Christopher M. Begg is the Chief Executive Officer, Chief Investment Officer, and Co-Founder of East Coast Asset Management, Inc. Chris is also currently an Adjunct Associate Professor at Columbia Business School where he teaches Security Analysis.

Chris is one of the most thoughtful people I know and I wanted to share his love of learning that comes through. Chris to me is part philosopher, artists, scientist and investor and our conversation will show you the breadth, depth and height of his knowledge across these domains.

On this episode we also dive into these 3 things.

• His mindset – PIPER- Persistent Incremental Progress Eternally Repeated
• How to develop and compound your learning process
• And the most important principle he’s come across in the last year!

I am Sean DeLaney, the executive performance coach with over a decade of experience working with CEOs, executives, and leadership teams, guiding them beyond traditional definitions of success.

Interested in working together? https://seandelaneycoaching.com

Chris Begg Episode Transcript

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

Chris: Sean, great to be here.

Sean: Yeah, it’s good to see you. I love the way you think about and craft your life. Some of the people I think about throughout history are the great poet and playwright, von Goethe, and then his good friend, Alexander von Humboldt.

And the way you think about the sciences, the arts, philosophy, and how you intertwine that with your craft, I’m really appreciative of. So I always want to deconstruct how people go about their life and how they think about the world. One of the things I love starting with is around mindset. I know you learned a great mindset from Glenair CEO Peter Kaufman and then you twisted it. So I would love for you to dive into the Piper mindset.

Chris: PIPER mindset. That’s a good place to start. Plus, you mentioned two of my favorites, Goethe and Humboldt. Yeah, I think Humboldt, by the way, if you really study his life, is the perfect person who learned from upstream heroes and mentors like Goethe and then affected so many people downstream.

Darwin, for example—the only books that Darwin brought on the Beagle were Humboldt’s books. So when you read Darwin’s journals, he was trying to write for the approbation of great people, great heroes of his. So it’s a wonderful connection. One of my favorite biographies I’ve ever read is by Virginia Woolf, I believe.

And yeah, so Peter Kaufman, incredible friend, mentor, someone I’ve learned a great deal from. He’s been a frequent speaker in the class that I steward at Columbia. What I’ve learned from Peter is seeing how the world works, seeing how these different areas—physics, biology, human history—all connect.

One of his principles was this: he looked at evolution and kind of looked at compound interest. He had a great saying about it, which I simplified into persistent, incremental progress, eternally repeated. This is really at the heart of the magic of compound interest, which we work with in the investing world, but it’s also the underlying principle with which all evolution takes place.

So, it’s a PIPER mindset. It’s kind of how I see how businesses evolve, how they get better, how individuals evolve, get better. There’s no special sauce often when you really look at greatness. It’s just that dogged pursuit, and that’s the beauty of things that are kind of growing and getting better.

Sean: That’s interesting, you’ve got a great line you say, “I find it invaluable to see things from the standpoint of their origin stories.” So I’m curious about yours. What were the early days look like where we could have gotten a glimpse into who Chris could have become?

Chris: That’s a great question. I always say there are two ways to kind of evolve a craft: you can learn from a great mentor—I think that’s actually the best way to do it if someone is willing to be a mentor to you. The other way is to choose heroes and to have a kind of collection of great heroes and to take bits and pieces from those heroes to craft who you want to become. That’s what I did in those early days.

I’ve had the opportunity to sit in an investment analyst role at an early age, right out of my undergrad. It didn’t afford me a great mentor, but it gave me a great seat to sit, learn, read, and develop a temperament for the kind of investor I wanted to become, the kind of person I wanted to become by looking at these different mentors and taking bits and pieces from them.

So that was my origin story—just reading a lot. What it took to have some sense of a learning curve, a cumulative compounding learning curve that could lend itself to doing something worthwhile. The craft I’ve chosen is the investing craft, but, in those early days, I really wanted to understand. I wanted to be multidisciplinary. I looked at Charlie Munger and said, “Wow, there’s someone who’s not just a great investor, but he’s a great thinker.”

He’s a philosopher. He’s able to reason through the world in a really thoughtful way and attract the respect of other business leaders like Warren Buffett, or just physicists and biologists. He could entertain a conversation. And Peter Kaufman—how many people have the respect of Charlie Munger the way Peter had for about 30 years?

And Peter, I learned later in life, was also that kind of thinker that I really wanted to try to become—to be well-rounded, be interested and interesting. So, those are the things that I was doing in those early years, and it lent itself to being able to go down a path and say, “Alright, I’m ready to launch my own investment firm and have a strategy.” I thought that really demonstrated the essence of who I wasn’t as an investor.

Sean: What was that thoughtfulness and the approach to how you want to think about the world and how you want to be able to connect with people? Was that obvious prior to undergrad? Was there anything in your early days, little teen years where that would have come through?

Chris: No, I had a kind of meandering journey. In those early years, it took me a little bit to get going. I was really into sports. I really respected what my father was doing as an accountant on Cape Cod, working in a small office. But what I loved about what he did was that he really cared about his clients.

He really served his clients well, and I saw that they respected him. I thought, “I kind of like that. I want to be in a position to serve others.” So I said, “Oh, Dad, I’m going to be an accountant.” He replied, “No, you’re not. I really don’t like accounting, but I like working with my clients.”

So that was something I learned a lot from, and it led me to veer off into investing. But I think it was later that I really started to understand how to learn—like no one taught me how to learn. There were so many years where I was reading the book that was assigned, and I just had no scaffolding where the learning could actually stick. Then something clicked. I can’t say exactly what it was, but all of a sudden I started to build a scaffolding with which the learning could actually stick, and there were memory tools and all these things that I thought were quirky to myself. But now, looking back, I realize they were really important.

I try to share those with others now, but I’d say it was late. I wish I had some of those skills and tools earlier, like podcasts like this or others, where you’re kind of getting those hints along the way in those early years. I think there’s a lot of wasted time that could really be used to take in that rich opportunity, whether it be sitting in a calculus class or an English lit class, and just absorbing that incredible wisdom. For me, in those early years, it was just doing what I was supposed to do.

But then it jumpstarted, and I really fell in love with learning—it’s one of my passions.

Sean: Chris, say you were restarting that process, you were building the scaffolding, rewinding to when you’re 23, 24, and redoing it today. What does that look like?

Chris: Yeah. So the most important thing, and I think Peter Kaufman probably helped refine this, was this part of the scaffolding: having a place where the categories of knowledge could live. When I think about a thread that begins with physics, for instance, the origin story of physics is 13.7 billion years old. You kind of take that thread through time, and you see, okay, chemistry emerged at a certain point. Now you have 3.7 billion years of that timeline, and then biology emerges. Then you have human history, writing, mathematics—all these human endeavors.

So when you think about how you learn, you’re like, “When I’m learning physics, I can place physics on a timeline. I can place chemistry on a timeline and see it in terms of eternity throughout the thread of human history.” Ah, this is where it lives. This is how biology evolved to human history. And then all of a sudden, things start to connect, and you have this interconnectedness.

And so, you kind of choose where you want to play at any one time, like, “I’m going to play in biology and go down this deep rabbit hole on a particular subject of biology.” And then I can step back and say, “Okay, where am I choosing?”

Sean: So, that was part of the scaffolding and you realize that these threads are all interconnected, right?

Chris: There’s the timeline of the evolution of things such as technology, where we’re now downstream in human history. You think, “Okay, I see where this piece of technology emerged from. I see where it might be going.” So you have the past of the present, but then you have the future, and you start to be able to reason about how things might develop based on this rich history. This is something I’ve shared before: you don’t just want a breadth of knowledge. You want a depth of knowledge. You don’t want to know just a little bit about a lot of things, which is where people sometimes get stuck by being multidisciplinary.

You need to create a habit to go deep; the depth of the work allows you to really have a nuanced fluency with the subject. So, I developed a habit about 20 years ago where I would take three-month increments to allow myself to go as deep as possible, a total immersive learning in a subject.

Then I step back, digest that, maybe even write it up in an essay form of some sort, then move on to the next subject—three-month increments. That’s really worked well for me. Depth of knowledge, breadth of knowledge, height by seeing the timeline across time and how the threads connect—that’s what I call a 3-dimensional understanding of learning.

Sean: Yeah, you really expanded my own thinking there with adding height into that. I hadn’t conceptualized that prior to seeing some of your work before. If you’re looking back over the past 20 years, you mentioned those three month type sprints. Has there been one that has been most fruitful? It was almost this cascading effect that led to all of these other insights.

Chris: Yes, I think in the early years of this process, a deep dive into evolution was certainly a fun one, kind of going to that Charles Darwin kind of thinking in terms of the origin story of how we saw species evolution and natural selection. So that was a fun deep dive, and approaching it through real-time what it felt like to have these insights in that timeframe, because I think when you bring yourself back by doing the immersive work, you get into the mindset of what it felt like to have an epiphany that perhaps no one has articulated before. And if you’re studying an artist, what did the artist feel like when he or she was creating this? What did it feel like to be in that time period? 

I think that immersiveness creates a texture to the learning. It’s not just something from afar; it’s something that you’ve embodied. That’s why when I do a deep dive, like on evolution, I’ll try to touch every aspect from all angles—from an aspect of poetry to an aspect of art, which sometimes involves making my own art from it, right? It’s about creating an illustration or some type of work that makes it your own in a way.

Sean: Talk to me about how that arts even birthed out of that. I’ve loved some of the pictures in some of your letters and I love how those come to fruition. I would just love to hear about that.

Chris: Yes, I’ve been working with a creative artist, Camille Vicente, and she and I have been on this fun journey together where I’m on this path of learning. There’s that feeling of wanting to make it your own, and that’s where some of the artwork comes from, or an acronym.

Where now this knowledge is not just known, it’s part of me, it’s an embodied experience. Camille and I have a great time where I share some of these ideas that I have, and then we’ll go back and forth, and all of a sudden, it’ll become something that memorializes that thing that you want to come out of the experience.

It creates a memory palace for it, in a sense. Over the last three years, I’ve been experimenting with my own creativity, just playing in the art studio with different mediums, whether it be acrylics, oils, and watercolors. That sense of creativity is a really fun part of what I’m doing. Now that I see it from a brain perspective, we learn a lot with our left brain.

Our left brain is the language center. As a human species, we’ve developed a lot of left brain orientation, and the right brain is the creative side. It’s about seeing the context of the whole, not just the parts. Art allows for the exercising of this right brain, which I think has atrophied over time.

So, Ian McGilchrist, who is one of my favorite thinkers in this space, has really changed my whole worldview on this subject. I’ve spent a lot of time with Ian over the last three or four years. It’s just incredible to see it through a real scientific lens.

He’s written “The Matter of Things,” which is just this enormous scientific work on the subject. So, this creativity is a wonderful way to exercise this right brain. I think we all could use more of that.

Sean: Talk to me about the blending of the two. What I mean by that is, I’m thinking about one of these three-month deep dives you’re about to embark on. There’s probably a question mark, maybe even an inner tension, especially for someone earlier in their career, wondering how this is going to help me in my craft of investing.

So, I’m curious about how you think about what you’re going to deep dive into next and then about the creative tension around just exploring into the unknown, even if you’re not going to see immediate benefits. I’m just wondering how you navigate that.

Chris: Yes, I do believe in the practical utility of your learning. I really think that we have a responsibility to steward capital, to compound capital at high rates over long periods of time. We’re not being paid to go down these rabbit holes, but what we take from them are our rich pattern recognition skills to see the world in a deeper way.

And again, Charlie Munger gave me a lot of permission by seeing how he did it, how he wrote it up, how his essays developed, and how he took these insights to make profound judgments about important decisions. So, the way the subject generally will manifest is that I don’t have a list of them, but all of a sudden one will just keep poking me like, “Go deeper here,” and it’s a continued nudge.

I’m like, “Alright, you want, I know I have to study this subject in a deeper way.” And so they compete for attention. And that’s usually how it happens in real-time. And you know, like this morning, I was sitting, and we’re preparing for a trip to Italy this summer, a family trip to Italy.

And I always like to just think, “Okay, there’s something in, we’re going to Naples just outside Naples that needs attention.” And so there’s this wonderful sculpture, a veiled sculpture by Corradini, called Veiled Truth, or also it’s called Modesty. And Corradini was this incredible artist who was able to take a block of marble, not just carve a beautiful human depiction, but he was able to carve these incredibly thin veils.

So the idea of Veiled Truth is this veil over a woman’s body. I’m like, “Oh, now I’m down this rabbit hole,” and kind of preparing for this. But as I think about Veiled Truth, and time, Truth Unveiled by Time is another way the title has been depicted over the last 1750 years that the sculpture has been done.

I was like, “Oh, what a wonderful theme.” Because it’s a theme that I’ve been thinking a lot about as far as research; it’s a journey for truth and the truth is often veiled and it’s time that unveils the truth, right? So that’s our job as researchers, whether we’re research analysts, is to try to understand that underlying truth and through time, we can see whether we were correct or incorrect and how we were assessing it.

So, there’s a piece of art, but a deep philosophical connection to something that ultimately is probably the most important question: What is true and how do we understand the truth of a particular subject that we’re looking at?

Sean: It makes me think about something you said a moment ago about Munger. Essentially, by observing how he thinks about the world and how he writes, it gave you permission to live your truth a little more. We were talking about Goethe earlier. He has that great line, “As soon as you trust yourself, you’ll know how to live.”

I’m wondering when you started to uncover deeper truths within yourself that allowed these to manifest outwardly and how you think about investing.

 

Chris: Yes, I think we all have an essence about us, and life is this process of understanding what your essence is. How are you not living your true self? Over time, if you’re exploratory in this, you can understand and feel what your essence is, and you allow yourself to align with that essence.

I think the permission to do that, whether it be developing a craft that really fills you with joy or sharing your gift with others, is crucial. It’s not just about saying, “I’m an investment banker. This is what I’m going to do because I need to make a living,” but to pursue something that truly feels like part of you, that you find real joy in— and not this whole follow your bliss thing. I do like that expression of Joseph Campbell. yeah. But I think you can find joy in a lot of different crafts, the way that you bring.

That part of some of your gifts to that.

Sean: Yes, I’m in agreement. Goethe did some great stuff there, talking about his own inner essence, the daimon, which you explored deeply, which is always interesting. But this makes me think about you and your decision to launch East Coast Asset Management. I’m just wondering what you were wrestling with internally during that decision, or maybe it was a completely clear path for you.

And I’m just curious about what that process looked like.

Chris: It was definitely an itch. It was an itch to have some freedom and of expression and that freedom of expression to find that inner essence to allow it to blossom into something that could be of service to others. And, I love this. There’s like a saying that I find useful, I kind of borrowed it from George Cantor.

He said, “The essence of mathematics lies in its freedom,” and I kind of tweaked it a little bit. So the essence of everything that grows lies in its freedom. And I think at some point, through a process of discovery, you can grasp that idea of freedom, the idea to have, what I think Warren Buffett has said, to paint your own canvas. So at that point of the launch of East Coast Asset Management, it was the freedom and desire to start to paint my own canvas. In a way that I thought, represented my sense of truth, what I thought great investing might look like, and what kind of partners she wanted to do it with and for.

And it’s the kind of temperament and investing style that you could bring to that craft.

Sean: How long into your journey do you think you really knew what that temperament for you was, and you aligned that with your investment approach?

Chris: Yeah, it was definitely around 10 years in where everything started to fall away and you just realized it got simpler and simpler as far as what you do that you want to focus on.

Sean: Was that a natural process?

Chris: It was, but it never looked natural up close; over time it was like, “Oh yeah, it looked obvious back then.”

I mean, obvious now, but not then. I looked at a lot of things. It was really interesting in those first 10 years where I would reverse engineer what were considered the best investors of all time, and those who were currently investing at the time. I actually had a very detailed process where I would reverse engineer their decision-making and I would ask myself, “Would I have done that? Could I truly have done that? Could I have done that?” And there were certain things that I started realizing that the ones that made real business sense to me, I thought I could replicate. I said, “I can get into the mindset of what exceptional businesses look like, what a competitive advantage is, embracing secular tailwinds, not headwinds, understanding good capital allocation and good operational excellence and then valuing the enterprise.” That seemed like something I could do.

And we could be wrong from time to time. But I thought, “That made sense to me.” Speculating, trading, technical investing—like any of these things—I was like, “I can’t do that. I have no skill there. It’s magic.” They’re operating at a standard. I think it’s a great investor, but I wouldn’t have a clue how to operate the way Stan does.

Right. You start to realize, and that’s where Warren and Charlie, like I said, what they were doing made a lot of sense and they were doing it in a really admirable, honorable way, which kind of brought me back to wanting to serve others in a thoughtful way.

So, yeah, it quickly kind of things fell away. I was like, this is kind of makes a lot of sense to me.

Sean: I’m intrigued about some of the challenges you must have faced because even just the way you thought about that, you had to suspend the ego and not say, “This is what will look better to others. Let me think about what actually makes sense for me.” And so I’m wondering what you’ve wrestled with during all the years of East Coast Asset Management that when you look back, you go, “Yeah, that was pretty challenging.”

I obviously grew through that, but I’m just wondering what some of those struggles might have been like for you.

Chris: No, and it continues to this day. I mean, there’s a real choice. I think if you are managing money for yourself and for others, you can choose to create a large enterprise, which is going to have a lot of success markings of success. And there are some trade-offs there, right?

There’s going to be a lot more frictions, larger team, principal-agent conflicts will be greater. So over time, I also realized that I needed an internal scorecard, not just an external scorecard of success. And so the internal scorecard of success became more meaningful to me, like having more freedom of time, more freedom of decision making that I thought was intelligent versus what I thought would be acceptable to a group of limited partners.

So all of those things are just a lot of decisions to try to create something that I thought could endure. Could create a lot of joy, could also create something that I thought was world-class. And I think we look back on a career, and I keep bringing up Charlie and Warren, but you look at a 50 year plus career at Berkshire and decision making, and you look at a 20 and a half percent compound return and, there’s real satisfaction in that. And I kind of want to look back at the end of a craft and have something that you’re really proud of. And I think a lot of the decisions on architecture are important to get to the finish line there. So, you’re a reader of James Carse’s Finite and Infinite Games, it’s a real decision there to play infinite games.

And I think that it’s just that one decision. It’s 1,000,000 decisions along the way.

Sean: Hmm. We’ll talk about those million decisions, but you used a phrase a second ago, the pursuit of world class. I know you’ve written deeply about the pursuit of Arete, and the lens of virtue, excellence, quality, and all of that. And I’m just wondering when for you, and what does that look like daily?

Really a maniacal focus towards that.

Chris: Yes, you referenced a piece that I wrote last year called “The Joy of Unknowing,” which was inspired by a beautiful piece of architecture in Ephesus, Turkey, where four Greek goddesses are represented. The first is knowledge, the second is wisdom, the third is intelligence, and the fourth is Arete, or virtue. This was really a continuum for me, right? To move from knowledge to wisdom, or from reason to intelligence, which is doing something simpler, with less entropy, to Arete, which involves doing it with quality and virtue. As you move along the spectrum, Arete is the face that you want to end up with. I’ve referenced Robert Pirsig’s work, where he talks about quality, the metaphysics of quality, and quality being a dynamic versus a static.

So, the leading edge is operating everything you do with quality.

And everything you do with virtue and so that it’s how you treat your counterparties. It’s the investments that you want to make and associate with. It’s how you journal in the morning. It’s every detail is doing it with a sense of quality.

And, that’s, it becomes almost the way you want to live your life in, in, in every interaction. That book made a big difference in my life when I read Zen and the Art of Motorcycle Maintenance and Lila. It was the first time that I saw articulated what, what you feel inside is what quality is, you know.

He’s really probably really struggled. You could tell he struggled to put those words on paper in a way that made sense. That’s why he had to write lightly because he’s I’ve touched on the philosophy. I want to go deeper into the philosophy of the metaphysics of quality. And I would literally fast forward to all the parts.

I’m like, okay, we’re getting more of a nugget of what quality is. And then you tell a little story, but it was a really important book, on the articulation of quality and virtue.

Sean: You mentioned some of the books you’ve read. You mentioned Warren and Charlie multiple times here. You’ve had some tremendous speakers in your class. I know James Carse was one of them. If you’re looking back and really thinking through some of the people that you’ve studied and that you’ve met, who do you think embodies this level of quality?

Chris: First person comes to mind and is Nick Sleep, Nick Sleep who ran Nomad, which was almost a mystical investment partnership out of London for many years, incredible long-term track record. Some of the best investment letter writing I’ve ever seen. So Nick was gracious. He doesn’t do a lot of public interviews or speaking, and he’s been a gracious perennial speaker in the class, and Nick articulated these concepts of quality in his letters and he lived it right up to the point where he closed the fund.

He wanted to close the fund in a way of quality, right at the, without any deterioration of quality in, in any part of what they were doing. And that was, it’s impressive because it’s not just words, it’s actions. And, Nick and I have a fun conversation every year where we, we go a little deeper and share that story with the students and try to give them, give the students kind of a model for what quality looks like.

And I think that meant a lot to Nick when he was running the fund and how he runs his life today. Yeah, so Nick is great. I highly recommend the letters are all public now. So they’re available on a foundation website. So anyone that hasn’t read them, they should.

They’re wonderful investment lessons in there to how we broke down Amazon real time by looking at the pattern recognition of Costco.

And today, is what are the current investment business cases that require something to be reimagined. Amazon was reimagined at that point through his lens, through his pattern recognition. That’s today. If you’re looking at old patterns, old stories, you need to take those patterns and actually make them relevant for the leading edge of the train today.

What does that look like? What businesses are emerging? Really important.

What allows you to suspend yourself to be able to think through that in that way? Yeah. You mean the, we all fall prey to old patterns. I could get comfortable and this has worked for me, or I’ve been fortunate that if there’s. I’m a right of center thinker, meaning I do tend to see the whole, and if there is a weakness, I have to work back to then make.

Can I analytically analyze? So I tend to have an intuition and then can I build the intuition? Can I reason through it?

Sean: Okay.

Chris: So sometimes I can’t. And so when I can’t build an investment case or answer the question, “How do I lose?” working from right to left or left to right is getting that holistic view that.

Okay. I understand it. I don’t think I can identify blind spots that I have in my analysis. I see where things are emerging. This is what I think it will look like five years from now; tomorrow, it might be different, right? Allowing the hologram to change. I think that’s the mindset that I try to have is being willing to say what information tomorrow will allow the hologram of your thinking yesterday to evolve.

It’s a dynamic process. If you’re asking questions, and you’re open to inquiry, you’re open to critical thinking, allowing that hologram to change in real-time is something that I’ve found to be a great mindset for a world that’s changing. It’s a complex environment, right? There are new inputs and the complexity of it is just going to emerge into something very different, right?

Sean: Talk to me about the hair above the wave then.

Chris: Oh, yes. By the way, my 5-year-old, he loves the hair over the wave symbol. It’s become a personal symbol. So, I was on one of my random learnings, I decided to take a class. And I was learning, teaching myself to read hieroglyphs because I was fascinated by these Egyptian pyramids.

I’m like, I have no idea what all these things are. Like, I should probably take a higher class. I did. And there was one hieroglyph symbol that stood out. It was this hair. And it looked like it was elevated on top of this ripple of a wave. And I’m like, I love surfing. And it kind of looks like it’s surfing or foiling.

I’m like, if there’s one hieroglyph, that’s going to be my hieroglyph. And then, so I looked it up and I realized the hieroglyph meant, it was a symbol that meant the essence of life. And also it meant rebirth because the hair goddess was named Wenet, and Wenet was the goddess that allowed the Nile to flood every year, so they were like, wow, thank you goddess.

Wenet, you’ve allowed for the flooding of the Nile, which now irrigates our crops, gives us life. So the essence of life was this hair goddess over this water symbol. And so, what I took from that is I said, wow, that’s kind of the way that I want to live is the willingness to be able to allow things that weren’t serving you to be discarded, old ideas and be reborn to new ideas, new ways to look at things, new ways to behave, new habits, all this stuff. So the symbol is kind of this idea of the essence of life, which we got to, we talked about earlier, which is what is your essence, right? And also this idea of being reborn in a way to new thinking, new ways to create more joy, that kind of thing.

Sean: Yeah. Talk to me about what you’ve learned out on the water surfing.

So let’s start there. How important is it to have some type of expression outside of your craft to open your mind up to new ways to think even in your craft or about life?

Chris: Yeah, it’s such a good question. First and foremost, I think we live a lot in our conscious minds. So when you catch yourself, you’re thinking in language, you are constantly, your mind’s just languaging. So we’re using our conscious minds, probably a little overactive, right?

And it’s these sports, potentially, or meditation that allows us to quiet our conscious mind and allow our unconscious perhaps, or just to have an expression. And so I think flow state activities are a great way to quiet the conscious mind, particularly in that flow state, you’re not thinking you’re just doing; it’s full presence.

And I love that, and surfing is one of those rituals and crafts that I absolutely love because it puts me in that flow state. Whether you’re just getting up on that wave and whether it’s 3 seconds or 15 seconds, whatever it might be, you’re in the state of full presence with that activity and I think meditation is another way to go there. I took up foil surfing a number of years ago. This summer for me, it’s been tennis, just kind of going out, whether it’s for 30 minutes or 60 minutes and that moving meditation is just full flow state presence activity, quieting the conscious mind, also getting another stacked benefit of fitness, and cardio workout and all these things that just kind of fuel into your other activities in a positive way.

Sean: do you see that recent Federer documentary just came out last week? 

Chris: I was, it’s, it, I’d say tonight is going to be the night to watch it. My friends who are huge tennis players are big Roger fans. So I’m like, I’ve been waiting to get the onslaught from them of how great it is, but I’m a huge Roger fan. He’s

Sean: Yeah, I’m a huge Roger fan and he does, you were talking before about investors where you were like, I couldn’t do that. “That’s magical” how he’s able to travel on the road with his entire family and go from being center court at Wimbledon to then I lost at Wimbledon center court and I’m just rolling around on the floor.

I don’t know how he’s able to transition in and out like that. He’s magical to me.

Chris: Yeah. And the way he’s held himself with such, he’s such a noble, good just a great role model in so many ways.

Sean: Let me share this cool story. So he’s a Nike athlete and was out at Nike’s campus and they had the whole day of trying on all the new apparel and then planning the new product line. He’s walking out of the building. They’re about a hundred yards away from the building. So he’s got his team at Nike who’s escorting them through and he goes, “Wait.”

He just sprints back into the building and he comes back out 15, 20 seconds later. They said, “What just happened? What’d you do?” He goes, “I forgot to thank the security guard.” It wasn’t like there were cameras around and it was just like, “Oh, wait a second. Human goodness here.” And that is why Roger without a doubt is one of my favorite athletes of all time.

I found myself getting extremely emotional during the documentary because you think about the ending of an era and what this man meant, not just to sport, but to the world. So yeah, it was a fun read or a fun watch, but talk.

Chris: It’s those little acts of kindness. I think that’s the magic of life, but I always try to catch myself and is there an opportunity behind it right to be to take an extra moment and have that, an interaction that you may not have had and. To go back and say, thank you, or whatever it is.

Sean: Yeah, he’s a cool guy. Talk to me about how you think about, cause I know you were so thoughtful with everything, about adding in some of these elements like surfing, arts, studying hieroglyphics. I’m just wondering about how you structure and craft your life that allows for the richness that you live. 

Chris: It’s having a design principle ahead of time to make the time necessary where you’re not looking back and there are no deficits, right? And the way that I think about a balanced life is, I think of, okay, what is the time allocation that I want to do really thoughtful work in my craft of investing.

So there’s a category of time allocation. Here’s the time that I want to spend with family, really present time with family. And how does, what does that look like in a day in a week? That feels really good. And young children require more of that time, right? So, a 5-year-old is a rich time to have a lot of allocation there.

When you’re with your wife and all of that stuff and friends are really important. It’s my third category that I really allocate an appropriate amount of time and, and that’s important. The extracurricular activities are really important. It’s the fourth area that I think a lot about and, community, how you’re interacting with community, and then your spiritual practices.

So those are the kinds of how I allocate and it’s just, I kind of look at my calendar throughout the day and I look at opportunities to stack activities to, if I’m surfing with a friend, or spending time with family. And, but generally, my day starts, it starts early, usually up about 4:30.

And I begin my day, usually with a blank journal. And what I’ve tried to do over the years is if there are questions that I’m working through, and this is a practice I learned from Joshua Waitzkin, to be honest, I will submit a question or a series of questions to my subconscious overnight, but kind of see how those have changed or throughout that expression of time.

And I just love sitting with the journal. and even not writing in a journal, actually, just let symbols kind of populate the pages. Okay. The way that the information organizes and all of a sudden I’ll be like, I’ll look at a blank piece of paper. I’m like, wow, I didn’t really realize that I had connected a couple of things.

And so I’ll have epiphany moments through that. But I love that journaling time in the morning. then I usually kind of spend time with family, love those two hours of family time, and then make my way to the office and kind of arrange the extracurricular activities throughout the day.

And, but it’s, it flows. It doesn’t feel like it’s overly organized or structured. It’s just, I know I have to check all the boxes or something’s gonna feel off.

Sean: That’s why I asked the question, because someone who I feel like also does not overly structure, I’m wondering how you’ve been able to learn so much and touch so many different things. So I think that approach is just really refreshing to hear about how you thought about that and then how you structured that.

But it makes me think you mentioned Waitzkin. He’s got this great line. He says, it’s rarely a mysterious technique that gets someone to the top; it’s the profound mastery of basic fundamentals. And I’m wondering if you’re looking back and you go, you know what, at the heart of Chris Begg, these are the basic fundamentals that I’ve compounded over time.

Any thoughts on that?

Chris: Yeah, no, I love that quote that Josh said. That’s right, it’s always the 10,000 hours, and what you want to choose to be excellent at—we can’t be great at all things. So we have to choose a number of things that really give us some sense of joy, really. And have those 10,000 hours be really fun.

Like when I think of working out, that doesn’t appeal to me, but going, hitting a tennis ball for 40 minutes and getting an incredible workout, that’s awesome. And the same with surfing, like, at surfing, it touches so many boxes, meditation, fitness, community. And yeah, I can’t imagine spending a lot of time in the gym.

So I try to choose these things that really bring a lot of joy but also, you get some ancillary benefits as well. And then spend that time really investing in the time to, hopefully, reach some mastery. I love the expression of mastery and anything that I want to take up.

I don’t want to be a dilettante; I really want to apply myself to climb a learning curve and get better and better. That’s really, it’s really fun.

I love that phrase, the expression of mastery. If you’re looking at all the people you’ve looked at over the years, who would you say has one of the deepest levels of that expression of mastery? Who really has gone the furthest? Anyone come to mind? In the field of, I guess we could choose any different—we mentioned Roger, that would certainly be one on the tennis side. I’ve learned a lot from Josh over the years; he’s a friend. He’s someone that we’ve approached some of these arts together and he thinks very much about mastery, having reached mastery in chess, mastery in martial arts.

And now, through his love of surfing and foiling and something we’ve done together. So he’s a great person to learn side by side with on that. You know, I think going back into the investing world, I love seeing someone at the top of their game. When they’re 93, I had my 50th birthday, which was two years ago at Charlie Munger’s house.

And I looked across the table and I was like, this guy’s 98 years old and he is on top of his game, right? We were there for 4 hours and he was answering every question with wit and wisdom. I was like, that’s kind of what’s a bottle for me, right? I was like, I want to be doing that at 98. I don’t want to hit 70 and all of a sudden be like, Okay.

Things are going to get a little worse, a little worse. So you choose these games that are, that allow you to do them for a very long time. I think that’s another design principle is, tennis next to a number of folks that are in their 80s, just really enjoying the game surfing, do that very late in life.

So, yeah, yeah. I think duration is, is something to kind of think about too.

Sean: Always remaining that perpetual student, which makes me think about now a decade plus being a teacher. And I’m thinking about what are some of the harder concepts that the people within the class have just the hardest time embodying? it just takes forever to learn that. I’m wondering if there’s anything that you’ve analyzed that you think about.

Chris: Yeah, when I look at my goal as a teacher, and the reason that it motivates me to do this every year, and I think this year is my 13th year, is that I want those students at Columbia Business School who have gone back to business school, maybe four or five years out of their undergrad, had a career path, kind of retool, go back to business school. I think they’re all very much in a hurry. They’re at one of the best schools in the world. What I want them to take from at least the class that I steward is to see things from a longer time horizon. Can they look at models of success that have played an infinite game versus a finite game and have done it with virtue? And so I try not to say this is the way to do it. I just put a bunch of people up there that are just so admirable. That you just say, oh, there’s an exemplary material. There’s an example, Howard Marks. There’s an example, Seth, Clarence, Todd Combs here. They have all done it a little differently, but there’s an underlying principle to some, a group of people that played a longer game.

That did it with class, I guess, a sense of class. Yeah.

Sean: What does stewardship mean to you? You keep bringing it up.

Chris: Yeah, I mean, I guess I feel very, especially in those early years, there was this imposter syndrome when I walked in, or when Bruce Greenwald asked me to do the class. I said, “Wait, this is Ben Graham’s, you’re right.”

“What do you want me to do? Teach the book? All I know is the book.” He said, “No, just teach what you do.” I’m like, “Oh, wow.” So it took me a little bit to feel, and I still feel like I’m stewarding something that’s bigger than me, right? It’s a legacy of what those principles meant.

Margin of safety, Mr. Market, thoughtful, intelligent investing, studying businesses, and there are so many greats. So I’m bringing those greats in. We’re having a conversation where we’re treating the classroom as a laboratory. So I very much feel like I’m stewarding something that’s way bigger than me.

Sean: This makes me think about a line from one of your letters where you said, “The saying that education is wasted on the young rings quite true with my own experience.” Too much of my early education, just like the way I approached Hill’s “Think and Grow Rich,” was spent finding the fastest way to the finish line while I often found answers.

They lacked a true understanding of the principles, the process, and the illustrations of the practical experience that led to them. So how do you develop a deeper sense of principles in general now?

Chris: That’s so true, by the way. 

Sean: You join your own writing there, huh? That is, you know how many of these paragraphs and lines have just deeply resonated with me?

Chris: Yeah. It’s all principles, right? And that’s where I went in search of, I kind of went in search of the general principles that could inform the whole. I believe that the world is very fractal, right? When you find a nugget of a principle, it could be applied across all different disciplines and realms, and I am still fascinated to kind of go in search of these principles.

Because that’s the nugget that you’re going to be like, “Oh, I can take that. That is a general principle.” And that general principle can be applied over here. It’s still what drives me, I love going out in search of them. For example, there’s a general principle that hit me over the head in the last year, and it was this concept of graph theory, which I used to just call network science or network intelligence.

And then I kind of understood it. If you go back to the origin story of network science, it begins with Leonard Euler in 1739. And Leonard Euler was sitting down with a problem called the seven bridges of Königsberg. And the problem at the time was, can you walk across all the bridges without traversing the same one twice? And everyone was trying to solve the problem and saying, “I don’t know, I think you can,” but he kind of stepped back and he said, well, he simplified the question. He said, “Let’s develop a simplified diagram. This is a node, and this is an edge of the node.” And he kind of laid this out and solved the problem.

But it laid the groundwork, the foundation of what became graph theory.

So I took this thinking about graph theory as a general principle and I said, “Whoa, the architecture of graph theory is actually one of the most fundamental, important architectures of most of the things that have compounded and scaled over time.” Think of like MasterCard and Visa as a graph of how payments traverse the world. If you look at Google’s page rank system, it is the architecture of graph theory, literally it’s just graph theory. Meta or Facebook in the early days was an application of a social network or a graph.

So nodes and edges in nature, humpback whales, probably the only species that have a graph that traverses the entire globe by way of a pod group of whales communicating by song. And the song is the edge. So node edge. They have a complete global graph that allows for this real-time exchange of information through song and the information that has changed that way and all of a sudden I’m like, “Whoa, everything that has been created, the biggest value creation through the time frame has been the newer application of a graph and that could be a graph on a graph.”

It’s just a better graph. And so when I started seeing the world by way of graphs, I said, “Okay. Ask the question. What are the graphs that are emerging today? The next layer of graphs will be the next 10 trillion company. The first 10 trillion company potentially will be the next application of graph architecture on the world.”

And that would might be Earth-centric; eventually, it will be something that may emerge outside of the earth, but it will be an application of a graph that’s communicating information, moving information. Information in an abstract way could be where clusters of information where humans, right?

Could be real money transferring through a node to node could be whales by song. I think one of the most interesting things that’s happening in real time is, as we develop autonomous driving, you have potentially the creation of a new graph an instant potentially where you turn on 5 million nodes that can now be used and utilized in a different way than they have before. So long answer to your question, but that’s finding a general principle and then creating some utility around the general principle as it applies to a domain that you’re looking at.

Sean: I’m just admiring watching that real time. What that general principle just gave birth to, for you to articulate it like that. What was that blooming process like for you to get there?

Chris: It’s actually funny because I joined a group of investors in Zermatt last September, and I was thinking about this in real time. And I’m like, we were all tasked to come to this meeting. It was maybe 15 to 20 portfolio managers from around the world. And we were all, we could bring, have a conversation for 15 minutes on a subject about an idea.

You could talk about a philosophy, something that was maybe useful to you as an investor or thinker or whatever. And I’m like, I’m going to talk about graph theory. Yeah, I’m ready. And I got up. And I looked at some of the smartest people I know in the world and they’re just like blank stares at me.

I was like, I don’t know if that went well. Not one person asked me a question about graph theory over the next couple of days. I was like, I don’t think I was ready to articulate it because I was even, and still am, really amazed at what I’m learning through it. And I think that there are some individuals that have an intuitive intelligence around graph theory.

I invited an incredible thinker from Austin named Charlie Burgoyne to join me last semester as I was working through this. And you talk to someone who also sees the importance of graphs and Charlie’s one of them. His eyes just light up and it’s like you found a kindred spirit.

And he’s thinking about how he applies this into military intelligence applications. You look at Netflix in their recommendation algorithms and application of graph theory. So there are different ways that this can be applied. If you look at the way that we store information today, we still store information in SQL Server databases that are categorized, identified as a label, right?

In the future, it’s going to be like our brains. Our brains are the most incredible graphs. We have neurons and synapses, right? A node and an edge. That’s how information and data should be stored. It’s not today. It’s in SQL Server databases and we will have a dynamic, traversable graph where you’ll be able to access this in real-time.

Grab this piece of data. Grab this piece of data. But I think that we’ll have to re-architect the entire way that information is stored. Now that’s a big business. That’s going to be an incredible business.

Sean: Yeah.

Chris: someone’s working on it right now. Maybe it’s Neo4j. Or another someone in a garage is working on this and it could be re-architected the way that we store data.

So it looks more like our brains. It’ll look more like those whales and the whale songs.

Sean: So when you come across something like this, are you re-architecting your investment process because of this? Or are you putting it through the lens?

Chris: I would say that a clear understanding of the principle of graphs helped me understand what made some of the best investments we’ve ever made really special, right? They were benefiting from this underlying graph architecture. Google, Meta, Mastercard, Moody’s, S&P, Amazon—its logistics network is a graph.

So when you see a graph kernel and then the ability to scale it, big businesses can be created, and three-decade, four-decade compounders are created. So it gave me the lens to now look at the universe. And as businesses that are emerging, you start to say, “Ah, that’s—I see a graph here. This is a really interesting graph.”

Something to note, understand, think about. I even thought about what I call the G.I.Q.—what’s your graph intelligence quotient? You have an I.Q. and an E.Q. Like your G.I.Q., there are some people that see graphs in a way that no one else does. I think Elon is probably the best at graph G.I.Q. that I’ve ever seen, right? Look at Starlink. Does anyone realize he just created the most insane graph that’s ever been created? He’s putting up 23 satellites every other day. And now you’re like, “Oh yeah, we just turned on Zimbabwe for internet,” and now he’s turned on 110 countries now have access by way of a low-cost satellite system.

So it is remarkable. That graph literally manifested in the last 7 years.

Sean: And if you’re looking back, the entrepreneurs, the business titans that you’ve studied, who have you learned the most from?

Chris: Yeah, I mean, certainly Warren earlier would be on the high list, but someone I haven’t mentioned yet who I really admire a lot is Mitch Rails. So, Mitch Rails, the CEO, chairman of the Danaher family of companies, not CEO anymore, I’m sorry, but he was a founder. You know, Mitch has come into the classroom a couple of times now, to see him operate with such excellence.

And we, that concept of piper, I think what makes Danaher special is that they’re constantly iterating, right? Persistent, incremental progress, eternally repeated. And the Danaher business system is a business system that actually takes the Piper and actually puts it into practice at a large scale.

And he’s done it with a number of the businesses that actually have emerged, by way of Danaher’s business system, for the Colfax and Danaher is a very different business than it was 7 years ago. So I’ve had an opportunity to kind of just learn by what Mitch has built, but also from him directly with the students.

And here’s someone that is learning at a higher rate than he ever has been in different domains. And it’s so impressive. Yeah, really, really admire Mitch a lot and what he stands for.

Has that been hard for you as you’ve evolved and your learning process has sped up so quickly over the decades that now you get to this level where it’s hard to find new people and ideas to feed you? I’m just curious what that’s like with such a Piper mindset now over decades.

If anything, the more you learn, the more you realize you don’t know anything, you know what I mean? So I’m like, I developed a greater sense of humility, I think, as I go through life and it, because I’m not looking for a finish line, it’s really fun. I just find so much fun in learning that there’s always a rabbit hole or thread to follow and like me sitting at Starbucks this morning of all places, having my latte and reading about Cordini and the veil truth and just oh, I got to stop now and go bring River to camp.

So, yeah, no, it’s never ending.

Sean: Yeah. We’re going to round this out here in a minute, but I’m just so curious with River, how you’re thinking about what it means to be a parent and the lessons you’re trying to instill?

Chris: Yes, everyone does it differently. And I always like to teach by example, at least with a child, that it doesn’t matter what you say, but it’s what you do. And so just giving him, I think, an opportunity to kind of see what you do, what you’re passionate about. And he may take from that.

He may not, one of the things that we do together is we paint. So I took up painting kind of when he was interested and just grabbed crayons and said, okay, let’s build this little art studio in our backyard, and we’ll go out there. We put the music on, we get a bunch of blank canvases.

And I paint, and then he’ll kind of see what I’m working on and then he’ll just start, and I’ll see him kind of like grabbing the acrylics and like last weekend we were working with spray paint. And so we were like, I see him, he created one of my favorite things he’s ever done with spray paint and some acrylic paint.

I was like, and he just kind of was following my lead. So I think that’s how I like to parent, just be kind of a role model.\

Sean: I love that. Chris, say you could do this long form conversation and sit down with anyone throughout history or still alive today. Who would you love to just ask endless questions of?

Chris: I think I’d have to go back to Humboldt. That might be a fun one. He was so interested in nature and science, in the arts, and writing. He’s kind of this character for me that I kind of see a lot of what influenced him, and he’d be fun. Yeah, that’d be fun.

Andrew Carnegie is both a business leader, but also I really believe he stood for a lot of positive things in his philanthropic work. I think I’ve shared before that I go to Sleepy Hollow Cemetery from time to time if I’m in that part of New York and I just go visit Andrew Carnegie’s grave, which if anyone’s out in that area, yeah, just kind of pay respect to some of the things that he did.

I mean, I’m not sure if a lot of people realize, but he donated 7,700 organs that went to churches for more music. He built 2,800 libraries. He gave away most of his wealth during his lifetime. And certainly, Napoleon Hill, he can grow reach, which was all based on a lot of Andrew Carnegie’s philosophies and the way he lived his life.

Sean: Chris, we only scratched the surface here. There, there’s so much depth to you. And I really just wanted to bring out that joy you exude where what you do with your craft, you really have just merged that, that level of play and your essence has really come out. So I just appreciate the heck of what you do and coming on and sharing some of these lessons.

So I can’t thank you enough.

Chris: Thank you, Sean. This has been so much fun. We appreciate it.

Who am I?