Invest Like the Best with Patrick O'Shaughnessy

Cliff Sosin - Owning the Complements to Intelligence - [Invest Like the Best, EP.497]

Intelligence is widely distributed. There are a lot of smart people. And so if you think about what actually differentiates those who do well, it's often the complements to intelligence — things like work ethic, integrity, the ability to get along with others, and emotional stability.

Diet TBPN

Anthropic Q3 Revenue, Europe’s Freezer Hack Scare, Northwood Raises $375M | Diet TBPN

Markets are really good conventional wisdom distillers and that's actually very valuable. In other words, people will say that as a sneer, they're like, 'Oh, this is just conventional wisdom.' And I like, 'No, that's actually really good.'

Invest Like the Best with Patrick O'Shaughnessy

Cliff Sosin - Owning the Complements to Intelligence - [Invest Like the Best, EP.497]

Intelligence is not sufficient for success. The world is full of intelligent people who don't succeed, and the reason is that intelligence has complements — things like drive, emotional stability, the ability to work with others, and good judgment — and those complements are often more important than intelligence itself.

Invest Like the Best with Patrick O'Shaughnessy

David Vélez - Building Nubank and the Future of Global Banking - [Invest Like the Best, EP.495]

Brazil has one of the most concentrated banking systems in the world. Five banks control more than 80% of all financial services in the country, and they've been able to maintain net interest margins that are among the highest in the world — often 10x higher than what you'd see in the United States or Europe.

Invest Like the Best with Patrick O'Shaughnessy

Cliff Sosin - Owning the Complements to Intelligence - [Invest Like the Best, EP.497]

Intelligence is probably not the limiting factor for most intelligent people. If you're smart enough to be in the game, the question is really about the other stuff — your ability to stay humble, to keep learning, to manage your own psychology.

Invest Like the Best with Patrick O'Shaughnessy

Cliff Sosin - Owning the Complements to Intelligence - [Invest Like the Best, EP.497]

Intelligence is probably one of those things where there's a certain level you need, but beyond that, the marginal returns are pretty low. And actually the things that matter much more are the complements to intelligence — things like work ethic, emotional stability, intellectual honesty, and the ability to sit with uncertainty.

TBPN

Warren Buffett & Charlie Munger LIVE on TBPN 🎃

Some people are being fearful. Most people, I would say, are fearful. It seems like that. That made me start feeling a little greedy.

Invest Like the Best with Patrick O'Shaughnessy

Cliff Sosin - Owning the Complements to Intelligence - [Invest Like the Best, EP.497]

Intelligence is probably the most overrated trait in investing. The thing that actually matters is whether you can sit with uncertainty, whether you can be wrong for a long time and still hold your position, and whether you have the emotional stability to not panic when things go against you.

Invest Like the Best with Patrick O'Shaughnessy

Cliff Sosin - Owning the Complements to Intelligence - [Invest Like the Best, EP.497]

Intelligence is widely distributed, but the complements to intelligence — things like the ability to sit quietly in a room alone, to not need external validation, to be patient, to be willing to look foolish — those things are much more rare.

Invest Like the Best with Patrick O'Shaughnessy

Cliff Sosin - Owning the Complements to Intelligence - [Invest Like the Best, EP.497]

Intelligence is broadly useful, but if everyone is smart, then intelligence doesn't differentiate who wins. What differentiates who wins are the complements to intelligence — things like judgment, temperament, and the ability to act under uncertainty.

Invest Like the Best with Patrick O'Shaughnessy

Cliff Sosin - Owning the Complements to Intelligence - [Invest Like the Best, EP.497]

Intelligence is probably not the binding constraint on investment performance. The binding constraint is much more likely to be things like emotional stability, patience, the ability to hold an unpopular view, or the willingness to be wrong for a long time before being right.

Invest Like the Best with Patrick O'Shaughnessy

Cliff Sosin - Owning the Complements to Intelligence - [Invest Like the Best, EP.497]

Intelligence by itself, has very limited value. What matters is what complements it — things like the ability to do hard things for a long time, the ability to be honest with yourself, to have good values, to care about the people around you.

Invest Like the Best with Patrick O'Shaughnessy

Cliff Sosin - Owning the Complements to Intelligence - [Invest Like the Best, EP.497]

Intelligence is probably not the limiting factor for most intelligent people. The limiting factor is more likely things like courage, or open-mindedness, or patience, or emotional balance — the complements to intelligence.

Invest Like the Best with Patrick O'Shaughnessy

David Vélez - Building Nubank and the Future of Global Banking - [Invest Like the Best, EP.495]

In Brazil, the top five banks have over 80% market share, and they've had that for over 30 years. The average Brazilian pays 30 times more for banking than the average American. And the return on equity of these banks is among the highest in the world — so they were making enormous profits by charging customers enormous fees.

Invest Like the Best with Patrick O'Shaughnessy

Cliff Sosin - Owning the Complements to Intelligence - [Invest Like the Best, EP.497]

Intelligence is probably the thing people spend the most time thinking about in this business, and I think it's one of the least important factors in long-run success. The returns to intelligence are just not that high in investing, and the reason is that markets are pretty efficient.

It's Been a Minute

There's nothing scarier than private equity in food

Private equity isn't trying to make your experience better. They're just trying to make money.

Invest Like the Best with Patrick O'Shaughnessy

David Vélez - Building Nubank and the Future of Global Banking - [Invest Like the Best, EP.495]

The banks in Brazil were making 25% return on equity, some of the highest profitability of any bank in the world, while at the same time charging some of the highest interest rates. Credit cards were charging 300% a year in interest. And so you had this market that was highly profitable for the incumbents and yet deeply exploitative of consumers.

Diet TBPN

Why Moderna Tanked, MSG Employees Duped By Their Boss, The Mansion Section | Diet TBPN

It's great if you're a cancer patient, but it's not so good if you're an investor who's banking on 49% or maybe a beat, maybe an update.

Invest Like the Best with Patrick O'Shaughnessy

David Vélez - Building Nubank and the Future of Global Banking - [Invest Like the Best, EP.495]

The banks in Brazil were making 25% return on equity consistently for decades. They were some of the most profitable banks in the world. And the reason they were so profitable is because they were screwing customers.

Invest Like the Best with Patrick O'Shaughnessy

David Vélez - Building Nubank and the Future of Global Banking - [Invest Like the Best, EP.495]

Brazil had one of the most concentrated banking systems in the world — five banks controlled over 80% of all deposits — and yet it was one of the most profitable banking systems in the world. The banks were making enormous returns, 20-25% return on equity, while charging customers 300-400% annual interest rates on credit cards.

Compound Interest

Austan Goolsbee Is Worried About AI Inflation | Compound Interest

The bigger the hype, the greater the chance that you overheat the economy in the short run. that for the day job of the Fed, the more promise there is, the more the more temptation, the more tendency to spend today based on the promise of what is to come. And that you got to be careful about because that's just old-fashioned overheating right now.

Invest Like the Best with Patrick O'Shaughnessy

David Vélez - Building Nubank and the Future of Global Banking - [Invest Like the Best, EP.495]

David believes the industry is still in its Blockbuster era, with most of the world's banking still running through branches and incumbent banks, and that AI will make digital banks dramatically more efficient than the incumbents they compete with.

The Week

Stocks Hit a Record High While Bonds Flash Red. Who’s Right? | The Week

It's why markets do create bubbles because it's not that people are stupid. It's not that people don't understand that you can spend too much and overbuild data centers. Of course, they get that. But the risk of not doing it is that you fall competitive space that is moving at the speed of light across the globe.

The a16z Show

What Makes a Great Entrepreneur? | Ben Horowitz on Vintage x Vintage

great investors should look for world-class strengths rather than an absence of weaknesses, and why expanding the ways we recognize talent can raise the bar rather than lower it

Acquired

The Home Depot: How America's aging houses built the best stock of the last 45 years (Audio)

Home Depot went public in 1981, one year after Apple Computer. And astonishingly, if you put $1,000 into Home Depot and Apple at their IPOs and you held them all today, your investment in Home Depot would beat your investment in Apple. And if you reinvested the dividends that it paid out, it has compounded at nearly 25% per year for 45 years.

Invest Like the Best with Patrick O'Shaughnessy

Michael Moritz - Lessons From 40 Years of Investing and Writing - [Invest Like the Best, EP.491]

The great businesses that we've all admired and that have created enormous wealth for shareholders are ones that have been run by people who are relentlessly focused on the needs of customers, who don't spend a lot of time worrying about competitors, who don't spend a lot of time worrying about Wall Street, who don't spend a lot of time worrying about the press.

The Week

The Iran War Is Costing You Money. Here’s How Much. | The Week

When you look around the poker table and wonder who the sucker is, it's you. because not because it's a bad business, just because what's happening is this is not a financing event anymore. They're not raising money for anything other what's really going on is people are unloading shares.

Invest Like the Best with Patrick O'Shaughnessy

Michael Moritz - Lessons From 40 Years of Investing and Writing - [Invest Like the Best, EP.491]

The ones that are really, really difficult to make are the ones where you have to somehow assess whether a person who is completely green and untested is capable of learning the sorts of things necessary to found a great company. And that, I think, is the art form of the venture business, because you're trying to assess a person who has no track record at all.

Pivot

Why Scott Galloway Is So Worried about Democrats' Midterm Chances

Selling shovels in a gold rush is great. Using your shovel profits to buy your own stock, it basically says that the shovel seller isn't sure how long the rush is going to last or how deep the mine is going to go.

Invest Like the Best with Patrick O'Shaughnessy

Michael Moritz - Lessons From 40 Years of Investing and Writing - [Invest Like the Best, EP.491]

The thing about venture capital is that the decisions you make, you often don't find out for 10 or 12 or 15 years whether they were right or wrong. And that, for somebody like me, has always been humbling. There are very few fields where you have to wait a decade or more to find out if your judgment was sound.

Invest Like the Best with Patrick O'Shaughnessy

Michael Moritz - Lessons From 40 Years of Investing and Writing - [Invest Like the Best, EP.491]

The best VCs, the best investors, the best business builders are people who have a very strong ability to suspend disbelief. They have to be able to imagine a world that doesn't yet exist.

Invest Like the Best with Patrick O'Shaughnessy

Michael Moritz - Lessons From 40 Years of Investing and Writing - [Invest Like the Best, EP.491]

The things that really matter in venture capital are a tiny number of decisions. You might make one, two, three decisions in a decade that really matter, and everything else is noise.

Invest Like the Best with Patrick O'Shaughnessy

Gabe Stengel - Building Investing Superintelligence - [Invest Like the Best, EP.492]

The challenge with investing is that the signal-to-noise ratio is incredibly low. You can do everything right and still lose money in the short term, and you can do everything wrong and still make money in the short term. That makes it very hard to learn.

Invest Like the Best with Patrick O'Shaughnessy

Michael Moritz - Lessons From 40 Years of Investing and Writing - [Invest Like the Best, EP.491]

The thing that I've observed about the truly great investors is that they have an absolute obsession about not losing money. It's a very different orientation from people who are obsessed with making money. The ones obsessed with not losing money tend to make a great deal of it.

Invest Like the Best with Patrick O'Shaughnessy

Michael Moritz - Lessons From 40 Years of Investing and Writing - [Invest Like the Best, EP.491]

The thing that I find so hard about venture capital is that you might be right about a company, but if you make your investment at the wrong time, you can lose all your money. You can be right about the destination but wrong about the timing, and it doesn't matter that you were right about the destination.

Invest Like the Best with Patrick O'Shaughnessy

Michael Moritz - Lessons From 40 Years of Investing and Writing - [Invest Like the Best, EP.491]

The venture capital business is one of the few endeavors where you can be wrong the vast majority of the time and still be considered successful. The reason is that the gains from the rare, extraordinary winner so thoroughly dwarf the losses from all the failures combined that the overall outcome can be spectacular.

Acquired

The Home Depot: The best-performing stock in the S&P 500 since IPO (Audio)

Home Depot went public in 1981, one year after Apple Computer. And astonishingly, if you put $1,000 into Home Depot and Apple and their IPOs and you held them all today, your investment in Home Depot would beat your investment in Apple. And if you reinvested the dividends that it paid out, it has compounded at nearly 25% per year for 45 years.

TED

Who Controls Your City’s Money? | Trinity Tran | TED

Money ultimately decides what gets built. Money decides what survives. Money decides what future becomes possible. So change where money goes and who controls it -- then you change what becomes possible.

Founders

#431 How Henry Singleton Worked

"Henry Singleton has the best operating and capital deployment record in American business. If one took the hundred top business school graduates and made a composite of their triumphs, their record would not be as good as Singleton's."

Invest Like the Best with Patrick O'Shaughnessy

Sarah Guo - What the 250 People Building AI Believe - [Invest Like the Best, EP.489]

At the center is Sarah's conviction that no single company will own the future of AI, and what that means for founders, investors, and anyone allocating their time and resources in a world moving this fast.

The a16z Show

Gavin Baker: Why AI Demand Is Outrunning Compute Supply

David explores whether the bigger near-term risk is not overbuilding, but failing to build enough.

Founders

#431 How Henry Singleton Worked

Henry Singleton has the best operating and capital deployment record in American business. If one took the hundred top business school graduates and made a composite of their triumphs, their record would not be as good as Singleton's.

Invest Like the Best with Patrick O'Shaughnessy

Neil Movva - Making AI 10x Cheaper - [Invest Like the Best, EP.488]

the premium the frontier labs charge for being three to six months ahead may not last

Invest Like the Best with Patrick O'Shaughnessy

Eric Vishria - A Decade of Lessons Investing in Software & Hardware - [Invest Like the Best, EP.486]

The best hardware companies look a lot like software companies in the way they think about software and the customer relationship, and the best software companies are starting to look a lot more like hardware companies in the sense that the physical world matters and the intersection of the two is where a lot of the most interesting things are happening.

Invest Like the Best with Patrick O'Shaughnessy

Eric Vishria - A Decade of Lessons Investing in Software & Hardware - [Invest Like the Best, EP.486]

The best companies we've invested in, the founders had a point of view about the world that was different from consensus, and they were right. And the hardest part of venture is that you can have a non-consensus view and be wrong, or you can have a consensus view and be right, but only the non-consensus and right leads to the outlier returns.

Invest Like the Best with Patrick O'Shaughnessy

Neil Movva - Making AI 10x Cheaper - [Invest Like the Best, EP.488]

The cost of running AI models has dropped roughly 10x per year for the past several years, which is faster than Moore's Law ever moved. If that rate continues, the things that are economically impossible to automate with AI today become possible very quickly.

Invest Like the Best with Patrick O'Shaughnessy

Ben Thompson on Big Tech, China, and the AI Boom Running Out of Money - [Invest Like the Best, EP.487]

The interesting thing about AI is that the returns are so uncertain. You could imagine a world where AI is transformative and these investments are the best ever made, or you could imagine a world where the returns never come and it's the biggest misallocation of capital in history.

The a16z Show

Martin Casado on Where the Value Is Going in AI

Martin believes this may be the biggest unlock of wealth he's seen since the 1990s.

Invest Like the Best with Patrick O'Shaughnessy

Ben Thompson on Big Tech, China, and the AI Boom Running Out of Money - [Invest Like the Best, EP.487]

why he thinks it would be dangerous for the United States to win the AI race outright, what container shipping and the railroads of the 1870s tell us about the buildout, and why the binding constraint on all of this may be capital rather than compute.