Into the Impossible With Brian Keating - Part 1 of A Conversation with James Altucher on his philosophies, investing strategies and how comedy works. (#062)

Episode Date: August 5, 2020

  James Altucher is an American hedge-fund manager, author, podcaster and entrepreneur who has founded or cofounded over 20 companies. He has published 20 books and he is a contributor to publications including The Financial Times, The Wall Street Journal, TechCrunch, and The Huffington Post.  ‍♂️ Find Brian Keating on Twitter at https://twitter.com/DrBrianKeating Find Brian Keating on Instagram at https://instagram.com/DrBrianKeating Buy Brian’s book LOSING THE NOBEL PRIZE: http://amzn.to/2sa5UpA Subscribe for more great content https://www.youtube.com/DrBrianKeating?sub_confirmation=1 ✍️Detailed Blog posts here: https://briankeating.com/blog.php Join my mailing list: http://briankeating.com/mailing_list.php Join my Facebook Group: https://facebook.com/losingthenobelprize ️Please subscribe, rate, and review the INTO THE IMPOSSIBLE Podcast on iTunes: https://itunes.apple.com/us/podcast/into-the-impossible/id1169885840?mt=2 A production of http://imagination.ucsd.edu/ Learn more about your ad choices. Visit megaphone.fm/adchoices

Any sufficiently advanced technology is indistinguable from magic. Hello, everybody, and welcome to this week's episode of the Into the Impossible podcast. I'm your fearful host, Brian Keating, co-director of the Arthur C. Clark Center for Human Imagination at UC San Diego. And on this podcast, we talk about very numerous ideas and opinions. We talk about very painful divorces, medication, medical lapses in our guest's history. No, we don't actually do that. I don't know Arthur C. Clark.

I didn't know he was so fascinated by all that. So James and I actually met six years ago this year, five and a half years ago in November of 20. So first of all, my guest is James Altucher, none of the famous James Altucher, host of the James Altricher show on the interwebs. And I actually met James back in 2014. We both shared the stage here at San Diego's very own Ted Axelchurcher, centerpiece. And actually, it was very awkward for me, James, as I was tweeting to some of my friends today. I felt kind of, you know, torn at that moment because you were the final speaker. You were the

lead up to everybody on that day. So I was kind of a warm-up act. But I was sandwiched between you at the very end, author of The Power of No, and another author by the name William Uri, or Yuri, who wrote Getting to Yes. And I kind of felt like I was back, you know, the child of divorced parents. And who was I going to side with, you know, James or, or William? And he also had his daughter on, and she had set the record for, you know, a plank, holding the plank position longer than I could, you know, remain in bed. And this wonderful, very inspirational young lady was on stage demonstrating how to hold a plank. And I still haven't, you know, been able to get up to more than 12 seconds. I set a personal best, though. So I've had, I've had a deep desire to get,

to get James on the podcast. He wouldn't come on, he said, until I actually did an interview with an astronaut while she was on the space station. So I checked that off in January. And then he said he wouldn't come on until I had on, you know, one of the world's most successful investors of all time, Jim Simons. And actually, there are connections between James and James Simons, reputedly called the world's smartest billionaire.

And James Simons, Jim Simons, as we call him, He will be our guest Father's Day episode. So depending on when you're listening to this, you can either go back or forwards in time if that suits you. And actually, before I had Jim Simons on, I asked Jim Altutcher whether or not he had any questions because it was rumored that he was the guest that he would most like to have to pick his brains, at least when it came to investor geniuses. I don't know if he's ever been on any podcast, right?

No, I think I have the first. Very secretive. Yes, he is. He's very secretive. It was a very intimate interview, very personal, and I can't wait to share it with the world. So I checked that off the bog. Now James said he'd come on the show. And he gave me a question to ask Dr. Jim Simons.

And I did ask him that. And after that, he's never been on a podcast, but now he's going to, he wants to start a podcast with you as the first guest. So James Altoucher, welcome. There's a long wind away. Welcome to the Into the Impossible podcast. Thank you so much. I've been such a huge fan of yours for years, actually. Well, Brian, I'm a fan of yours.

I mean, everybody should read your book on almost losing the Nobel Prize or losing the Nobel Prize. And you came on my podcast recently, and it's just such a fascinating conversation. I've been thinking about it ever since. I kind of want to get a PhD in physics now. I've been reading all about Einstein and, you know, it's exciting. Yeah, speaking to that, actually, I was listening to a podcast that you must have recorded it a couple of days on the James Altucher show before you and I got together. because you were going over your tips for how to run a successful podcast and actually how you speed read. And you went through this, you went through an exercise.

You basically taught people how to use these tricks and tools that you've developed. I'll put a link to it in the show notes of this podcast. But one of the podcasts was like, or one of the tips for speed reading was like, basically you don't need to know the whole paragraph. That's your thesis. You read the first sentence, maybe the last sentence. Because nobody really cares, you said verbatim about, you know, the boring details of what happened 13 billion years ago and the big best. and nobody really can. And the author's probably not that good

because, you know, he's a nonfiction writer. Oh, no. I'm not going to mention... So I thought to myself, well, that's really high praise that you were using me as a cautionary example. No, no, no. You know, think about it in terms of like an academic,

like academic research. And it's funny because I just was doing another podcast with some academics. And we were talking about, are there too many academic research articles published per year. You know, there's about three million scientific research articles published per year. And my point there is, if you read the abstract and the summary, you know what the article is about. You don't need to read all the math. That was really my point in that

one, is that for me, a layman, you know, I was looking at an article about the, you know, dynamic, moving, blah, blah, blah, of a human golf swing. And there's all this math in it. I just want to know how to move a golf club better. So and my point is most when I read fiction, I try to read every word because if I'm reading fiction, I'm reading it for to be a better writer. Fiction writers almost by definition are the best writers. They focus, they focus their careers on writing. You know, if I'm reading and I'll even specifically use an example, if I'm reading, well, maybe I shouldn't use an example. If I'm reading somebody's history book, you know, they wrote and they spent 30 years researching.

They're experts on history. They're not experts on writing. Writing's a hard skill, and so is history. So I want to know the history, but they're not going to be the best writer. So sometimes they're going to use extra words. The paragraphs are not going to be as formed as well as possible. But I will say I almost never, ever speed read because I do think to prepare for a podcast, it's important to read everything.

It's in some situations. I've been managing my schedule better this past year. Some situations in prior years, I would have five or six podcast schedules in a week. I'd have to read just too many books. And like if you have Nassim Taleb on and he's written four books all worth reading, but they're all kind of dense. I'm not, I can't read every word. No way.

I was really kind of referring to his books, actually. No, it was actually a wonderful example, actually, and something that you might not know just because you're not in academia. But one of the things that happens most often is you'll write a paper, put, you know, a month into a single sentence and then I'll have a citation. And then a couple weeks after it gets posted to the, what's called the archive or the, you know, the preprint server, we used to call it. It's really like a way to bypass paid journals. And I want to get into that with you in a little bit. But, but then you'll get an email from a crank, you know, or a friend.

You didn't cite my paper. And I feel, you know, like this is really relevant. And, and you don't know, this person could be the referee and this, you know, you have no idea. We're going to get into gatekeeping. choosing not yourself and academia in a little bit. But one tip that you gave in that podcast about reading nonfiction was very pertinent. And that's, you know, what do authors love the most when you read the acknowledgments, when you read the footnotes? And I thought, I could do you one better because I actually think the highest level of compliment and tell me if you agree is when you find a typo in a very well popular book,

a book that sold millions of copies that's called The Power of No. And when you find a typo in that book, or maybe even an error, isn't that the best thing for an author to hear that a reader has found a typo in his or her book? Hmm. That's a difficult question because on the one hand, it does demonstrate an acuity of reading that I appreciate and I'm glad that one did. But I don't like to know that I made any errors. So it's still probably more interesting to me to be asked about who's in the acknowledgments. but I'll have to try that trick on, you know, a future podcast guest and see what happens. You know, by the way, for academic papers, though, if you find, like, you know, that's kind of equivalent to finding, like, a flaw in the math.

And I've done that a couple of times as well. And again, the response is sort of mixed. So I did find a typo in the power of no, which I'll send to you. Yes, well, please do. I will, I will. It's on page 85 you call Isaac. you speak about the importance of leaving your family behind. And you talk about the examples in the Bible,

and Abraham left his father and the squabbles of siblings because you want to give people the power to really be empowered themselves and say no sometimes means saying no to your family. And you say that Isaac and Ishmael, sorry, you say Isaac and Isaiah fought with each other. But Isaiah was not the brother of Isaac. So it was Ishmael. I will send that to you.

Yeah, right. So Isaiah was a prophet in prophets. That's right. Actually, maybe he had his own book named after him. I forget. Yes, he did. Yep. Yeah, so, and you're right.

Yeah, I don't, that's a, that's a pretty bad one. I don't know, because I'm pretty familiar for whatever. I'm pretty familiar with the Bible, and I like the various structures in the Bible. I want to get to that because, yeah, you use it as an exemplar. I mean, I always say I'd kill for 1% of God's book sales. You know, that would be great. Something I had to appeal to people, say, 3,000 years ago. Even nobody disputes that academic scholars, that it's historical.

historically ancient. But if you look at both the Old Testament and the New Testament, it's kind of interesting how many people abandoned their fathers. Yeah. Like, you know, even in the New Testament, you know, Jesus says to, I believe Peter, you know, Peter is like burying his father. And Jesus says, let the dead bury the dead. Follow me.

And so it's kind of a weird thing. And we know now that there's, you know, of course, there's multiple authors of the new. Testament. We also know now there's multiple authors of the Old Testament. It's odd that this was like a common theme. But it happens to Abraham, Isaac, Jacob. It happens to. Yeah. Yeah. So Joseph was sort of, he was sort of, he didn't abandon Jacob, but he was kind of kicked out. Well, he does have a chance. You know, he's the second, I don't want to get too nerdy on the Bible, but he becomes basically the second in command to Pharaoh. For 17 years, he doesn't contact his father to say, I'm alive.

he waits until his brothers happen by happenstance come to Egypt. Right. Yeah, I do want to talk about your connection to Judaism. And you mentioned it a lot as a practicing but not orthodox. I never want to like burden other Orthodox Jews with the sentiment that I'm an Orthodox Jew. Oh, and I'm not even practicing. I mean, I haven't practiced my entire life. Yeah, yeah.

So I do want to talk about that and Israel and, you know, some other very light topics, I'm sure. But we'll do that at the end. For now, I wanted to get started, you know, kick things off with. going back to that night in November of 2014, we shared the stage at TEDx, San Diego, which is really something I look forward to doing, you know, since they came up with the concept of TED talks. But you really, you know, kind of set the stage on fire with your characteristic vulnerable. It was right after choose yourself had come out, you know, a year or so afterwards, power of no had come out. And I saw you and your then wife Claudia, I believe. You guys

We're in the green room. We hung out and I was like, yeah, I'll see you after the show. And then you ghosted me, James. I haven't seen this the first time face to face that we've been. So what, what is your story about that? What do you recall about that night? Yeah. What'd you do it again? I would because I think I'm a, I think I'm a much different public speaker than I was then, but I would, that was a big TEDx. That's like one of the big TEDxes. And there was, I don't know, it was like, I felt like maybe there was 500 or a thousand or more people there. I have no idea how many people were there.

There's 1,500 people. 1,500. I was so unbelievably terrified. Like, I have never been that terrified before a talk. Like, I had been giving talks, probably at that point for about 10 years. And I was really scared. And then right before me was actually the right before me was Gabriel, Gabrielle Yuri, William Uri's daughter, who was doing the plank.

And, you know, what was so interesting and vulnerable and brave about her, She has this, I don't know what you call, like a chronic illness or an illness since birth. So that it was part of the thing that was amazing about her doing such a long plank was also her physical issues. And then right after me, and then I was going to go on after her. And then right after me was going to be like the San Francisco ballet. And I figured what is going on here? The audience is going to be crying after Gabrielle. And then they're going to be anxiously waiting.

for the ballet. Like they don't, they're not, I had it in my head. The last person they want to see is me after Gabrielle. They just want to get straight to the ballet. It's the end of a long day. You have this totally emotional, beautiful performance by Gabrielle Uri. And then you have this amazing thing with the San Diego ballet that's going to happen. So I left the conference and I was not going to come back.

And this was like, this might have been while you were talking, actually. And I'm like walking around the block and I'm thinking, what am I going to do? I can't, I'm just horrified, but I did go back. I was terrified and I went on the stage. And this often happens with public. People should know who are thinking of being public speakers. This often happens. You're nervous beforehand, but then something, some neurochemical action kicks in.

When you actually get on the stage, something kicks in and you're a new person again and you do your thing and hopefully you do it well. So I survived. But I really was, that was probably the moment I've been most terrified to do. public speaking. And I think I did okay. Like right now, if I were to rate it from a zero to 10, I probably did like a five. But it was, it was scary. So then afterwards, just my mind had burnt me out. And I don't even know if I watched the ballet. I think I was just done. No, I don't, I don't think so. And then we had this after party, which is really fun because all these, you know,

famous classical guitarist and thinkers and, and me and other people were there. And I remember, yeah, I was the same way. I'd never spoken in front of that many people live. I mean, people have seen a lot of my videos, but never that many people live. And my mother-in-law, Allison was in the audience. She was like, are you nervous? And I said, you know, I like to pull her legs. Not until just now. How could you ask me such a thing? Now when I think about it, I guess I'm very terrified. Why would you ever say? She was freaking out because she made me feel like, she thought she made me feel nervous. But I was a little nervous until we got, I mean, we had speaker coaches. And of course, they give you alcohol, which I don't really think about as a positive influence

towards a good, and they also, you went on last, and I think your advice lately, which I, which I really agree with, and I commend you on as well, as like, if you're going to go on a comment, and I hope we can get to, like, the physics of comedy later on, but, but you talk about, you had this opportunity to get out like before Bill Burr or after Bill Burr. And what, of course, is the, you don't want to be, you know, come on after, he's going to, you're going to get slaughtered. But you did that for Ted X. And I wonder if that was your first kind of endeavor, you know, closing out a show, basically closing out of show, because the ballet. day dancers didn't have much to say, you know, to the audience. They were performing.

You know, I think it was more the kind of status of Ted X that was scaring me even more than the size of the audience. Like, because I've spoken in front of thousands of people before that, but it was where I was like more in control of the situation. It was like an event maybe set, like I used to be a spokesperson for fidelity. So they would have these huge events with like five to 10,000 people and I would speak. And, So I felt a little more comfortable at those because they were there to see me, whereas TEDx is like just a long day and everybody's great. Like, look, you're, you should be your Nobel Prize winner and you were speaking.

And then there's me. So, you know, and then, and William Uri, Gabrielle Uri, there's so many great speakers that were there. And I think I was just, and then like you said, we were coached. And it was almost like we're overcoached. Like my coach, I think, didn't really like me that much. And so she was like, no, do this, do this. And like I had already been doing public speaking for 10 years, but I felt like I had to stay within the rules of her coaching because it's it is TEDx. Yeah.

And I don't know. I kind of lost my center of psychological gravity. And again, you do kind of get it back at the end. There's other techniques too. There's there's a cognitive bias if you go last where it's called a choice ambiguity bias. So if you say, if the first thing you say is, hey, everybody, give it. you know, I'm the last speaker, give it up for everybody who's gone before me. So they all clap, but because you've kind of lumped everybody into this category of everybody,

they actually at that moment, it's a cognitive, but they have a hard time remembering anything about who they saw before because they just kind of clap for the group. So in their brain, they had to reorganize their brain to do that clapping. What am I not going to clap for the girl who's got a congenital disease? Yeah, well, they probably remember her, but then they, but they probably everyone else becomes the other. And so that's a technique I often use when I'm on last.

It usually works. But this time I was just in a state of terror, you know, and then afterwards, I was, you know, whatever we had, 15 minutes, I was just totally burnt down. And, you know, it's funny. Now, looking back at my talk, because I watched videos of my talks just to study them. And even now I'll watch talks from 2013, 2014. I've watched that talk recently. and I can see now what I've learned since then and I think I would do things differently now. The key would be, though, would be to overcome the coaching because ultimately now in retrospect,

I don't think the coaching was that great. And not to criticize her, she might have been doing what they told her to do, but I think I would have played it a little differently if I was the coach. Yeah, I want to get your thoughts on the rapid fire portion. that's the blitz at the end of the conversation about, you know, is Ted over, or are we past peak Ted? But we'll get to that in a little bit. I mentioned earlier in the introduction that, you know, we kind of had this connection through Jim Simons and wanting to communicate some ideas or so forth with him. I understand that you not only applied for a job at Renaissance

perhaps. You proposed this question that I'm going to answer for you here, but also you claim that you have a strategy, which is, you know, which is possibly a potential interest to them. So I know that, you know, we're just sharing this between a few thousand close friends. So yeah, yeah. Nobody's listening. Well, it's not so much a strategy that would be interesting to him. But it's reverse engineering. You know, he has many strategies and he has a couple of funds.

And there was one time where he was launching a fund that was going to be stocks only, which is unusual for Renaissance. Like they do every asset class, but they do a lot of like intercountry stuff and currency and and things like that. But he at one point, this is like 10 years ago, maybe a little more. Actually, it's more. It's like 15 years ago. He was launching a huge, huge mega fund that was going to be stocks only. And at the time, and I think this is still the case, I think I more or less reverse engineered the strategy of that fund.

And it's not a complicated strategy. He'll basically invest in every small to mid-sized public company that has a large amount of cash, no debt, and is either profitable or break-even. With the idea that if they have a lot, like, let's say a company has 500 million cash, no debt, and, you know, and they're not even that big. Like, let's say they're burned before revenues is like 50 million a year. They're going to be in business for a long time. And so if you combine that concept with the idea that, you know, Warren Buffett has a strategy where he says, if a business is going to be still be in business 20 years from now, it's probably a good investment now. So the best way to ensure a business is going to be in business 20 years from now is to look at their balance sheet. And if they have a lot of cash, if they have no debt, if their yearly expenses are nowhere near their cash levels, it's probably going to be in business 20 years from now.

So my thinking is, and you could you could see this by looking at, if you do, you could look at it in different. test this idea in different ways. If you look at any company that has a lot of cash and no debt, chances are Renaissance technologies is one of the largest shareholders, even now. Big companies are small because I remember during the bottom of the most recent crash that were potentially still enduring. You know, I looked at, I talked to a friend of mine, you know, do you think it's a good idea to invest in Verizon or for AT&T? And he was like, well, let's compare them. You know, the street thinks Verizon is a much better bet. And I said, well, just out of curiosity, what is their, what's their revenue? And it's like $29 billion. Holy cow, that's awesome. That's

amazing. And I was like, just out of curiosity, what's their debt? And it's like $200 billion. Like these companies have multi-hundred billion dollar debt that even if they took all the revenue just to pay down their debt in, in, you know, four years, they'd be bankrupt. So yeah, how do these companies, so it can't apply to, they can't print money. It can't apply to like super huge companies, right? Right. No, I don't think, you know, so for that type of company, he probably has other funds and other strategies. It's just specifically this one fund I was reverse engineering. And I noticed, because I always like at this time, this was like 14 or 15 years ago, I always like companies that have a large amount of cash and no debt. I'm very risk averse. So,

you know, and again, it's hard to piece through his filings because his biggest funds own hundreds and hundreds of companies. So it's hard to necessarily find them. But if you look at even in small or medium-sized companies. And again, if you do a search on, there's various stock screeners out there, if you do a search on companies that have, again, large cash, zero debt, so usually like mid-sized companies, or maybe there might even be biotech companies, biotech companies really, you know, research companies don't really take on a lot of debt. He's usually, he's, Renaissance Technologies is usually one of the major shareholders. But now he's got, you know, tens of billions of dollars in this fund. So he, he, he, he, he, he, he, he, he, he, he, he, he, he, he,

has to be in hundreds of stocks, but there are hundreds of small to medium-sized companies that have a lot of cash and no debt. And so I just figured that was the basic strategy. And he figured it's a strategy. It doesn't have to really focus on too much. It's very simple. Like, just make sure they're not going out of business. No debt. They have expenses to go for it or at least, you know, five to 10 years, whatever his thing is. And that's, that was my reverse engineered approach. And I only noticed it, not by studying what companies he was invested in, but that I noticed that every company I was interested in using these metrics, he seemed to be invested in. And when I looked at companies that didn't have those metrics, he wasn't invested in.

So that's, that was my sort of reverse engineering there. Now for his main hedge fund, which he's had since the early 90s, or I think it was like the early 90s when he started, that's a much more complicated algorithmic like arbitrage between currencies and things like that. That's right. That's the, so he was implementing idea sex before the idea for idea sex was hatched in your idea. Yeah. So, I mean, basically for a long time, as I understand, you know, Greg Zuckerman, who I guess is a friend of yours and a friend of mine, he wrote his autobiography of Jim Simons, which, you know, it's funny because Jim comments on the book. He's, I don't think it's a very good book in my podcast.

So I don't know if I'm going to send this to Greg, who's a good friend. But the, but the point was, you know, back in the day, people would say, how does it? they do it and and you know how do they consistently do it it's one thing to do well and and so I asked him like how do you do it what's the secret give us the secret sauce right now no so I didn't ask him that but I said you know it's it's interesting because what renaissance did for the first time as he explained it to me and I parsed it through the all-toucher filter of idea sex back then there was like technical analysis which is like looking at charts I mean you know much more about hedge funds than I do ever know but there's technical analysis and there's fundamental analysis so what

And there's quantitative analysis, which is different than technical analysis. Right. So that was the third analysis, he would not do. I doubt, unless he, unless he misinterpreted and thought you said quantitative analysis, tech analysis for people like that and, and even for me, like, it's bullshit. Like that doesn't really exist for series of measures. Right. But applying the quantitative analysis had never been done to something that has fundamental analysis. So I'll give you an example. You know, he would look at, you know, pork bellies or whatever. And he would do that and he would do a quantitative regression analysis

against the Turkish lira, you know, whatever. And there'd be some advantage. And in our discussion, he's like, all we needed was, you know, a 0.001% advantage because we have so much capital that we can exploit that lever. As long as it's a 50.000.01% probability of success, we would put a ton of cash behind it because they had a ton of cash. So it was kind of like card counting in blackjack. Like you only, And in the best card counters, like let's talk Ed Thorpe, who was the original card counter and who was a affiliate with. Right, who is one of their subhead funds, I think.

But, but he basically, you would just need a, like you say, a 0.01% advantage. And that's when you know to start betting huge. Yeah. And so, so, yeah, the combining this kind of fundamental analysis, like if there's a drought in Peru, then, you know, Peruvian weed is, I'm just, I have no idea what the hell I'm talking about. But that will go down. So that's a fundamental thing. You can just look at that.

Now, the one thing that they did. have for decades was they actually had like newspaper clippings, you know, going back to whatever, the 1930s. And so they could do these regression analyses as far as I understand it for a long time. And I think that was one of the major advantages that they had. And again, you just need this fraction of a percent advantage if you have the cash flow to stay alive. And that's the hard thing, I think. And so because they had the first mover advantage, because they had the idea sex of quantitative plus fundamental, for the first time, really, they really came to monopolize. that space and have done really well. So that is a great book that I know Jim doesn't care. And actually, one of the things we'll talk about at the very end is kind of legacies and books and so forth today's podcast.

But yeah, go ahead. You know, another, I'll just reverse engineer a little bit of at least Renaissance's early strategies. I don't know if they still do this. But like, just take the idea of quantitative analysis for a second. And I'll make it very simple. Let's say, you know, Canada and the United States are essentially the same country financially. Like if the U.S. does well, Canada's going to do well. If Canada does well,

the U.S. is going to do well. So if two days in a row, Canada goes up and the U.S. goes down, then it's almost common sense. Okay, U.S. just went down. They should be going up and down together. But if U.S. goes down two days in a row and Canada goes up, they've diverged. So now snap them back together. So buy the U.S. and short Canada. So you actually take very little risk because country markets don't really move that much versus stocks. And you have the extra advantage that you've seen. So really quantitative analysis, you've statistically back tested. Well, the last 500 times Canada went up two days, when the U.S. went down two days.

If you buy the U.S. the next day and you short, you sell Canada the next day, they'll snap back together. Exema is unpredictable. But you can flare less with ebbglis. A once-monthly treatment for moderate-tissaphyr. After an initial four-month or longer dosing phase, about four and seven people taking Ebbglis achieved itch relief and clear or almost clear skin at 16 weeks, and most of those people maintain skin that's still more clear at one year with monthly dosing. Ebglis, Libri Kizumab, LBKZ, a 250 milligram per 2 milliliter injection is a prescription medicine

used to treat adults in children 12 years of age and older who weigh at least 88 pounds or 40 kilograms with moderate to severe eczema, also called atopic dermatitis that is not well controlled with prescription therapies used on the skin or topicals or who cannot use topical therapies. Ebglis can be used with or without topical corticosteroids. Don't use if you're allergic to Epglis. Allergic reactions can occur that can be severe. Eye problems can occur. Tell your doctor if you have new or worsening eye problems. You should not receive a live vaccine when treated with Epglis. Before starting Epglis, tell your doctor if you have a parasitic infection. Ask your doctor about Epglus and visit atlis.lis.com or call 1-800-LillyRx or 1-800 545-979. So you do all sorts of, you find all sorts of pairs like that that are

statistically related. Now, people used to do, if they're fundamentally related, like if GM goes up and Ford goes down, but, you know, then you snap them together. But it's much better to do it where it's statistically related because there's interesting things that happen because Canada and the U.S. are also very different. Canada is a natural resources country. The U.S. isn't. So Canada and Canada is an ex-British country.

U.S. is, but not as much as Canada and Australia, which is also a resources company. country. So you can do the same arbitrage with Canada and Australia. So sometimes Australia has a bigger gravitational pull on Canada and sometimes the U.S. does. And you could statistically model that all out. And that's what I believe Simon started off with on his quantitative arbitrage strategies. And he would always do arbitrage so he would take very little risk. Like a strategy like that in 2008, which it was even when things were hugely volatile after the bankruptcy of Lehman Brothers. That was actually a very successful strategy. Yeah. Yeah, I agree. And, you know, I had on my podcast twice already, Eric Weinstein. Oh, yes, super smart guy.

Super smart. And he was, he's a managing director of Teal Capital. I know you're close with Peter Teal and you've had him on the show. And Eric and I were talking. And one of the things he says to me is, you know, I had an idea for an unsinkable or undefeatable arbitrage strategy. And when I went to work, He was working on Wall Street and hedge fund before Teal Capital in the late 90s or something like that. And he said, you know, it was like the right of passage. You know, you show up for work at the first day of the hedge fund. They'd say, you got any killer ideas? And everybody would say, I've got this idea for this three-way arbitrage, you know, triple triplet of currencies, you know,

that we could make arbitrage bets on and win. And I just started like cackling at him and, you know, saying, oh, that's such a rookie mistake. It's like hazing for hedge fund geeks. And he was just like they tried to convince him that that trade would only was correct. The math was 100% correct, but it would never work because they didn't have the resources to go behind it. So unlike, it wasn't Renaissance.

But, you know, so there is, you know, never under, I always say that, you know, quantity has a quality all of its own. You know, it's not just like, oh, we want to spend quality time with my kid. Of course, yeah. But quantity of time is equally important. And we'll get into fatherhood because you and I. are both fathers of five. And I want to pick your brain about fatherhood as we go up.

And you know what, though, it's, it's, I could go on and on about the hedge fund strategies because that's such a fascinating topic. I'm sure Eric had some, you know, in the late 90s in particular, in the early OOs, still people had not implemented these quant strategies. There was maybe Renaissance and there was a company called AQR. There was very few quant funds out there. So there was opportunity. And by the way, there were also scam opportunities that were, that were, that were

under-regulated. So one strategy in the 90s that was brilliant that unfortunately, you know, it was, you know, I wasn't even aware of it, but people made hundreds of millions of dollars and then it got regulated and those people just disappeared. Like they're gone with their billions or whatever. But it was a strategy called playing the calendar. So you would open up an account at Goldman Sachs and you would just trade millions of shares of stock generating lots of fees for the brokers, and the goal was to lose as little money as possible. So the brokers would end up with these huge fees, and you would hopefully not lose so much money. And then when there was a big IPO that happened, like eBay, you know, in the late 90s,

you would say to your broker, hey, you just generated, you know, several hundred thousand dollars in fees. I want the biggest allocation possible from eBay. And you would get it and you would sell. It would go up 300% the first day and you would sell. Even though you're not really supposed to sell the first day, they would try. to make you sign something, not to sell the first day, but because you were generating so many fees, they would let you get away with it. And it's called playing the calendar because you'd open

up accounts depending on which banks doing what IPO on what day. Yeah. And I know that you've, you were not only deeply involved in this hedge fund world, but you also were one of the writers on the head show billions on showtime. I was an advisor, yes. I advised the writers. And one of my favorite thing. So I'm going to take the Jim Simon's episode of Into the Impossible and divide it up into little clips like you've taught us how to do so spectacularly successfully. I'm going to take these clips and put in one of them is going to be called, you know, Jim Simon's on this one weird tip that'll make you billion. No, it's going to be where he goes through and explains, you know, alpha and beta. And that was actually your question. We'll get to that in a second. Yeah.

But he gets to, you know, this description of what is alpha and he thinks about it mathematically and and geometrically actually, and we'll describe that. And so it's unique. And I really felt like little goosebumps, you know, as he's describing it, kind of like Einstein. Let me just give you a lecture on, you know, relativity and the speed of light, much better than Brian Keating could ever do. But Jane, I doubt that because you were explaining it to me. I do my best. And we'll talk about pedagogy and academia because I know you've got so many thoughts about that as well. But getting back to Jim, he goes through this, you know, description. And, and then I was looking up because I knew you, I'd been an advisor to billions. So I looked at billions.

and James Altucher. And it comes up with a blog post from a few years back. And basically in the blog post, you basically say that almost every hedge fund is crooked. And you have this story about, you know, you applied for a job with a certain securities dealer firm. And you were rejected. And we deal a lot with rejection, fear of rejection. I wonder if you could tell that story. And whether or not you think, because you basically accuse most hedge funds of doing something crooked or illicit.

And the question is, does that apply? Do you think to Renaissance? But first, what don't you tell your quick story about your misadventures with applying for a job and getting rejected? It must really sting looking back in retrospect. Yeah. So, I mean, I have a bunch of rejection stories. I have a Renaissance rejection story.

Are we talking about that one? Yeah. No, no. Do that one first. And then there's another one with a guy named Bernie something. Yeah, yeah. First do, Jim. So I wrote, you know, I was doing all these quantitative strategies and I was, and actually other quant-based hedge fund managers were investing with me.

So I wrote to Jim Simons. I figured out his email address, you know, you kind of look, you Google at renaissance technologies.com all over the internet and you see how they format their emails. And then I wrote, I figured out how, how to write Jim. So I wrote to him, I described my background, I described my strategies. and he's like, this is great. You should come in and talk to us. We'd love to meet you. And at this point, I had also written a book about quant strategies. It was my very first book called Trade Like a Hedge Fund.

And then he's, and then I forget who brought it up. I think he asked, but wait, do you have a PhD? He said, I noticed you went to graduate school at Carnegie Mellon. Do you have a Ph.D.? And I said, actually, I got thrown out of Carnegie Mellon, so I never got the Ph.D. And he's like, it's a rule. We only hire PhDs. I don't think that's correct.

Actually, I think, I think, I think there might have been other ideas. But when was this again, James? That was like 2004. But maybe they still did. But soon after that, they stopped. Because I had a whole bunch of grad students that wanted to get jobs with him. And at the end, he was just like, no, we've got too many PhDs.

We got too many eggheads, basically. And we need some people to understand business. That's funny. So it could have been a pretext, but who knows. Yeah. Yeah, maybe. Yeah. And then another time I was raising money for a hedge fund.

And my neighbor says to me, hey, I work for this one guy. He's really nice. why don't you come in? So we go in and his boss gives me a tour of the office, a great guy, he explains everything. We go into his office and he says, okay, James, what can I do for you? And I said, well, I have a different strategy, I think, than you. And why don't you, I was hoping you could invest money with me. And, you know, we can figure out the details. I'll give you a break on fees or give you equity in the fund. He said, listen, I'm sorry, If you want to work here, you know, I like you.

You're smart. You're friends with Danny, the guy who brought you in. You could get a job. We'll hire you any day you want. But I don't know where you put your money. I don't know where you invest. So the last, in many points from Southeast, is the last thing we need here at Bernard Madoff Securities

is to see Bernard Madoff Securities LLC on the front page of the Wall Street Journal. So, and then I was crushed. Like, I thought like, oh. He rejected me and he's got better returns than me. How am I ever going to compete in this industry? Like, I couldn't raise money. And I actually got out of, I started the process of shutting down my hedge fund after that because of Bernie Madoff. So you benefited from his investing advice in one way.

You know what's funny too is that after he was exposed, he was exposed like three, three or four years later. So after he was exposed, everyone, all my friends in the business was like, oh, we totally knew. he was a scam. And I said, no, you know, I remember when I was walking into the building, you were calling me and begging me to ask him to let you put money into his fund. I don't think you knew all along. So no, not very few people knew. Yeah, but 100% of people claim they knew. Oh, yeah, it's like at Woodstock. There were 20 times more people who thought they were there, claim they were there. But yeah, looking at him. And then, yeah, I mean, look at that's at a medallion fund that's run by Renaissance technologies. I think they've been, you know, haven't ever had

down here, you know, in 30, 40 years, whatever it's been. And, uh, and no one's saying, oh, yeah, I, I knew it in a second, you know, he must have been doing something crooked. You know, you know, some people, some people have said to me, or they've asked me, is Renaissance, uh, doing something, uh, not totally kosher? And, but I was always convinced they were completely kosher. A, I knew people who had, who had worked there. Be, I reverse engineered at least one or two of their strategies. And, and, and see, you know, most, most people, don't know how to research these things. So I show people, oh, you can see.

Here's Jim's, you know, Renaissance's stock holdings. Like they're legit company. So, you know, it's fine. So you asked me to ask him a question about the difficulties in the environment that they operate in now brought about largely by their success. Are they being victimized essentially by the proliferation of quantitative hedge funds and yeah, essentially are they a victim of their own success, that they really were the kind of first movers in the space,

and now there's so many quants, et cetera. And so I did ask him about that. And you said, you know, there are there problems capturing Alpha? And it was good that you did because that prompted him to like, let me explain alpha and let me explain beta and, you know, I encourage people to listen to the podcast because he does it in a signature way. So Jim was a mathematician before he was a hedge fund pioneer. He was a mathematician.

You work with your dad, right? Yeah, yeah, they work together at SUNY-Stony Brook. He hired my father, that was their connection from Sunni, from Cornell, or my father had been the youngest full professor ever at Cornell to come to SUNY-Stony Brook to start this fledgling math department where they work together. And Jim goes, so, you know, describing Alpha, he's like, he thinks about it in terms of like, you know, a topographic surface in this higher-dimensional space. And he goes through like, well, you have to look at, you know, the properties of these, of these vector bundles on top of a surface and an idealized space and that these properties

of alpha and beta are orthogonal to each other. And you're looking to maximize, you know, certain properties of this relationship between alpha and beta. And it was funny, James, because it was like we had the podcast, I think I recorded two weeks ago, the 5th of June. And the market was way up, like way up that day. It was like up 1,800 points or something. And he kept just like looking over and looking and he's like, oh, God. And he's like, I'm like, Jim, what's wrong? He's like, you know, we're getting crushed today. And he even says it in the podcast.

And I'm like, you know, Jim, if you need a bridge loan, I'm good. But I'm going to charge you, you know, four and 40 like you guys do. Yeah. He didn't appreciate that. But that's an interesting observation on your part that he was looking over that. And he was stressed because the relationship between alpha, beta, and the market is very important and suggests how correlated he is with the underlying. market, he's not correlated at all to the underlying market. So a big update, depending on how his

bets, you know, relate to alpha, beta, gamma, and every, and Vega, it could, you know, he could be, he could have a huge down day that day. Oh, yeah. And it's, and it's, and just as he can make a tremendous amount, you know, leveraged against a tiny amount, you know, of, of, of, of, of, probability above 50, 50 chance. He also can lose a tremendous. So on that day, the market's up 6% though the journal Greg Zuckerman actually reported that the fund that he's in now so I think he's out of I don't know if he's out of them a I don't know understand how it works but but there are other funds that are open to institutions and he was invested in those and he's probably their biggest investor and so when those and Greg reported that those funds are down like 20% on the year which is like

seriously underperforming the S&P even and of course nobody would expect that given the apocalypse which we have gone through maybe haven't gone through I want to get your opinions on that but yes exactly. So looking at that, it's possible to like understand both how much he views things in terms of bets. And you've had Annie Duke on. I know I'm hoping to have her on my podcast someday too. She's got a new book coming out soon too. So she'll be doing the rounds of podcasts. Yeah. One of the things you gave me an idea to do, which is like all these authors, especially the first time authors, but but even second time authors like Annie, you know, their book tours are all canceled. So I was like, this is my chance to get, you know, people on the show who would never come on the show anyway.

So I just pitched. I'll do an interesting. email if you want or maybe you've already talked to her publicist but you know but i would love an intro uh to her um and i have some great ideas for people that i think you'll resonate with too including eric and and other people but we'll uh we can cover that offline but he thinks about it so much in terms of hedge like if you go through i'm going to have a video up on our channel for the simons observatory which is this hundred million dollar project in the high out of comma desert 17 000 feet above sea level in Chile that we're looking for the signatures of the Big Bang. Here's a little note card.

Thank you, note with our website on it. So it's got, we have an animated. It's really cool. Anyway, when we talk about it, he's like, well, and I just talked to him last Friday again to give a little inspirational marching orders to the collaboration as we endure COVID ourselves and get through our daily work. And he said, you know, like, you're going to be on this guy soon. we're going to have information about the origin of the universe very soon,

or we may find out that it's, that it didn't have a big bang. There wasn't a, and that's what I prefer, but I don't care because even if I'm right, the universe didn't have a big bang. There was just an infinite cycle of creation and destruction events, creative destruction like the hedge fund, Titan he is. But if it did have an origin and you detect it, then we win the Nobel Prize.

So he's like, I'm like, you even hedge that. Like you hedged your science bets too. But it's clear to me that that's, That's the way that he analyzes everything. And it's pure, but even drilling down deeper, it comes from a basis of geometry and the properties of the way that he sees things. I asked him in the podcast, I was like, you know, oftentimes I said that a certain thing in math will be beautiful.

Like the Nobel Prize winner, Paul Dirac said it's more important that your equations are beautiful than that they agree with experiment. I don't agree with that, but people fall in love with this beautiful aspects of mathematics. But he, I said, well, what is beautiful to you in mathematics? And you can listen to the podcast when it comes out. But basically, you know, things that have a symmetry or a beautiful unity or express some essence of the underlying truth, those are things that can then, in Altutcher speak, make connections or network or idea sex that can combine to leverage up as hedge funds do to make a greater gain than you would have expected. Like, he admits he's like, I can't do math anymore.

I haven't been able to do math for 10 years, but I can still think, you know, in terms of hedge funds, I can still think in terms of of bets. I can still think in terms of philanthropy. But he's using these meta skills that he, that he derived and developed much younger in life as a mathematician. I also asked him, you know, do you think mathematicians always do their best work by age 30? And it was kind of interesting to hear because he's in, you know, he's 82 years old. He smokes six packs of merit cigarettes a day for the last six decades, which made it really fun to take him up to 17,000 feet on oxygen, pure oxygen tank. But he survived. I took him up there last year. By the way, on that question, And, you know, I've read something recently, gosh, I forget where I read it.

But I read a book about that very question and they pointed it or a chapter on that question. They pointed out how Einstein actually his most cited work was when he was in, I believe in his 40s. Yeah. So it was some of it. It was some of his analysis on quantum mechanics like in the 20s. Yeah, he did. He did so. I mean, 1905, he was 25 years old.

So, you know, that's the miracle year. But, you know, 10 years later, he was 35 and doing much more technical mathematics. I mean, the special theory of relativity, the constancy of the speed of light, length contraction, time dilation, those are, those are mathematic, but the equations are algebra, basically, a little geometry, you know, Pythagorean theorem with what's called a hyperbolic geometry. But for general relativity, I mean, he had to basically invent new mathematics or apply things from like 1800s in what's called differential geometry, the same kind of math that Jim Simon's traffics in.

And so I think that was really interesting. He did say that it is harder to, you know, just to answer your question, you know, give you a preview of the episode, that it is harder now because of, you know, firms like Renaissance and others to really capture alpha while preserving beta, you know, or minimizing beta volatility. And, but, you know, it's kind of like we were reminded of supercomputers. So the Moore's Law is, you know, is this exponential growth, is this, you know, increasing exponential, as our mutual friend Peter Diamandas loves to talk about. And that's one of the properties of, of technology when it becomes demonetized and democratized. But one of the D's, actually the D in democratization,

means that the utility function is higher. So the reason that the total amount of computations isn't really increasing worldwide, even though the speed of each individual computer and the speed of the fastest computer on Earth is not benefiting to the extent that you would predict based on Moore's law, it's because there's a usage penalty. Like the more powerful the computer gets,

the more people want to use it. and so it gets a subscription tax and it can't because there's an overhead associated with each process or job as they call it and and then the processing within each process also has a tax and overhead. So even though the fundamental unit of computation is getting better and better, it's also a victim of its own success. So we related it to that. And so there's more of them and so it's harder and harder to find opportunities. And it's harder to maximize what mathematicians call the surprise.

It's like, you know, it's not a surprise if I say, you know, Florida's pretty hot and humid right now, Jane. Like that doesn't tell you, so you're not surprised to hear that. And so I've revealed, I've communicated information, but it doesn't have any utility. So in this case, with computers, they're getting faster and faster or with hedge funds, there's more and more of them. But the underlying revelation of new information is constant or maybe it's declining. So in some ways for their flagship funds, I don't think that they've really suffered at all because of this. whereas the institutional funds, according to Greg Zuckerman, they have because they're competing, you know, he said in the medallion fund, they can do 90%, they could be as much as 90% short,

I think, at a given time. And, but in the, you know, for every dollar, they could go at 90, 90 cents short or something like that. Whereas for the institutional fund, I think he told me that it's like 5%. So you don't, it's asymmetric waging. Like you can't really exploit a surprise. function benefit to your advantage? Yeah, and he, you know, it's tricky, though. I'm still intrigued where he finds, I mean, he's not going to really give the real answer because that's how he makes billions of dollars. So, but I'm intrigued. I'm curious what his process now is for finding alpha because it's very, it's very difficult. Like every, there's kind of been a race to the bottom on every strategy. So like, take as an example, this Canada, U.S. Arbitrust strategy I described before.

Well, if everybody knew that strategy and this is not such a complicated strategy, then, you know, right, as soon as the divergence happens, everybody jumps in and snaps it back together. There's no more arbitrage. Right. So, you know, I remember one time I had a strategy that was literally, it was like an ATM machine. The strategy works so well. So it was basically if the NASDAQ was gaping up in the morning between 0.4 and 0.6 percent, I could short. it at 9.30 a.m. and within a half hour, it was going to go back to even at some point, and I was done for the day. And so I wrote about this on an article on a financial website, and somebody called me up who was working on the strategy with me and other strategies. And he said, what did you just do? Why did you just? And I'm like, nah, no one's going to play it. And the market's huge. Like, you think just a few readers are going to squash this out? Strategy never worked again. It had worked. It literally had worked.

99 times out of the prior 100 times and then it never worked again. They talk about, Jim talks about in, I think in Greg's book, how there are certain signals, you know, they describe everything in terms of signals, which is, you know, some correlation analysis must be used for that. And he says he's got some signals that, like, haven't ever not worked. Now, you know, for the Medallion Fund, as I understand it. You know, so there's signals that go back 30, 40, 50 years.

You just got to wonder, what the hell is like still correlated? you know, that is, it contains the surprise entropy, you know, that's like a discovery that only they know. And of course, they're not going to say what it is. So I thought it was really interesting, but really to see how he does things. And I also talked a lot about him, about academia and leadership and kind of got his notion of what, you know, kind of what his role model is for a leader. And I wonder, have you had on Doris Kearns Goodwin? I forgot. No, you know, and I've considered having her on and for some reason I didn't. I don't know. I forget why. So I thought of a way that you could get her on, which is that I'll send you the link to obviously the video, Jim,

but I asked him, who's your favorite historical figure of all time? And he said, without a hesitation, Lincoln. I was like, holy, you know, why not Euclid or, you know, his boat is named after Archimedes, his famous quote, you know, Eureka. His boat is called Eureka because, you know, That's what Archimedes said when he got into the tub, allegedly, it floats. But then I asked him because I was like, I got to get Doris Kern's Goodwin on the show. So I was like, any good books you can recommend? And he said, oh, yeah, yeah, Doris Curran's Goodwin. So what I'll do is I'll send you because you can get, I can't get access to her.

But I'll send you to you to the Liggins. Just say like the world's most brilliant billionaire is obsessed with your work or whatever. We'd love to have your conversation. Yeah. So I'll send you that. Yeah, it's a great idea. Lincoln, what was it, her book about Lincoln? A team of rivals.

Yeah, right. So it specifically refers to his leadership strategy, which is to have kind of this discourse, something that which never happens in American politics since, which is to have discourse among people who disagree with each other. Because he needed that kind of consensus to lead in such a difficult time. And I said to him, look, you know, what you were also, before you were leading these edge funds and so forth, you were the chairman of the inaugural chairman of the Sunni-Stony Brook Math Department. And what was your strategy there? Because I had asked him, you know, when we were on a

trip to Chile last year, you know, about this kind of what's his leadership strategy. And he also mentioned a book. And I can't find this book, but it's, um, it's a fictional book. It's called like Captain or the Captain. It must have come out in the 60s or whatever. And it's about a naval captain, a fictional story about this naval captain who is like exemplary, you know, in terms of leadership and building consensus. But then Jim's strategy in some sense was to let people, you know, passionately decide the things they're passionate about. You know, it's like he would let them kind of burn out their energy and they'd have squabble. We want to hire this person in integral analysis, you know, whatever, at the math department.

But then there's something that was really important to him. Then he would speak up. And because he didn't, you know, waste all of his political capital, so to speak, on the decisions that he really didn't care about. I mean, you could hire somebody good and another, he didn't really care. But when it came to something or some decision or some new program or course or whatever that he really cared about, then he would like. lay down his marker and he had a lot more chips really stashed up. And he's, you know,

in some sense, he learned that from this book, Captain, which I got to find. And so maybe we can get a researcher listening out there to do that. But, but yeah, I thought it was really interesting that he's had success in three different fields. That's so rare. I mean, most people are lucky to have half a career. And especially field, there's hedge funds. There's the math. And philanthropy. Okay. And according to Greg, he's also, he's a codebreaker. But, you know, He famously got fired for opposing Nixon's secretary of war or whatever in the 70s from this Institute for Defense Analysis. He really didn't last very long as a codebreaker. But he was, you know, officially that was one of his early careers. But I really think of him as this,

you know, unique individual for achieving the highest level of success, winning the highest prize. You know, there is no Nobel Prize in mathematics. And he won this prize that's second, you know, only to something like that, or the Fields Medal, called the Veblen Prize when he was young. And then he, and then obviously he went on to start the Renaissance technologies and also to begin the Simon's Foundation, which has this unique mission in an academic research or fundamental research, which is only to research thing. You know, it's often said that the problem with basic science is that it produces technology. Like, like, if it didn't, you wouldn't expect, like, where's this fast? Like, what is studying the Big Bang going to teach you about, you know, getting a faster cell phone? Nothing. But if you look back, the same laboratory that where the CMB, the cosmic microwave

background was discovered, was Bell Laboratories. And it's not an accident because these scientists were serendipitously came upon the signal. They were trying to get rid of this noise and the first communication satellite. So that was like, again, it's kind of like idea sex. You've got, you know, this basic, you know, problem where you want to reduce noise, you're looking at things that are floating around in space. And then accidentally, you never know. And that's the problem. Serendipity is by definition a surprise. And it's a surprise. And it's a, them expected. And they are, they flip things around and say, we're going to fund things that have high likelihood of success, but are also potential sources to unlock serendipity. And I thought, you know,

right now we could get into talking a little bit about academia because, you know, you talk a lot about your academic pedigree and, and you're famous and lack thereof. And that cost you a job, probably both at Bernie made off securities and that Renaissance. But, but I think you'll, you know, you've done okay for you. yourself. But academia, you know, it's kind of this interesting thing where it clashes to be, you know, with all due respect. It clashes with a lot of the advice that you give and, and potentially has these challenges, especially what I do in terms of experimental physics. So I want to segue into that. First, I want to preface this, but, you know, Gavin Newsom, my ultimate boss is listening.

You know, I love my job. I would do it. You know, I'm going to keep doing. I'm not going anywhere. But, you know, you talk a lot about this, this, the essence of experiments and, and why the 10,000 hour rule isn't really so applicable anymore. You talk about the 10,000 experiments rule. I like to say that it's not 10,000 hours for me. It was 13 billion years. So, you know, that's, I had to work that long. So, but in experiments. This is why we had the conversation on my podcast where I was asking you, do you really need the math to be a good physicist?

because what if someone had the ideas, like conceptually, you could imagine we can do thought experiments about 10 different ways the universe could have started and then, you know, the math could sort of take care of itself with a mathematician and then focus on the experimental stuff without knowing any math. I thought more about that. And I was thinking, like, let's say you look at this glass apple that my wife got me for my birthday or my, maybe it was my long as I forget. Was that like your dream gift?

Like she got you? Oh, yeah. It's solid diamond. This is amazing. Oh, okay. This episode is brought to you by Netflix. Most valuable promotions in Netflix are hosting a blockbuster triple headliner Saturday, May 16th.

Rhonda Rousey returns to face fellow woman's MMA pioneer Gina Carrano in the main event. Plus co-main's Nate Diaz versus Mike Perry. And the best have you wait in the world, Frances Nganoe versus Felipe Lins. Watch Rhonda Rousey versus Gina Carano, live only on Netflix. Saturday, May 16th. 9 p.m. Eastern Center time, 6 p.m. Pacific time. Yeah, yeah. So, you know, I was thinking like, well, let's say you like Azik Asimov, I know. Let's say, you know, you're looking at the earth. And Asimov said something like to the effect that if you think that the earth is a sphere, you're wrong.

But you're less wrong than if you think the earth is flat. Like, the job of science is to really not necessarily come with like something extremely brand new. And some people say, like Lee Smollin, who's a brilliant professor friend of mine at the Perimeter Institute, which is a really interesting, kind of like very unusual think tank, started from funds from Blackberry Incorporated Rim, and that's why it's called Perimeter. But anyway, Lee Smollin doesn't even think the scientific method exists or in some sense. But getting back to Asimov, so like, would you know enough, like just as a layperson to say, well, like the Earth isn't a sphere? Like, I bet you thought the Earth probably is a sphere, right?

I mean, it's sort of beautiful. This is a great question because if, let's say we were transported 3,000 years in the past, okay, it looks to me like the Earth is flat. Yeah, oh, absolutely. Like, I would have a hard time. I tell my students, James, I tell my students, can you prove to me you now have your PhD, like on the day of their, I'm such a piece of, you know what. But anyway, I say to them, like, you're now a card carrying PhD in astrophysics.

I believe that the earth is the center of the universe. Prove me wrong. And very few. I mean, I have some brilliant, brilliant students. And it doesn't matter. UCSD could be Princeton. It's very hard to do. But the reason it's hard to do is because people are ignorant in some sense of history.

And they don't understand how do we come to know what we know. But they certainly have these lacunae, these gaps in their knowledge. And I think, yeah, it looks like it, but the looks can be deceiving. That's why you don't trust your eyes. You build tools and telescopes to augment your eyes. But go on, yeah. Yeah, but like even, you know, you mentioned air, Weinstein earlier, who's, you know, got his training in physics and math and so on. And, you know,

it's hard for people to start with first principles because we don't know, we kind of, like you say, we forgot what they, what they are. We kind of start with, we already know about gravity and we already know about Galileo and that's kind of just baked into like just the intro or the forward of our physics books. Like if I, you know, you ever read a Connecticut Yankee and King Arthur's Court by Samuel Clemens? By Mark Twain. Yeah, right. Yeah. So, so, so, so, so, so. So, So I always wonder if I had to go in time to King Arthur's court, I'm going to just die because there's nothing I can do. I wouldn't even be able to teach them how to boil an egg or like or make toast or and that guy strung together like phone networks and he made guns for them.

Like I wouldn't have been able to do any of that. There's a book. It's like one of these prepper books or whatever, but it's basically it has that as a thesis. Yeah, how to invent everything? Yeah, how do about everything, right, yeah. I think, I think that's really funny. But yeah, getting into science, like, can a lay person do this? We talked about on the podcast. You, it's like, you don't even know, and that's not an insult. It's just like, that's not your skill stack, right? I mean, you need to know so much about, like, well, why is the Earth not a perfect sphere? And that connects to celestial mechanics and the rotation and also the plate tectonic. Like, there's so many meta things that go into it. Nobody would say, like, in other words, it appears that the illusion is so

strong once you overcome the illusion that the earth is flat the uh the attraction to this beautiful idea of perfect symmetry is very strong and so it's very resilient to to disruption to changes in the way that we think about things so i do think it's hard to really break out of that paradigm but but what i want to talk about you know next with you is is um you know as i said i'm not going anywhere gavin you know don't worry but um and actually i was thinking you know like you know what the proof that being a professor is the best job that there is, James? You basically can live in a science fiction world and you have job security for life from it.

Yeah, that's one thing. But you know what the proof text, as we would say, you know, Talmudically is, you know what? The most famous human being who ever lived, you know, born at least after the last couple of the last couple hundred years, do you know what he did? Neil Armstrong, after he came back from landing on the moon, he became a professor at the University of Cincinnati.

So, yeah, he became an engineering professor at the University of Cincinnati, and he lasted at that job. It was like a year or two after he had walked on the surface of the moon and reached heights that no human being had ever reached. He did that. He taught. He didn't get tenure. He got, no, I'm just kidding.

I think he did get a PhD too, didn't he? I don't know if he did. Neil, Buzz Aldrin does from MIT and aerospace engineering. I don't think he did. No, he was a test pilot. I'm sure that's something Wikipedia can tell me while you answer the next question. The next question is about academia being like kind of the bizarre world of choosing yourself and that we talked about this a little bit on your podcast, but I want to explore it a little bit more deeply

and that we have a little more time. First step, you're in high school. You've got to get into college. There's a gatekeeper there. Once you get into college, you have to do well. You have to take the GREs, get into graduate school. These are all the steps to become a professor that I went through. grad school you have to do well have a good thesis have a good advisor he or she has to be connected

help you land a next job and then you have to do well in that job that's called a postdoctoral scholarship or fellowship that's kind of this purgatory between being a graduate student and being a professor when you have to show your medal and show your worth and creativity as an independent scholar that's when i got fired from stanford when i was a postdoc as i talk about we really depressed then um you mentioned your book liberated no i felt liberated like now I'm free. I can be, you know, it ended up being, you know, I wouldn't be talking to you. I wouldn't be married.

I wouldn't, you know, who knows? Maybe I would. But looking back at life, it couldn't have happened any other way. At first, obviously, it was devastating, like Stanford University. It's one of the best places in the world to be. It has this prestige ranking off the charts and to get fired. But I was unhappy there. It was like 1999 in Silicon Valley, making $32,000 a year as a postdoc, living six miles away

on the Cal Trains line where the trains were running back then every 15 minutes from, you know, five in the morning till midnight. And so I didn't sleep more than five hours the whole year I was there before I got fired. But getting back to postdoc. So your postdoc, you do well, you're competing against your postdoctoral advisor at some level because, you know, he or she has to get funding and get tenure, him or herself. Then you get a have to get a faculty job. There's 400 applicants. We had a job opening this year. 400 applications for one position. You have to get through that gate. Then you have to have to get through that gate. then you have to get funding because you only get a certain amount of startup fuel, you know, funding from the university that's going down because budgets are going down.

Then you have to, you know, apply to the National Science Foundation, get a grant. That's about 15% if you're lucky. And that you have to get past all these gatekeepers and possible trolls and people that are your competitors that are reviewing your pool. Then you get through. Then you have to get 10 years, so you have a permanent, then you can do, you know, ultimate freedom. But now you're, you've invested about 20 years in higher education. It's not just that too. You're always ranked according to how many citations are.

Exactly. Yeah. So that was the next thing I want to talk about. There's something called the H index. We'll get into these meta rankings of how you assess quality of academia and what your note, like how you would, an alternative to it in the rapid fire section. We'll get to that. And then you can't choose yourself.

That was the one rule they gave me at the Nobel Prize that they still adhere to. They forgot about every other rule or ignore every rule that Alfred Nobel had. And that's that you can't choose yourself. Literally. You cannot choose yourself to win. So these are all the gates. These are all the hurdles. Right.

But let me ask you this. And this is an important question. They are the gates to what? Yeah. So to, you know, for any metric of success, I think not getting tenure is almost like, I don't want to say something horrible, but, but it's like losing something, like losing a pet. You know, it's devastating.

And it's a huge investment. Like you put in a lot of tremendous, you've moved. You've had your family. You've done. And so that's a very important marker. Yes, you know, there's many ways and outcomes of to graduate school. But if you want to take the path that I've been, you know, I view that I've lived this hunger games, basically.

And I just happen to be lucky. I don't attribute it to my own brilliance. But, you know, I have certain skills. I know. But they're the meta skill. They're not really the skills of like, I'm super brilliant in solving this differential equation in a matrix algebra. Those aren't my core strengths.

And so what I wonder is, like, yeah, so the metric of success is this, you know, at least that, that getting, yeah, you don't have to win the Nobel Prize. But if you don't get tenure, that's pretty devastating. And actually, you don't get, find out until you, if you got tenure until you're in your late 30s, maybe early 40s. Think about starting your life all over again. Yeah, it sounds romantic, but you've had 20 years in higher education, 22 years of higher

education. It's hard not to feel like you're a failure at that. Sure, sure. you're because because like very specifically answer the question this is the path or the gateway to what well i think you know people want to do if you want to be a scientist it's very difficult in the 1800s you could get you know do a small experiment and find electricity emanating from a spark gap or whatever or james what could make the steam engine he was just like a mechanic yeah right or the right brothers could invent an airplane and their bicycle they owned a bicycle shot right so so

the low-hanging fruit has been plucked. And I guess the question is, if you're addicted to science, you love science, and you're good, you're just good. But like there's some person who's on your tenure committee who's going to choose you, and you'll never know who she or she was. But I'm still going to dispute the answer to the question. It's not really to be a scientist.

It's to be a tenured professor in a science department at a college. Because then to be a scientist, you still have to raise money, you still have to manage a team, pick the team, you know, publish more to get, you know, people attracted to working with you. So, so specifically what you described was a gateway to being a, an associate professor at a university. And, but there are, but, but, but, and so the argument is that's the only path. Even though you gave me an example of Neil Armstrong, obviously didn't take that path, but he became a tenured professor at a university. So, but let's say he's, let's say he's an outlier. There's, I don't, there's, I'm,

outliers in other industries like Michael Dukakis is a tenured professor at Harvard because he ran for president. He doesn't have a PhD, but he ran for president. So we could we could come up with outlier anecdotes of people who did not take the path you rigidly described to get to be associated. But let's just assume they're outliers. But there's also the fact that you have like take Neil deGrasse Tyson, who's, you know, a very smart astronomer cosmologist. World's most famous scientist. in human history. Yes. Right. But if he did not have a PhD, he could still do what he does. Like, you know, I would argue he is, I don't know, since I don't know the science part, I would argue he has just as much communication skills or more. He's a media, he's a charismatic media personality.

He's a head of a Hayden Planetarium. Right. Yeah. So, so, so, and then, and, you know, then there's also guys like, Dan Carlin has one of the most popular podcasts on the planet called Hardcore History. And when he started that podcast, it started because he lives in Montana. He was always arguing at the dinner table about history. And he was like really into all these like esoteric ancient wars that nobody's ever heard of.

And I think his mother said, you should just start a podcast. And he's like, I can't do that. I'm not, I don't have a PhD in history. But he did it. He chose himself without the PhD. And he has like the most popular history podcast on the planet. He made a great living. Yeah.

The fact that you can name. these few people speaks to the survivorship bias. I mean, there's many more people. Let's say you wanted to teach at a universe, at a college level. Let's just forget about university where there's even more hurdles to getting grants and getting papers around.

You know, teaching college, you know, a school where they don't give out PhDs necessarily. You know, it's a terminal degree to get a bachelor's degree. That might be all you ever wanted to do. And you wanted to teach. And yeah, you could maybe you could get a job and teach high school. I'm not denigrating that at all.

I mean, my greatest inspirations earlier on, high school teachers. But if that is your goal, if you see your, you're a core identity of who you are as a teacher, as a giver, as someone who loves, and I was having this conversation earlier, you know, there's one book in the whole federal registry of documents. You know, this covers the IRS, the FCC, the SEC, like all the different federal three-letter agencies. There's one book where you'll find, in order to succeed in this particular field, you'll find Maslow's hierarchy of needs. And you'll find the words like, your students need to feel loved. And I'm just curious, like, do you think that's the IRS?

Like, where do you feel, where do you think like the word love and, and, and CIA? What's that? CIA, definitely. Because you're recruiting foreign agents and they need, you know, nobody, in general, nobody cares that the U.S. gets information, but they want their self-worth to be higher. So you CIA tells them and says, you're going to be a general in the CIA, if you give me information, and they love it. Well, that may be true.

but I'm sure you're right, but where I found it is in my side pursuit, my side hustle, is wanting to someday be a flight instructor. And to be a flight instructor, you have to pass several different gates, including being a private pilot, a commercial pilot. But then you have to understand the theory of pedagogy, which I was never taught as a professor. Like no one ever taught me like, your students need to feel safe. They need to be fed. They need to have like their physiological needs met.

Like I never knew that. And I thought, well, why is it for the FAA? you know, like IRS doesn't have this, like to be a kind of general, you know, tax auditor, you know, you really, no, they don't care. They just go off and ream you, right? But the, but the problem is, you know, for the cost of a mistake in learning process for a student of aviation is death and possibly killing other people. So it's no surprise in some sense that you'll find it there. Whereas we kind of say in academia, like, my student doesn't get in. Like I once thought, and this is a crazy stupid idea,

but I was like, how do I know that I made a difference in a student? Like, what's my metric for success? When I was teaching as a graduate student, I had a NASA fellowship to go out to like kindergartens and teach them about space and NASA. And I was like, how the heck do I know if I'm going to have an influence on this person? If I teach them that there's only eight planets

as there are now in the solar system, and somebody comes back when they're 25 and says, how many planets are there? You know, they could have learned that from anybody. But if I teach them, there's only four planets. You know, like, and then at age 25, someone out, how many planets are there? Four planets.

Then, Brian Keating, I had a great, I never did that. Don't get me wrong. But, like, it's very hard to be a good educator. And yet we don't really teach it. And so someone who, by definition, wants to teach it at teaching college or, you know, college just pregnant.

And they don't get to it. It's, I don't want to say catastrophic. It is definitely. devastating. And so what advice can you give? Yeah. There's a very, very, very specific goal, right? So it's someone who is a professor slash teacher doing scientific research and at a good school. Then you need all the things that you described. And you need, you need a few more. You know, like you said, you need to raise grant money and so on. So that's a very specific thing. So if I wanted to be a brain surgeon, Yes, I can't be a brain surgeon without a medical degree by the law.

If I wanted to give medical advice, though, I don't have to get a medical degree. Like maybe I could read a ton of books about brain surgery and even give just as good or even better advice than a brain surgeon. I just wouldn't be able to legally do brain surgery. Or, you know, I've given, because I have experienced in a couple different areas, I've given lectures at law firms and I've been a consultant for law firms. Not because I'm a lawyer. I don't, I've never taken a law class in my life, but some areas of the law I know as well as any other lawyer.

And in fact, I'm able to give lectures on it. So or, you know, the same thing goes for, you know, it depends on the field, but, and it depends on the type of regulations with the licensing. And, and, you know, to be a tenured professor, scientist, teacher is almost as, as hardcore. It's almost like it's regulated like any other licensing is. There is, yeah. But if you wanted to take the skills of a physicist, there's many things you could do. You could work at a hedge fund. You could work at SpaceX.

You could work at Google. You could even be doing physics at Google or a hedge fund or SpaceX. Like let's say a hedge fund is thinking about, you know, high-speed frequency, you know, high-frequency trading. They're dealing at the quantum level. And you might need some physics to get an edge for a hedge fund at that level. So, you know, there's your thing of a very specific thing. Yeah. Where, yes, it's, but even then we found exceptions.

You know, Neil Armstrong, Michael Dukakis, there's probably more exceptions. And if you go down the chain on the quality of the school, we're going to find more and more exceptions. Like, I can't teach physics, but maybe I could teach some other class without any higher education degree at a community college. So, you know, if we lower the quality of the school, it opens up the, the outline. So I think to say, yes, I can't choose myself to be a medical brain surgeon at the Cleveland Clinic. But I can, if I'm obsessed with medicine and I read all the books and I study things and I read all the latest journals, I might know even more than, you know, they always say a doctor has the most amount of knowledge the day they graduate medical school. But if I'm obsessed with medicine, maybe I might know more than a doctor. even if I haven't practiced it in a surgical setting.

I don't have a degree or practice. Right, right, because I'm not legally allowed. But maybe I, if a family member has a problem and they call me, I mean, I'm not saying me specifically, but, you know, let's say I'm this type of person. Family member calls me and their doctor says this. I could say, ah, that doesn't sound right to me. Get a second opinion. I had that happen recently.

Some accountant gave me advice. And I was like, that doesn't sound right to me. And I would ask them questions and their answers didn't sound right to me. So I got a second opinion and I was right. So again, like you could learn, you could be the best physicist on the planet without getting, without going through that path. It's just that you have a very specific physical outcome that in 98% of the cases, not even 99, but 98% of the cases require the path. But if you were going to, if you wanted to be just learn all this physics, you could do a podcast, you could write popular science books. You can work for a hedge fund.

You could work for a tech company like Google or a semiconductor company. There's many. You can work for the CIA and build ways to track people's cell phone, GPS. You can work for the IRS, actually. You know how the IRS determines if you're living in California versus Texas? Let's say you say you're living in Texas because you want to avoid the state taxes of California. Right. It used to be the IRS or Florida, right?

Or Florida. Right. It used to be the IRS would say, let me see your utility bills. Now what the IRS does is they subpoena your cell phone. records and using physics, they make sure the towers all line up. So that's 185 days a year. You were in, you were accessing towers in Florida. You know, they triangulate your phone and all this stuff. So there's, you could be a great physicist without doing exactly what you're doing right now. That's how I would choose to view my, I would view the truth. So I want, like, let's say I'm,

I'm 52 years old. If I wanted to be a physicist. Right, right. And so I would basically read all the books, study all the math, and I've read, you know, all the popular books like the Michi Okieu books, Brian Green, Stephen Hawking, Neil Legras. I read all those books. Brian Keating, yeah. At least the first chapter and the last chapter. No, no, no. I know for sure. I read the whole book, word for word. And then I'd have to like study the next step would be like Feynman's courses on physics. Then I would take some online courses and then I'd get into more textbook stuff. But I could do it. I just can't do what you do. But then maybe I start a physics podcast or maybe I write to you and say, oh, here's some ideas I have for your experiment

and you hire me to work on the experiment. So I'm not working for the university. I'm working for your grant, but I'm a physicist now doing physics research and you trust it because I would be giving you all the equations and you would say, oh, do you have your PhD? And I would say, nah, and you'd say, okay, I can't hire you at UCSD, but I'll hire you on my grant funds and blah, blah, blah. So I could still be a physicist. I could choose myself to be a physicist even now. Yeah, and be physics adjacent, right? And I can even teach. I could do an online course at Coursera on physics.

If I write a popular physics book and then I could say, look, I don't have a PhD, but I wrote the most popular physics book of 2021. You know, Brian Keatings was the most popular of 2020. And maybe I could teach at an online course. Yeah, online university. We were number one in Lebanon, as I told you a couple weeks ago. Yes. So, yes, I actually taken that advice.

And now I'm doing a TikTok course on advanced general relativistic. quantum mechanics. So that's a brilliant idea, by the way. Yeah, exactly. So by the way, that's idea sex. So so many people think, oh, there's only one path to be a TikTok influencer, which is I got to be, I got to dance like a 13 year old girl. Or I've got a lip sync really well. But in fact, weird things made a glass and I do those and that freaks people out. Right. Yeah, exactly. In fact, actually, you could be an enormous TikTok. And by the way, the average age of people on TikTok, it's going up every single day. So a 13-year-old, that audience has gone down percentage of TikTok, and the 45-year-old audience has gone up. So you could be this enormous,

famous TikTok physics influencer and be doing legit physics and explaining it on TikTok. How much of that is his first mover advantage while I look up your TikTok account? How much of that is like, well, TikTok is, you could be the, you know, Neil DeGrasse Tyson of TikTok because he's not on it and he's busy with Twitter and he has 13 million followers on Twitter, but I'll never get that. Do you think that's first mover advantage? Like TikTok is viral. You're kind of leveraging the virality sex of physics and first mover.

It's a little bit first mover, but not, you know, is a combination of many things. It's a little bit first mover. It's a little bit which influencers like you. So that's kind of like the luck factor. And then there's just the quality of the content. That's just as important as you don't have to be first mover. The quality of the content is probably the most important because at some point, if you're consistent with high quality content,

some major influencer will bless you with their, hey, check out Brian Keating's page. And then suddenly you just get enormous numbers of users. Yeah. Because I've seen famous comedians on TikTok and they get nowhere. And then I see someone who just hits the right zeitgeist and quickly they get a million followers. Yeah. I mean, you could easily double my TikTok followers.

following and by just having one person join. Actually, maybe you'll join my TikTok, Dr. Brian Keating. I'll join it. And you're James Altitcher on TikTok and J.L. Titcher on Twitter. I want to get in, because it's not so often I get to pick the brains of somebody who's had so many careers as you have. I want to go into comedy right now.

Do you still have some time, James? Yeah, of course. Okay, awesome. So before you talked earlier about your TEDx experience, for my TEDx, I wanted to have the experience of bombing in front of a high, maybe low stakes, but in a kind of high pressure situation before I went and failed potentially TEDx. I wasn't super nervous because I give a lot of lectures. It's my job, right? But it's different. It's a different set of skills giving a lecture. First of all, you're naked, you're without a podium. You've got this time limit, this TikTok in your

ear, like 15 minutes. It's like, what happens at 15 minutes? And my speaking coach said they shoot these blow darts at you, you know. You're a nice coach, I think. My coach was not as nice. And then, you know, so I wanted to have the experience of being in a, you know, in front of an audience that's hostile, potentially, or just not exposed to me and not positive. Like, I'm not saying my students are positive. So I went to the comedy store here in La Jolla and I did a tight, tight 10 milliseconds. Now, I did, I did a tight two minutes? I had a, that's great. So what, how did you, did you say to them, hey, I'm doing a 10x San Diego.

Would you let me do some time and they say, oh, all right, two minutes? No, no, no. It's, it's worse than that. I didn't say it at all. In fact, I just went up there. I had my wife there. And because I am, you know, I go to you know, kind of links to be associated with the Jewish community. And I had a rabbi there. And I was like, I can't curse. And it's really hard not to curse in front of like your rabbi. Right. So, so I did, I wanted to do a clean set. And I was the last person, an open mic night, I had two minutes to go. And I, and I had to be clean. So I went up there. I tried a little shit.

I went up there with a Tweed jacket with swayed elbow. And I took out a bubble pipe. And I did some jokes. And, you know, and they were all clean. And I was the last person. I was the only person who got to laugh. And I want to talk to you about that because it's kind of like, and so I should say, you are owner or co-owner or a full owner of stand-up New York.

Co-owner. I own about half of it. Yeah. And I can't wait to check it out next time I'm in New York City later this year. And maybe do a set if you have an open night night. But the point about comedy. And so I wanted to have this experience. It was a little difficult because everyone there is drunk.

And so I made a new rule that all my students have to have the two drink minimum before each lecture. And things have gotten a lot better for me. And so we did this. By the way, that's a joke. Yeah. No, I know. Actually, the pipe's not a joke. That's a joke.

Yeah, yeah. I had a couple of jokes. I had one about a professor because I was like, I'm the, you know, the stand-up cosmic. No, no. It would be a joke further. That's really just a premise. It'd be a joke further if like, and then I was, the middle of talking about the Big Bang, and one student started heckling me.

And you'd have to, the actual punchline would have to be a good heckle. So I'd have to think about that. I want to get into that. Because I want to, I have a philosophy that no comedy is not victimless. Like there has to be a victim. Sometimes it's you. Sometimes it's the audience. Sometimes the heckler.

Sometimes you're being heckled. But anyway, so I had some jokes. I had like, I'm writing a book right now called the timely history of briefs instead of a brief history of time and that flop. But I went through this whole bit about like this kid who takes a class on ornithology. And have you ever heard this? Stop me if you've heard this joke, as they say. But this kid's taking my class.

When I was in college, I was taking a class in ornithology. And I wanted to learn all about it. And I learned about the birds. And in the final exam, all the professor was asking me was like, here's this bird track print on the ground, identify the bird. Here's the bird print footprint on the ground. Identify the what the hell is this? This is such BS.

We don't learning anything about their migration habits. They're mating habits. You know, it wasn't anything that we learned about in a stupid final exam. So I went up in the middle of class. I handed in the final exam. I didn't put my name on it. I stormed out.

Professor reaches up and says, wait a second, wait a, you didn't put your name on it. And I said to the professor, here, figure it out. And I put up my foot. And it got a laugh. It was actually, you know, people laughed at that show. So there's a case where, so act outs, that's called an act out. Yeah.

Oh, really? Okay, that has a name. act outs are funny. Like if you ever see like, you know, like a Louis C.K. special, he's often doing act outs. Like he has the one joke where he's teaching his, is a famous joke. He's teaching his daughter, Monopoly, but it's too hard for her, really. It's like very emotional monopoly. And so he's acting like her voice and then his voice.

And so he's acting out both roles. I see. While he explains Monopoly, there's a lot. And actouts and voices are funny. So if you ever listen to Jim Gaffigan, part of his joke always is like he has the voice, he plays the voice of the audience a little bit. Like, is he doing that joke again? And like, you know, right. So is he going to stop talking about horses?

Hot pockets? Yeah, right. Yeah. So, but there's all these different things. So you didn't act out, which is funny. And, but, you know, a big common thing, which, which is like you started to do with the physics class example with the two drink minimum is you can, it's like an idea sex thing. conflate two different areas and oddly connect the dots. So for instance, I saw someone the other day do a joke where you ever notice that,

you know, of course we care about women's equal rights. Ever notice the best food in the world comes from country to feed women hardly? It's like no one ever says, hey, honey, let's go out for Canadian tonight. No, you go out for the Middle East, Middle East where they chop off women's hands. So it's like you're conflating these two concepts that are not really connected, but there is this odd real connected dots moment. And now that's often the construction of a joke. So like you were basically turning your physics class with the two drink minimum

into a comedy club. So I felt like that was kind of going in the direction of a joke. Yeah. And whereas the other example, the act out, that's more of like a sketch type of joke. Right. Yeah, like a bit, a routine. Yeah. And actually, one of the things I mentioned in the two minutes or whatever, I was like,

speaking of Louis CK, because I know you've had him on. I know he's a friend of yours. But I, like, I haven't had him on. I haven't had a mom. Oh, okay. I thought you did. Are you, you've been in a room with him or whatever. Anyway, and someone's like, oh, I have so much respect for him.

You know that he writes a new routine every year? I'm like, you know what it's called if I only write one new routine every year? It's called unemployment. You know, it's just like, I mean, the standards for, and I, he's funny. I know he's controversial. I'm not, I'm not, but like that that was the power, like, if I only come up with one idea or one hour's worth of speeches, you know how many speeches I give or how many podcasts you give? I mean, it's, it is very hard. And that's actually what I wanted to get into, you know, like, the basis of comedy, I think is, you know, and I kind of mentioned that earlier. Like I got into like, how do I know I made an impact in someone's life? Like, it's kind of cruel to teach a kid that there's four planets just to see if they will remember what Brian Keating said. Like, you know, I kind of mention that. And I said, like, you know, the dinosaurs were killed by, you know, by, they think it's killed by the meteor falling, but really, you know, it's because their arms are so freaking short. They couldn't cover their mouth and they sneeze and whatever. And I went to this whole thing.

And again, I'm like, these people just heard a woman talking about her, I'll just say, monthly cycle and like with the most vulgar language in the world and like this other guy, you know, and it was like, F bomb, F bomb, F bomb. And like, hi, rabba. You know, like, it was very challenging. And I don't think I'd ever want to do something with a, with a, you know, like, I just feel like that is demeaning to like, like, that you have to use the, like, it loses its currency. I mean, what do you think about cursing? And most comics, I would, not all of them, maybe it's half and a half, I don't know, but most comics don't really, you know, rely on, uh, the curse words to, for the, the humor. They might rely on curse words for timing. Like, they need to throw in a word as just like a, a. beat between the premise and the punchline. So, and then you know what this effing guy did? Like it just, they needed that extra two syllables or something. Right. And also effing has the K sound in it and that's funny allegedly, right? Yeah, like, but Seinfeld's totally clean.

Jim Gaffigan. Yeah, Gaffigens's totally clean. Yeah, he performed in front of the Pope. But, you know, speaking of the writing every new routine every year, the big argument actually was Seinfeld and Louis C.K. Because Seinfeld would not write a new routine ever. And in fact, I mean, I think now he does in his last special, but the last time I saw Seinfeld before him, he actually did a joke. I remember him doing in 1992. So, you know, but Louis C.K. would never have done that. And Dave Chappelle doesn't do that. So, you know, I think most comedians now rewrite quite a bit. And certainly after this, the weird thing about this pandemic and lockdown is you kind of have to rewrite. Every comedian now has to rewrite all their material. Right. None of the old material works. Like Jerry Seinfeld now has a whole new routine

about going out. Like, you know, let's get ready to go out. And then we're going to go out. He makes fun of the word out. And then he reverses it. And he's like, okay, but when are we going back? And like, now I got to get back. And now I got to go back to the car.

And then he, but now that joke doesn't even make contextual sense anymore. And even after the lockdown. So, so, you know, everybody's got to rewrite their material now. So it's a little different story. But, yeah, that was a big shift in comedy when it was clear Louis C. was writing a whole new set every year. And Dave Chappelle does like three or four a year now. Yeah.

Yeah. I mean, it's it's nonstop. So I want to talk a little about the physics of comedy and really relate that to what we talked about earlier, which is this notion of entropy or surprise and combinatorics, so to speak. And, you know, I was thinking like, why is it so hard to make people laugh? And I think the, and let me know if you agree with it. Like, it's so easy to make people cry.

Like, the difficulty gap between making somebody cry, like, all I have to show. Like, all I have to show you is this mother who's about to give birth or gave birth and she had cancer. Like, I'm starting to tear up right now. Like, it's so easy to make the world cry or make them feel negative emotions. Well, think about if you listen to a song with minor chords, you're going to feel like crying. Yeah. And but, but and I was relating that because like the old joke is like, how do you, how do you turn someone funny into someone who's, you know, completely unfunny?

And it's not really a joke, but, but it's an observation. It's like, ask them to explain their jokes. Like, if you ever see. like, oh, here's, what's his name? Jim Carrey and he's on the Tonight Show or whatever. And they're like, why are you so funny? Tell us why you're so funny. And that's like the least funny he'll ever be in their entire life.

But like, I don't have to explain to you why it's sad if a mother dies, right after she gives birth. It's like, so it's like entropy. There's more ways to be unhappy. And this is I was thinking about the second law of thermodynamics and like, why is it that when you mix milk into coffee, you never see like a spontaneous separation of coffee and milk because there's almost an infinite number of combinatorics permutations where milk and coffee are equally blended.

But there's only one state where there's half coffee, half milk. And there's almost like an infinite number of ways to be sad and to be emotional. But there's only like really very precious few ways to be funny. And like I don't think most comics are that funny. Like I might not laugh. I agree with you. Yeah. I mean, I watch as an owner of a comedy club and a performer, I've watched maybe a thousand different comedians. Yeah. Most are just not funny. And, and I I think, you know, like you said, it's hard to, there's so many different, like, theories of comedy, like, and there's so many different, there's no one answer, right? Like, I talked about conflating two ideas.

You talked a little bit about doing an act out, and then there's, you know, storytelling. But, but, but, yeah, there's always an element of surprise. Like, there's some tension that's created, and there's a pacing of that tension. So the tension lasts just long enough, but not too long, that, you know, that you. you then release the tension. And, you know, then you can use these other things like conflating to ideas or doing an act out, doing voices. And, but yeah, there's no one theory of comedy.

But maybe it's a good point that you're putting energy into the tension. And the more, there's a certain amount of energy you put into that tension so that when it's, you know, it's potential energy. And when it becomes kinetic, that's when. Yeah, exactly. And that's what I was thinking like, and I wonder, I want to get your take on this too. Like, where is it hardest to be funny when people expect you to be funny? And when is it?

And maybe this is because the inherent tension in a situation. I don't know about you, but like I've had, unfortunately, like many, you know, how to speak at a funeral. And actually, like, they're more funny funeral speakers, you know, like giving a eulogy than I think there are comedians. Well, that's so much tension, right? Right. That's also why, like, it's probably funnier to get a laugh at a TED talk than in a comedy

Club. I mean, it's hard, sorry, it's probably easier to get a laugh at a TED Talk. That's right. Because the, you know, or let's take a funeral very specifically, there's so much tension already. You don't have to put as much energy in, like, there's all this tense energy anyway, and no one's released it, right? The rabbi doesn't release it. The other, you know, congregants don't release it. So if you release, if you give people an excuse to release that energy just a little bit, like you open up the valve a little bit, it's, it's an explosive laugh. It's like, oh, finally, I've been holding in all this potential energy. I get to be kinetic for a second. And in a comedy club, first, they're expecting just nonstop kinetic energy. So you have to really

like, and there's no tension. It's like, I'm out for a good time. And like, I'm expecting you, like you let me down if it'll be tense if you're not funny, jerk, you know. Right. And I mean, like that's why. I expect to be fooled, right? Right. But still, you expect to be surprised. It's like it's no good if it's too easy for you to figure out. If, if, you know, and then there's, you know, there's the, the act and then you think it's over, but then there's the other surprise, you know, they always do at the end. But so comedy and magic has, have similar features, but more dexterity with magic. Yeah.

But, yeah, no, with comedy, it's all about you can't. And this was always my problem. Like, when I, when I first started out, is that I would try to. tell a classic joke, but they knew it wasn't true. I was just telling like some dumb joke that had a classic structure, but because they knew it wasn't true, I wasn't building the tension.

But if I said, you know, a joke like, you know, something like, oh, I don't want my daughter to go to college. So I said to her like, you know, Josie, don't spend, don't spend, you're a young pretty girl. Don't spend 300,000. $300,000 just to have sex nonstop for four years. They should be paying you.

That's the point. And then someone might be upset. Like, you can't say, I'm like, oh, I'm sorry, she's a whore. And so like you could then, like you build up this tension. Like, is he really giving that advice to his daughter? And then you, then you, there's all these different directions you could go. Like, I can act like, I'm clueless. Like, oh, no, you're right.

I should just say she's a whore. or I could say, listen, I'm just being a good father. So, like, I'm, and then I'm playing the role of like a clueless, an unreliable narrator, which I'm sort of giving good advice in a weird, bizarre world, but I have this odd way of releasing the tension of it. And so, you know, you do, again, it's a matter of like finding that right point of energy where things are about to boil. Everyone's thinking like, this guy is the worst father in the world, and then I have to like break that tension somehow so they see that, oh, it's a joke, sort of. They're still not even short. And I could keep diving into that. And, you know, then, you know, maybe my daughter can say, oh, you know, climate change. What do you think of that? And I'm like, well, what, you know, what do you think of it? And, oh, you know, Molly, she'll say to me, you know, My teacher says, my grandchildren are going to be dead by the time, you know, in the next 40 years. Like, the world's going to be destroyed by climate.

And I could say, you know, Molly, your grandchildren, I don't give a fuck. Like. Right. I don't know that any of my great-grandparents. What the hell am I know? I'm never going to be. Yeah, like, I don't even care about you that much. Like, why would I care about people I haven't even met yet?

Yeah, right. I can see this is going to be our father's day. episode or the next day. So yeah, well, I have five kids. So I'm, I have nonstop material from, from my kids. And, uh, and then, you know, there's a lot of material being Jewish and depending on how you're raised. And, and then there's a lot of material with politics and so on. So there's, yeah, anything that brings up tension. And so for me, and then by the way, just like a simple example, this is like a basic example with coronavirus conflating two things. I'm not going to get coronavirus. I'm waiting for coronavirus 2.0 because it'll have a better camera, better Wi-Fi, you know.

Mulligan, the coronavirus Mulligan, right? Right, like, I'm conflating then how versions of technology with this deadly pandemic. Right. So you imagine the Netflix specials once we know about coronavirus. Right. So, so like, and then, but then I'm creating the tension, like, how can he say he's not going to get it? Like, does he not care? Does he think it's not real? Like, you know, and they start getting angry, but then you, you get into this, you connect the dots in this weird way with the technology world. Yeah. Yeah, I think the thing that appeals to me. So I kind of like reverse hacked it because I found that it made me better, not better for TED, you know, for the TED talk, but then when I came back to being, you know, my, my professor job, because that's a situation

that's, that's tense, right? Because kids don't know if they should laugh. They maybe they don't want to laugh. You know, I'll make up jokes, stupid physics jokes, even if they're puns, which, you know, I used to have it, you know, an opinion that puns were like the lowest form of humor, but and I think that's common. But actually, I think a good pun, you know, is a pretty beautiful thing. Like Jim Simon's, it's funny. One of his meta skills is clearly like his comedy. And he told me a joke, not on this podcast.

He's told me he's, I mean, he was known for being, you know, a jokester. And he told me once, like, he was like going through this bit. And I didn't realize he was telling a joke until like he just, because he's like so serious. And you're in the room with this guy's a billionaire, right? So there's tension, right? It's building up. He's like, you know, it's really hard. he's telling me, that's like, you know, I got two houses and it's really, you know, it's trouble

enough just having one house. And once I needed to have over, you know, a technician. And, and, and I thought to them, you know, I said like, well, the plumber, you know, you're going to fix the house. It's so expensive. Like, he came back. He did the, he fixed the, fix the house. And he said, you know, the toilet's now working. That'll be $300. And she was like, what the hell? Like, I run a hedge fund. You know, that's, that's $300 for a freaking, a freaking toilet. I don't even charge that much, you know, my fees. And the plumber said, yeah, you know, I used to charge pretty low rates when I was a hedge fund manager. Jim Simon's like stand up New York. I think I'm going to go. So that's, that's funny. And I was thinking of one. But anyway, it's just, again, it's all just

a matter of like that was a case where they're arguing. So there's some tension there in the story. And they just got to, you know, they conflated the two occupations and reversed it. it. So there was a reversal. There's often a reversal in, at the end of a joke. It's like completely the opposite of what you think. And then that's how that, that's how that works. Yeah, manifest the surprise. Exactly. So yeah, but just thinking about it, like, what do you think, you know, when I'm up there, I don't, I'm not expected to be funny. So even something that's a corny pun, or I'll say, you know, the unit of luminosity divided by areas flux. I'll say, like, what do you think the unit is? What the flux? Just whatever, like stupid. And like, they'll laugh. And, you know,

maybe they're laughing because I'm going to control their entire destiny or not. But I wonder, you know, what about this podium? Like, having a podium is a barrier. And that's part of the reason I felt like more naked when I did the TEDx talk. Like, do you think it's kind of taboo to use a podium or like worst case scenario? Like using like using note cards. Like Adam Carolla, who was a friend of a friend, came to San Diego last November. And we went and saw him.

And he was like working on bits. And he's like reading note cards. He's like, I don't like this one. And I was like, is that. It just wasn't as funny. Like, he's a funny guy. No, but he's doing that on purpose. No, I know.

I know. But like, I was thinking, like, what if everybody used no card? Like, would we just accept it as like, that's just the way comedians work. Just like, rat. No, it's just like hats. Yeah, if everybody used it, it wouldn't work because they're specifically doing an experiment, the way a scientist would do an experiment. They're, they're, if they get even the slightest reaction,

even though their performance is deliberately so poor, then they know that they can work on that material. Because let's let and who know. And who knows these percentages, we're making this up. But let's say 50% of a joke's humor is the way you deliver it on stage. And, you know, like if you had, let's say the joke that was the act out where you showed the professor your feet, what if, what if you had just said, look, you're just going to have to look at my feet then. That wouldn't have been as funny. You needed the act out.

So, you know, like Stephen Wright is this comedian known for his very tight one-liners. But he also has this very droll way. So if he had just said very excitedly and very fast, like, it's a small world, but I wouldn't want to paint it. It's not as funny. And for him, he does it in his drollway. Right. I lived on a one-way, you know, a dead-end street. Right.

Like, yeah, like his drawaway is like he creates his persona. And the delivery is that for him, it might be, well, I don't know, the writing on that's hard, but it's at least 50% is the delivery. Louis C.K. does so many act outs. It's half as the delivery. Dave Chappelle is huge on the delivery. All the comedians you see Netflix specials for, it's huge on the delivery. That's such a big part of it.

And also, you have to be, the weird thing too is you have to be charming. Like the audience has to like you. So one comedian, he'll go up on stage on 9-11 and he'll just look at the audience, he'll stare at them. And he says, it's 9-11 and you're in a comedy club. You pieces of shit. But he makes it come across as very charming in a weird way.

Right. So he's insulting them. If he just was like sort of an annoying guy in his look or his presentation, they wouldn't laugh. They would just hate him. And yeah, so that's part of it as well. There's all these different components that are a part of it, which is why, out of all the skills I've ever had to learn, you know, I haven't had to be a Nobel Prize-level genius

physicist, but I'm chess master, a programmer, investor. writer, written a bunch of books, you know, all sorts of things. But comedian is the heart. I mean, I've been doing this like five, six years and maybe more. And, you know, from beginning to end, I became a top chess player. I was in New Jersey's, you know, when I was in high school, I was the junior champion in New Jersey, did that in a year. But comedy is like six years in.

and I could see vast vistas in the future of just things I need to learn. And then, of course, there's the things I don't know that I need to learn. Right, the Dunning Krieger. I mean, I've toured with this guy, Tony Woods, who's Dave Chappelle acknowledged Tony Woods in the Mark Twain Awards as Tony Woods was Dave Chappelle's mentor. So Tony and I travel around together. Right before the lockdown, we did five different cities in the Netherlands.

Yeah. And so I was able to see firsthand. This is Dave Chappelle's mentor. And I just learned so much. It was incredible, but it also shows just how much there is to go. Yeah, there is. And there's so many similarities between, you know, even the profession that I have. It's not so dissimilar.

Remember, most of my time is not spent, you know, stroking my non-existent beard, pondering the universe. It's like, how do I get this truckload of concrete up the mountain? How do I get the funding agencies to give us a COVID gap supplement? You know, how do I convince these other more brilliant scientists that this is an idea of travel? So it's all these meta skills stacked on top of each other. But I do find that, you know, we don't expect professors to be, you know, stand-up comedians. And I'm not saying that you have to be, you know, to be successful.

But I think, yeah, there is a chemistry. There is, and it's not like manipulative chemistry. I think, you know, sometimes like a magician will do something. And, you know, Jerry Seinfeld's, you know, famous lines. You know, it's like, what does a magician do? It's like, look in here. You're a jerk. Here, look at this, you idiot.

You know, like, that's manipulative kind of charisma or, or, you know, presence in a way. But I wonder, you know, kind of combining ideas, sex here for a second. You mentioned COVID and we talked about comedy. Do you think that COVID, sorry, do you think that comedy would work, Zoom, let's say the Zoom app, you know, Zoom, stand up New York or sit down, New York, you know, where you're on stay, but you're, you know, you're coming into the audience and on an app. There's no audience. It's not like a Netflix special. You're just like beaming, like, what do you think about that idea? Well, every comedy club has been doing that this past. Oh, really? Oh, exactly. four months. Yeah. So there's been huge, like a lot of Zoom comedy events. I've been, of course,

invited to go on a whole bunch of them. I have not done it just because, and I haven't watched one, just because I actually don't really, for me, I don't think it would be fun. I think for me is the visceral reaction of the audience. I really enjoy. I mean, I do Instagram lives almost every day, so I try material, but even then you just see a bunch of hearts come up and, or you see a smiley face. It just doesn't feel the same. Although I enjoy being funny on those things, it's not the same experience. And if I'm going to watch comedy, there's a big advantage to being in person because then you get the energy of, you feel not only if you're performing, but even if you're in

the audience, you feel the energy of the audience. So if someone's really funny, that's like, I watched Louis CK for years on YouTube. And I thought, oh, this guy's funny. But then the first time I saw him perform in Radio City Music Hall, I was laughing so hard. I thought I was going to have to leave the room. Yeah. And it's just a difference like in person. It's just much.

And again, it's all related to energy and it's related to likeability and it's related to the tension in there. And everybody's tense around you all of a sudden. And then they're first out laughing at the same time. And so it's just, it's just different. And then, you know, also there's different philosophies like Dave Chappelle's philosophy.

And he's a very funny comedian. He's the best, but his philosophy is better to be interesting than funny. So his most recent release was not funny at all. or there's like three seconds of humor and mostly he was talking about, you know, Jason events and so on.

But so, but for him is better to be interesting than funny. Then on the reverse side, you have, in terms of the tension, you have Andy Kaufman, all he would do would be to increase the tension until it was unbearable, and then he would release. You wouldn't tell jokes or anything.

Right. Just was about the energy and attention. Any sufficiently advanced technology is indistinguishable from magic. If you enjoyed this episode of Into the Impossible, please subscribe, comment, share, rate, and review. For a chance to win a free copy of our most recent guest's newest book, send a screenshot of your review to info at imagine.ucsd.edu. We appreciate hearing from you and are always open to your suggestions for future episodes. For more information, go to imagination.

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in the Division of Physical Sciences at the University of California, San Diego. Eric Viri, director, Brian Keating, co-director.