[00:03:07] Kyle Grieve: So his book, Richer, Wiser, Happier is going to be released here in paperback form. And I thought it would be just good to get him on here, ask him a few questions that are related to the book, and maybe chat a little bit about some of the learnings that he’s gotten from being part of these smaller communities over the years.

[00:03:21] Kyle Grieve: Let’s kick things off, William. So in the opening chapter of your book, you mentioned that investing kind of became your outlet to create wealth by just simply out thinking others, which I love. You also share that writing the book was a way to kind of uncover these principles, processes, insights, habits, and personality traits that help just these legendary investors that you studied achieve these incredibly impressive long term performances.

[00:03:44] Kyle Grieve: So to start things off, If you had to choose just one overarching theme from that book that’s had kind of the biggest impact on your own journey to get richer, wiser, and happier, what do you think it would be and why?

[00:03:55] William Green: It changes the whole time. I think I keep coming back and thinking, like Howard Marks kept saying, this is the most important thing until he finally wrote a book where there were what’s like 15 or 20 most important things.

[00:04:07] William Green: So it does keep changing, but I wrote the book in a strange way where actually the final part that I wrote was the introduction. And so I’d written all of the chapters over almost five years, and then I came back to the introduction, and then I had to say, okay, so here’s what it all adds up to, here’s what it all means, and so what I figured out is really the overarching theme that I kind of uncovered through this very painful process of reporting and writing this thing over many years.

[00:04:34] William Green: I figured out the most important thing really is this idea that, okay, we live in a very uncertain world where we have no idea what the future holds. We really have no idea. I mean, we can, we can pretend we can listen to all of these suit say is on wall street and beyond and in the news who claim to know but either they’re diluting themselves or they’re trying to dilute us.

[00:04:53] William Green: The reality is despite that we’re not powerless there are things that we can do to stack the odds in our favor and the reason you want to study the great investors is because they’re extraordinarily pragmatic about probabilities, about thinking through this question of what choices can we make that will very subtly tilt the odds in our favor.

[00:05:16] William Green: And I think in some ways, the person who embodied this best for me was Ed Thorpe, who I wrote about in the introduction, who is just this extraordinary genius who I mean, he was sort of the ultimate game player, right? Early in his life, he most famously figured out how to count cards and beat the casino at blackjack.

[00:05:36] William Green: Then he figures out how to beat the casino at roulette, which is outrageous, right? So he, and, and this legendary partner of his called Shannon, who’s a, was a famous scientist at bell labs and at MIT made the first wearable computer. And Ed went to the casino, and he would actually activate this thing with the big toe in his shoe, and he could tell how fast the rotor wheel and the ball was spinning, and so it takes this game of chance, and he adds a little bit of knowledge, a little bit of information that gives him an edge.

[00:06:09] William Green: And that’s such a sort of emblematic way to approach life, right? It’s saying, I’m not going to play this game. That’s just random. But if I can give myself a slight advantage so that I can keep playing the game and over time, the odds of success are going to work in my favor, then I’ll do it. And so one of the things that I found curious was that you could find these approaches, these principles that worked in investing in markets, but they would also work in business and they would also work in life.

[00:06:41] William Green: And so when you start asking someone like Ed Thorpe, as I did over this three hour breakfast in a beautiful hotel in New York, when you start asking him, okay, so if you approach life as a game and you think about how do you stack the odds in your favor in life, Ed actually is incredibly thoughtful about that as well.

[00:06:59] William Green: And so over this amazing breakfast, he starts saying, well, okay, so your health, for example, is a really good emblem of what we’re talking about here, this approach to life. You said you’re dealt certain cards, right? Genetically, you’re dealt certain cards. That’s the hand you’re given. But then you influence the outcome by the decisions you make about how to play that hand.

[00:07:19] William Green: So for example, if you decide that you’re going to exercise, or you decide that you’re going to eat well, or you decide that you’re going to get your annual checkup from your doctor, or you decide that you’re going to make sure your vaccinations are up to date. You’re increasing the odds of a happy outcome.

[00:07:37] William Green: Now, you still actually don’t know whether the outcome could be good. You know, my wife right before I came on the interview called me and she was walking down the street with our dog and this woman turned into her in a car and stopped literally like a couple of inches ahead of her as she was walking across the street.

[00:07:54] William Green: She didn’t have control over that. That was in the hands of the driver who somehow turned recklessly and didn’t look at her. But you increase your odds if you look carefully. If you are not crossing the street when you’re drunk or when you’re luckily my wife doesn’t really drink more than about half a glass of wine a month.

[00:08:13] William Green: But you know what I mean, these decisions about our own behavior, they don’t mean that everything is going to turn out well. But over time, if you behave stupidly, if you behave recklessly, it’s going to come back and bite you in the butt. And if you behave sensibly, it’s more likely to turn out well. And I think what I found really interesting was that you could see this way of playing the odds really in every area of the investor’s life, right?

[00:08:41] William Green: You could see it in the type of information they digested. You could see it in their approach to being continuous learning machines, to use Charlie Munger’s phrase to describe Buffett. You could see it in the way they would set up this kind of quiet, thoughtful, long term lifestyle. That enabled them to think more peacefully and more dispassionately about markets and odds.

[00:09:03] William Green: You could see it in their investment style in the way that many of the great investors would just sit back very calmly and wait for moments of disruption when everyone else was very emotional and they could pounce with what Charlie would call gumption and take advantage of these rare mispriced bets.

[00:09:22] William Green: And so you’d see it in their habit formation, right? I mean, you’d see them decide, okay, so I don’t just want to compound money. I’m going to, I’m going to benefit from compounding with good habits. So if I meditate, it’s not going to make a huge difference on the day, perhaps, but over five years, 10 years, 20 years, if I meditate, or if I exercise, or if I’m kind to people, it’s going to start compounding.

[00:09:49] William Green: So I think in a way, that’s the master principle. That’s the overarching principle. And I, I guess I spelled it out a little bit in, in the introduction. But I think it’s easy to miss. I mean, I, you know, I did a lot of cloning of other people’s books, right? And I, I studied very carefully books by people like Malcolm Gladwell and Oliver Sacks.

[00:10:08] William Green: And I could see, okay, so here’s someone like Gladwell who would have one great idea, like the tipping point or blink or outliers. He would have one major theme and then he would have all these variations on a theme. And my book was similar in a sense, except that there were so many themes. I mean, in a way, it’s almost like nine books.

[00:10:28] William Green: It was like, crazily ambitious. But I think the overarching theme, the thing that brings them all together is the fact that if you behave in the way that’s outlined in each of these chapters, you’re subtly stacking the odds in your favor, and you still might be screwed, because we live in such an uncertain world where terrible things happen to great people who are incredibly rational, but you’re much more likely to succeed if you operate this way than if you don’t.

[00:10:56] Kyle Grieve: Speaking of cloning, those great authors you just spoke to, I want to talk about cloning, because cloning is just one of my favorite metal models, and I really enjoyed how you put that specifically at the very beginning of your book, and I know you did that kind of intentionally so. There’s a couple of things I want to mention, though.

[00:11:11] Kyle Grieve: I’ve heard Mohnish Pabrai on numerous times in his interviews, say how he feels that humans have this kind of natural aversion to cloning. And so from my observations, when I look specifically at a lot of the value investors that you outlined in the book, or just people that even aren’t outlined in the book, it seems like a lot of them have succeeded specifically by cloning specific traits or strategies from people like Warren Buffett and Charlie Munger and all those types.

[00:11:36] Kyle Grieve: So I’d love to get your opinion, you know, what do you think? The average person thinks about cloning and is everyone capable of it? Or do you think there’s just a small subset of people who are kind of, you know, have that survivorship bias and we see them cloning people, but maybe make up a very, very small minority of the population.

[00:11:56] William Green: I think cloning is an absolute superpower, but you have to understand how powerful it is. And so I think part of what happened to me is that because I’m old friends with Guy Spier, who’s possibly Mohnish’s closest friend, I got to know Mohnish pretty well over the years. And I would go to Omaha with him for the Berkshire Hathaway annual meeting.

[00:12:15] William Green: And when I wrote an earlier book called The Great Minds of Investing, I went out to Irvine, California to his office and spent a lot of time with him there. And one time we flew back on a private plane that guy had rented from NetJet. So we were chatting about cloning and things like that on the flight back from Omaha to New York.

[00:12:33] William Green: And so then when I came to write this book, I knew that Mohnish was just extraordinarily thoughtful. He has this brilliant mind, and he thought very deeply about this stuff that I think nobody else had really thought about. And so I decided to write at the start, literally actually before I even, you Got a book deal.

[00:12:50] William Green: I went to India with Mohnish and spent five days with him crossing India. I mean, we did crazy stuff. We, we went into, we went to all of these, not all, but a lot of schools that his foundation, his charitable foundation, Dakshana funding. And we even shared a a bunk bed in a train one night on an all night train ride from, I think it was Mumbai, Dakota, or the other way around.

[00:13:14] William Green: Yeah. And the reason I wanted to do all of this and spend all of this time with Mohnish is that I realized he had figured out this one unbelievably powerful idea that I needed to focus on in the first chapter of the book, which is that you don’t really need to be original. What you really need to do. I mean, it’s great if you are original, it’s fabulous, but if you’re like most of us, and you’re just pretty smart, pretty talented, pretty diligent.

[00:13:39] William Green: It’s much wiser to say, let me look at people who are smarter, more knowledgeable, older, more experienced, wiser, more successful, have figured out already. And let me reverse engineer it really carefully and then replicate what works for me in their approach. And Mohnisha’s point is that almost nobody bothers to do that.

[00:14:02] William Green: Partly I think because they don’t get that this is an important approach, but partly I think because as he would put it, there is this kind of natural resistance, almost this sense that it’s tawdry and vulgar and unoriginal, you know, to just say, oh, that works really well, let me rip that off. And so I think that gives a tremendous advantage to anyone who actually understands both the power of the principle.

[00:14:26] William Green: But also as Charlie would say, you know, Charlie, one of my favorite lines from Charlie was take a simple idea and take it seriously. Take a good idea. Take it seriously. And so when you encounter something like cloning, the key is actually the degree of fanaticism. Involved in the application and so for me, this has become really a central principle in my life because I’ve seen it work so well.

[00:14:51] William Green: And so I’m applying it the whole time and I use it in very small ways, right? Where something like my website, which I just updated this week after about 3. 5 years of meaning to update it and never doing it. I wanted to have williamgreen.com, but it wasn’t available. So, I looked at Michael Lewis’s website and various others and I see, oh, MichaelLewisWrites.com. And so I just clone that immediately. So I have WilliamGreenWrites.com. Or when you and I were trying to figure out what time to have the masterclass, I’m like, oh, well, one of my guests on the podcast, Michael Burke, he teaches this amazing monthly class for an international audience over over zoom and he does it at 1pm eastern standard time.

[00:15:30] William Green: And I’m like, I’ll clone that. It’ll probably work for people in London. It’ll work for people in Toronto. So these very simple decisions I clone, but then you can do it with investing, right? So you can say, okay, as, as Mohnish did, what are the underlying principles behind Warren and Charlie’s success? So one of the things that Charlie said to me on a zoom call that I had with him once is he said, look, all successful investing.

[00:15:57] William Green: Involves buying more than you’re paying for getting more prospects than you’re paying for. And he said, look, there are different ways of doing that, right? He said, you could do it by buying Amazon as Bill Miller did many, many years ago when everyone thought in the value investing community that Amazon was vastly overpriced and was going to go bankrupt.

[00:16:16] William Green: And Bill was like, no, this has a an advantage that people aren’t seeing. And it’ll become apparent one day. And so he, he, he found value that other people didn’t see that. So there are different ways of doing it, but they’re all reflections. They’re variations of that fundamental theme of buying, you know, as Joe Greenblatt said to me, value an asset and buy it for less, buy it for much less than it’s worth, and that’s the whole essence of, of investing.

[00:16:46] William Green: So I think you, you want to study what these people have figured out and then reverse engineer it, but then you want to do it in so many ways, right? You can model yourself on these people. So you can literally do things like what Li Liu, this great investor who managed part of it. Yeah. Charlie’s fortune did where when I went to visit Li Liu in Pasadena once he he had in his office a bust of, of Charlie as a physical reminder, I guess, to behave more rationally in the way that Charlie would.

[00:17:15] William Green: Guy Spier has the same bust in his office in Zurich and in his home in Zurich and in the library in his home. I have the same thing in my house, which guy bought for me many years ago and sent to me. It was made in India cast in India. And I discovered recently that I think Mohnish told me that he auctioned one recently for 26, 000 for Dakshana.

[00:17:38] William Green: So my wife was less enthusiastic about getting rid of my statue of of Charlie Munger when she heard that it might be worth 26, 000. But, you know, these are physical reminders of certain characteristics that we want to emulate. So it’s not just emulating their investing principles. It’s, it’s looking at that sculpture and thinking, okay, at this bust, at this bronze bust of a, of a balding, bespectacled, nonagenarian guy who you know, passed away a year ago at 99.

[00:18:07] William Green: It’s a way of, it’s a kind of physical cue to remind myself to try to emulate the characteristics that Charlie embodied, like integrity, a sense of honor, a sense of decency, sense of rationality. You know, a huge emphasis on the power of positive sum relationships where nobody, you know, where he made sure that his suppliers got treated well, that his partners were treated well, that everyone was treated decently, you know, he didn’t believe in life as a zero sum game.

[00:18:37] William Green: And so, you know, once you start to actually think really seriously about cloning in all of these, these different ways, it radiates out in such a beautiful way. And you start to see, oh, wait a second. So Amazon, in a sense, was cloning Costco. And you know, this is one of the things that Nick sleep in case the carrier figured out when they saw the prime membership thing for Amazon, they were like, oh, it’s like the Costco membership card.

[00:19:02] William Green: And Nick sleep said to me, it’s like Costco on steroids. And so. I think this in a way, it’s like a muscle that you’re trying to build. It starts with an understanding of the power of this actual practice of cloning, understanding that it’s something that we’re resistant to and understanding that it’s been very beneficial in the past, whether it’s to, I mean, look, Warren, Warren clearly cloned things from Ben Graham.

[00:19:26] William Green: I mean, he, he cloned things like the fee structure that Ben Graham had when Warren set up his limited partnerships in the fifties. He mimicked the fee structure that Ben Graham had, but then also he ended up diversifying much less than Ben Graham, right? So I think this is a really key point. It’s not about, it’s not about slavishly following what someone else does.

[00:19:48] William Green: I think to clone in an intelligent way. You want to take the principle, take the spirit of what the person has figured out or the company has figured out and then you adapt it to suit your own temperament and your own talents and your own situation and circumstances. And so one of the things I, I ended up writing about with in the conclusion to my chapter on Mohnish, which I was thinking about just this morning is Mohnish became obsessed with truthfulness.

[00:20:17] William Green: And that’s clearly really important, but this, he, he drew it from David Hawkins book, Power Versus Force, and I started to think, well, yeah, so the idea of focusing relentlessly on one virtue is really important, but why should it be truthfulness? Why shouldn’t it be kindness? Why shouldn’t it be compassion?

[00:20:34] William Green: And so for me, kindness is probably more important than truthfulness. They’re both pretty important. I mean, when I interviewed Mohnish on my podcast, and I pointed out that maybe he’d got the wrong principle from David Hawkins, he said something along the lines of, well, it’s easier for me to be truthful and for me to be kind, which is incredibly candid and interesting insight.

[00:20:58] William Green: For me, maybe it’s easier to be kind than truthful. I don’t know. So maybe I, maybe I, I tilt towards that. I don’t know. I’m not self aware enough to tell, but I, I think that’s a really good example of something where you, you take the idea, the spirit of cloning this, this principle of focusing intensely on one virtue, but then you adapt it.

[00:21:19] William Green: You ask yourself, well, am I Mohnish or do I have a different approach? I mean, for me to clone Mohnish is unbelievable concentration on two, three, four, five stocks would be suicidal because I’m not as unemotional as Mohnish. I mean, I remember once asking Mohnish. About how he felt when how he dealt with the stress when his fund was down something like 67 percent in 2008.

[00:21:47] William Green: And he said, I don’t feel stress. And I said, really? You’re serious? And he said, yeah. He said, my wife at the time didn’t even know. That we were going through this kind of crisis. Like she, she wasn’t aware there was any pressure. And he just told the truth to his shareholders. He said, it’s not because of the market that we screwed up this much.

[00:22:07] William Green: It’s because I made this dumb mistake and this dumb mistake and this dumb mistake. And almost nobody redeemed from the fund and then he bounced back unbelievably and it was all fine. So, I mean, that’s great if you’re totally unemotional and you can make these dispassionate bets on really cheap stuff. I am not totally unemotional and so for me to clone that would be really dumb.

[00:22:30] William Green: So, yeah, I mean, just to wrap up this idea. It’s a superpower to clone. It’s an unbelievable muscle to build, but you’ve got to make it true to who you are. You’ve got to make it suit your talents and your temperament. And you also, you don’t need to clone everything from the person you’re cloning. So you could say, well, you know, this great investor or that great investor is unbelievably honest and unbelievably smart.

[00:22:56] William Green: An unbelievably thoughtful, but they don’t play nicely with the other kids and I work in a team and so I want to clone somebody else when it comes to figuring out how to manage a team. I mean, Mohnish doesn’t give a damn about, you know, team dynamics. He’s just, you know, he’s just not interested in working with a team.

[00:23:16] William Green: Neither is Warren, really. And so, you know, whereas I have a guest who I interviewed recently on a upcoming episode of podcast, which a famous investor called Bill Priest, who is one of the Barron’s round table members. And he just operates brilliantly in a team is really amazing and operating in a team.

[00:23:34] William Green: So I would very carefully clone what he’s figured out about teamwork and how to get the best out of people and how to, how to use the people in his team to challenge his own views. Mohnish feels like he doesn’t want a team because then you have investing by committee and you can’t think independently.

[00:23:53] William Green: So there are so many nuances to this, but you know, this goes really deep. I mean, if you really study cloning, it just becomes something that you want to make a central tool in your life.

[00:24:05] Kyle Grieve: Yeah, absolutely. And I know in the masterclass, you know, it gave me a lot of time to really think about stuff that I want to clone.

[00:24:11] Kyle Grieve: So I went through and looked at like different characteristic traits that I want to clone from other people that I’m currently working on or maybe need want to add in the future. I think it’s a really, really helpful thing for anyone to do, because you’ll find that there’s some people that you high respect already doing things that you want to do.

[00:24:26] Kyle Grieve: And, you know, like Charlie Munger said, if you want to live a good life, deserve it. And I think just doing things that other people are already doing who have lived a good life, there you go. That’s kind of your blueprint to live a good life.

[00:24:36] William Green: So did, did anything come out of, out of that specifically, who did you decide to clone and what did you decide to clone?

[00:24:42] William Green: Like, are there any actual real breakthroughs in what you’re doing?

[00:24:46] Kyle Grieve: I think for me, it was a lot of just seeing what I’m already doing and maybe being a little bit more intentional about the specific things, you know, looking at people like Warren Buffett and, and, and, I mean, him and Charlie, honestly, there’s a lot of things that you can just kind of lump together and like, just like their ability to treat people kindly and like you said, like the win win thing, that’s just, that’s, that’s been a huge kind of thing for me, that a big learning.

[00:25:13] Kyle Grieve: It’s just showing that there’s a different way to do business that I think a lot of people just either they don’t want to do it or they don’t care about these win win relationships. But like, just to your point there, you were talking about Charlie and how he always had these win win type relationships.

[00:25:30] Kyle Grieve: There was a little, it made me think of this point from damn right where, so he had this initial partner in his partnership and things didn’t end up going the way they both wanted and they ended up separating ways. And basically in order to make this guy, I guess, say face, they gave him a portion of the fees that they would make from the partnership.

[00:25:47] Kyle Grieve: And, you know, he could have just said, no, you’re out, but he did that because he knew that was going to be a win win for both him, the partnership and for, for his friend that they parted ways with. So it’s just little things like that, that was a really big insight for me and that’s something that I’m, I’m trying to kind of melt, weld into my, into my life as, as much as possible.

[00:26:05] William Green: I actually think it goes back to that idea from Charlie of take a simple idea and take it seriously. If you just take that one idea and it becomes a guiding principle, it has a very profound effect because it’s such a simplifying filter in so much of what you do because I mean I’ve talked about this before in my dealings with stick our partner at The Investor’s Podcast Network we don’t really seem to do anything in writing in contracts there’s just this sort of assumption that we’re going to take care of each other and he has exactly the same policy with preston i’m sure he has the same thing with you.

[00:26:42] William Green: And that radiates out once you start to decide, oh, well, I’m actually not going to try to screw these people and get the best deal. I’m actually going to very consciously make sure they’re okay and that the person on the other side of this deal would be happy. That’s very powerful because the thing that I think Charlie figured out because he was so rational, he was not sentimental about these things.

[00:27:08] William Green: He said to me at one point. He said, look, Mohnish is so mathematical and so logical that he said he knows that he’s going to be richer and more successful if he treats people decently and honorably, if he’s, if he’s really ethical. And he said, people like me and Mohnish, we don’t deserve much congratulations for being so ethical.

[00:27:29] William Green: We know that we’re going to be richer and more successful because we’re ethical. And so once you understand that, it has a very profound impact and it gives you permission to behave in a certain way. I was very struck a few months ago when I was in England, I met with Nick Sleep at an event, and I asked him about something that he had learned from Charlie, where Charlie had said to him, I can only teach people what they already almost know.

[00:27:56] William Green: And I thought it was a beautiful insight. I’d never heard this before. And so I think we, we already almost know that we should behave in this honorable win win fashion. But there’s a part of us that thinks, yeah, but maybe that’s just woefully naive and I’m going to get screwed in this way and taken advantage of in this way.

[00:28:16] William Green: And what if I’m the naive one who acts that way? And I get my head handed to me and then you watch TV and you see Succession and Billions and the like, and you see all of these rapacious businessmen doing unbelievably well, you know, I mean, there are so many examples, right? And so it takes an act of faith in a way to say, I’m not going to operate that way.

[00:28:40] William Green: I could operate that way and I’m not. And what happens somewhat miraculously. In my experience from observing Charlie and Warren and Tom Gayner and Tom Russo all of the money all guys be all of these people who operate that way they draw incredible people into their lives and these people also have that same mentality of win win.

[00:29:08] William Green: So when you surround yourself with people who operate that way, your life becomes kind of magical because you’re not always watching over your shoulder for someone to screw you. And it just becomes much easier. So I, I think this is one of the reasons why I love studying the great investors is because they’re not sentimentalists, right?

[00:29:28] William Green: I mean, I have a tendency to be sort of sentimental and, and mystical about all of these things. And they’re like deeply pragmatic, right? So when you say to wait when I think about money should I think about the amazing things he’s done for charity to live tens of thousands of people out of poverty in india it’s very easy for me to become sentimental about it and you know I think of these.

[00:29:52] William Green: Beautiful things like the same from the tablet about you know who saves one life saves the world. And I sort of think that’s true. And Mohnish is like, nah. He’s like, the world’s kind of meaningless, and you know, if you can just leave it a better place and do a good job with your kids and help people and, you know, that’s good.

[00:30:09] William Green: The rest of it’s just a game. And I don’t know if he truly believes that. I think it’s somewhat true to what he believes. Maybe it’s totally true. But he’s not being sentimental about it. He’s like, no, life will be better if I help a lot of people and it’s just a game and let me figure out how to do it.

[00:30:27] William Green: So there’s something just so deeply pragmatic about it. And then, you know, as Charlie would say, I observe what works and doesn’t work and why. And so you observe what works in the, in, in these people’s lives and you try it in your own life. And then you say, that’s weird. I behaved honorably and it had this beneficial effect.

[00:30:48] William Green: I had this one time with Mohnish, I don’t know if I ever told you this story, where early on when my book came out, Mohnish was going to buy a huge number of copies as gifts. He’s always incredibly generous about giving gifts of books every year. I got my first copy of Poor Charles’s Almanack from Mohnish maybe 20 something years ago.

[00:31:05] William Green: And he decides he’s gonna buy lots of copies of my book and so I put him in charge with this bulk seller. I had a publicist at the time who was trying to arrange for me to sell, you know, lots of copies by bulk. And Mohnish writes me and he says, is that the best price? And I look at it and I’m like, no, it’s a crap price.

[00:31:22] William Green: Like, wait, why, why, why is this more expensive than it should be? And it turns out that it was going through a different bulk seller because they would be counted for the bestseller list or something like that. I mean, there is all sorts of machinations of a bestseller list. And so I wrote back to him and I said, no, no, you would do better to buy it through this other seller and you’d get it for like, you know, a dollar or two less per copy. And it didn’t occur to me, you know, to lie about it. I’m like, well, you know, I’ve, I’ve written a whole chapter about money and about power versus force and telling the truth. I’m going to tell them the truth.

[00:31:56] William Green: And he writes back and he’s like, oh, okay. That’s absolutely fine. I’ll buy it through the seller. They want to sell it through. So he knowingly goes and buys it more expensively. Because the publicist had said that that would help me, and it was just a really interesting experiment to see like this little microcosm of, wait a second, so if I take this principle from David Hawkins of trying to be more truthful, it actually doesn’t hurt me, it ends up weirdly with this honorable guy helping me, and so I think you just test these things out, and you see, huh, these principles are pretty powerful, let me do more of that.

[00:32:34] Kyle Grieve: Let’s continue riffing here on Charlie Munger here, seeing as where we’re going pretty hard on that.

[00:32:38] Kyle Grieve: So your chapter that you had on avoiding foolishness, I think, tied in really well with a lot of the lessons I learned from reading his book, Damn Right, which I’m sure you’ve, you’ve read as well. And, you know, I just found, I found it so fascinating that Charlie Munger’s approach of just reducing standard stupidities.

[00:32:55] Kyle Grieve: Was such a powerful edge for him in the market. I mean, it’s such a, like, like you just said, you know, it’s a simple idea, but he took it very seriously. And I think he, he executed on that at such a high level. But, you know, one of the most interesting parts, I think, is his emphasis on avoiding self defeating emotions that you pointed out in your book.

[00:33:12] Kyle Grieve: There was, you know, anger, resentment, self pity, and, you know, he famously just said he doesn’t do them. But, you know, for us mere mortals who have emotions that are maybe harder to control, I’m interested in learning more about how you would suggest investors or just, you know, everyday people work on maybe.

[00:33:30] Kyle Grieve: Defeating these more easily triggered emotions that kind of sabotage them from making optimal decisions.

[00:33:37] William Green: Yeah, I don’t think you ever defeat them. I think part of what, as I understand, I’ve worked on this a lot, and I’ve talked to people like Daniel Goldman, who wrote this book on emotional intelligence and has become a friend.

[00:33:48] William Green: I’ve had him on the podcast, I think, probably three times now, and he’s an expert on meditation, but also on the brain. He was a science writer for the New York Times for many years, a very remarkable guy, and he explained to me that it’s not really about overcoming and defeating this stuff. He’s like, you’re still going to get anger, you’re still going to get envy, you’re still going to get anxiety, but be aware of it.

[00:34:14] William Green: And so I had this actually just on my, on my way to the office here where, where we’re recording this. I was stuck behind a whole array of trucks and cars as they were sort of chopping down trees and stuff and I was late as I always am and so I was getting kind of frustrated and so I very consciously started to focus on how I felt and I literally, I mean, I don’t usually do this, but I literally found myself talking aloud in the car and saying, okay, so where are you feeling the anger?

[00:34:44] William Green: Where are you feeling the frustration? And I was like, oh, okay, there’s a little bit in the forehead, like I feel my forehead tightening. And, oh, there’s a little bit of pressure in my chest. Oh, what’s happening in the back of my head? Oh, that’s interesting, there’s actually pressure in the back of my head.

[00:34:59] William Green: And, and I’m like, what’s happening with the breathing? I said yeah my breathing is getting a little constrained and then I wasn’t trying to change it I relaxed a little bit but I was actually really just focusing on observing it and then a couple of minutes later i’m like. Okay so has it subsided is it gone or is there a little bit of a residue that?

[00:35:23] William Green: I mean, yeah, maybe there’s a little bit of a residue, but actually it’s kind of gone. It’s kind of gone. And then I see there’s a car double parked and I’m having to go on the opposite side of the road to get around and I’m like, oh no, there’s annoyance still. And so, I, sorry to be so granular and self referential about it, but it’s literally, it’s observing this stuff in your body.

[00:35:42] William Green: So it’s not that it’s not happening. It’s that you’re observing it and then you’re saying, Because you’re aware of it, maybe you can make more skillful decisions about what to do with it. And so one of my favorite examples in the investment world of this is from my friend Ken Schubenstein, who, after being a very successful venture capitalist and private equity guy, quit the investment business to become a neurologist.

[00:36:05] William Green: And I had Ken’s class. Columbia Business School, where he taught the advanced investment research class, which is an amazing class. And I ordered it one, one year, a few years ago while I was working on the book. And because Ken is such an expert on the brain, he’s really thought through these questions of how you deal with emotion, how you prevent the emotion torpedoing your judgment.

[00:36:29] William Green: And so Ken would very consciously not make decisions when he was in various suboptimal states, right? So he would talk about when you’re hungry, angry, lonely, tired, in pain, or stressed. These are great preconditions for making lousy decisions. I remember telling someone this once and he said, what else is that?

[00:36:48] William Green: That’s, that’s all of my states. But so one of the things that Ken would do is as he found himself getting into those states, he would very consciously slow things down because in the same way as I was saying in the car where I was asking myself, okay, has it subsided yet? There’s this sort of peak of the emotion where you feel the anger or, you know, and sometimes when you’re angry, you’re really just like possessed.

[00:37:15] William Green: It feels like you’re almost demonically possessed and you just kind of, you’re like, I’m not going to say this to my wife. And then 10 seconds later, you’re like, oh God, there I go again. I just blown up this thing and I’m gonna be in the dog house for two days because I couldn’t control myself I got better at that over the years but I still lost my temper the other day when I was struggling getting into New York City and I was driving terribly I parked terribly at my wife’s like do you want to get out and I’ll park for you and just my poor little male ego just kind of you know it’s so ridiculous because it’s like literally my wife taught me to drive when I was 25 so there’s no reason why I should particularly 32 years later, 31 years later, have any pride about this, but I just was so irritated.

[00:38:00] William Green: So there, there are times where you’re kind of taken over by it, but I think, I think you’re more likely to get back to normal. If you’re aware of what’s going on and sometimes in the moment where you’re feeling kind of overtaken by anger just to walk away just to know nothing good is going to come of this.

[00:38:20] William Green: Let me just take myself out of this situation is very helpful. But when it’s less fiery emotions like anxiety, which I have plenty of, I mean, I think that’s why a lot of people, it’s much less than it used to be, but I think that’s why a lot of people end up meditating is initially because we have anxiety and then you get in the deep end and you start to be like, no, no, this is way, way, way more profound and the applications are way deeper.

[00:38:44] William Green: But, you know, for anxiety, when it’s sort of lower key, it’s just kind of a, you know, you know that you’re not going to make great decisions because you’re just worried you’re a little jumpy or a little angsty. Just to get back to a few key habits that you know are helpful is a really practical thing to do.

[00:39:04] William Green: And so what, what Ken Schubenstein said to me is, look, we, we know that there are four things that promote brain health. and brain function. There are four habits that have been scientifically proven to help. So, we know that meditation helps. We know that a good diet helps. We know that good sleep helps. And we know that exercise helps.

[00:39:26] William Green: And so, when he was under a lot of stress during something like the 2008 period where his fund was getting killed and because he didn’t have a gate, lots of his shareholders were cashing out at the worst possible time when stocks were incredibly cheap. And we’re using the money so that they didn’t have to redeem from other funds that had erected a gate that stopped them getting out.

[00:39:46] William Green: And so it was just a terrible time for Ken. And so he very consciously got back to these basic habits. So even something as small as saying that he started to make a point of eating more fish and more vegetables, more salad. And he stopped mashing up chocolate chip cookies and vanilla ice cream, which was a particular temptation for him.

[00:40:09] William Green: So just knowing, knowing that you want to simplify your lifestyle and get back to these basic positive habits that promote good decision making is very helpful. And what I’ve, what I’ve found that I really cloned from Ken over the years is when I find that I’m getting overwhelmed because I just have too many things going on, I’m juggling too many projects.

[00:40:30] William Green: I really try to radically simplify my life, and sometimes in a kind of antisocial way, I, I was, I literally didn’t go with my family to Thanksgiving, because they were going to Massachusetts, and I’m in New York, and I had so many deadlines, and I’m like, it’s just gonna push me over the edge. And in some ways that contradicts everything that I always say about the importance of having a balanced life and, you know, emphasizing the value of relationships and stuff.

[00:40:55] William Green: But yesterday, as I was driving my daughter into New York City, she said to me, you were totally right not to come on Thanksgiving and she had sort of overwhelmed herself by overloading her system with too many things. And so knowing what an appropriate speed limit for yourself is in terms of the amount of complexity you take into your life is really, really important.

[00:41:15] William Green: And so those are a few very practical ways to deal with your emotions. The other thing I would say is, look at this book that David Hawkins wrote, letting go and look at chapter 2 of that because it’s just got this very powerful technique for dealing with emotions where you’re watching the emotion and you’re seeing, where it’s showing up semantically where it is in your body but you’re not trying to change it and so this I guess is what I was trying to do in the car.

[00:41:46] William Green: And Hawkins point is that the thing that keeps the emotion going, these negative emotions, is resistance. And when you have kind of radical non resistance to them, they sort of dissipate on their own, because as we know from studying, you know, Buddhism and the like, everything is impermanent. Everything changes.

[00:42:07] William Green: And so, you know, in Christianity, this too shall pass, right? Like, it’s gonna pass. And so, you, you want to just try to avoid doing anything incredibly stupid while under the influence of dumb emotions. And, and Charlie had, I think, an emotional advantage, a wiring advantage, But he didn’t really feel these emotions.

[00:42:26] William Green: But when I said to him, how do you, how do you resist these emotions? He said, well, I just don’t let them run. I don’t even let them start. And he said, because I know they’re stupid. And he said, I’m trying all day, every day to be less stupid. And so the knowledge itself is helpful. So even knowing that something like self pity is actually self defeating and stupid, that it’s going to hurt you, is very powerful.

[00:42:55] William Green: Or knowing that anger or a desire for vengeance is stupid, is very helpful and Charlie was very consciously looking at other people he could climb to figure this out so I remember. Once in a daily journal meeting when he was chairman of the daily journal I think this is back in about two thousand sixteen two thousand seventeen during the time after the meeting where a few of us sort of superfan disciples were milling around and asking him additional questions.

[00:43:22] William Green: Someone said to him what would you ask Ben Franklin if you had dinner with Ben. And he said, I, I’ve had all my conversations with Ben. And so in his own head, he’d already been sort of talking to Ben about how to live. And he starts talking about how Ben Franklin never managed to overcome his resentment towards his son, who had very starkly different political views to him.

[00:43:48] William Green: And it really tore apart the relationship. And he said, so I’ve done a better job than Ben of letting go. I thought that was such a revealing comment that for someone like Charlie who couldn’t benchmark himself against many living people, he was benchmarking himself against the eminent dead, and he was very consciously saying this giant Ben Franklin, who I absolutely revere, screwed up on this one front, and he wrecked his relationship with his beloved son and let me not do that because I know that resentment is stupid. What an amazing example that is.

[00:44:27] Kyle Grieve: I wanted to move this we’re talking about cloning I wanted to move this to an area that maybe is harder to clone and that’s Contrarianism. So I really liked your book because you in your kind of chapter on contrarians, you talked about Sir John Templeton, who I think, you know, he’s probably one of the best examples of a contrarian that you could possibly get at in the way in the world of investing.

[00:44:46] Kyle Grieve: And so, you know, he kind of made, he started his, his quest, you know, buying stocks that no one wanted during the second world war or buying stocks overseas when Americans were just not going to do that. And so then you also added a really interesting point that Francois Rochon made, which was that he felt that some of the best investors were missing what he called the tribal gene.

[00:45:08] Kyle Grieve: So, you know, you know, genes, some of them are turned off, some of them are turned off. And I guess in some people, hopefully this tribal gene is, is turned off and that offers some unique advantages. But, you know, I I’m interested in learning from you since you’ve spoken with so many of these incredible investors over the years, you know, do you think contrarian in these investors is Is a trait that they’re able to learn over time.

[00:45:29] Kyle Grieve: Like, are they able to mold their way into that? Or do you think that you’re kind of born with it and you know, if that’s the way you are, that’s the way you are. And that’s how you express it in various aspects of your life.

[00:45:40] William Green: I suspect like most things it’s a mix of nature and nurture. I remember Templeton saying to me that during his childhood, his parents never told him what to do, and he had, he’d once gone on, gone on this trip, I guess it was a road trip, and he takes his family, he, he’s given the map, I guess, and he’s told that he’s navigating, and he takes his family massively in the wrong direction, and his parents just never said anything, I think.

[00:46:06] William Green: And then finally he figures out, oh God, I’ve taken us in the wrong direction. And he said, that was such an amazing education to have to learn from your own mistakes. Similarly, I think, I think Nick Sleep said to me once that he went to this posh boarding school in England, but all of the other kids were boarders and didn’t leave.

[00:46:28] William Green: And he actually was a day boy because he lived nearby and and so he wasn’t sleeping there at night so he even had a job in a local pub the weekends and so he said I became very comfortable with not being part of the crowd and it’s possible that we’re just creating narratives that, you know, prove our point.

[00:46:50] William Green: I always remember Howard Marks beginning a sentence when I interviewed him once saying in my myth of myself. And I love that phrase, right? Like, there’s a, so I have this myth of myself, right? That I think of myself as, you know, one of 10 Jews who went to Eaton, this very posh English school, and a Jew with a birthmark at a school of 1300 really posh English boys.

[00:47:15] William Green: And so that’s an amazing kind of circumstance in which you would become extremely independent minded and I am extremely independent minded. I mean, I think that’s one reason why I’m so drawn to the investors. I write about is because like me, there’s some deeply subversive, independent, smart aspect of them.

[00:47:36] William Green: Where they’re figuring out how do I crack the code of the markets? How do I crack the code of how to live so that I don’t have to take any orders from anybody and can just live the way I want to live? So, in my myth of myself, that’s become part of my identity. But is that really who I am or is it just, I don’t know.

[00:47:55] William Green: I mean how much, how much of it is in my DNA as a descendant of people, you know, my, my great grandfather literally had to flee as a 14 year old from, from Ukraine and Russia speaking no English, speaking only Yiddish and going as a bristle merchant to Cincinnati and almost starving to death and ending up in Glasgow, you know, and having a son there who became an eye surgeon, who was my grandfather, who then sent my father to really good schools.

[00:48:24] William Green: And my father ends up becoming a judge that my dad sends me to really good schools. So in my myth of myself and my family, that sort of made me who I am. But I don’t really know. I mean, some of it may just be wiring. I saw some of it may be emotional. I mean, you, you look at a lot of the great investors and they’re just emotionally wired independent of their conditioning to be not team players, to be very independent spirited, to be very contrarian. And I, I remember Chris Davis, who’s an incredibly thoughtful observer of this and was very close to Charlie Munger and Warren Buffet and Tom Gayner and Bill Miller. I mean, and, and, and his father and his grandfather were both great investors as well.

[00:49:07] William Green: So, I mean, nobody has observed great investors. More closely and talks about the more eloquently than chris and chris i remember talking to me about his father Shelby Davis I was really great investor and he said he was such a loner he said he would just sit in our house in tuxedo and tuxedo park with like a stack of.

[00:49:29] William Green: Annual reports in the phone and he just you know. It just was digging up information all day long. And he said, it was a very lonely existence. And he said that for a lot of the great investors, he said, it was clear that when they were at school or university, they didn’t really like team sports. They tended to like sports where it was just them, you know, maybe they were playing tennis or squash or something like that.

[00:49:55] William Green: You know, they weren’t, they weren’t in the lacrosse team or the football team or something like that. They weren’t president of that class. They were loners. I think that’s a very interesting observation. And so I think if there’s a takeaway here part of it is we want to be self aware right we want to know how we are wired how what we’re comfortable doing I remember when money shocked warren early in his career if you could go work free for warren and warren wrote back this very polite note saying sorry I just know that I operate best on my own and you think of red alio who had on the podcast couple of times and gray said to me life is life is just about.

[00:50:37] William Green: Finding suitable paths as he pronounced it i would pronounce it pods. Suitable pads based on a knowledge of your your own character your own nature and your own values and I think again it’s a very simple idea that’s very profound so you have to know how you’re wired and then set yourself up to play games that suit your particular wiring and so for someone like Mohnish he’s bizarrely well suited for this game where you just sit quietly in a room. And you look through masses and masses of companies and you make very very quick decisions about well this one looks rubbish this one looks rubbish this doesn’t make my get through this filter and then you get to a few that seem really interesting and then you get maniacally focused on doing deep dives and once in a while you find something extraordinary I remember him once.

[00:51:32] William Green: Writing to Guy Spier and he said look if I do fifty deep dives a year every four years a company like race which is this Turkish stock will drop I’ll find one race every every four years and extraordinary multi bag and so that’s a very systematic way of thinking right if I do two hundred deep dives really intensely with my big brain.

[00:51:57] William Green: Sitting quietly in my room and taking a nap in the afternoons as Mohnish does and going to play racquetball and going cycling and stuff and having no appointments and not really ever being prepared to meet with a prospective investor. Eventually, I’m going to find a few really great mispriced bets. And so Mohnish has just managed to set himself up in this really sort of slightly antisocial way, which suits a guy who’s slightly misanthropic.

[00:52:24] William Green: I mean, I love Mohnish. Mohnish is an amazing company and funny and brilliant, but he’s aware enough of his own nature to say you know, I remember many years ago when, when he talked to me about his early career managing a tech consulting company and he’s like i’m just not interested in having all these weepers coming to me complaining about their problems and so that just doesn’t play to his strengths he’s figured out how to operate in a way that plays his strength. So I think for all of us really understand whether you should be part of a team whether you should be operating on your own whether you’re good with systems and practices and or whether you know you’re non linear and then I, I talked to Ray Dalio about this at some length. This idea of just finding, surrounding yourself with people who also compliment you, who make up for where you’re weak.

[00:53:15] William Green: So it all is basically built on self awareness, I think.

[00:53:19] Kyle Grieve: So sticking with the theme here of self awareness, I wanted to talk a little bit about Howard Marks, who has been one of my biggest influences. He’s obviously a person who’s super aware. His book, the excellent book, with two of his books, you know, he mentions this whole point about cycles and kind of not necessarily knowing where you’re going to go, but being aware of where you are in that cycle.

[00:53:42] Kyle Grieve: Who knows if it’s going to go up or down, but just, just being aware, aware of, of where you are in that cycle. And I think to me, a lot of the things that I’ve learned about Howard Marks is the fact that you, you’ve already alluded to this, that we can’t predict the future. Right? I mean, he talks about that basically in his whole book as well, but there’s always going to be people out there talking about predictions, whether that’s, you know, the next quarter, a month from now, a year for a year from now, five years from now.

[00:54:06] Kyle Grieve: So, but the fact is, if you look at some of the best investors, most of them, they’re not really focused on that. And I think that’s a really big insight. So from your experience with talking with a lot of them, I’d love to know. You know, how can the average person who unfortunately tends to be very focused on things that they shouldn’t be, such as predictions and, you know, noise and macro environments and interest rates, you know. How can you best kind of develop a level of awareness that helps you really focus on the things that are going to truly matter?

[00:54:40] William Green: Yeah, I, I think some of it is just educating ourselves. So we know that Wall Street is full of people who are trying to sell us on a dream that works well for them but probably doesn’t work well for us. And so to go into it, not I was gonna say not cynically but skeptically you can go into it pretty cynically, go into it cynically and say it was a child’s phrase where he said with advisors especially mistrust advice that’s especially profitable for them.

[00:55:15] William Green: You know, I’m slightly gobbling it, but you get the point. And so look at people’s incentives. I mean, Charlie taught beautifully about incentive caused bias. If you look in his essays on the 24 or 25 causes of human misjudgment, this whole idea of incentive caused bias is incredibly powerful. So I think you have to look at all of these soothsayers who are trying to sell you on the idea that they know.

[00:55:45] William Green: That they can tell where the market is going or they can tell what short term moves in the market mean, or they can tell what’s going to happen geopolitically or politically, and just look in your own life, look at the news and ask yourself, if I look with my own eyes, does this make sense? Does it make sense that it’s predictable when I look at the fact that we had no idea that Syria was going to lose its leader after 70 years. I mean, none of the experts predicted that, right? There are so many complex interactions going on that everything is just wildly unpredictable. And so I think this is very liberating. Once you start to look and you start to see just how much is unpredictable, whether it’s the market, I mean, think of, think of Howard saying to me. I think this is in the chapter called Everything Changes that I wrote about Howard. When I went back and fact checked with him during the COVID pandemic, he said, look, this, this has become the biggest thing in our lives, COVID. And most people were not even aware that it could happen, let alone that it would happen. And, and so for him, it was a reminder of the importance of humility.

[00:57:02] William Green: They’re a reminder of the fact that. We can’t know the future and yet there’s this miraculous paradoxical thing, which is once you actually accept that you don’t know the future and that nobody does and that the people selling on this nonsense are lying to you or themselves or both. It’s very liberating because then you can focus on what you can control and so then you can start to say, okay.

[00:57:26] William Green: Let me prepare for an uncertain future. And so what does that mean to be prepared as as Howard would say? It’s really critical not to overreach, right? So you need to make sure that you don’t have too much debt. You don’t have too much leverage, but whatever happens in this uncertain world where nothing is knowable where the future is unknown but nothing is gonna just absolutely tear apart your life. And so you don’t want to have all of your assets in one country, all of your assets in one asset class, all of your assets in one bank, all of your assets within one brokerage firm.

[00:58:05] William Green: I think then you’re really playing with a loaded gun. So you just want to say there are, there are so many things that can happen in this strange world and in markets, eventually they will happen. And so think of, think of, for example, home bias, which is one of these, these famous biases where people in their home country bet much more on stocks from that country.

[00:58:29] William Green: What would have happened if your country was Cuba? You know, what happened to my mother in law’s family? I mean, my wife’s grandfather was a successful, very smart doctor in Vienna, and then the Nazis invaded and he had to flee and he ends up in Cuba, which also was not a place you particularly wanted to build your fortune over the next decade.

[00:58:51] William Green: But luckily, he then moved to New York City eventually, and it was okay. And so what if the market you’re in now is Germany and the government is collapsing in Germany and you know, you look at, you look at the UK where I’m from, and you know, I’m, I, I’ve been invested in Guy Spier’s Aquamarine Fund for many, many years, probably 24 or maybe nearly 25 years, probably.

[00:59:15] William Green: And so I look at his returns over 26 or 27 years since the start of the fund. And it’ll always have the UK market and the S&P 500 and the MSCI. And, you know, these different things that he can benchmark himself against the Dow Jones Industrial Average. It’s stunning to see just how little the UK market has done over 26, 27 years.

[00:59:38] William Green: I mean, I think last time I checked it, it averaged something like 3 percent a year, something like that. So if you were someone like me, or like my father, or like my uncle, or like my grandfather, who was inclined to invest in your home country, and your home country was England, you are in deep trouble.

[00:59:55] William Green: And so just knowing that we live in an uncertain world where we have no idea whether the U. S. is, quote unquote, permanently advantaged, which I would say, in a world where everything is impermanent, seems very unlikely, or whether this is just another pendulum that will eventually swing back. I think, I think you’d be wise to hedge against the possibility that it’s just another cycle, that it’s just another pendulum.

[01:00:22] William Green: I think I spoke to Laura Garrett, a great international investor about this. When I had her on the podcast, and there was some statistics we shared on that episode about just the periods in which emerging markets massively outperformed the US for many years, and then the pendulum would swing, right?

[01:00:38] William Green: Because something gets really cheap and the opportunity to become so compelling that it sort of turns and eventually it becomes attractive enough that prices rise just when everyone is kind of capitulated and given up on it forever. And so I think you’re just instead of this is maybe one of the great insights from Howard.

[01:00:59] William Green: I think is, is this idea of just preparing, preparing for uncertainty, never overreaching and being aware that even though history doesn’t tell us what’s going to happen. It’s kind of a pretty good guide to what could happen. The fact that cycles tend to be temporary and sooner or later the pendulum will swing and yet at the same time how it’s very humble about this and I remember a couple of times I interviewed him.

[01:01:36] William Green: He would talk about the fang stocks, right? And he would say, well, I just, I’m very skeptical because I know that, you know, nothing, the trees don’t grow to the sky. And so as a result, he was deeply ambivalent about things like Facebook, Amazon, Netflix, Google, and the like. And as a result, didn’t benefit nearly as much as people who were much more reckless or saw something that he didn’t see.

[01:02:03] William Green: And it’s, it’s complicated. It reminds me of this, this comment, Howard once told me he, he had lunch with Charlie and at the end of lunch, Charlie sort of stood up and said, anyone who thinks this is easy is stupid. It’s not easy, right? I mean, Howard was hopelessly wrong in being so skeptical. Well, maybe he was right to be skeptical, but the outcome was totally different than he expected.

[01:02:28] William Green: And so it just, it just gives you a sense of, of why we should be humble if, if Howard, who’s way smarter than I am, was so hopelessly wrong about the fangs, what do I know? And so I need to hedge against my own stupidity.

[01:02:41] Kyle Grieve: So let’s shift this and talk a little bit about simplicity. So you had a chapter in your book that was called simplicity is the ultimate sophistication, which is wonderful.

[01:02:50] Kyle Grieve: And there was one lesson from Joel Greenblatt that really stuck out to me. It was this key insight that a strategy should be simple, logical, and deeply believed in. I think that that just, it just really stuck with me and you know, it just, it makes so, so much sense because. You have to have this kind of conviction because the market is going to punish you at some point in time.

[01:03:08] Kyle Grieve: You have no idea when it’s going to be, but it’s going to be at some point. And you’re, you’re going to have times where you think that your strategy just, it doesn’t work, right? You’re going to be challenged, but you know, what a lot of people end up doing is a drastically change of strategy, and there’s a lot of downsides to that because you’re essentially going from something that you know, and maybe has some track record of actually, you know, providing value in the past to going to something that you don’t know. It’s unknown.

[01:03:37] Kyle Grieve: So I just kind of wanted to pose this question because let’s say there’s newer investors here that maybe invest started investing after the great financial crisis. You know, they haven’t really been punished too much other than you know, maybe, maybe the, the post COVID issues that we had, but even those types of people who maybe haven’t experienced these gut wrenching moments when their conviction is tested, how do you think these people, to your point about Howard Marks and preparation, how do you think these people can prepare themselves to kind of handle these times and hopefully stick with their strategy that’ll eventually work, but might not work for multiple years out?

[01:04:08] William Green: It’s such a good question and such a difficult one actually to deal with in practical terms because you don’t really know how you’re going to respond when everything goes haywire. And when one thing i can see from having been through multiple periods where things went haywire is I’ve never sold in those periods so I can see that I’m wired enough not to panic. I can see that I’m in I think in every case I’ve bought more when I could probably not enough but I bought more so I sort of know myself enough that I understand the principles enough that at least even when I’m paralyzed by fear and uncertainty during these very intense periods.

[01:05:00] William Green: I don’t panic into bailing out. So I think that self awareness looking back at what you’ve done in the past is very helpful. But if you’ve never been through anything like that, I mean, if, if you’re relatively new, it’s very hard to know. And so I think you have to kind of assume that like most humans, you’re going to be subject to these really intense emotions.

[01:05:25] William Green: Ask yourself, if I were down 50%, would I really be able to add to my portfolio? Would I really be able to buy? Would I really understand well enough not to liquidate what I own? And it’s very valuable to study history and to know what can happen. Right? So Munger, I think had four drawdowns of 50% in the course of his investing lifetime.

[01:05:53] William Green: And, and once he said, look, if. He said, if you don’t have a 50% draw down, it may be that you’re not being aggressive enough. Munger was more aggressive than most of us and less emotional. I had a, you know, I mean, I’ve had things be down, I, I had one fund that was down 46% in 2008. It was pretty painful ’cause I lost my job at the same time.

[01:06:15] William Green: And so one of the things that really helped me was that I didn’t have any debt. And so I was very conscious, because I’d been a journalist for many years, I knew that the magazine business was always in this kind of slow disintegration that then suddenly turned into a collapse. And so, I was like, well, let me at least not be the one who’s caught swimming naked with lots of debt. And so I literally, I didn’t own my own home. I rented a home, plenty of cash and I have money in the stock market. I never really had much in the way of bonds because I thought bonds were really boring although I think that’s probably, you know, how it marks would argue that now the returns are attractive enough that you should definitely be thinking about owning some bonds.

[01:07:00] William Green: Maybe I own a little bit, but not much. And so the fact that I was not overexposed was hugely important because then my stock portfolio got really slammed during the financial crisis. But what I hadn’t realized is, Oh, I’m going to lose my job at the same time as my stock portfolio gets really slammed.

[01:07:19] William Green: And so I think one of the things you want to ask yourself is, If there were a perfect storm and two or three or four things were to happen, what would I do? And I, I mean, I think of someone like Bill Miller, who I’ve interviewed an enormous amount over the last 25 years. Bill, during the financial crisis, really had a perfect storm where, you know, he got divorced, so he lost half his money in the divorce.

[01:07:47] William Green: He was on margin and he made an analytical mistake and it was amplified by the fact that he always loves dad and you know bill is genius and it’s an amazing investor and it worked out fine and he has a tolerance for risk that is significantly higher than the average humanoid so he was fine and is now back to being a multi billionaire so good luck to him.

[01:08:11] William Green: But I, you know, he, even he said to me, look, I, I’m glad that I didn’t have so much leverage that it ruined me and I’m glad that I was able to keep the emotional strength that I didn’t curl up like a tortoise in its shell, but actually continue to buy stocks in the midst of that mayhem. And he sold his yacht during that time to buy stocks.

[01:08:33] William Green: I mean, he didn’t sell his plane, but he did sell his yacht. So I don’t know, this is a slightly long winded way of saying, I, I think, I think you have to really consider how emotionally vulnerable you might be. And how bad things could get if multiple things happen. And you want to be aware that times of great profit tend to make us complacent.

[01:08:58] William Green: And so understanding that things are cyclical means that during the good times, you should very consciously shore up your position. And so one of the things that I did in the decade or so after the global financial crisis is, I, you know, thank God it was a good decade in the end for me, though it felt pretty rough at the time.

[01:09:19] William Green: But I bought a home with not a huge amount of debt and I bought a car with a tiny amount of debt and now I have no debt on either of my cars. You know, so I very consciously have a fair amount of cash and I very consciously reduced my risk during the good times. I still think I’m probably overexposed to the stock market.

[01:09:42] William Green: I’m probably overexposed to the US. But I think if, you know, if there were a 50 percent drawdown, I wouldn’t be a forced seller. So you want to make sure that you’re never going to be a forced seller. And so one of the things that Howard said to me that I think I wrote about in that chapter, Everything Changes, is he said, you need to be aware of your own emotional vulnerability so that you’re not going to panic out of the market.

[01:10:10] William Green: And so, so you’re sort of looking at all of these forms of fragility, your recurring financial obligations, right? You don’t, you don’t want to, you don’t want to get a really expensive office during the good times. That’s then going to be a recurring expense. You don’t want to load yourself up. With that on your cars in your homes in your holiday home during the good times on the assumption that it’s always going to be good because we live in a cyclical world where it can really go wrong and so this is quite it’s quite hard it’s quite hard if you’re temperamentally just the sort of bullish optimist I happen to be temperamentally more pessimistic and more bearish. I think that’s probably one reason why I, I became a writer and not a hedge fund manager or venture capitalist or something. But I think it also is probably a product of that long history of being Jewish and being from a family that had to flee. There was always a sense of very viscerally in my DNA.

[01:11:10] William Green: There’s a sense things can go badly wrong. Let me prepare for it. And so I don’t know. I think you don’t want to be so pessimistic that you don’t invest. I mean, I still love the stock market. I’m still heavily invested in the stock market. But I, you just want to prepare yourself for turmoil.

[01:11:30] Kyle Grieve: So let’s shift this to one of the most popular chapters in your book.

[01:11:35] Kyle Grieve: And the reason I’m saying this is because part of the the Richer, Wiser, Happier masterclass, I put on one of my questions was, what were some of your biggest takeaways from Richer, Wiser, Happier. And I got an overwhelmingly, a lot of people that said that it was the chapter about quality that covered Nick Sleep and Qais Zakaria.

[01:11:51] Kyle Grieve: So I wanted to go just a little bit off, off that though, and just talk a little bit about Zen and the, and the heart of motorcycle maintenance, which is this book that I know heavily influenced them. So I’ve read it once and, and honestly, I found it a slog to, to get through, you know, I think I actually found the ideas that I think they took from that book to be way more illuminating both from their, their, their their letters, which I highly recommend people read. And just from reading your book, I think that, you know, you can probably skip that book and still get some of the insights. It’s a strange book, but clearly, you know, there are people that have, that have taken a lot from it, but it’s not everyone’s cup of tea.

[01:12:30] Kyle Grieve: The overarching theme of quality, I understood that, you know, going into the book, that’s kind of the type of insights that I was looking for. And there are a couple of interesting things I found, but like I said, you know, I think that you, you and them covered it already. So I’d love to know, you know, what are some of the key qualities in terms of the partnership structure that Nick and Zak created that you think that they took from understanding quality from, from reading that book?

[01:12:56] William Green: Yeah, in a way, it’s flattering what you just said that you got this kind of essential view from my book of what they got from Percy, because I also did the same with, with David Hawkins. I probably did the same with the Stoics, where I would look at the source material that it inspired this great, these great investors.

[01:13:16] William Green: And then I would think, what’s the essence of what they got from this thinker. And then I would write about that in an incredibly condensed way that I hope sort of distilled a really powerful lesson from it. And so one, so I’ve, I’ve read Percy a couple of times that, that novel. And I agree it’s funny, my, editor, Rick Corgan at Scribner, who’s a famous editor, who’s had like a hundred bestsellers.

[01:13:40] William Green: It’s his favorite book, but he’s very, you know, Rick is very philosophically oriented. So I, I sort of understand that. I don’t think it’s a wonderful piece of writing, but I think it’s a very, very interesting book. And the, and the ideas are powerful. It’s worth getting a small book called On Quality, which Josh Tarasoff, a well known hedge fund manager, who’s a friend of mine, gave me.

[01:14:02] William Green: And I actually, a couple of I think about two years ago, I organized a Zoom call where Josh and Brian Lawrence and Nick Sleep and Matt McLennan and various other friends of mine got together over Zoom and chatted about that book, On Quality, because it’s a sort of, it not only has Pirsig’s views from Zen and the Art of Motorcycle Maintenance, but also from this other famous novel of his, Lila, and from some of his letters and from writings of his wife.

[01:14:28] William Green: So, it’s a sort of condensed way of getting at these ideas. But for me, I think in the paragraphs that I wrote about Zen and the Art of Maintenance, I pointed out that what Pirsig said in that novel is there’s a beautiful way and an ugly way to do everything, right? So whether it’s sewing a dress all mending a chair there’s a beautiful way and ugly way of doing it and so he talked about the metaphysics of quality and he capitalized the word quality right and so it becomes this big sort of philosophical exploration.

[01:15:01] William Green: But really it’s kind of this vague nebulous term right where you’re just saying you sense that there’s a high quality way to do things just as you can sense when I’ll sometimes go on a podcast and I can just tell because I have this BS meter for this sort of thing I can tell where they stopped reading my book or whether they never read the book or whether they, you know, and you just know, they’re not prepared and sometimes they’re so charming that they can kind of get away with it.

[01:15:31] William Green: And then when you go on a podcast and someone has really read it and thought about it. You’re like, oh, and you pay a different type of attention and I remember Nick Sleep read that chapter of the book and he said, I started reading the whole book and he said, oh, this book is very different than I thought it was.

[01:15:51] William Green: Now I have to pay a whole different sort of attention to this book because I see what it is you’re doing. And that was great. That was great praise, right? Like he saw, oh, this isn’t just another book. This is something where you’re really aiming for quality, whether you hit it or not, right? And so I think, I think the most, the first idea that we really need to draw from them and from Pirsig is just this sense of like, do, do I want to live a life of quality?

[01:16:17] William Green: Do I want to actually think about the high quality way to do everything that I do? Like, do I, do I want to be the person who does a crappy job preparing for podcasts? Do I want to be the person who does a crappy analyst report for my boss? Do I want to be the person who, you know, half asses it when I, you know, write a chapter of a book?

[01:16:41] William Green: And so for me, I just decided at a certain point, in a slightly bloody minded, stubborn, obstinate way, that I was going to optimize for quality in everything that I did. And when I say everything I did, I don’t do it with things like exercise or nutrition. So I’m selectively optimizing for quality. But with my book, at a certain point, I just decided I am going to make this as beautiful and deeply reported and thoughtful as I possibly can.

[01:17:13] William Green: And if it fails, it will not be for want of me trying. And I’m not saying that in a self aggrandizing way, it’s like, I really decided that I was playing for keeps, and I was going to try to write something that would be read in 10, 20, 30, 40, 50 years. That’s totally different than when I was a magazine journalist, and I was at Time Magazine, and sometimes, you know, I would be editing the Asian edition of Time, and then the European, Middle East, African edition of Time, and sometimes, you know the magazine would go to bed on a Saturday night late at night and you get articles and they’ll be breaking news and someone would file a story late on a Saturday afternoon or Saturday evening and if it came in as a mess you had to roll your sleeves up and just get it across the finish line just make it okay that was a different game and you know we played that game beautifully we did it.

[01:18:04] William Green: I mean it was an amazing magazine in so many ways incredibly talented people to do that high wire act. But I think that simple decision of deciding in a world that’s so full of shallow, ephemeral, useless nonsense. Do I want to be contributing shallow, ephemeral, useless nonsense? Or do I want to bet on the side of quality?

[01:18:28] William Green: That’s a very powerful and important filter. And that’s something all of us, I think, should be thinking about. And there’s more and more of a push to do I would put it asinine stuff, you know, really like moronic stuff that just adds no value. And so one of the things that Nick and Zak did is they just very consciously said, if we’re running a fund that is a metaphysical.

[01:18:55] William Green: And almost spiritual experiment, as Nick put it in the Nomad Letters. What would it look like if everything were guided by this notion of quality? What does that mean in terms of the companies we bet on? What does that mean in terms of the way we ingest information? What does that mean in the way we structure our fees?

[01:19:17] William Green: What does it mean in the way that we treat each other? And what does it mean in the way that we treat our shareholders? And so they structured their life in this very counter cultural, ornery way, where they were just getting rid of all of the, what Nick called the sin and folly of Wall Street. And so, one of the things I loved, I had this amazing interview, Where, after spending a lot of time talking to Nick, who’s unbelievably enigmatic, I mean, Nick never talks publicly, then finally, kind of become friendly, if not friends, since then I’d say we’ve become friends, and finally I’d won enough trust that Zak, who’s even more enigmatic and private, if anything, than Nick. He came and spent the afternoon with me as well in their office on the kings road in london and they started talking about their lifestyle and the way they work together and we’re sort of sitting there in this office and he’s literally, Zak doesn’t even have a desk i mean he’s so non tribal he literally doesn’t have a desk in this big beautiful office that’s full of light he just he just has like a lazy boy chair.

[01:20:27] William Green: And then they’ve got this, I’m sitting there with them next to these two beekeeper suits that are hanging on the wall that are like they’re matching beekeeper suits. I mean, these are profoundly idiosyncratic individuals and they’re really charming and funny and nice and they’re finishing each other’s sentences because they like each other so much.

[01:20:47] William Green: And so you start to think, okay, so how has their relationship been built on this notion of quality? And you realize, oh, well, okay. When they structured the company, Nick had been this super successful investor who’d worked at this big hedge fund marathon. And Zak had been absolutely tortured as this analyst, really a broker at Deutsche Bank, which he hated, was totally unsuited to because he was a, like the least salesman like salesman.

[01:21:16] William Green: And so, you know, you could easily, when they formed the company, Nomad, you could easily have said, well, you know, Nick is the alpha male, he would be the dominant, the dominant one. And so Nick immediately says, well, so let’s just own it 50 50, the two of us. We’ll just split it all 50 50. And Zak says, no, I want to have 49%.

[01:21:38] William Green: I want you to have 51%. And that way, anytime we disagree about anything, which they never ended up doing, you’ll have the deciding vote. And So Nick said to me, you know, when someone hands you a loaded revolver like that and says, here, shoot me if you want, what are you going to do? You know, if, if, if you’re modeling yourselves on Charlie Munger and Warren Buffett, and you don’t view life as a zero sum game, you don’t take the gun and shoot, shoot your partner, you treat him really honorably.

[01:22:09] William Green: And so the whole, the whole relationship was built on kindness. And I saw this because when I was interviewing them, the fund had been closed for several years. They’d returned three and a half billion dollars to their shareholders. And there they are, still sharing the same office. It was an amazing thing.

[01:22:25] William Green: And they didn’t come into work that often, but they still wanted to share the same office. When I saw Nick a few months ago in London, and then also in this beautiful estate, the Goodwood estate in the English countryside, I was asking him how Zak is doing, and he just beams as he’s talking about Zak, and he starts talking about the philanthropy that Zak is doing, and you see he’s so proud of his friend.

[01:22:47] William Green: There’s something just so beautiful about that, and so one of the things that Nick said to me is, good behavior has a longer shelf life. It’s a really profound observation to say, okay, so let me build my business relationships and my personal relationships as much as I can, despite all of my flaws and foibles, and God knows we all have a lot of them, let me build them on good behavior as much as I can, rather than trying to shoot the guy with the revolver.

[01:23:15] William Green: And then they did exactly the same thing with their fee structure, where they just kept making the fee structure worse for themselves and better for their shareholders. So they got to a point where they would put their incentive fee in a bucket where they couldn’t, they couldn’t get the money for years.

[01:23:31] William Green: And so if they subsequently lost money, you know, they would just never get that money. And so at a certain point during the financial crisis, I think they knew that they would have to work for free for year after year after year and Nick said we kind of liked that we kind of like the fact that we were working for free and you know they sort of enjoyed wearing a hair shirt and the sense that.

[01:23:53] William Green: In a world where most people were self seeking and behaving in a slightly tawdry, self interested, incentive biased way, they were going to do the opposite. And so, I think then you apply, you apply this notion of quality in so many different areas, and it ceases to be a really vague useless nebulous notion and actually becomes really really practical so you say to yourself in any situation I’m sure I did this when I was thinking about what to tell money about those books that i that he was buying you think alright what’s the quality move here.

[01:24:33] William Green: Low quality move if you’re, if you’re inverting like Charlie was basically to lie to Mohnish and say, no, no, no, you’re getting a great deal. Just go for it, dude. I think it’s fair. And, you know, it’s clearly 20 percent lower than the normal retail price. So you’re doing just fine. The high quality move is to say, oh, I’m so sorry. The reason they’re doing this is because they figured out it’s going to benefit me in this way. And so it just becomes this really useful filter. And so one of the things that Nick and Zack did that was so counter cultural, they started to close the fund for the first time when it reached something like a hundred million dollars in assets under management.

[01:25:10] William Green: That’s crazy. If what you’re trying to do is build a profitable business, that is, that’s kind of suicidal, but they didn’t really care about it being a profitable business. What they cared about was getting great returns. And they thought if we’re, if we’re maximizing odds of getting great returns, the assets will follow.

[01:25:32] William Green: It doesn’t really matter. And so I think part of it, it goes back to what you were saying before about Francois Rochon being non tribal and talking about the non tribal gene. I think part of it’s that Nick and Zak just, was so non Wall Street to that core. I mean, Nick, you know, really wanted to design gardens and just it never worked out his landscape architecture career never really worked out and Zak really wanted to be a meteorologist.

[01:26:00] William Green: So they weren’t like born to make money, they, they actually just happened to be really really smart and when they encountered the problem, the intellectual problem of how you find a business that’s going to do well over many years, intellectually it really interested them and so they were able to come up with it.

[01:26:19] William Green: You know this beautiful insight that there was one business model that was better than all of the rest where they they focused on, on, on what they call scale economy shared, but, you know, when I saw, when I saw Nick in England, it was pretty clear, they found it really hard to find more companies like that.

[01:26:35] William Green: There aren’t many like that, but, but it led them to a portfolio where they owned enormous amounts of Berkshire, Amazon and Costco. So, so it was really, it’s really a beautiful example of a lifestyle constructed around a principle. It’s really powerful. This principle of quality.

[01:26:56] Kyle Grieve: I want to talk about a recent more recent interview you did with Brad Stulberg, where he kind of described the spectrum between two things.

[01:27:04] Kyle Grieve: One was this toxic positivity where you know, everything is portrayed as being perfect. I think you see this pretty often on social media where, you know, someone’s life, if you know them really well, it could be unraveling, but you go look at their pictures and it looks like their life is a 10 out of 10.

[01:27:18] Kyle Grieve: And then on the other side of that, of that spectrum is, you know, nihilism or despair where everything feels broken and hopeless. I think it’s, you know, it’s just such a fascinating framework and I think it really applies really well to investing as well. And I love this point because, you know, I think that there’s probably a specific area where I think a lot of the best investors sit on this continuum.

[01:27:37] Kyle Grieve: And you kind of just admitted yourself there that you tend to be more on the pessimistic end, although I don’t know if that counts as nihilism or despair, but I just wanted to get your insights and see where you feel most of the great investors sit on that spectrum.

[01:27:50] William Green: Yeah, I remember once interviewing Chuck Akre, a great investor.

[01:27:54] William Green: I wrote about it, not great length, probably a couple of pages of the book, but he’s a remarkable investor, had an incredible long term record. And I said to him that I’m pretty pessimistic by nature. And actually, I think I’m less pessimistic than I used to be. And he said, well, good luck with that. And I’m like, what do you mean?

[01:28:10] William Green: And he said, It’s not a great characteristic for an investor to be pessimistic, you know, and I, I think it’s a balance. Howard Marks, who we talked about before, said to me once that he would have been terribly suited to being, say, a venture capitalist because he’s, he’s not a dreamer, he’s not into blue sky dreams of, untold growth. I mean it was really hard for him to take advantage of the fangs as we said before he was also very skeptical about things like bitcoin but on the other hand one of the things he said to me is look I’m not being paid to be chicken.

[01:28:45] William Green: And you know, like I have to be aware. That I’m wired in a way I’m wired in a way where there’s going to be things are going to go through this filter. And I’m going to see them in a more worried way than certain investors, right? So how it is pretty conscious. And it’s interesting how it comes from a similar background to mine.

[01:29:06] William Green: And so it’s interesting. I think in his, in his DNA too, is probably the sense of things can fall apart. You know, it’s we live in a deeply uncertain and impermanent world. And so he’s aware of the fact that his natural wiring is going to color his analysis of anything and so again it comes back to this really important point about self awareness so to accept the fact that you’re wired a certain way and that that lens is going to distort reality if there’s such a thing.

[01:29:39] William Green: In some way either to make it look gloomier and scarier than it might be or to make it look sunnier than it might be and so once you’re aware of your own temperamental bias. You can start to hedge against it and create workarounds and so one of the best workarounds you can have obviously is to have a sparring partner and this is one of the reasons why.

[01:30:06] William Green: It was so helpful for Howard to have Bruce Kosh as a partner. So during the financial crisis, they could really talk things through and say, well, look, there’s a limit to how bad things can get. And at least at a certain point, he said it was kind of, it wasn’t, it, you know, usually Howard would look at any situation as improbabilistic terms, and would just say, well, there are an array of different probabilities for this outcome, this outcome, and this outcome, and here are the odds I assigned to them.

[01:30:40] William Green: And it was so dire potentially during the financial crisis that he said either it’s like it’s the end of the financial system or it’s not and if it’s not then the mistake would be that I failed to buy during this incredible crisis and so he kind of, he and Bruce made this incredibly bold bet and ended up making, I think, about nine billion dollars, something like that, by betting on toxic bonds and the like, and that nobody else would touch, and sandwich makers and companies like that, you know, that were absolutely detested.

[01:31:16] William Green: And they were buying stuff at, you know, a fifth of the price that private equity firms had been previously buying. So they were buying so cheap that all of the pessimism was priced into them and that they were these asymmetric bets that if they were right we’re going to be incredibly lucrative. And so I think understanding, understanding your own biases, your own temperamental inclinations, very important partnering with somebody who can talk to you, not only discuss these things, but actually expose the ways in which you’re probably blinded and prejudiced and biased is very, very powerful.

[01:31:54] William Green: And so you think of say someone like, Annie Duke, who was a guest on my podcast, who, who told me that she was, she’s friends with Richard Thaler, the famous Nobel Prize winning economist, but she was also friends with the late Danny Kahneman, another Nobel Prize winning economist. And I was very struck when she told me that Daniel Kahneman had literally appointed Richard Thaler to point out his own blind spots and biases to tell him when he was, when he was being stupid.

[01:32:22] William Green: So I think that’s a very powerful thing to say. Okay, if I’m wired this way, I’m likely to skew my judgment in all sorts of unhelpful ways. So let me surround myself with people who can challenge my view and point out where I’m blind. But then also I think. It helps to be a little bit pessimistic and a little bit skeptical because the first thing is you got to survive and so it may be that my pessimism and skepticism seems pretty dumb after a really great period basically since World War II.

[01:33:01] William Green: I mean we’ve gone through what is it 79 years that with a few pretty brutal hiccups and also depending on what country you actually lived in it’s been a pretty golden era for much of the world at least for countries like the US but i’m looking back a lot longer. I mean you know I’m thinking about times three thousand years ago when everything fell apart and so if you’re trying to decide it depends what game you’re playing.

[01:33:31] William Green: I want to survive, get to the finish line. And so I’m really happy to have. Berkshire Hathaway as part of my portfolio, because I like the fact that he’s sitting on hundreds of billions of dollars in cash and does it bother me that I don’t own Bitcoin and that it’s gone up so much? No, really, I mean, would have been nice to own it, but I still, there’s still a part of me that sort of waiting for it to collapse and maybe I’m entirely wrong.

[01:33:59] William Green: But I won’t be at all surprised if it collapses, and I know people will now berate me for saying this, but I just think we live in a strange world, and maybe it’ll win out. I think there’s obviously a much, you know, and I’m talking about stuff I don’t really understand as people will no doubt point out in their responses to this, maybe it’ll win out, but we live in an uncertain world, and we don’t really know.

[01:34:21] William Green: And I think it would be perfectly sensible for me to have had, you know, 2, 3, 4, 5 percent exposure to cryptocurrency would be perfectly, perfectly sensible to do that. But for me, I’m optimizing for getting happily to the finish line and so I don’t need to be that speculative. I need to make sure that I do well enough that I don’t ever have to work for anyone I dislike or do anything that I really dislike you know, be tempted to behave in a, you know, in a tawdry, unethical, self serving way, you know, for financial reasons.

[01:34:59] William Green: And so I don’t know, maybe the virtues of pessimism and skepticism have become undervalued in this bullish period and will be reminded of their benefits by subsequent periods.

[01:35:14] Kyle Grieve: So I want to shift this over to talking a little bit about your experience just being part of kind of these close knit groups.

[01:35:22] Kyle Grieve: So I personally have been helping run the TIP Mastermind Community with my co host Clay, and I’ve also been helping set up the Richer, Wiser, Happier masterclass with you. And, and basically I’m actually a member of the masterclass. I’m not really running it. You are, which has been pretty awesome. So, you know, I, I I feel like that’s kind of been my first real entrance into working with close knit group of people who are all, you know, trying to improve themselves at a really, really deep level.

[01:35:47] Kyle Grieve: And, and you know, not, not just the superficial level kind of like you, or you were just referring to there. So I know you though personally are not really new to being parts of groups that are trying to help each other improve. I know you, you were once part of a group that, you know, Charlie Munger was a part of it for, for a short period of time.

[01:36:03] Kyle Grieve: Can you maybe discuss a little bit about how being part of these groups has helped improve your life?

[01:36:09] William Green: Yeah, I think the most powerful realization came to me from, I guess I started to, I started to have these meetings every Friday morning with three friends who were all really remarkable people and they’re very successful investors and they’re brilliant guys.

[01:36:30] William Green: There really evolved really thoughtful really interesting really soulful people and we’re all studying the teachings of a particular of a particular tibetan buddhist teacher who’s amazing and so we would meet every friday typically at 8 AM sometimes earlier. And we’d call in even if we were traveling, basically.

[01:36:53] William Green: I mean, sometimes you’d call it ridiculous time. Sometimes you’d have to reschedule to 7 AM. Once in a while, we’d, we’d miss it. This has been going on for probably a year and a half, something like that. And, you know, I resisted the idea, at least in my mind, initially, because I thought, you know, God, this is such a big time commitment.

[01:37:10] William Green: And then, and, and one of the friends is this guy, Yen Liao, who’s very well known hedge fund manager, who’s just a brilliant, brilliant guy. I’m beautiful human being and said a certain point this time is sacred. And you know, he, he hadn’t, I don’t think he had ever done anything in his career that wasn’t in some way directed, right?

[01:37:33] William Green: Like he knew what every hour was going to yield. I mean, he’s such a driven, intense and process driven, process oriented, systematic person. And here were these sort of slightly aimless unstructured times where we’re just talking about. You know, we would start by talking by having a kind of check in where we talk about what was going on and then maybe we discuss particular principles or things we’ve learned or stuff we’ve learned from the teacher.

[01:38:02] William Green: And then recently, this great teacher has been calling in from Katmandu and teaching us. So, like, last week, I probably spent like two and a half hours and then Dan Goldman will join, which is kind of amazing because he’s. Unbelievable as well and and his wife, who’s incredible Tara, who’s also a great psychologist and author and so I think what I saw in this very visceral way is that setting aside time to be in a group that discusses stuff in a very personal intimate way is so powerful.

[01:38:36] William Green: And so we would just do it over zoom, but, you know, one of my friends who’s in the group is this, this guy, Matt Ludman, and whose office I’m sharing as well. And so it’s become a very close friend. He’s a money manager as well. And he’s been studying Buddhism for probably 45 years or something very seriously.

[01:38:54] William Green: And he used this phrase friends along the path, which I guess he had taken from Tibetan Buddhism. I think I may be misquoting. And that idea is really stuck with me. And that’s, that’s what we’ve used in talking about and, and structuring the masterclass is to say, well, I want a small group of friends along the path who are going to help each other and support each other and be candid and learning together. And so we ended up, we decided to have maximum of 20 people and so we structured the ritual wise happy masterclass basically where it’s 20 people meeting monthly over zoom and then a few meetings in person.

[01:39:38] William Green: And because of this idea of friends along the path, what’s beautiful and liberating about it for me is I don’t feel like I have to be the wise man who knows everything, who’s teaching everyone, you know, all of these investors, because a lot of these people are really, really successful investors. I mean, there are people who manage like 25 billion in the group and, you know, really terrific investors, really smart people, people who run 20 companies, you know, you know. Very impressive group of people if I were trying to pretend that you know I was smarter and wiser about investing I would be in deep trouble I’d have even more imposter syndrome that I have already.

[01:40:16] William Green: I mean one of the people literally at one point is you know, his previous job was head of the physics department at stanford before he went into being a hedge fund manager you know/ I mean it’s like, what am I going to teach someone who’s still an emeritus professor of theoretical physics at stanford and the guys so smart and so the idea of being friends along the path is kind of beautiful because then it’s just like we’re learning together. And I think if there’s a takeaway here, it’s the idea of creating space in your life or meetings with people you really like or who you could really like.

[01:40:53] William Green: You know, they don’t, they don’t necessarily have to be people you know really well, but a small group of people who are really serious about learning and improving themselves and sharing ideas and making it a real time commitment so that it’s not, so that it’s actually structured in there because we’re all so busy.

[01:41:13] William Green: I mean, there are so many reasons. Why we shouldn’t do this, right? Because we have such busy lives. But it’s, I think as Yen said, it’s really become like this kind of sacred space. It’s been, it’s been a huge life enhancer for me. And I, I think part of it, part of it for me grew out of the realization that the secret source for Charlie was not just that he was brilliant.

[01:41:35] William Green: It’s that he had this ecosystem of incredible friendships and relationships. And so he set up various things in his life where, for example, he had this, this weekly zoom breakfast with really smart people. So Rick Guerin used to call in and I, I, so I guess that they had to go remote during COVID and, you know, Lou Simpson, who is legendary investor at Geico would call in.

[01:42:02] William Green: Great investor in Australia in Sydney called Mark Nelson who would call in and Ron Sugar who is a CEO and you know. And and they would invite guests sometimes and so they invited me one time and I knew it like the week before I think or a couple weeks before they had invited Howard Marx and you know anyone would dive the opportunity to be on a you know, to assume breakfast with Charlie and all of these people just discussing ideas. But I thought it was really interesting that he had structured this into his life and then similarly according to Mohnish he had a, Charlie had a regular friday afternoon bridge game at the country club. And so Mohnish would get invited at the last minute when one of these old codgers was feeling too sick or something. And he would just drop everything and, and, and go and play. And I think they had lunch there as well.

[01:42:53] William Green: And then Mohnish told me that Charlie also had structured things. So I think every week he would have a zoom call where his 20 or so grandchildren or great grandchildren or whatever it was would be invited on the zoom call. And so I think what’s interesting is the recognition you need to invest in relationships, not, you know, in terms of building a rich life, you need to invest in relationships.

[01:43:17] William Green: But it’s so important that you actually have to structure it in. And so I think you and I are on this journey where we’re kind of exploring where this can go. So we’re probably about three months into the Richer Wiser Happier Masterclass. And I’m really loving it. I didn’t know how it would be, but I think it’s kind of a beautiful thing.

[01:43:35] William Green: And they’re amazing people. And so you and I are discussing, maybe we’ll do it again next year, and we’ll do a new cohort of 20 people. But there’s also a part of me that’s thinking about how to make it a more kind of permanent kind of infinite community where you have a small group of people of friends along the path because I want more of this. I, I did it with a book group. I set up a book group several years ago, where it was just a whole array of writers. Everyone was a writer. I think we’d written more than 20 books between us. And, and we would just meet to discuss classic literature, like really great fiction. So we would read Nabokov and Flaubert and Tolstoy and, you know, really produced great, great stuff.

[01:44:16] William Green: Melville Jane Austen, things like that. And we would meet over dinner, and so we would have good food, good wine, chat about great literature with great friends. It was people like Jason Zweig, who’s a great columnist at the Wall Street Journal, or Nina Monk, who’s a wonderful writer, who’s now moved to France, John Gertner, who wrote The Idea Factory, and a friend of mine, Ramin Barani, who’s a great filmmaker, who made a wonderful film called The White Tiger, which you can see on Netflix, well worth watching.

[01:44:46] William Green: So just to sit around chatting with people like that about great fiction while eating was one of the great delights of my life. And it became too complicated and too difficult to keep going. But I think that kind of, that gave me a sense that part of what you want to do in life is create these, these containers that bring together people you care about.

[01:45:07] William Green: Yeah, and then we, yeah, it was also great editors. I mean, we had a former editor in chief of Barron’s and a former editor. I mean, really wonderful people are really thoughtful. And I remember once a friend of mine, a friend of mine briefly was a member of that group who had been the editor in chief of sports illustrated and, we were reading Anna Karenina and, and and he sort of pauses at one point we’re making all these great sort of, you know, literary analysis and he’s like. Is anyone aware that this horse racing scene is like one of the, probably the greatest horse racing scene in the history of literature? Just the fact that you’re sitting there with like, the former editor in chief of Sports Illustrated and he’s talking to you about that, or that you can discuss like, you know, the brain and economic biases with Jason Zweig, who’s also there with you, you know, it’s just an amazing thing.

[01:45:56] William Green: So, this is a very long winded way of saying, like, if you’re trying to construct a really rich and abundant life, for me, this has to be a part of it, like to structure communities where you’re learning together and you’re supporting each other. It’s just a really beautiful thing. It’s been hugely life enhancing.

[01:46:15] Kyle Grieve: Well, I think that’s a good place to end this conversation. So I just want to say, William, you know, thank you for so, so much for coming on the show and sharing your profound insights with me and our audience. And also, you know, I’m eternally grateful you’re in my orb of people that I get to learn from because I’ve learned over already learned so much from you.

[01:46:30] Kyle Grieve: And I look forward to learning a lot more here in the future.

[01:46:33] William Green: Thank you so much. It’s great to be a friend along the path with you, Kyle. I really enjoyed chatting with you.

[01:46:39] Outro: Thank you for listening to TIP. Make sure to follow We Study Billionaires on your favorite podcast app, and never miss out on episodes. To access our show notes, transcripts, or courses, go to theinvestorspodcast.com. This show is for entertainment purposes only, before making any decision, consult a professional. This show is copyrighted by The Investor’s Podcast Network. Written permission must be granted before syndication or rebroadcasting.