. He brought up the version of that idea that was put across by Simon Sinek, which in many ways has been far more popular, but I did not realize, I know I’m not a dummy, I didn’t realize how important it is to play infinite games.  I’m still learning and I’ll just give you one example that came out of my life in the last couple of weeks. I really wanted to be back in Zurich now but they put the UK back onto quarantine rules. I would have had to spend 10 days at home, not leaving the home. It’s very strict in Switzerland. There’s a Delta variant, the India variant,… but I had a work around that I could have implemented. The workaround would have been to take the train from Paris and Paris doesn’t have any quarantine with the UK and Switzerland doesn’t have any quarantine to France. I would’ve just had to kind of in a certain way, slip across the border, so to speak and I would have been fine.

I think that the Guy Spier of 10 years ago would have done that. Actually my wife was urging me on to do it. And what I realized was that if I did it, the people who knew it would be my staff, just my staff and my family, and the question arises. Why should I expect others to play by the rules, for example, that I’ve set for my phones? We have redemption restrictions. You can only redeem at certain times, and those are rules that we’ve set up. How can I expect them to abide by those rules, where my staff see that I’m not abiding by rules, that may be stupid, but they were set by the Swiss government. And they’re set with the expectation of us complying with those rules. So what on earth is that got to do with the infinite game? It’s got to do with the infinite game, because if people see that you’re willing to play by the rules and not skirt by the rules, that makes you a trusted player in many other games. And I didn’t realize that. So there’s just one example of how that thinking is still evolving in my life.

I’ll give you another example. If you make any amount of money, you’ll get tax advisors who will recommend tax strategies, which are more or less aggressive. And I’ve come to the realization that the standard by which I judge sort of tax minimization strategies is this legal, that’s sort of what you really want to get to, I believe. I’ve been talking about this to various people around me . The tax man, the tax inspector, when he looks at the tax return should look at it and go, yup. He’s okay. Or this company is okay. And should give him that good feeling. These people are okay. Because in theory, your tax return is private and not for public consumption in practice, people talk and people know who you are. And so that idea of people unquestioningly knowing that you’re looking to pay them a fair amount of tax, and you’re not looking to push the law to the extreme means that they’ll say good things about you. And as a result, you’ll be invited into other things. You’ll get the opportunity to do more than if you pushed it to the extreme.

I think that, you know, it’s just enough just to go to a completely different area. I think this is from one of the Jordan Peterson talks that I’ve listened to recently, apparently even dogs when they play with each other, a dominant dog will allow a non-dominant dog to win a certain amount of the time. So this idea that if you want to get invited back into the game, even if you’re way, way better than your opponent, you need to allow them to win. I think maybe it all comes back to, you know, the simple idea that Warren Buffett has that whenever you have an interaction with somebody make it a rule to leave them feeling… for them to leave the interaction feeling like they won big time, always to leave them like they won big time and it’s so hard to be strategic in life about what’s going to unfold next. But that’s a simple heuristic rule that if one starts applying it. Before I sort of hand the mic back to you, Sean, I think that it’s such a powerful idea that I am only starting to understand and explore the implications of it. I’m starting to realize the many ways in which I haven’t actually fully implemented it’s lessons in my own life and smart people around me dont understand that that’s the real game. You know, the game is not to win. How many times have you, or I seen a resume that says I played to win? And the problem with that, the ideal, the emotion expressed behind that is that, you’re trying to win every single game.

You’re actually not trying to win every single game. You’re trying to make sure that you get invited back to the series of games that are being played in life. And in order to be invited back, you may voluntarily lose quite a bit of the time because that’s how you get invited back. So for example, I voluntarily lost in the game of getting back to Switzerland this time around even though I could have pushed the rules to win because I knew that long … and that’s what actually just comes back to me. It’s what Warren buffet is saying when he’s talking about long-term greed. You know, it is actually self-interest, it is actually greedy, but it’s greedy in a way that works if you like. How did I do Sean?

The Education of A Value Investor

Sean: [00:09:11] No, I love this. Well, your book, The Education of a Value Investor, came out, back in 2014. When I first read that back, then I remember thinking, oh wait, this is all about compounding goodwill. I walked away from the book, that’s what it seems like at least. Is that how you think about things? Most of the time, I know you’re playing the infinite game, but is it about compounding goodwill?

Guy: [00:09:33]It certainly is, but just to give you a sense, Sean. The way I’ve described by writing that book is… I don’t know where I read the story, but, so the king is standing on the balcony of his estate, which overlooks a river, and he’s got a sort of cautiousness there. And he has a beautiful daughter that can be married off. And his part of the pups of the event is to figure out who his daughter gets married off to. Suddenly they see a man who is on the other side of the river. Who’s being chased by lions and he’s doing everything he can to get away from the lions. And then he has to sort of get across the river, which has got alligators in it. He somehow manages to wrestle three alligators, and gets across the river. And then he’s up on the balcony and the king says, I offer you anything in my kingdom. What would you like? Including my daughter? And the man says, I just want to know who put me next to the river in the first place. What I’m trying to say is that the process by which my book got written and every book has its own story, is that I suddenly found myself in an analogous position to that man where I had accepted a contract to write the book. And I knew that I had a delivery date and now I was just in a state of utter terror as to what I was going to write for the reader.

The only thing that I knew was that the title of the book was going to be the education of the value investor, but that could have covered any number of things. And I knew that at some point I was going to talk about lunch with  Warren Buffett, because I knew that that would be good for book sales. But I didn’t know anything else. And, suddenly I spent a few months with all these kinds of useless schema and ideas about how to teach people about investing. This is an interesting thing, this idea of when you commit to an outcome. So I had committed, I realized that come hell or high water, I’m going to deliver a manuscript and this book is coming out. And so the terror, and it really is. I mean, it’s not a terror for my life. I knew that I wasn’t going to die, but I was terrified because this was going to be my perhaps only book that I’ve written for the world and would set my reputation with the vast majority of people who would never meet me. And what was this going to be? Was it going to be a second or a third or a fourth grade book or was it going to be the best that I could do? And thankfully for me, I figured out pretty quickly that. The only thing I could really do that would deliver real value to the reader was to show up myself and give as honest an account as I possibly could of my experiences with the world.

I wasn’t at the time thinking of playing an infinite game, I was just in utter terror trying to do the best I could, trying to make it give a good account of myself if you like. It’s easy in retrospect to say, “oh yes, Sean. I had, while I was playing the infinite game, no”. I was in utter terror trying to give a good account of myself with the extraordinary help of a few people. At that point I’d already met  Warren Buffett. I’ve recently read the autobiography of Mahatma Gandhi, and I’ve read this book by David Hawkins: Power vs Force and Mohnish Pabrai is my friend. And he exemplifies this idea of sort of honesty and truthfulness and that using that as a way, complete a hundred percent honesty and truthfulness about oneself with the world to go places. So with those mentors as guideposts, I ended up by some miracle in my state of terror writing in an honest way about myself and in a certain way to your point, falling into the infinite game. And you know, I don’t know if you have children. So obviously these are all things that we want to teach our children, but I don’t think that you or I would be very effective if we sat down with our children and started saying, oh, you need to play the infinite game.

And so funnily enough, I’m holding this up. For those of you who are listening, this is a letter that I received today from my daughter. It’s hand addressed. I’m just showing it to Sean, Sarah Spire. We, my wife and I teach our children to do handwritten notes and we’ve had varying degrees of success. And it’s only now, Sean, that I realize that those handwritten notes are a way of playing the infinite game, but I didn’t realize it at the time. 

The Impact Of Handwritten Notes

Sean: [00:14:44] I’d love for you to even double click a little bit more on handwritten notes and the impact these have had on your life.

Guy: [00:14:50] Yeah. And what I would tell you now is that they’re really, … to describe handwritten notes as a shortcut for something far bigger, but for your interest, Sean, and for the listener it’s so I’m like, I’m very frustrated with myself and the world. I know I’m not making the progress that I should. And there’s a part of me, I think that there’s a part of my mind, my wife, Laurie, for the first time she accused me of being Asperger-ish. I don’t know if that’s true or not, but there’s an element to which I kind of do things without an understanding that what I’m doing is socially awkward. And so there’s three notes a day, 50 notes a week. I literally read in Robert Cialdini’s book about the salesman who was so successful and I was determined to get more successful. I knew that the strategies I’d use to date had not worked. And so I just took this one thing and I pushed it to the extremes.

There were many days … I know, I remember the office. The office was 40 West 55th Street, which was actually an apartment building just off Fifth Avenue. Like if you walk off from Fifth Avenue on 55th Street in New York city, there are kinds of apartment buildings. I’d realized that I could get more space by renting an apartment building than by renting an office. It was a two bedroom apartment and my office was in one bedroom and the living room was kind of the reception area and so many days I would not leave because I hadn’t written my three notes. I’d write, I’d scroll three notes to the most ridiculous people. I remember my friends laughing at me for it because I started developing a reputation for doing it. The handwritten note, this is really just a microcosm of a far bigger principle. I’ll just give you one example of it. At the famous lunch with Buffett, with me and Mohnish Pabrai. He stayed way longer than we ever expected him to stay. That was another way of him kind of leaving more on the table. Warren Buffett is always going to find a way if he possibly can to leave more on the table, to leave you feeling like you won way more than you ever expected to. Which is kind of what happens when I receive a handwritten note. I mean, I never expected to receive something from my daughter and there it is. And it’s like, she took the time to think of me. It took me a long while to realize that the handwritten note is just a kind of a shorthand for something far bigger. I mean, just something I was realizing recently. It was about five or four years ago that I realized there’s an organization called Entrepreneurs Organization, EO.

And at the time they didn’t have an Israel chapter, which seemed to me to be ridiculous, given that Israel is such a center for entrepreneurship. And I went to that and started that chapter sort of like committed myself to that result. And that was in a certain way. It was kind of a way of writing a thank you note to EO. If you like, EO had a huge impact on me. I’d learned so much from the organization and it was a big, thank you note to EO. It took a lot of time, energy and effort, but one can’t just stop at the thank you notes. One can actually have an enormous amount of fun finding creative ways to make people feel great that I’m alive. And that they’re the recipient in the same way that my daughter has just done it with this. I hope that she doesn’t stop. She doesn’t leave it there. She goes on to do many other things. Just another idea that actually, I would tell you though, pretty much all of my experiments in this direction have failed.

So here’s my theory, Sean. I kind of share this with interns, but none of them, I don’t think anyone has actually implemented it. It’s along the lines of write a hundred thank you notes, and you’ll get yourself a good job. A thousand, you’ll get yourself a good job, right? 10,000, and you might be able to start your own business, for a hundred thousand and you probably got a nice business, now you’re ready to go places. But this idea is very common in sales training literature, which is, you know, you need to have a thousand calls before you get to a sales result. So don’t treat calls number one to 999 as a failure, just because you didn’t get the result. Treat them as if you have to just pass through them in order to succeed. And that’s certainly true by the way of writing, which is in order to write the good stuff you have to just write a lot of garbage.

And one of the problems that I think that I have suddenly and many others do is that it’s just hard to get through all the garbage. There’s just a lot, a lot there. The way I tried to describe it to my interns is that you’re filling a bucket but the only way you can fill the bucket is with drops of water from shaking a cloth, you can’t switch on a tap. And when that bucket is full and there’s water sloshing over the sides, every time you carry it somewhere, that kind of a bucket is overflowing with goodwill. That’s when your life really takes off. But, the first thing that one has to do is just fill that bucket. And there’s a very, very long time that filling that bucket could take, could take 20 years before it’s full and it’s overflowing with goodwill. And most people give up. And, but if you can just keep going, if you could enjoy the process, the rewards at the end are really just extraordinary. And yeah, go ahead. 

Bouncing Back From Failure

Sean: [00:20:47] No, I’m just wondering about that mindset, that ability to take on these failures is that you just have that because you lived through that? I’m wondering, you just mentioned telling this to younger people. I’m wondering if those are experiences that you have to live with. You can’t just read that in a book.

Guy: [00:21:04] It’s interesting, Sean, because I think that what really pushed me to take that view of the world was to have a humongous failure. A failure that really took me down and threw me back on myself and my decision to go and work for DH Blair, this very sleazy investment bank, not dissimilar to the firm Stratton Oakmont in Wolf of Wall Street was what I described in the first chapter of my book. I was disgusted at myself and I was disgusted at the world. I had to find a new way of developing success. The approach that I’d taken, which you could maybe summarize as a young, arrogant man in a hurry. And the world appeared to me to be full of young arrogant men in a hurry who had succeeded. There’s an element to that, which is a lottery ticket. Yeah. If you have a million people of a certain age doing their very best to succeed by “raping and pillaging” or by burning their relationships, there are going to be a few who are going to stumble across a lottery ticket and succeed. And those are the ones you’re going to read about. You’re not going to read about all the ones who fail and the vast majority do fail. I’ve successfully left, but now it’s like, how do you pick up the pieces? And I think that it’s in that environment of arts of failure and having nothing much to lose that you can start trying new strategies if you like.

I was still young enough and flexible enough of mind that I was willing to just try it. What I tell you, Sean, is that one thing, is if you write thank you notes, by definition, the reward doesn’t come right away because you’re putting it in the mail and you sending it off. So there’s the expectation that if anything good comes of it, at minimum, it’s going to take two or three days for the mail to be delivered for the person to have a reaction and for it to come back. I think that when I started seeing some extraordinary results out of it, like ending up going for lunch, for dinner with  Mohnish Pabrai  and others. At that point, I think that my whole orientation to doing it changed because at that point I realized that it wasn’t any single one, but in a certain way, everyone was a mini lottery ticket that could have tremendous rewards. And we just didn’t know which one. And so I developed the sense of anticipation and excitement as I was doing that because, if you kind of want to get to a place where the investments we’re making today, they’ll reward us in 5, 10, 15 years time. Meanwhile, we’re reaping the rewards of the investments that we made 5, 10, 15 years ago, and kind of like expanding that envelope. And so I think that I’ve become more able to, and that was the beginning of me expanding that envelope, if you like…

Non-negotiables in Guy’s Life

Sean: [00:24:59] Well, I’m just curious today. I mean, it’s clear and obvious how much thought has gone into this. I love the thought of writing thank you notes. Luckily, that was something instilled in me from my parents really early on. It’s one of those things that, yeah, you never know when one of those things are gonna come back to you, but, they end up coming back to you. So I’m wondering for you today, what are some of these other non-negotiables that you tend to implement in your own life?

Guy: [00:25:30] Holding myself to a standard, if you like,  like that three notes a day, for example. So I think that there’s this strange… There’s this counter intuitive thing that happens if you have any degree of success, which is, there’s a certain amount of friction that I need to overcome now I didn’t have to overcome. Once the writing that I did for that book and authoring that I’ve done has I think being psychically and in terms of becoming a better human is the most rewarding activity that I’ve done. But it is at the same time, the most painful. 

Sean: [00:26:00] Expand on that.

Guy: [00:26:20] You know, there’s an article that I want to write for a friend of mine and I haven’t yet written it. It looks too freaking painful to write, but so I had a phone conversation with somebody who’s a life coach and he kind of said to me, “oh, I haven’t really written much. I don’t think I’m much of a writer because whenever I sit down to write it’s too painful and it switches something on in me.” And I know some people who write copiously who find it very easy to write, but I don’t think that they write particularly well. And so I developed this theory that the people who write the best are the ones who are willing to go to a painful place. And the work of writing well is extraordinarily painful, because what you’re actually doing is you’re sitting down with your notepad or computer, you’re trying to work out what you really think in a certain way. You kind of rearrange the furniture internally, and that is painful and difficult. 

And so in terms of non-negotiables that you asked me about, I think that I would be a far better person if I was to discipline myself to sit down and write 500 words a day. But I find it very hard to discipline myself to do that because it’s just extraordinarily painful. It would be a bit like, I’d be a better fit person to pass if I did hill runs every morning but boy, that is a freaking painfully difficult thing to do. I actually struggle with how I want to spend my time. I have enormous, enormous respect for the people who are willing to spend that time writing and willing to put themselves in that painful place in order to deliver something for the rest of humanity. I think that the non-negotiables… so I’m not sure that I want to do that because it’s this trade off between. I want to enjoy my days, I’m not sure … It’s an interesting question because I have a friend who writes for the Sunday Times in the UK. She reviews books and I’ve asked her and she says, yeah, it is painful, but I really liked the result. And my friend William Green, who’s just finished this extraordinary book and I already am in awe of him because I just have a very good sense of exactly how much pain it is to do what he does. And it’s just enormous. 

I guess what I’m saying is, that is quite possibly a non-negotiable that I ought to hold myself to, that I have not held myself to. I think that’s what I find myself struggling with. Right now that is too. If you have nothing and you devote yourself a hundred percent of your time to having something, to having financial security, then that is extremely laudable, not just laudable. It’s a virtue to do that. It’s important. Successful societies need people to do that. We don’t want people to be wards of the state. But if you’ve been lucky enough that through hard work and some luck you’ve achieved financial security to spend the next 20 years of your life, getting more of the same stuff when we know that more of it doesn’t actually make a contribution is kind of asinine. It’s just a dumb idea. And so I find myself in a place right now where I have financial security. And I find myself really questioning what the motivation is of all these people who seem to have utterly devoted themselves in the world of business to taking a very, very high net worth and making it even greater. And that cannot be the answer. 

And so the question of how to live life in the most meaningful way possible and holding myself to that standard, that is something that I’m still figuring out. And actually, Sean, I think has got to do with sort of making the world beautiful in your own image. So finding ways to interact with people in such a way that they leave the world or they leave the interaction feeling like you know, they’re happy that I’m in the world and they’re happy that they’re in the world. That’s challenging, but there’s a part of me that would be quite interested. So I’m very sorry that I didn’t study more mathematics at university. I was a law student rather than an economics student. So the part of me that thinks that maybe I should just go and study mathematics for a few years. Yeah,I don’t know if I answered your question. 

Sean: [00:30:45] I love where the conversations are going. It reminds me, I have a framework I at least try to live by and that’s essentially being a great ancestor. So we’re thinking about putting good things out into the world that we might never see, never reap the rewards of, but for people way past us they’re going to be able to experience that. It’s kind of like planting a tree today that’s not going to grow and bloom for a hundred years. It seems like you’re kind of operating from that. I am curious though, talking about that resistance, that pain of writing, are you familiar at all with Steven Pressfield’s work, The Art of War?

Guy: [00:31:14] The War of Art

Sean: [00:31:17] The War of Art, going towards the resistance?

Guy: [00:31:20] Yeah. Do the walk, do the walk

Work-Life Balance

Sean: [00:31:24] 100%. Yeah. I thought that might be right up your alley. I am wondering though, you kind of talk about trade-offs and living the life you’d want to live. And a lot of us have the balance of trying to figure out the balance between family, work, all of those things. I know you put tremendous thought into that. How do you balance all of those demands on your time?

Guy: [00:31:45] Yeah, it’s a great question. Just before we go there, because I think it’s such a gem that you dropped that I haven’t heard before, which is just so wonderful as you reframed the question of how to live well as to how to be an awesome, great grandparents to your great-grandchildren. That is a wonderful, wonderful reframing. And I think that I see people around me who I think that if they thought in those terms would see things and do things differently, be the person that your great-grandchildren will be proud of. Actually, you could create a whole retreat for your friends around that, exploring that question. I just want to tell you that it kind of makes me pause and makes me think about what is it with that perspective that I should do and what am I not doing?  I think that men, especially don’t realize, …I think women are just closer to their children and they do realize, but the example that we set for our children in so many ways, in so many small ways, our children know us the best they observe us the most and they see what we don’t see and the idea that we can keep any one of our behaviors hidden from our children.

So another way actually, to put the challenge is be the hero that you want your children to have, aspire to that. And actually, I can tell you that I think that there are probably clear ways that I fall short of that on my own yardstick, which is …  I realized not so long ago that I actually have a high anxiety set point. And so the desire to achieve financial security has been great. But if you really want to be a hero, if I really want to be a hero to my children, I need to be about more than just financial security. And suddenly charity begins at home, having a healthy, stable family and providing for your children is certainly a good place to start, but it shouldn’t end there. And I’d think I’m lacking in … no, lacking is the wrong word, but I think that there’s something to be explored there. And obviously it has to be consistent with who I am. I think that just coming to your question about work-life balance, it’s so dependent on who one marries and I feel that in a certain way, I’m really lucky.

So lucky that it would be hard for me to answer the question in a way that is helpful to your listeners because my wife, and the mother of our children is jealous of my time. She’s jealous of the family life that we have. And she’s tough as nails. She is not going to concede ground. So I think that there’s a huge part of me that wants to save money and make money. And she represents a very different set of values of “no, we spend some money now and we spend time with our children. We don’t seek to optimize that sort of narrow, professional vision that you have for yourself.” And I think that when you know the view that I have of good relationships both in work and in marriage is that it is absolutely fine to be married to somebody who is very, very different to you because they kind of like, … this idea that the we’re all holding on to an elephant that represents reality and we’re all blind. And some of us are holding onto the tail, some of us are holding onto the trunk, but the process by which you figure out what part of reality the other person is holding onto and you don’t deny them their reality.

You respect their reality and you try to understand where the differences are and how to stand in two different places. And then to seek not to neutralize the difference, but in a certain way to celebrate the difference and find a way to move back and forth between the two. So for example, it took a long time, probably a decade of going on holidays, where after about three or four days, I was going nuts and needed to go to work. And so now if we’re on any kind of family trip, in the last 10 years my wife will schedule days where I just go to a regional office center and plug myself in, and get stuff done. And that puts me in a far better mood. And so that’s kind of like, it’s not like we’re not going on holiday. So, finding that kind of the ability to move between those two worlds and find a dialogue between those two worlds is actually what sets the relationship up for success. It also sets your children up for success because they kind of see the stereo vision. And I actually think that’s true of teams. I’m not particularly good at managing teams, but we have a small team that helps me to run the Aquamarine Fund. When somebody comes up with something that I disagree with, the goal is to really sit with them and understand that they’re coming from a place that I don’t yet understand. It is part of that dialogue. 

They’re not wrong, they’re holding onto a piece of reality and we need to identify that piece of reality, understand in what circumstances that response or that idea is valid. I think that it’s worth saying, Sean, that I’ve asked myself questions as to… I’m in a traditional marriage.I am the bread winner and I have a career, a professional career. My wife is a homemaker and she has very much a career if you like within the home. She does an extraordinary job. I mean, just to give you one sense, I did not have a good relationship with my sister when my wife and I got married. Now I have a far better relationship with my sister and it’s because of the work that my wife has done. So she’s managed to do all sorts of really wonderful things inside our family. But I think that I don’t have much to say that’s valid in a relationship where both couples, both sides of the couple that have a professional career and are active in the home. And I think that in many ways is far more challenging, but also potentially far more rewarding and potentially far healthier for the children. If one can get there.

Sean: [00:38:39] You brought up a point a minute ago. I would love to explore a bit further. I love the analogy there of holding on to different parts of the elephant there and how people are viewing reality. How important and impactful has that been for when you’re parsing out different investment ideas, being able to kind of turn the tables and view things from a different angle. Has that been a critical component for you?

Guy: [00:39:03] Somewhere else I use this analogy and I pause because I don’t think it reflects me in a good light, … this idea of drunks and bars, the idea, the image that many people have of investors. And that kind of like what I react to and what you’re saying is that it implies that I’m this sort of brilliant guy, who’s carefully examining investment opportunities from different perspectives and taking the other person’s shoes and seeing how they see it. The way I see it… I see myself as a drunk in a bar. If I’m drunk in a bar, you want to keep the alcohol far away, you want to keep the soft drinks nice and easy to reach. And so I am approaching the investment challenge without the assumption that I’m a rational human. I’ve, in a certain way, taken on board, all of this behavioral psychology assumes I’m not a rational human. Assume I’m going to do a whole bunch of stupid stuff. And so I would tell you, Sean, that I feel like the vast majority of what I’m doing when it comes to my investment practice is another way of describing it as bowling, with when you go to the bowling alley and you’ve got the cartons up for children, I’m just constructing those cartons.

I just want to find a way I’m not trained. I’m not working on the quality of my bowling. I’m not working on my technique. I just want to go bowling. I just want all of those rails up there so that they kind of lead the ball right to where it’s going. The assumption that my bowling technique will never be any good. And so for what it’s worth, I think that that’s just the approach that has worked for me. I think there are some people who are absolutely brilliant in being able to judge risk and to time when they buy something, when it’s extraordinarily cheap to buy when others are fearful. And I’m not one of those people.

Self-Knowledge & Self-correction

Sean: [00:41:09] Well, I think the process of self-correction kind of begins with self knowledge. And so it seems like you’ve done a very good job in really understanding who you are and aligning who you are with the strategies, whether they be investing or your family life, that best work for the totality of all of that. I think partially that might be where the genius lies.

Guy: [00:41:32] Yeah. This idea of “know yourself, be true”. It’s this diving into oneself and, and kind of really coming to terms with one’s own weaknesses and one’s own lack of strength. And I think that is something that I would tell you is, I’ll tell you the process by which it happened. So there’s self-introspection, I’m a huge believer in self-introspection. Introspection in any way, shape or form,… I think there’s been an extraordinary strength in my marriage. There’ve been moments when my wife and I have not been able to agree on anything. Other than that, we were both going to go to a therapist and discuss it or to marital therapists and discuss it. That was it. I mean, we were at our wit’s end. We didn’t even want to look at each other, but we both agreed that we would go in and examine ourselves with a therapist and not all the therapists were good. I remember showing up to one therapist in Zurich. The funny thing, Sean, that united us, my wife and I had been fighting for like the previous two weeks. And we’re really very unhappy with each other. At that particular moment we came out of the therapy session and she said, “he was really bad.” I’m like, yeah, that was terrible.”

Sean: [00:42:54] You can agree on the stupidity there.

Guy: [00:42:55] Yeah, exactly. But I will just tell you the story because it’s an interesting story. So I’m spending a Sunday in Locust Valley on Long island and it is the weekend that Princess Diana has tragically died. And I tell the mother of this friend isn’t this so tragic? Isn’t this so awful? I’m so sad. And the mother says, “that woman had it coming to her, she was passive aggressive,” and I’d never heard the word passive aggressive before. And she was narcissistic and there were all sorts of things that were incongruent about her. I’d never heard somebody talk about somebody like this. I said, “Where does this come from? Where does this perspective come from?” And she said, “well, I’m a therapist. And I can tell you that woman got an awful lot going on that doesn’t meet the untrained eye, but if you trained a little bit like me.” I said, “Wow, that’s amazing. Could you give me a book to read?” It’s terrible because I don’t remember the name of the book, but it was an introduction to young people in therapy. It was an  introduction to the young people in therapy through the story of Tristan and Isolde, which is a kind of a fairy tale myth of a woman who goes off to Ireland. I don’t even remember the story, but that triggered in me.

So Sean, I started reading that. I read that introduction to young people in therapy. And then I started having dreams and I was one of these people who never had dreams. And for example, one of my dreams was, I’m with my family, I’m living in New York City and I’m with my family around a wooden table and I’m shouting at my family. And so the husband of this woman is also a therapist and he and I are tennis partners. And I asked him about that dream and he said, well, the interpretation is, you’re probably angry with your family and the wood on the table. The wooden tree is kind of saying, it’s okay to express that anger. You probably ought to express it, which I think was pretty close. But what began was this process of introspection and shining a light on what’s going on internally. I found myself a young psychotherapist, whom I saw for a period of about 10 years. I think that process of becoming introspective started there and has just changed an enormous amount in me. What I would say is that, even better than psychotherapy is writing, but writing is this very powerful way. You have to examine your insights before you write anything properly. Once you start on that journey, if you’re honest about that journey, you can’t really stop. And in some sense, the book is an emanation of that journey, if you like.

Different Type Of Writing

Sean: [00:45:52] Guy you were mentioning before, the pain for you of writing, is this inner journey, self-reflection writing different from your style and type of writing that you do for a book?

Guy: [00:46:06] It’s the only style that I know. It’s not the only style that one could apply. There’s a journalist in the UK. She writes for the Guardian newspaper. Her name is Marina, Hyde . Marina writes these are silly, brilliant take down pieces of British politicians and she makes wicked fun, wicked fun. And that is just it. But, Marina Hyde, what she does is brilliant. Absolutely brilliant, but she’s not there at all. Her personality, who she is as a person, you don’t know. She’s kind of like in a certain way, invisible and it’s utterly freaking brilliant and maybe one day I’d get to meet her. And by the way, I don’t share the political opinions with her probably in many circumstances, but what she does is brilliant. I don’t know how to do that. What I know how to do in a certain way is to show up full throated as who I am, here I am before you type of deal. And here I am examining my end trials. Interestingly enough, when William Green was writing Richer, Wiser, Happier, I urged William to put more of himself into the book than he did. He’s not  Marina Hyde. He doesn’t hide, but, in a certain way, he’s not, full-throated there. He’s the eyes and ears. He’s your eyes and ears as we observe all these other people, but there’s a part of William that remains hidden.

I actually think Sean, that I would have preferred if I could have gotten away with it, I would have preferred to leave more of myself hidden than I did leave. Because exposing yourself to the world is painful. But it was the only way I knew as a civilian writer or if you’d like, a non-professional writer to write something worthwhile that might stand the test of time. And that might actually be a positive contribution to the world of writing. So it’s the only way I know how to write. And it happened to me, funnily enough, writing this year’s annual report letter which was the most painful lash I’ve ever written. And I basically told the readers, I stand here before you, as the guy you’re compensating to manage your money. And you expected me to have been in the right stocks and to have predicted the crisis and to have known how, and I did none of those things. I’m not capable of doing those things, but here are the two or three things that make me optimistic that we’re going to come out okay in the end with a few things. What I started off doing is, you want to start off … and we’ve all seen investor letters like this. It’s like, well, you know, here’s what I did and I did it right. And I saw this coming and therefore I moved the portfolio into, that’s not my experience of it. That’s not how it works for me, but honesty. So getting to that honesty for me is not something that happens naturally. And I think that it’s a muscle that can be strengthened is the good news. And you know, actually I got he’s so great. James Clear, he wrote something. I was reading it last night. Have you interviewed him?

Sean: [00:49:38] No, I have not. I’m a huge fan of James, his work. He hasn’t been on the show.

Guy: [00:49:42] Yeah. James, you need to interview with Sean Delaney. I just want you to know that, but he says every action that we take is a vote for who we want to be in the future. So when you get up and exercise, it’s not that that’s going to turn you into a muscle man or the fittest triathlete, but it’s a vote for who you want to become. And every time you get up and you do that, you’ve cast another vote in that direction. And so the work of being honest with the world, each time you do it, is a vote for having that honesty and the muscle gets stronger. And so I think that becomes easier to do. And I think that actually a muscle that I would really like to strengthen in myself is one in which I just write something every day, because I think that there are probably some things I’d be sad if I had not shared with the world, that would be valuable, if you like, but, and I’ve not been very good at casting those votes, Sean.

Sean: [00:50:39] Have you tried just speaking your thoughts?

Guy: [00:50:43] Yeah. That actually works really well. I did a few, so my little podcast was my lockdown project, and then one of the things that I did was in addition to interviews, I just, for example, took an email to my readers that I sent out and read it out. Or I read out my annual letter to investors, or I just shared some thoughts and put them up on SoundCloud and yeah, so that’s fine, that’s good. But, at the end of the day, if you really want to decide what you think about something you have to sit down and work through it in a text. And that bloody hard.

Sean: [00:51:29] Oh, it’s very hard. In the same way I’ve got to distill my thinking and it gets clearer and clearer and clearer. The further you go on it, the more you write. It’s a painful process though. It’s not easy.

David Burell

Guy: [00:51:38] And there’s a guy that I really admire a lot and it really gets to me, Sean, that the people I admire increasingly are half my age. That’s David Burell. I don’t know if you’ve come across David Burell.

Sean: [00:51:50] Yeah. I don’t know David personally, I’ve seen his work. He’s got some great pieces he’s written online.

Guy: [00:51:54] Yeah. And, he’s taught me a lot about writing. It’s just amazing. And so why does he come up for me? Because he’s inspired me to write more actually. And I think every now and then I ought to do his course. It seems like the people who do this course do explore extraordinarily well. Yeah. I don’t know why he came up, but he did. 

Sean: [00:52:15] I think I’m pretty sure the course is … I’ve not taken it. The Rite of Passage by David Burell.. I’m pretty sure it’s the course. It seems like a lot of people have gotten profound benefits from it. Yeah.

Collecting Different Thinkers, Ideas, And Thoughts 

I can’t help, but notice the amount of different people, ideas, thoughts that you’ve pulled from so far during our conversation here. And I’m wondering what this looks like for you in terms of just collecting different thinkers, ideas, thoughts from varying and vastly different domains. Is that something you actively do or do you just happen to randomly come across a few of these interesting things?

Guy: [00:52:49] I think that it’s a great question. My mind jumps to things all the time, some people call it ADHD. So one of the things I’ve learned in conversation, Sean, is to notice when my mind is jumping and to give the other person fair warning that my mind is about to jump. Would they like to make that jump with me? So I have a rule that when I notice a book, I kind of put it into my Amazon list and buy it pretty, pretty quick. A book should always be bought. Otherwise it’s sitting all lonely there in the Amazon warehouse, we need to give it a nice home. It’s kind of an orphan book out there, your eyes have come across it, take the poor thing home. Don’t leave it there. And this kind of like something that I had in Lincoln Square synagogue in New York, 20 years ago, which was this rabbi talking, I don’t know… But if you know, the book always gets bought, the toy, the luxury good, the whatever it is, but you always buy the book. Don’t worry about spending money on books. It will always come back to you. I’m very impressed with Umberto Eco who died recently, but he had this idea of the anti library. So people would laugh at me and say, you’ve got 70 books. Have you read them all? And I say, no, of course I haven’t, I’ve read less than 5% of them, but that’s the point. The point is I don’t need to have the books I’ve read. I’ve read those. You want to have the books that you haven’t read. So I think part of that is part of what you’re picking up on is just to be extraordinarily liberal with the acquisition of books and to use one’s library as a kind of a serendipity machine.

I always find it very interesting when you know, what is it that suddenly catches my eye about a book that makes me decide to read that book right now and not another book. It was just kind of, I want books around me and I want to be able to move them. So I move them. And actually we tried an experiment in my office in Zurich, sort of like ordering the books in subject. Actually, I’m coming to the conclusion, I don’t want them ordered by subject. I just want them ordered the way I want them ordered. And I want them moved around when I want them moved around. And on some level, it doesn’t really matter about finding them because if you really need a copy of the book again, you can go and get it on Amazon. So no problem, if you can’t find the particular book. I would tell you that… I think that idea of it’s a bit like being a hoard. You know how that might have something for me, I’ll go and buy it. And keep it at home. We’ll keep it around. And then we’ll see if serendipity results in me.

Another analogy that I’ve had around books is that your library is a bit like a cocktail party. So you know, there’s a, if you’ve got a thousand books in your library, there are a thousand people at your cocktail party. Some you don’t want to talk to, you don’t want to take every single person you meet at the cocktail party home with you to have like an eight hour conversation. There are some people that just want to have a five minute conversation. They’re not the right person for you. That’s the book that you flip through and put back on the shelf. And so what fun to have that cocktail party of books available to you. But, what I would say is that I think that what I’ve done is I’ve sort of found out about the world in a very haphazard way. And I wonder Sean, if I had had a little bit more, if I was a little bit more structured about it, either because of my own impetus or with the help of others that maybe I would’ve gone a lot farther down particular lines of inquiry and thought and interest. So I think that in a certain way I’m just a beginner of playing in the sandpit and maybe with a little bit more structure and knowledge, I’d be building some nice tall cathedral, but because I’m a beginner I’m sitting in the sandpit. 

A Structured Way of Capturing Thoughts And Ideas

Sean: [00:57:08] I’m very much the same way. I have the same policy around books. If I see it and I’m interested, if I hear it in a talk, I’m just going to order it. But I have tried to get more structured in terms of how I distill down what I’ve learned, but I also think that there’s a point there around the serendipity. If you weren’t being so open to different ideas and picking up different pieces here and there, maybe some of the serendipity and the interconnectedness of it all might not come to fruition for you.

Guy: [00:57:33] So, yeah. And it’s funny. I’m looking back because I think here’s an interesting example. So Brett Weinstein, or is it Eric Weinstein? In one of his podcasts, he reads an essay by a guy called Arthur Koestler, the title of the essay is We, The Screamers. Arthur Koestler, is a German-Jewish guy who’s living in the UK is trying to call attention to the Holocaust and nobody’s paying attention. You can go on YouTube and you can hear  Eric Weinstein reading it. It was a fascinating essay for me. And so then I went and bought every single one of the Arthur Koestler books. So they’re just pretty much all of them are just here and I don’t know what I’m going to do with them. I’ll flip through them at some point, but I’m kind of curious to see … It’s amazing how many books get published that we … If you walk into a Barnes & Noble or a Waterstones, it’s such a small subset of the total books that one could read that are actually available. But then the other thing that I’ve started doing, and it sounds like you’re doing something similar is … I think I read somewhere that you are active … maybe it wasn’t you, but I use Evernote and I’m blanking on his name. I feel I’m not remembering. It’s somebody who’s done … It’s this idea of “the capture habits”. So get quick and efficient at capturing thoughts when they arise and capturing ideas when they arise. And so I changed drastically the way I take notes about the world about a year ago. And I feel like I don’t know where it’s going to go, but it’s, I feel like it’s going somewhere good. The concept of … so here’s the guy if you’ve not read him, his name’s Arthur or Paul Sonke and it’s about the thought capture technique. And I hope you don’t mind. I’m looking it up now, please right now.

Sean: [00:59:37] I’m always intrigued by people’s different processes. And then anytime you come across someone who just seems to be so far better than yours and what you can learn from that. So believe me, I’m always open and so are the listeners.

Guy: [00:59:49] Sonke Ahrens  is the guy. The study is of a professor who was a professor at a German university, who, again, his name just escapes me. He had a system of three by five cards on which he’d write all sorts of notes. He had like 80 or 90, 90,000 of these notes on three by five cards. And he kind of called it his thinking partner and he called it his serendipity machine. And there are people who’ve picked up on this. So this guy Paul Sonke is his name, no, sorry. Sonke Ahrens has written about this professor and his system and how the system can be applied today. And so. Another place, by the way, that kind of applies some of those techniques … It’s terrible, I’m having these brain freezes, I don’t know what you’re going to do with them. You’re going to have to maybe cut some of this because it’s so useless. So Roam research, I don’t know if you’ve looked at Roam research as a note taking tool.

Sean: [01:01:03] I’ve never used Roam, but I know a lot of people do.

Guy: [01:01:07] Yeah. If we forget about that technology, because the thought capture system is just pen and paper, but, I think that all of them are trying to find ways to work in conjunction with the way our brains work. And there are specific things that we can do to improve. Our ability to think clearly about the world and what are the places where it starts is this idea of the capture habit. So when you have a thought, wherever it is in the shower, write it down real quick, the idea that the thoughts are going to stick around, we all know what happens. It just floats into thin air and then disappears. Capturing thoughts is a bit like capturing butterflies, you’ve got to grab them and preserve them while you still can. And then later on you can kind of take them out and review them and new things will come out of your thoughts as you review them. So I think that there’s a kind of a similarity between those systems of capturing thinking and, and developing one’s thinking and having serendipity work and the library. Especially now that so much more of what we read is online. On the Kindle, we need to find ways to capture that.

So just for your fun, I don’t know if this is, and I’m fine if we put this up on YouTube, but I was reading this book by Ivy Loeb, Extraterrestrial. It’s a terrible thing, I dog-ear the pages and then underline a few things. I think that’s already smart, cause those are textile tactile ways of making the notes yours. And then I have endless supply. I mean, I just happen to have them here. So this is one of my notebooks that you can, I don’t know. Let’s see. Yeah. I’ll just turn the page, and I stick stuff in. 

Sean: [01:03:09] You have pictures cut out as well.

Guy: [01:03:11] Right. Whatever inspires me because you kind of want to make the pages yours. And what we’ve learned is. In the same way that the guy who built memory palaces and there’s a fee, there’s a famous book about it, the way you make the thoughts yours. And the idea is that you try and find as many different mental pathways to connect them up. And so the written word is one, but pictures is another. And images, you name it, anything that it takes. I started using these notebooks. Here’s another one that I’ll just flip through. Can you see it? Let’s see that. Let’s see. This just does everything there and actually what I do afterwards, funnily enough is… this one is an old one, it doesn’t have it, but currently this one does. So they get names. This is number seven, and I create an index. I create the index after I’ve written it, and the index is often not on the first page. So the index here is on page 13 and I’ll kind of like to create my own index for each of these books. I don’t know where that’s going, but it’s certainly been an enormous amount of fun and makes me feel better to do it. I think that when we put our thoughts onto a page, however incoherent and unformed, there’s a sense in which we can relax. There’s a kind of relief because the thoughts, we’re no longer exerting mental energy to hold on to. They’ve been captured. So now we can just relax and let it go, you know? Oh, absolutely.

Sean: [01:04:51] Absolutely. Yeah. I have multiple journals similar to you. And then even on my phone, I have the notes tab and I have certain things just titled thoughts. And the second it comes into my mind, I just have to get it down. And one of my favorite things to actually do is I’ve got a lot of different things, as you can tell. But one of them is I just keep a Google doc and it’s weekly thoughts and new learnings. And one of my favorite things to do is to go back in and reread those time and again. It’s funny how you see these ideas you captured months, even years before in a completely new light.

Guy: [01:05:23] The biggest difficulty I have, Sean, is to be consistent in doing it. And I think that I go through phases where I’m not consistent. And actually, I would tell you that one of the great benefits for me of being in a structured environment of the great benefits for me of being at university was that the environment forced me to be structured about those things. And one of the reasons why it was beneficial for me to move to Zurich is that I could structure my life in that environment far better. And now I am spending quite a bit of time in London. I’ve been kind of stuck here because of the quarantine rules, but also our children are at school here. We have a second home now here and in that new home, I still haven’t developed the habits. The habits are there for the old home, but they’re not there for the new home. And so I kind of have to reconstruct or construct a new, the habits that will work for me in this home. 

For example, in Zurich one of the things that works for me is, and this I think is straight from James Clear, is get up and put on exercise clothes because that increases the probability that I’ll do some form of exercise by an enormous amount and for various reasons, I don’t do that. And I haven’t yet found a comfortable way to do it at the house, it is just set up differently. One of the most difficult things that I have is to come to the computer, which is where I can write the notes most effectively. It’s also a place for social media and email and YouTube. And so how do I structure it, such that I go to the notes fast and the email YouTube, all those other things later. I haven’t figured that out yet.

Having Rules Vs Making Decisions

Sean: [01:07:05] Yeah. It’s difficult for sure. One of the frameworks I enjoy is around having rules instead of having to make decisions. So every day you have a rule, you sit down when you’re finishing your workday and you write down your thoughts, your ideas. I found that when I have rules, it’s way easier than the end of the day or beginning of the day when I’m extremely tired and I’m trying to make a decision, “Hey, I’m going to go do this”. And I just know how flawed I am that most of the time, I don’t follow through with that, but if I have a rule around it it seems to be easier.

Guy: [01:07:31] And funnily enough, that we’re just going back to the thank you notes thing. That’s what, the rule that I had with the thank you notes. And it was, don’t leave the office without having written three thank you notes. And I think that rule was the right thing for me at the time, but the rules can change. You know? Actually it’s an interesting study to ask, well, you could already have a limited number of rules for yourself. What are you going to choose? Because for somebody else, it would be a day that I don’t make money as a bad day. And I have to kind of like do over until I make money, which may be okay if you’re struggling to make ends meet, for example. So what are those rules? And I think that probably for me, it’s around writing, although I hate to admit it.

Sean: [01:08:18] No. I’m intrigued by all of this. And it’s funny, we were kind of talking about ideas, catching them, like butterflies. I’ve realized that myself, my inner journey when there’s inner tension, stress, things like that, my ideas aren’t flowing. And so I can actually go back in and I can see points where there’s a week and there’s barely any new ideas being generated. And I realized, Hey, I’ve got to address something else that’s prohibiting and blocking that idea generation process. I found that within myself.

Guy: [01:08:45] That’s really interesting. And what are those kinds of things that you’ve had to address? Sean? If I may be so bold as to ask you a couple of questions.

Sean: [01:08:52] Yeah, absolutely. No. I had one in the last two weeks in terms of one of the businesses I founded and operate. We had someone really important leave that really put a strain on the business. And so I look at my past two weeks, I went through my weekly learnings and thoughts and I had a 10 day gap there where I didn’t even put anything down. I just had too much. I was trying to figure out what I was wrestling with. And like, to me, I’m like, whoa, like Sean, you’re not operating from your best self. So it’s kind of like, how do you eliminate some of those stress points? So that, and then once I did all of a sudden, it was like, all right, ideas are starting to flow. And those ideas also help solve the problem I’m dealing with. So I know that’s kind of a long-winded way of some of the things I deal with and how I think them through. 

Guy: [01:09:30] No, that’s true. It’s really interesting because if we go to Jerry Seinfeld for a second, I mean, what he’s famous for is this idea of chaining days off writings. How many days in a row can you get off having written something and that in a certain way is a rule. It seems like he spent quite a bit of his life living by that rule. By the time I get to the end of the day, I’m going to have written some material, you know. And I remember when I was writing the book, how many times I’d sit down with the rule of 500 words a day and I’d literally start writing, this is garbage, this is garbage. I can’t write anything. I’m so useless. Three out of five times I’d start like that. And then suddenly something would come up and then there would be something good there that I would continue to write with.

Sean: [01:10:23] You got to get those bad ideas out before the good ones come in. I even know you wrote about this in your book. You’ve got to talk about the old Sherlock Holmes analogy. The mind is like an attic filled with old furniture. You got it, the old furniture out before the new ideas, the new furniture can come in. It’s just a concept I love.

Guy: [01:10:40] But Sean, the old furniture is so comfortable and it’s so familiar and it’s so nice and it’s so painful to throw it out. Why would I want to do that? I just think it’s an interesting thing now, so I started about three years ago with an email newsletter. I thought this was a good thing. And I started using a piece of software called Getrevue, which has now been bought by Twitter. And the first sort of email, I was really amazed because I discovered that if I put an assortment of things together, people really were interested in what was going through my mind. And so the email list. And now sub-stack has come along and there are some people who write for sub-stack, which is like, they’re really good writers. And they write some amazing newsletters. And I just think if my rule is I’m not going to send something to people’s email inbox, unless there’s something new and possibly hopefully likely worthy of their time.

And so now I’m just like psyched up by all these amazing writers as on sub stack, because like why on earth would anybody want to receive an email newsletter from me? And I’ve seen how some people start with high hopes for a newsletter, but they end up recycling what’s already out there. I know that I don’t want to go down that path. So what am I trying to say? It’s not just that writing is painful, it is daunting for me. It’s daunting. When I write something, I’m basically saying to somebody who might spend the same time reading one of Paul Graham’s essays, and I’m saying to them, no, read this, you know, this is worth your time.

Guy’s Worthwhile Books 

Sean: [01:12:28] Well, speaking of worthy of time, I know we’ve kind of talked about some of the books behind you. What do you deem all of your experience? What would you say would be worthy of your time to go back to again? Are there things that come to mind for you?

Guy: [01:12:41] In terms of reading? 

Sean: [01:12:43] Yeah, we can stick to or there’s something else that you’re like, “Hey, I listened to this. This was unbelievable.”

Guy: [01:12:49] A friend of mine is professor of mathematics at Zurich university and he was, I think it may be an essay by somebody, the unusual effectiveness of mathematics in explaining the universe. And I don’t have a reference. I haven’t read the essay myself, but the Unreasonable Effectiveness of Mathematics. So mathematics has been unreasonably effective at explaining so much of what goes on. I mean, so many you know, if you can like the Stokes-Navier equations, the equation for gravity, the equation for the speed of light you know, quantum mechanics, the mathematics behind quantum mechanics is not trivial, but it actually explains what is going on a hundred percent. That is extraordinary. So mathematics is really an amazing subject, an amazing subject. And I think that I was exposed to the same mathematical thinking. Any graduate student of economics and of a high school in the UK would have, but I actually feel like there’s an awful lot that’s missing there that I’d like to go back to. I started reading about complex analysis and I pretty quickly realized that I needed to go back and do a basic calculus course. And then for some reason I saw the book that I was reading took me one step back. And I’m now reading up on set theory. The ideas behind set theory on the one hand are so simple, but on the other hand are really very powerful thinking tools.

And I actually think that I would be more capable of thinking clearly about the world. And I’m talking about the very practical aspects of the world that we deal with every day, if I had done more mathematics. And so I actually think that going back and studying more mathematics is something that I want to go back to if you like. There’s a couple of video YouTube channels, which do a really good job of making anybody who watches them excited about mathematics. The one is called 3Blue1Brown, three brown, one blue, or one blue, three brown. Forgive me. I ought to have the name right. The other is Numberphile, those two video channels will give anyone who watches them belief and enthusiasm for mathematics. But I think that neither of them will replace what happens if you do a proper undergraduate course and you work, go through what problems and you try and improve things and you try and solve things. And it was like going back to stuff. I think that’s something that I would certainly urge anybody to do. Well, I urge myself. My future self I think will be grateful to me for having done more of that. The only question is how disciplined I’m about doing it. I would tell you that in the last, so it sounds like you’re asking about kind of like what reading list for listeners. 

Sean: [01:16:05] Believe me, we all love reading lists, so yeah. To give a few recommendations, we’ll take them.

Guy: [01:16:12] So I decided that I didn’t want to die, not having read some of the great classics of world literature. And a few years ago I decided this and there were a number of books. I felt like I ought to have read and I had not read. And I tried two or three times to read War and Peace and it failed each time. And then on a trip to Russia, the one family trip that we did to Russia, we visited Tolstoy’s birthplace, Yasnaya Polyana. It’s about an hour or two’s drive south of Moscow. I can send you a photograph if you asked me for it, of me and the family there. It’s not the main house on the estate because in typical Russian fashion, Tolstoy lost the main house in drunken gambling with the friend where he gambled the house. And basically that house was no longer his. So he was living in one of the less important houses on the estate, which is just hilarious, which is where he wrote  War and Peace. So I read  War and Peace. I needed like a good 10 day straight at like a hundred pages a day.

I read it. We took a trip to the Antarctic as a family, and I had planned for the crossing of the Drake passage three days to and three days back. I would be reading  War and Peace and I pretty much finished it on the way back. That book, because what happens, Sean is that first of all, the book is set in a very real period of history. It’s set during the time before, during and after the Napoleonic invasion of Russia. And so there are characters and events that are real, real events. So he describes, for example, the Battle of Borodino, which was an actual battle that happened between the Russians and the French. He describes the Battle of Austerlitz, which is a real historical event. At the same time, he traces the lives of these personalities through these vast swaths of history. And over the course of the book, these people kind of become your friends. You kind of get to know them really, really well. And you get to see how their lives are intertwined with history and how their characters intertwine with the other characters. But also how they intertwined with history and how there are things that they can, and can’t avoid based on, sometimes the events are too big for them, the events kind of overwhelmed, but sometimes they’re bigger than the events.

So long story short, I feel like I wish I’d read that 20 or 30 years ago because I think I’d have had more wisdom about many other things just gives a perspective that … I really enjoyed it. And so another book in this sort of project of reading, some of the world’s great classics, so I just recently re-read the Magic Mountain by Thomas Mann, who’s this sort of Nobel prize winning German author. To read that book, the whole freaking book, Sean, takes place in a hotel, not far away from where we have a ski home. So it takes place in a hotel in Davos called the Schatzalp Hotel, all the action, every single bit of it,  like two scenes. And seven years that this guy stays in this hotel, but in a certain way, the hotel is kind of a microcosm of the world. And so to read the book is to make yourself into European. You become more European, and experience a kind of an aspect of European malaise that anybody who’s spent any time in the US kind of despises.

So it was a combination of becoming more of what I believe I am or a part of what I believe I am, but at the same time, learning about some really extraordinary and interesting characters in the book who represent different approaches to life from the world. And so part of this, Sean, is me… so Charlie Munger… When you have a hero, I don’t think that the person is a real hero for you. At some point you don’t kind of hate them for what they’ve done and hate them because it’s like, you can never touch them. On some level, if the person is just your hero and there, they bask in your adulation, I don’t know. There’s something, not that it doesn’t entirely sit there. Yeah, because there has to be a point where you say this person’s my hero, but I can touch what they’ve achieved and therefore I’m annoyed. Because there’s so much better than me at whatever it is. And of course the answer to that is always, how do you beat Bobby Fischer at chess playing anything but chess?

So the answer, that’s the point at which you have to say, well, the hero has served me, but this feeling, this emotion means that I now have to differentiate myself from them and become the best version of myself rather than trying to become who they are. So a part, an aspect of Charlie Munger’s personality, that’s kind of rubbed me the wrong way is that he says that he doesn’t read fiction. And I took away from that, my response was dammit. There is an enormous benefit to reading fiction. And I don’t agree with you Charlie Munger, that fiction’s not worth reading. And so it was kind of like me deciding to become the best version of Guy Spier, who does read fiction. And I would just tell you briefly. I don’t know, this kind of goes way back to, in the part of our conversation, we were talking about introspection, but I just think that it’s kind of like a value bomb. The guy, Entrepreneurial on Fire,  John Lee Dumas calls it a value bomb. Emotions are a call to action.

Emotions are clues as to decisions that we have to make and things that we have to do. And, but the initial reaction to the emotion that we feel is often not the one the action that we need to take. So, yet again, an example of me sort of like wanting to pull away from Warren and Charlie, is that Warren and Charlie have this line that they’ve used a number of times at the boat show annual meeting where they say envy is the worst of the seven deadly sins because you know, at least when, when you engage in envy, there’s no enjoyment. At least, when you engage in lust, greed, at least there’s enjoyment, whereas envy there’s no enjoyment. Envy I think is perhaps one of the most useful of emotions because envy is … so if we’re angry, it’s a sign that I’ve boundaries have been violated, and we have to lash out. Well, we shouldn’t lash out. If our boundaries have been violated, the right thing to do is to go into a careful, thoughtful state, figure out what boundaries have been violated. And what is the action I need to take to reset this. Sadness is probably an indication that we need to seek comfort. 

So what is envy? Envy is one of the most underrated emotions because it is a signal … you don’t feel envy for somebody. I don’t feel envious of somebody who’s achieved something that I’m not capable of achieving. I don’t feel envious of who’s the guy who ran the a hundred meter sprint and the fastest way possible. 

Sean: [01:23:05] Usain Bolt.

Guy: [01:23:12]Yeah. I’m not envious of Usain Bolt, but we feel envy when there’s some part of us when we know that we actually could in some way be similar to that person, but we haven’t achieved it. And so one of the unproductive responses to envy is to be spiteful towards somebody, but to say, “wow, I’m envious of that person.” I need to go and examine my own life and see what changes I need to make and what things I need to try and do. Because I think that once you get going on your own path and in dealing with that envy, you no longer feel envy, because you’re the man in the arena now, and you’re out there figuring out your own future.

So why did that come up for me? Because I think a very unproductive response to my kind of Charlie Munger rubbing me the wrong way would have been to sort of say, well, he doesn’t know everything, and a productive response is to say, well, no, I’m going to actually prove him wrong for myself by reading some great works of literature and getting something out of them. In spite of the fact that he doesn’t think that that’s a good idea. Well, he doesn’t read it, it’s not worth it for him to do. So that came up for me. I have no idea why it came up, but I hand the mic back to you to see where you take the conversation next.

Sean: [01:25:33]  I love the framework, all of your conversations. It almost seems like shiny new lights on different types of ideas and thinking, which is what I love. We’re going to put a bow on round one here, but you’re so good at pulling and extracting wisdom. So I would love to know if you were going to spend the evening having a conversation like this, just talking to anyone dead or alive, just not a family member or friend. Who would you love to sit down with?

Guy: [01:25:58] I would love to sit down with Charlie Munger. I think that he’s got an extraordinary mind. At the time that Bill Ackman was investing in Valiant and he was talking about Valiant being this extraordinary company, and it turned out to be kind of a fraud. Charlie Munger was very clear that he thought very little of the company, and I want to say, how did he do that? Because he was accessing the same materials that  Bill Ackman was accessing, but he saw something that  Bill Ackman did not see. And  Bill Ackman is no dummy. I think that if I could get to spend time with Charlie Munger I would learn an enormous amount for him in that regard. But I think that in terms of heroes, just for the listeners, Sean did not say that he was going to ask me this question, so I didn’t get the chance to think about it.

Sean:[01:27:03] You’re quick on your feet, Guy.

Nelson Mandela

Guy: [01:27:10] I’ll tell you a story about Nelson Mandela, that for me has gotten a lot of applications for all of us. That was really interesting for me. So, first of all, you don’t have to visit Robben island, but it helps to visit Robben island and see where he spends those 20 or so years of his life. And to understand that he spent a good few years, I don’t know how long it took in a state of anger, anger at the system that had imprisoned him. But to understand the process by which he eventually stopped being angry and how he stopped being angry. So, the man that emerged from prison to become the President of South Africa had conquered his anger. He’d done an inward journey, he’d truly stopped willing ill on his imprisoners, on the system and the people who had imprisoned Nelson Mandela and was imposing this autonomously unjust system on the country. How did he do that? Is something that, a story that I don’t think has been well told even in his autobiography, I don’t think it’s a well-told story.

I would love to learn how he did that. And I could imagine myself sitting somewhere around an open fire pit talking to him. I think that would be great. But here’s something else, and I think that his autobiography doesn’t capture it. None of his biography captured it, at least not to the extent that I’ve been able to see. So when he was in prison, Sean, he started developing a correspondence with songwriters and it is utterly brilliant. He’s figured out that if he can encourage songwriters to write songs of resistance to apartheid, and if he can provide encouragement and moral support, which he did do, and there’s a wonderful movie talking about sort of like stuff to look at. So a revolution in Four-part Harmony is a musical history of the of South Africa to the end of apartheid. It has some of these musicians talking about their relationship to Nelson Mandela and how he would write to them and encourage them to write certain kinds of songs and where you’d get … What you had was a situation in South Africa, where you had African South Africans working in white people’s homes, singing songs of resistance that the white people didn’t understand.

And they were quietly resisting the injustice of the apartheid system with those people, not knowing it, singing songs that had been. So that, for me, shows an extraordinary mind of somebody who is in prison and he’s figured out a way to empower change far away from his prison cell. And to get societal change. And I think that somebody who’s capable of thinking in terms of that kind of deep strategy…  And if we go back to the act of writing thank you notes, or when you expand the envelope, it goes from thank you notes to maybe founding entrepreneurs, organizations or something else. And there’s a guy who’s sitting in prison encouraging songwriters to write songs for some unknown future that he has no idea will ever happen. He may have spent the rest of his life in prison, or if he’d have been a worse regime, he might’ve been executed. And so what is the mind that does that? I think that he’s somebody that I would have very much enjoyed talking to.

Sean: [01:30:50] This is why I love so much exploring your thinking. Oh, we always walk away with just unlimited amounts of new wisdom here. So I appreciate this so much. I hope this is only around one which turns out.

Gift Of Listening

Guy: [01:31:03] Sean. I’m happy to talk to you as often as you like. Actually for the listeners, what I would tell you is, and this is really special with you, Sean. So one of my investors actually, I had a call with her recently and she’s got a meditation practice and she’s also got a listening practice. And so listening well is a form of meditation and it’s a form of loving kindness to other humans. And it’s kind of a gift. And I would tell you that Sean, you’re an extraordinary listener. It takes a very special quality that I’m really curious to know where you got it from to be able to create the space, the mental space for somebody to express ideas, to ask them questions, and then to let them go. I just want to tell you that it makes me feel like I’m talking to that investor of mine. You’re extraordinarily good. Just want you to know that. Thank you for doing it, but also maybe you want to share with the listener. How did you learn to do that?

Sean: [01:32:09] Well, that’s an incredibly kind of one of those types of moments where you’re kind of lost for words, how to respond when someone you respect so much says something so kind. So that’s to me…  I don’t even know how to follow that up, but I’m not sure to be honest with you. It’s kind of one of those maybe subconscious type things I’m not even fully aware of. I do. I am incredibly lucky in terms of the parents I have, the values, the lessons they taught me. I have to assume a lot of it’s come from there. And then just honestly, from curiosity I could just ask you one question here, you talk for hours and I would walk away. Ah, so much better off than if I tried to interject too much. So I don’t know. I really don’t have a good answer for you, but I’ll tell you one thing. I appreciate the hell out of that. That means a lot.

Guy: [01:32:50] Well, it’s actually on my agenda to learn to be a better listener and my children catch me interrupting so often and it’s a really awful habit. It’s not a very nice habit. And I think the good news is that you can become better. So there are many things we maybe can’t become better at, but we can all become better listeners. The reason why it’s fun and this conversation is we’re talking about finding ways to play the infinite game. One of the ways we play the infinite game is in every interaction we have with people, we give them the feeling that they won in the interaction. They came away with more than they had to put it in. And I think that what is so beautiful about this idea of giving the gift of listening is that it’s free to give. So I get students and people well early in their careers. And I kind of say, look, you want to have these interactions with people where they come away feeling like you’re a positive thing in their lives and their answers, but I got nothing. I got nothing to give them. I don’t have knowledge. I don’t have money. I don’t have insight. I’m just some university student who’s maybe not even graduated yet. What can I give them? And the realization that giving somebody the time to listen to them properly is … 

Sean, I’ll just give you another thought, which I think we could spend a whole podcast just talking about. This is what I see in Charlie Munger and Warren Buffett is that so many of their actions have multiple levels of meaning and have multiple levels of smartness about them. So if we take this idea of giving the gift of listening that hopefully, Guy Spier talks to Sean, Sean gives him the gift of listening. Guy feels great because he feels like he’s being heard. And I genuinely do. It’s a beautiful thing, but also you’re bringing peace into the world because, when people feel like they’ve been heard, I believe I am very closely connected to the conflicts in the middle east. If we could take every single person who feels aggrieved in that region, and there are many. And just to hear them, just hear them I think that tension and opportunities for conflict would go down enormously. The idea that we all can give the gift of listening is probably part of building a better world while at the same time being long-term greedy. So it does both. And that’s that multiple level, it’s kind of like creating a more peaceful world while also playing the infinite game. And when you kind of see opportunities like that, we should certainly take them. 

Sean: [01:35:37] Guy, I’m certainly going to be spending my weekend exploring the gift of listening a bit more. I’m so glad you expanded on that. Guy Spier, I really cannot thank you enough. Where do you want the listeners staying connected with you?

Guy: [01:35:49] Oh, that’s certainly kind. So I think that I’m really quite active on Twitter. I like Twitter. My handle is @gspire on Twitter and that’s probably a good place to interact with me. And I enjoy the conversations that I have there. I’m obviously on LinkedIn and on Facebook and you just Google me and you’ll find me. And I do have an email list and I’m struggling with writing an update right now.  You can find it all, if you go to my Twitter account, there’s a link there that will take you there. I will just send you to my Twitter account.

Sean: [01:36:20] Absolutely. We’ll have that linked up along with your book, Education of a Value Investor, of course, where listeners can stay connected with you, but guy spear th this was a really impactful conversation for me. So I can’t thank you enough for joining us on What Got You There.

Guy: [01:36:32] And thank you so much, Sean, for listening to me and for having me on your show, it’s a real privilege.

Sean: [01:36:39] You guys made it to the end of another episode of What Got You There. I hope you guys enjoyed it. I really do appreciate you taking the time to listen all the way through. If you find value in this, the best way you can support the show is giving us a review, rating it, sharing it with your friends and also sharing on social media. I can’t tell you how much I appreciate it. Looking forward to you guys, listening to another episode.