The Tim Ferriss Show - #109: The 5 Things I Did To Become a Better Investor

Episode Date: October 3, 2015

I get asked a lot about investing. This is mostly due to start-up investing and the hoopla around it, but I've expanded my experiments to late-stage deals, real estate, and more. So far, my startup bets are 10x+ more successful (on paper) than my publishing career. Based on cashed-out positions, they're still several times more successful. I've had a lucky stretch. By no means am I an elite investor, but I've borrowed from elite investors since 2007. I'm incredibly fortunate that amazing people have been very generous with their time. Thank you, all! I've made hundreds of survivable mistakes, networked my little bald head off, and--net-net--I'm happy with the results. In this short podcast episode, I'll explain the 5 (or so) steps I took to become a better investor, starting at ground zero. Caveat emptor: I am NOT a financial advisor, and none of this advice should be taken without speaking to a qualified professional first. Also, my results could be due to pure luck and zero skill. M'kay? M'kay. Hope you enjoy, and please let me know in the comments if you'd like more of this. Or what you'd like more of. Related reading that I mention in the audio: Rethinking Investing How I Created a Real-World MBA Things I Learned and Loved in 2008 (Lots of Financial Lessons) This podcast is brought to you by Wealthfront. Wealthfront is a massively disruptive (in a good way) set-it-and-forget-it investing service, led by world-famous investors technologists from places like Apple. It has exploded in popularity in the last two years, and they now have more than $2.5B under management. In fact, some of my good investor friends in Silicon Valley have millions of their own money in Wealthfront. Why? Because you can get services previously limited to the ultra-wealthy and only pay pennies on the dollar for them, and it’s all through smarter software instead of retail locations and bloated sales teams. Check out wealthfront.com/tim, take their risk assessment quiz, which only takes 2-5 minutes, and they’ll show you—for free–exactly the portfolio they’d put you in. If you want to grab their advice and do it yourself, you can. Or, as I would, you can set it and forget it. Well worth a few minutes: wealthfront.com/tim. Mandatory disclaimer: Wealthfront Inc. is an SEC registered Investment Advisor. Investing in securities involves risks, and there is the possibility of losing money. Past performance is no guarantee of future results. Please visit Wealthfront.com to read their full disclosure. This podcast is also brought to you by 99Designs, the world’s largest marketplace of graphic designers. Did you know I used 99Designs to rapid prototype the cover for The 4-Hour Body? Here are some of the impressive results. Click this link and get a free $99 upgrade. Give it a test run…***If you enjoy the podcast, would you please consider leaving a short review on Apple Podcasts/iTunes? It takes less than 60 seconds, and it really makes a difference in helping to convince hard-to-get guests. I also love reading the reviews!For show notes and past guests, please visit tim.blog/podcast.Sign up for Tim’s email newsletter (“5-Bullet Friday”) at tim.blog/friday.For transcripts of episodes, go to tim.blog/transcripts.Interested in sponsoring the podcast? Visit tim.blog/sponsor and fill out the form.Discover Tim’s books: tim.blog/books.Follow Tim:Twitter: twitter.com/tferriss Instagram: instagram.com/timferrissFacebook: facebook.com/timferriss YouTube: youtube.com/timferrissPast guests on The Tim Ferriss Show include Jerry Seinfeld, Hugh Jackman, Dr. Jane Goodall, LeBron James, Kevin Hart, Doris Kearns Goodwin, Jamie Foxx, Matthew McConaughey, Esther Perel, Elizabeth Gilbert, Terry Crews, Sia, Yuval Noah Harari, Malcolm Gladwell, Madeleine Albright, Cheryl Strayed, Jim Collins, Mary Karr, Maria Popova, Sam Harris, Michael Phelps, Bob Iger, Edward Norton, Arnold Schwarzenegger, Neil Strauss, Ken Burns, Maria Sharapova, Marc Andreessen, Neil Gaiman, Neil de Grasse Tyson, Jocko Willink, Daniel Ek, Kelly Slater, Dr. Peter Attia, Seth Godin, Howard Marks, Dr. Brené Brown, Eric Schmidt, Michael Lewis, Joe Gebbia, Michael Pollan, Dr. Jordan Peterson, Vince Vaughn, Brian Koppelman, Ramit Sethi, Dax Shepard, Tony Robbins, Jim Dethmer, Dan Harris, Ray Dalio, Naval Ravikant, Vitalik Buterin, Elizabeth Lesser, Amanda Palmer, Katie Haun, Sir Richard Branson, Chuck Palahniuk, Arianna Huffington, Reid Hoffman, Bill Burr, Whitney Cummings, Rick Rubin, Dr. Vivek Murthy, Darren Aronofsky, and many more.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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Routinely, what I normally do is interview someone and dissect their excellence. In other words, I have a world-class performer of some type, and I deconstruct the routines, the habits, the influences, the favorite books, and so on that have impacted them and help them to perform at the highest level imaginable, whether that is in entertainment, law, finance, music, chess, you name it. We cover a lot of different fields because you find commonalities. Every once in a while, I do an episode like this one, which is intended to be very short, and I call them in-between-isodes. and that's normally when I riff on a particular topic. And this time, I'm going to talk about investing because I've had a lot of people ask me about

it. So I'm going to talk about the five or so things, might end up being six, I'm not sure, depends on how you count, that I did to become a better investor and some of my thoughts on investing. And I should put out a few caveats beforehand and provide a little context. So number one, I make no claims to be the best investor out there. There are many, many thousands of people who are supremely capable and better than myself. I will say, however, that I've been able to develop a skill set in specifically early stage tech investing, whereby I have been able to generate about 10x what I have in publishing or more than 10x. And I've been able to, very important point,

cash out enough positions that I've earned in real dollars, in real bank accounts, as much as I have in publishing. So that I would consider a success. They are still small numbers compared to what many hedge fund icons and so on produce on an annual basis, of course. But I think there are some lessons that I've been able to adopt and adapt for my own personality, my own weaknesses, my own life that may be helpful for other people out there listening. And I've also had the opportunity to interact with many different styles of investors. So, for instance, you have Chris Saka, who will end up most likely being the most successful venture capitalist in history, at least having

the most successful fund in history. He's been on the podcast, so you can listen to that episode as well. I've had a chance to interact with a lot of very, very skilled hedge fund managers who, by definition, are good at hedging. They're good at not only participating in bull markets, but also bear markets, and are good at covering their exposure, right? So that I find, just as a concept in and of itself, very fascinating. And that chess game is very, very interesting. We'll get to that. And then, of course, I've had a chance to interact with people who are kind of buy and hold or even index investors and people who are very good at it. And then you have value investors along the

lines of, say, a Buffett that I've had a chance. And I've actually also had the chance to ask Buffett a question or two at the Berkshire Hathaway shareholders meeting. There's a blog post on that. If you search Warren Buffett in my name, that'll come up. But let me just try to keep this simple. I'm going to go through the steps that I took and how you can apply them, hopefully for some increase in competence, confidence, or just the pure realization that you shouldn't play in games you aren't prepared to research and win. So first off, a basic concept that I'd like to push out there, and this was shared with me by other people in the hedge fund world, and I think makes a lot of sense. How do you invest and win?

Well, you have to have an advantage. And there may be exceptions, but there are always exceptions, so I'm not going to cover all of them. The advantages that you could have could be informational. That means you have information other people do not, and that gives you a decided advantage. In Silicon Valley, living in San Francisco, and participating as I do in the startup scene, I have an informational advantage. That is my primary advantage in picking stocks, as it were, in this case, early-stage startups. Then you could have, let's say you don't have an informational advantage, you could have an analytical advantage. That means you're better at reading the charts, doing technicals, or even crunching numbers.

Maybe you have PhDs, maybe you have algorithms that help you to take data that is available to other people, but make better use of it. Renaissance Capital would be a good example of that. And there are many others. Some folks at D. Shaw, for instance, blah, blah, blah. Then you have behavioral. Behavioral is a very, very, I think, under-discussed element. People are keen to get to the how-to, and they want the recipe for investing. But just because Warren Buffett can use it doesn't mean you can. And by behavioral, just as one example, if you read The Making of an American Capitalist about Buffett, there's a story of his daily routine and how he would go to the office, come home from the office, and then walk upstairs to read annual reports. And I'm roughly paraphrasing this. I might be getting a few

details wrong. And at one point, he came home, and I think his son was just splayed out on the stairs, had completely wiped out, and was in pain. He stepped over his son, went up to the office, and then later came down, maybe a few minutes afterward, and said, are you okay? All right. He has a hardwiring and an ability to divorce emotion from life, which includes financial decisions, so that he doesn't succumb to what you might call Mr. Market, the manic depressive who will have all the wrong instincts and not do what Buffett says, which is be greedy when others are fearful and fearful when others are greedy. Easier said than done. So behavioral, do you have a particular personality type or temperament that allows you to make better decisions?

That's it. Okay, so those are the basics. Those are the three. So the first step is to read about different styles of investing. And I should also point out, defining the term investing can be a little tricky. For me, I subjectively define it as allocating resources to improve my quality of life. What that means is for me personally, again, I could have an investment that returns an incredible annualized, um, you know, compounded interest, like 20%. But if it

keeps me up every night with insomnia and sweaty palms, it is not necessarily a good investment. And I will oftentimes liquidate those or avoid them altogether because if I am sacrificing my present day quality of life, especially if it's for longer periods of time, years and years and years, for a speculative future cash out, that is an extremely dangerous proposition and a gamble. So I am investing to improve my quality of life. And that is how I think of capital and resource allocation, time, energy, et cetera. I'll go into that another time. So start reading about different and conflicting styles of investment. And this is to, in some ways, try to spot patterns so you can identify people who embody your strengths or weaknesses.

Again, looking through the lens of informational advantage, analytical advantage, behavioral advantage. Who could you emulate, potentially? Number of books. And if you don't have time to read these books, guess what? You shouldn't play because you're going to get your fucking face ripped off. And that means that you should either say, and I'm not a professional financial advisor, so everything in this is my own experience and opinion. Get professional advice before making

any financial decisions, blah, blah, blah. But if you can't make the time to do this, then consider putting your cash in a mattress or, uh, just putting a bunch of stuff in no load index funds and just forgetting about it. Um, or using something like wealth front, which I'm, I'm an investor in a meaning I own equity in wealth front itself. Uh, but coming back, Buffett. Okay. Let's look at Buffett first. There are two ways to read Buffett, uh, that, that I really enjoyed. The first is The Making of an American Capitalist. And some would say read Snowball. Snowball is also very good. I just enjoyed the perhaps more brutally honest assessment of the unauthorized biography. But they're both

very, very good. So The Making of an American Capitalist is a very good look at Buffett. Secondly, read his annual letters. And if you just search the annual letters of Warren Buffett sent to shareholders of Berkshire Hathaway, you can find a paperback collection that is worth its weight in gold. Next, let's look at a very sharp contrast. There is a fantastic book called More Money Than God, and it's about hedge fund managers and the history of hedge funds. And there are some incredible personalities in this book with extremely diverse styles of investing. It is a fantastic read. It is along the lines of, I would say, liar's's Poker and its readability. And I think Liar's Poker is another great book to read. So I'll bring that up next. So More Money Than God,

must read. Next, Liar's Poker and Flash Boys. You could really read either one of them, but Liar's Poker put Michael Lewis on the map, covers Salomon Brothers, among many other things, bond trading and mortgage-backed, I think it covers mortgage-backed securities. And then you have Flash Boys, which is about high-frequency trading. Both of these make it clear that if you expect to read Barron's and then go compete against professionals who do this with nearly infinite resources, that you're on a fool's errand. So you wouldn't necessarily, hopefully, bet on yourself if you sat down with, say, the 10 best poker players in the world. You wouldn't bet on yourself. If you were thrown into a golf tournament with the best golf players in the world, you

would not bet on yourself. So if you get thrown into the stock market with sharks and brainiacs and teams of PhDs and computer scientists and so on with infinite resources, would you bet on yourself? And the answer should be 99,999 times out of 100,000, no. So these are two good reality checks. They're fun reads because Michael Lewis is amazing, but they show you just what happens behind the scenes. And so, for instance, the anecdote that stuck with me in Liar's Poker was at one point there was a guy at Salomon Brothers, the equivalent of I think his name is Fat Tony, who is the sort of character and caricature that Nassim Taleb uses for sort of street smarts, who would say, put, I'm making this number up, but he would put, say, $10 million into a particular type of bond,

and he'd say it's going up. And it wouldn't go up. And his colleagues would mock him. And then he would put $500 million or billion dollars in, and the entire market would freak out. All the market participants, they would think that he knew something they didn't, and then they would drive it up. And he would say, see, I told you it was going up. And this is not an uncommon type of tactic. So those are two good reality checks. So you have a healthy fear of death in you when you step into any of these markets. Okay, next, to give you perhaps some confidence after that one has deflated you, is a very underrated book. And I think it's underrated partially because of the title.

And I know how that feels because I wrote a book called The 4-Hour Workweek. But this one is You Can Be a Stock Market Genius by Joel Greenblatt. And again, I'm not a professional investor, guys, so this could be, excuse me if I misspeak, but it's effectively event-based investing. And I will let you look into this. It's a surprisingly advanced book. So I would say it's probably for intermediate and advanced investors who have some track record or mileage on their investing. But it, again, the purpose right now is not to immediately jump in and start spending money. It is to read about different styles. And event-based, meaning a merger or any number, a disaster. An event-based approach to investing, I find just intrinsically fascinating. So that is a good one to check out, and I'm probably not doing it justice, but You Can Be a Stock Market Genius, great book.

All right, now let's talk about, I'm going to give one more, and then we're going to get to the sort of buy and hold type books that I think have a lot of compelling logic in them for a lot of people. But before that, Money, I think it's Master of the Game or Master of the Game by Tony Robbins is also a compilation. You have people from PIMCO, you have people like Ray Dalio, very famous hedge fund manager, Carl Icahn, et cetera, who were interviewed by Tony, who's extremely good at deconstructing best practices. So I found that book very compelling. And for whether for the novice or the professional, I think there are gems in this. It's

a long book, but there are gems in there. So I did an interview with Tony, a two-part interview about money and finance. If you want to check that out, just go to fourhourworkweek.com, click on podcast, or quite frankly, just search Tim Ferriss, Tony Robbins podcast, and it'll pop right up. So now, next we have one by Daniel Solin, I think it is, S-O-L-I-N, the smartest investment book you'll ever read. You could also read stuff by Bogle or say, Random Walk Down Wall Street or through Wall Street by Burton Malkiel. And these really contain a compelling logic for a very large number of people, a very high percentage of those of you listening to this, following an index approach to investing.

So I will leave it at that. It's a very quick read and I think a worthwhile read to offset some of the irrational enthusiasm and optimism and sort of fight that you'll have in you after reading, say, More Money Than God. Because easier said than done what these guys do. I mean, they're the professional athletes, the Michael Jordans of the finance world. So read the smartest investment book you'll ever read. The title may not deliver, but it is a smart investment book at the very least. So those are some of the books. Now I'm going to point out one in particular. So this is the next step, which is what I learned losing a million dollars. And I think it's very important to offset all of these success stories. And there are some tragedies

and failures in the books that I just mentioned, but to read a book about losing money specifically. And what I learned losing a million dollars was introduced to me by Nassim Taleb in his books. We've also discussed it in person. The Black Swan, amazing book. Anti-Fragile, great book. Both of them, I think, have enormous implications for life but also finance, of course, since Taleb was in a former life. They might still have some participation in derivatives trading, which is a whole separate subject. So what I learned losing a million dollars gets into the psychological, gets into the practical, and it gets into cognitive biases and fallacies, in particular, when you start attributing failure to bad luck and success to skill. And it underscores, I think, a number of issues

that are inherent in investing and that are common failure points when you're working with financial advisors. So I'm sure many of you listening have been asked, what is your risk tolerance? Would you be comfortable in a quarterly decrease of 5% in your portfolio, 10% in your portfolio, 25% in your portfolio, and you pretty much just cover your eyes and throw a dart and make a guess and check a box. I have yet to meet anyone who has accurately been able to predict that. And I would say 99 plus percent people vastly overestimated. And I've spoken with some very high level wealth managers and I've asked them what the average was. And they've spoken with some very high level, uh, wealth managers and they've, I've asked them what the average was and they'd say, well, most people say 15%. And I said, when,

when their portfolio starts dropping, when do they actually freak out? And I mean, these are high net worth, uh, people, but five to 10%. Okay. So I think that it pays, in some cases, to take a very conservative approach to assessing your risk tolerance. Chances are you're going to freak out a lot sooner than you expect you will. And that has to be factored into a lot of your decisions. Okay, so you've read about the different styles. You've read about losing money. Now it's time to pick an area, pick a timeline, and pick tentative rules. What I mean by that is you've read about many different people investing in many different ways based on your personality, based on the amount of capital you have to play with,

and based on what timeline you think best suits all of those things. Are you going to hold for a day as a day trader? Are you going to hold for two months, three months? Are you going to hold for three years, 30 years? What is the timeframe? And then you have tentative rules. What I mean by that is simply criteria, right? Criteria for investment and also criteria and triggers for buying and selling. Because a fundamental, I think, error that I certainly have made many times is thinking that choosing the stock and buying it is game over. Meaning, you've done your job and now you can just sit back and enjoy the spoils. But the reality is, and of course, you can use all sorts of weird instruments to make this much more complicated. But you haven't made your ROI until you sell, until you liquidate in some fashion.

And, of course, you could use it as collateral for other things like revolving lines of credit, blah, blah, blah, blah. But we're not going to get into that. So knowing when to sell and having a plan for selling is just as important as buying in the first place. So people might say, well, you make your money in real estate or in stocks when you buy, that's why it pays to be a value investor because you're buying below book value, right? So even in a worst case scenario, you can do pretty well. And I would agree with that, but you can still make massive mistakes if you haven't decided like a good poker player, when you're going to walk with your chips, right? And so that's it. All right. So you're picking an area, one or two maybe, then you are picking timeframes and then you're picking

tentative rules, right? Like I did in the world of startups. What's next? Are you going to go out and spend a bunch of money, make a bunch of bets? Well, yes and no. So I would suggest one of two approaches. You could do both. And that is number one, I highly, highly, highly encourage you to paper trade. What does this mean? This means you're virtually trading. You're not going out and putting real money into bets yet. You can approach this two different ways. You can either say, I have a hypothetical portfolio over two years. I like to think of it kind of as an MBA, and we'll come back to that. So let's just say an MBA costs $120,000 over two years. I like to think of it kind of as an MBA, and we'll come back to that. So let's just say an MBA costs $120,000 over two years. So you decide to take $120,000 of your

hypothetical portfolio and invest it over two years. Well, you could do that for two years. I mean, if you're investing for life, what's the rush? But in that case, you would pick stocks, decide how frequently you're going to invest, for instance, if you've chosen stocks, and see how well your criteria works. So let's say that you have a two-year hold period. That's your time that you're planning on holding investments. So you place a bunch of bets in the first quarter or two of this hypothetical MBA. Again, it's not real money. This is on paper. And then you track

those investments and you should know when you are inclined to sell or think you would have sold or bought more, for instance, had you been allowed to. And then after two years, you can look at the results and assess, in fact, how you would have done over that period of time. Now, of course, if you have a 30-year time horizon, this is very difficult. There are ways to get around that. And, for instance, you can backtest. You could also do Monte Carlo simulations, but we're not going to get into that. So I guess they kind of overlap. But if you're looking at startup investing, for instance,

and because these time horizons tend to be pretty fast, you can have subsequent rounds of funding that indicate, at least on paper, and this is dangerous, but indicate on paper that the value has gone up. So, for instance, if you're interested in startup investing, you've read all these various books, and you would add another book to that, which is Venture Deals by Brad Feld and Jason Mendelson. So you understand deal structure. Super important. And then you could go to AngelList. And full disclosure, I'm an advisor to AngelList. I also have a massive syndicate on AngelList. But you go to AngelList and you could look at the startups that are being syndicated.

And again, you have this $120,000 over two years, you could place bets, see how much self-control you have, see if you spend it all too quickly, and then track that over the subsequent months, year, et cetera, and note down how many die. In other words, how many shut down, or how many get acqui- know or aqua hires larger companies acquire the smaller companies but they're really just soft landings you as the investor might not get anything back especially if you don't have preferences um or favorable preferences so um angelist very helpful for that if you want to see the deals that i've picked you can check them out it's just angel.co forward slash tim i think i have 40 to 50 deals total since 2007. You can

check nearly all of them out, um, in my criteria and whatnot. If you just want another kind of data point, right? Another data set rather. Um, so that's, that's angel.co forward slash Tim. And there are lots of very good angel investors on this list, uh, or on angel list, I should say. Okay. How would you back test? How would you backtest? How would you backtest if you're like, you know what, I want to get started sooner though. I don't want to wait two years. I don't want to wait a year. What do you do?

Well, you could, for instance, go back and look at, and you can just Google this, TechCrunch50 or TechCrunch Disrupt finalists, you know, winners and runners up from like 2009, 2010, 2011. And just look at the article that lists them, you know, the five or six companies. And watch the pitches as they were given that year and then place your bets. If you had to place a bet on one of them, or you could even take a more conservative approach and look at two different tech crunch like 2009, 2010, right? And look at the four to six finalists

in both cases and say, if you had to invest in one to three companies, who would you invest in? And because startups tend to live fast, die fast, you will be able to probably figure out, you know, which are dead, which are kind of the walking dead, like zombies who are probably not going to exit well, but they're kind of limping along, and then which ones did really well. So you could try to backtest that way and do it pretty quickly. The other way that you could do this, so there's paper trading. The way that I approached it, and this is why I introduced the concept of a real-world MBA. If you want very specific details on how I did this, you can just Google real-world MBA Tim Ferriss. I go into great detail in a 2,000-word post on this.

I, behind after going to Stanford Business School, decided instead that I would take the money I would have spent, $120,000, and spend it over two years on startups. Very important assumption that I had was that I would lose all of that money, but that the skills and relationships that I developed over that two-year period of time, just like in an MBA program, would more than compensate for that cost. So I viewed it as tuition. I did not expect to make an immediate return on investment over that two-year period. So I viewed it as tuition. I did not expect to make an immediate return on investment over that two-year period. I was viewing it just like an alumni network and skill sets from classes in an MBA program, but I was playing with my own money. And that is how I got started in 2007. And big thanks to Mike Maples Jr. for helping me with that and the many people

who have helped me along the way in my education, like Chris Saka and Naval Ravikant, who is the CEO of AngelList, as a side note. But that's how I got started. And I made very small bets in the early stages, made some massive mistakes, and in that way cut my teeth in the real world. Because the way you respond playing Mike Tyson punch out is very different from how you respond when you have Mike Tyson actually punch you in the face. And that is how I have sort of developed my skill set. But I expected to making that money back very, very quickly. And for all the hits that I've had, you know, the Twitters and the Ubers and whatnot, the hold time that Uber, of course, hasn't exited yet, Evernote, you name it, right?

Shopify would be another one. The average hold time for me from my first contact and first paperwork to liquidation is like seven to 10 years. It's not as short as you might think. So that is how that happened. Okay. So those are my two recommendations, my two recommendations, paper trade, or consider if you have the financial cushion to do so, you have to be able to, uh, afford losing it, uh, real world MBA. And hopefully this is helpful for you, for you guys. This seems kind of wordy to me, but I'm doing my best here. Uh, last but not least, this is a super important step, is you need to have regular check-ins with yourself and practices so that you don't forget the point and lose the forest for the

trees. What I mean by don't forget the point is it is extremely easy to focus purely on the metrics, the compounded interest, the ROI, financial ROI, that is, the amount of money in the bank account, the valuations on paper. And many of those things could be making you utterly fucking miserable. And I have found that in the past. And then I've liquidated various positions. And you could say I'm losing money because they later went up. But that is very rarely the case if you compare it to the starting point. Although that's been true with options. I suck at options. Maybe somebody can teach me how to be better at that. So there are a number of resources that I find very helpful.

So one is the 80-20 principle. And the book is by, I'm going to say, Richard Koch. I'm not sure if that's how you pronounce his last name, but I will choose that version, K-O-C-H. Another is Less Is More, an anthology of ancient and modern voices. I think it's in praise of simplicity. Fantastic anthology. And it seems very self-serving, but the 4-Hour Workweek is really a collection of lessons, parables, principles that I collected for precisely this purpose. So that may also be worth a read or revisit. If you guys want to hear more of this kind of thing, let me know.

I could have investors on the podcast. I know a lot of good investors. And if you want to look at how I was thinking about investing in 2008, 2009, which hasn't changed all that much, quite frankly, you could search rethinking investing. And then my name, Tim Ferriss. And there are two long blog posts, part one and part two, about this. So rethinking investing. And I think it's common sense investing for uncommon times, something like that, but rethinking investing. And I appreciate you guys listening. I'm not the best investor in the world, but I've been able to

make it work for me. And I've been able to generate more of a return than I ever thought imaginable. And I have played in some other areas and done decently well, not just startups, real estate, for instance. And for me personally, I decided that I wanted to take, and I'm sure I'm going to do this principle, this concept, no justice. So maybe I'll have Nassim Taleb on the podcast at some point. But I have decided that for me, I don't have the time or I don't want to dedicate the time to develop an approach like some of these incredible asset allocators like Swenson of Yale, for instance. I just don't have the bandwidth and concentration. It's not a good personality fit. However, I can take a barbell strategy approach,

which is something Taleb talks quite a bit about, where I am either being, and there's much more nuance to this, so read into it, get the black swan, get anti-fragile, but I'm taking either hyper, hyper conservative approaches, cash, cash-like instruments, et cetera, that are say 80 to 90% of my portfolio. And then a small percentage, 10 to 20% are hyper, hyper aggressive, early stage startups. For some people, that might be options. I do not play moderately conservative or moderately aggressive. That is my choice. It should not necessarily be yours. And for many of you, it is the entirely wrong approach. But for me, this barbell approach has really allowed me to sleep well at night, especially when there are binary decisions where I am doing a lot of homework, then investing in something like startups

where I can't change my mind. In other words, I'm not watching a stock ticker wondering, should I buy more? Should I sell? Should I buy more? Should I sell every moment of every day, which I know is my masochistic tendency. So as in many things, know thyself, that applies to investing as well as everything else, skill acquisition, learning, happiness in general, relationships. But I appreciate you guys listening. And if you want more of this stuff, just let me know at tferriss, T-F-E-R-R-I-S-S, on Twitter or facebook.com forward slash Tim Ferriss, two R's, two S's, on Facebook.

And I'll be doing plenty of Q and A's on Facebook and might have some investors pop in. So like the page, check it out. And as always, thank you for listening.