We Study Billionaires - The Investor’s Podcast Network - RWH052: Wise Guys w/ Ray Dalio, Bill Miller, Chris Davis & Michael Berg

Starting point is 00:00:00 You're listening to TIP. Hi folks, it's lovely to be back with you again on the richer, wiser, happier podcast. Today is a special celebratory episode that's going to be a little different from our usual programming. We recently hit a big landmark for the podcast. We released our 50th episode, which made me want to pause and look back and think about some of the most valuable lessons that I've learned from these past 50 episodes since the podcast launched back in March 22. 22. I think all of us are a little bit overwhelmed by the bombardment of inputs and information that we get from the media. And so I think it's really valuable to stop and take stock and really try to internalize some of the most important lessons and try to figure out how we're

Starting point is 00:00:49 actually going to use them in our own lives to affect the way we invest and the way we think and the way we live. But before we get to any of those specific lessons, I really wanted to thank you from the bottom of my heart for actually joining me on this journey over the last two and a half years or so. When I started the podcast, I kind of expected just to do about eight episodes, which I thought I would call the richer, wiser, happier conversations, and then I'd be done and would go back to my usual life. But what I discovered much to my delight is it actually really loved doing a podcast. There's something really wonderful about having these very rich, long-form conversations with amazing people. And I just was thrilled that I got to chat,

Starting point is 00:01:33 often over an hour and a half, two hours with these people like Howard Marks or Bill Miller or Ray Dalio or Rick Reader who is managing $2.6 trillion, or Joe Greenblatt or Annie Duke, Aswath, Demodran. And it just seemed to me in many ways to combine all the parts of being a journalist that I loved most without the most painful parts. So I would get to do all of the research, which is great fun, and the interviews, which I love. But I wouldn't have the torture of actually sitting in my room on my own bashing my head against a computer screen, trying to do the writing, which is incredibly difficult. So that was really fun. And then at the same time, another thing I really love is the fact that the guests are really candid.

Starting point is 00:02:18 So they're really sharing a lot of the most valuable lessons that they've learned, which made me think about this great line from me. Charlie Munger who said that the best thing a human being can do is to help another human being no more. So that really was the spirit of the podcast from the start. But then I think what surprised me also was to discover that it had this remarkable reach and impact. I think partly because there's something very intimate about hearing people's voices and maybe also because we launched during COVID. A lot of us were at home and really liked the company and listening to people. But for whatever reason, I've been kind of shocked at how big an impact and how bigger reach the podcast had. And I was checking the numbers the other day for the first time in a long time

Starting point is 00:03:08 and was amazed to see that the average episode has had a little more than 140,000 downloads. And I think then if you add YouTube, we had nearly 1.6 million YouTube views for the videos of the episodes, for the first 50 episodes overall. So by my calculation, we've had a total of, I think, 8.6 million downloads and views for the podcast. So it's been reaching this great audience. But in many ways, for me, it's really never been a numbers game. I think the thing that I love about a podcast is that there is a kind of intimacy to it. There's this very direct connection to the audience. And one of the great joys of doing the podcast over the last couple of years has been that

Starting point is 00:03:52 I get all of these messages from listeners talking about how the ideas from the guests have had an impact on them. So I really just wanted to thank you for that because it's been a ridiculous amount of work doing the podcast, very enjoyable, but at the same time, crazy amount of work. And it sometimes seemed irrational. And then when I get these messages, it just makes it. it very life-affirming and joyful for me and makes it just all seem worthwhile. So thank you, truly. In any case, the game plan for today is to focus on a handful of my favorite interviews

Starting point is 00:04:26 from the last couple of years, starting with an amazing conversation that I had with Ray Dalio. And what I'm going to do is play you a handful of clips from these episodes, and then I'll add a few comments on my own. And I think probably we'll focus on four or possibly five of my absolute favorite guests. It was hard to limit it to these. But I think you'll understand by the end of the episode why these particular interviews and these particular insights had such an impact. Thanks so much. You're listening to The Richer Wiser, Happier Podcast, where your host, William Green, interviews the world's greatest investors and explores how to win in markets and life. Our first clip is from an interview that I did with Ray Dalio back in 2023.

Starting point is 00:05:26 As I'm sure you know, Ray is one of the most successful investors of all time. He famously founded Bridgewater Associates and built it into, I think, at the time of our interview, a company with $150 billion in assets, which made it the world's largest hedge fund company. Ray also wrote books like Principles, which was a number one New York Times bestseller and sold more than four million copies. In this conversation, we spoke in depth about a new book of his title, My Principal, your guided journal. As you'll hear, this first clip is about the importance of self-awareness and the absolute necessity to understand our own strengths and weaknesses so that we can create

Starting point is 00:06:08 workarounds to help us deal with them. This has been absolutely fundamental to raise success both in investing and business. It's a pretty long clip. It's about 12 minutes long. And it starts with a slightly absurd piece of confusion because I pronounced the word path, which which is spelled P-A-T-H as path and not as path. In any case, I'll play the clip for you, and then I'll add a few comments and observations of my own at the end. Thanks a lot. It all really starts with the adage that you need to know yourself, that to know your nature is critical, so you can match it up with suitable paths.

Starting point is 00:06:46 And you write, I think, in the very last paragraph of the book, something that I think is, it sort of took me aback, and I started to think, God, I've actually got to internalize this. You wrote, life is largely a journey to discover one's nature and to find paths that suit one's nature, which strikes me as a really deep truth. Can you talk about this importance of the first step, really, of self-discovery, of figuring out your own nature and then finding paths that actually suit your nature? Yes. Your English accent, I just want to make it clear that that word is paths in Pyamorgan. Yeah, sorry about that. But that's right.

Starting point is 00:07:25 Find your nature, matching your nature with the paths that suit your nature. That's the discovery process. Sounds better in an English accent, Ray. If you want me to narrate your next book, just like that. No, no, no. I'm sure they wouldn't understand me. I'd make fun of me if I was in the UK. But I write, we are born with nature, a certain nature,

Starting point is 00:07:47 and then our environments give us a certain preferences, a certain personality. things that we want. And I've seen that through running my company, and that's also why I created this Principles You test that is available to everybody free. So it's like a half hour at test, you answer questions. And everybody virtually said, ah, that describes me.

Starting point is 00:08:13 And it also shows, if you put another person in it, it describes what your relationship with that person is likely to be like based on what you're like, what your preferences are. So we have these preferences. I can, you know, enumerate them. Somebody's a big picture adventurer kind of thinking. Some person is more detailed and not adventurous and all of these things.

Starting point is 00:08:36 So to know your nature and then you want to match it up with the path so that you say, ah, that's going to be, you know, a great path for me. And that's the exercise. So the first exercise is that exercise. You not only take the test that gives you, and it will describe you. Almost everybody who's taken the test says, wow, that's described me in detail. And then it takes you through some other questions to help to make that discovery and then you move on with the path. You did many different personality assessment tests yourself.

Starting point is 00:09:15 And obviously with people like Adam Grant, or Adam Grant, I should say, you helped to develop this test, the principles you assessment, which I'll include in the show notes for this episode, what did you figure out over the years about your own strengths and weaknesses and the way that you're wired? And then more importantly, perhaps what workarounds did you come up with to really compensate for or hedge against those, the weaknesses that you found? So I'm in personality test. I'm what's called a shaper, which is, and then there's other parts. I'm an adventure and so on.

Starting point is 00:09:54 But a shaper is somebody who likes to visualize something and build it out. And I'm very excited about new ideas and adventure and all of that kind of thing. So what I find is that I need people who are strong where I'm weak. And I'm weak in paying attention to a lot of details. I mean, I will go to the detail, but I need tremendous amount of leverage who are of different kinds of people. Some people are meticulous and reliable and they'll help keep me out of trouble or, you know, that kind of thing. So I guess that's kind of it in a nutshell. I wanted to find out when I started to transition, think about the transition of the control of Bridgewater,

Starting point is 00:10:40 I wanted to find out what were the elements that were in common among shapers such as Elon Moss, Bill Gates, Reed Hastings, who didn't, Netflix, Mohammed Yunus, who received the Nobel Prize, the Nobel Prize for inventing so many different things. So many different leaders. And I gave them the personality test in 0.8% of them, they were all the same, and they accounted for 0.8% of the population. So it's that element.

Starting point is 00:11:16 You know, you can see that preference. And so for me, it was that I have this personality and I need people who are strong and that means like meticulous, patient, reliable. Of course, in people, there are, in the people's nature, there are values, abilities, and skills, and they're different things. So you have to know what they are about match them up. You mentioned this whole issue of values and motivations in some depths, the values that drive us, I guess. And you listed a dozen or so of them in the book. And they include to be liked slash loved, to be ethically good, to create something new, to help others, to learn and evolve, to impact the world, to live a peaceful life, savoring the simple pleasures it has to offer, to attain financial success, to understand the world, to have a life filled with fun and adventure, to have good friends, and to live a peaceful life. And to live. have a thriving family. And I was wondering when you look at that list, A, what drives you most

Starting point is 00:12:21 and B, how has that changed with age now that you're 73? Yeah. So that exercise lists all those and some more, I think. And then what you're supposed to do is you pick the three most important, and then you pick the three least important. And that helps you to make that focus. For me, like I say, for me, It's meaningful work and meaningful relationships. And I am a shaper, meaning I like to visualize things and build them out. And so those are, I like adventure. I like ambiguity.

Starting point is 00:13:00 I like differences. I like going to far away on that unusual places with far away unusual places. I've always had those preferences. That's always been in me. And then by my nature, I just happen to find a way to do that. So let's go to the second exercise, which is really about how you go from the case at hand, the situation you're dealing with, to actually figuring out your best principles for dealing with this type of situation in case it recurs.

Starting point is 00:13:32 So you write at one point that your goal in creating the journal is to help you convert your experiences into reflections about how reality works and principles for dealing with your realities, well, to get you what you want. So let's go back, say, to that example from 1982, where I think there was a debt crisis where Mexico defaults on its debt. We have the worst debt crisis since the Great Depression. And you bet, I think, that the stock market and the economy would be battered by this, and instead, it actually strengthened. And it was sufficiently disastrous that you had to fire almost everyone at Bridgewater and ended up borrowing four grand from your father. When you think of that process in that case, how you went through this process

Starting point is 00:14:17 of reflection on what went wrong, what happened, what flaws of yours this exposed, or what misperceptions of yours, and how you develop principles based on that, how would that be a good microcosm of what we should do when we screw up? Oh, that's, it was so good. It was such a painful experience. And then I really learned pain plus reflection equals progress. That's one of the principles. I learned that every time I have an encounter that it's like a puzzle, that if I can solve the puzzle,

Starting point is 00:14:59 what should I do differently or how should I deal with it, I would get a gem. And the gem would be a new principle and a learning that would improve my life. And so in that particular case, I learned to fear and deal well with the possibility of being wrong. It gave me a humility I needed to balance with my audacity. In other words, it made me think, how do I know I'm right? And then through that process to try to find out of curiosity, the smartest people I could who disagreed with me and to study their reasoning. And it made me learn really how to diversify my bets so that I could,

Starting point is 00:15:44 by diversifying my bets, I could radically reduce my risk without reducing my returns. And it let me also reflect on life. Like, I was at a juncture. I was broke. And I, you know, it was, do I go get a job? Do I put on a jacket and tie and take the, you know, the railroad into the city and work at Wall Street or something, or do I not? And it was like I was sitting on one side of a jungle, and I could have this safe life by sitting on the one side of the jungle and not going into the jungle. But I knew that if I wanted to have a great life, I had to cross this jungle of all these threats in the jungle and survive.

Starting point is 00:16:31 And then I sort of said, okay, what am I going to do? Am I going to live this safe life and then it won't be as terrific or am I going to go into the jungle? And how would I go into the jungle? And then I realized, I learned, okay, let me go into the jungle with people who would be on the mission with me and could see things I couldn't see. And we would protect each other as we went into this jungle. And I found out from that experience that I didn't want to get to the other side of the jungle to the success and sit on the success because I found out.

Starting point is 00:17:04 found being in the jungle with these people or being on the mission with those people, even through the ups and downs and the threats was rewarding. That all came from reflections of that terrible mistake, that terrible mistake. We learn a lot from pain. You know, life, I think, is, it's almost a trick that what happens is the second order consequences are so often the opposite of the first order consequences. In other words, the things that are really good for us don't feel good. And the things that are bad for us feel good. You know, okay, you eat, you know, the tasty stuff is the stuff that is not probably good for you. The exercise that might be painful is the thing that you don't want to do and you want to do the painful. So quite often pain

Starting point is 00:17:57 or that is the opposite. It's a trick. Can you? you do the things that are really good for you. And so those kinds of reflections, I think, were very powerful. And how an experience really brought a lot of those. And from those lessons that I learned, that was the bottom. In other words, from that point, while there have been some up as and downs, it was almost totally up, almost all the way. There have been, of course, twists and turns and bumps and personal things, of course,

Starting point is 00:18:26 terrible personal things that have happened. I lost to the sun. I, you know, all of those things. But to reflect on reality, okay, what does it teach you about reality and whatever? And how do you approach that? All of those reflections, I've learned a lot from those reflections. Let's take a quick break and hear from today's sponsors. All right.

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Starting point is 00:22:56 Back to the show. There are so many powerful lessons in this clip from Ray Dalio. The first, I think, is this very fundamental idea of knowing yourself well and then finding suitable direction in life based on your talents, your skills, your personality, your values. And this, I think, is a reminder of a really important theme that came up again and again in my reporting for the richer, wise, a happier book. I remember, for example, when I went to the Daily Journal meeting in Los Angeles, where I ended up interviewing Charlie Munger, someone asked him for career advice. And he said, look, you have to play in a game where you've got some unusual talents. He said, if you're five foot one, you don't want to play basketball against some guy who's eight foot three.

Starting point is 00:23:45 is that it's just too hard, so you've got to figure out a game where you have an advantage. And so this idea of staying away from your weaknesses and playing to your strengths is really, really important. And also, I think when I write about happiness in the epilogue of the book, and I think about what makes certain investors happy and what makes them unhappy, I think this idea of living in alignment with your personality and your priorities and your values is really, really important. You have to decide what the game is that I'm playing that actually suits me, that I actually care about. And so for Dalia, he was very clear that he likes adventure, he likes ambiguity, he likes debating differences and searching for the truth about an investment.

Starting point is 00:24:29 He's not worried about conflict. I remember once having a conversation with him and asking him something kind of provocative that I sort of knew was a little bit impertinent just to kind of see how he would respond. And there just wasn't any kind of reaction on his face. There was no flicker. There was no flinch, no flicker of emotion in responding to it. And it was one of those moments where I realized, oh, he actually doesn't mind being challenged. He likes being challenged. I think what it was, if I remember rightly, was I said to him, it seems to me there's something kind of unkind about your approach of radical transparency and radical truthfulness, and that it's a little bit brutal. And he said, you know, why? If you're wrong about something and you misunderstand something, wouldn't you want someone to tell you about that? Wouldn't you want them to point it out? And so there was just a willingness to engage in debate that I think is really extraordinary. And so he structured his firm in a way that played to that desire to argue and to debate. So one of the questions then, I guess, a practical question for you and me is to say, well, okay, so how do I actually figure out the right game?

Starting point is 00:25:38 for myself. And one of the things that I found very helpful in preparing for this interview with Ray was I did the Principles U personality assessment test that he mentioned, which you can find, I think it's a Principlesu.com, and it's a free test. And one of the things that was extraordinary to me was that I saw very, very, very starkly the difference between my own strengths and my own weaknesses, and the chasm between them was just extraordinary. As I recall, I think I was in, sorry, I'm not trying to say this to be self-aggrandizing or self-congratulatory. I was in the top 1% in terms of creativity and conceptual thinking. But then when I looked at things like systems and processes, I was literally in the bottom 1%, which is kind of stunning, right? So one of the things

Starting point is 00:26:29 that came out of studying these lessons from Ray is that I was much clear. in my understanding of where I'm incredibly weak. And like Ray, I thought, okay, so I have to be honest about my flaws and my weaknesses, and I have to actually find people around me who are strong, where I'm weak, I'm partner with them. And so one of the things that I've really done in the last year or two since I first spoke to Ray was partner with people like Stig Broderson, the Investors Podcast Network, who's very systems-oriented, very process-oriented and has this amazing team.

Starting point is 00:27:04 the Philippines that's very systems oriented and very process oriented. Also, I recently hired someone who's amazing with systems and processes and is doing things like revamping my website. And I've been intending to revamp my website for something like three years now. And it just sort of sits there on my to-do list, never quite happening, because I just have so many other things to deal with. And so I think one of the things that's been very helpful for me from studying Ray Dalio has also been the kind of brutal honesty that he has in looking at his own flaws and his own mistakes and not being ashamed of them and not burying them, but actually bringing them to the fore. And there's a really extraordinary moment in this clip that I hope you were

Starting point is 00:27:52 struck by as much as I was struck by it, where he said, he looks back at this catastrophic investment mistake that he made back in 1982 that nearly destroyed Bridgewater in its impact. And he says, it was so good, it was such a painful experience. That's an extraordinary thing to say, right? This ability to lean into pain and to learn from it, not to bury our mistakes. And this is something again that we learn from Charlie Munger that I write about in the book, right? Where Munga, I remember when I went to one of the Berkshathaway annual meetings, Munga really very consciously rubbing his nose in his mistakes by talking about how we failed you. as investors when we fail to buy Walmart and when we failed to buy Google and how they were in our sweet spot and we should have bought them. So again, this ability not to bury your mistakes, but actually to bring them to the fore and be open about them is very, very powerful. And I think one of the things that's very distinctive about Ray is this ability to take experiences and then reflect on them and turn them into principles that he'll remember. And so one of these very central

Starting point is 00:29:00 principles for him, obviously, is pain plus reflection equals progress. And so it's not about just taking the hit and then going into fetal position or being self-flagellating about it. It's taking the hit and using it very consciously as a spur to reflection, to think about what it is you need to get better at. And I think what's striking about this self-honesty, this sort of brutal self-honesty, is that it enabled Ray to make a number of very practical improvements based on self-awareness. So you think about the fact that he said, well, look, I started to realize I had to surround myself with smart people who disagreed with me and who see things differently from me. And I need to study their reasoning.

Starting point is 00:29:47 That's a very, very powerful, practical workaround. And so he realized also, as he pointed out, that he had this natural audacity. That was part of his makeup. But you need actually to gain humility to balance your natural audacity because otherwise you can blow yourself up as an investor as he almost did back in 1982. And so this is one of the reasons why he came up with this strategy of diversifying in non-correlated assets. So it's making a very practical step based on the knowledge of your own weakness that I think is

Starting point is 00:30:21 so powerful. And so he also talks about finding people who are meticulous. and reliable, because that's not really his strength. So I think as you and I dwell on what Ray said here and think about takeaways for us, practical takeaways for us, I think one of them is simply to ask yourself, okay, where am I weak and where am I strong? And then another is just to say, okay, how can I protect myself from my own flaws or my own weaknesses? Are there practical workarounds? Are there people I can surround myself with who compensate? for my weaknesses. But I think above all, it's really a reminder that we need to play games that

Starting point is 00:31:04 we can win. And I keep thinking about something that Ed Thorpe, who I often describe as the greatest game player in the history of investing, said to me that I quote in the introduction to Richard Weiser Happier, where he said, look, when it comes to gambling, if I don't have an edge, I don't play. And so this has had a huge impact on me. I've really thought a lot of about when I decide to take on a project, am I playing to my strengths? Is this a game that I can win? Am I surrounding myself with people who can take care of the parts that I'm not good at? And I also keep thinking of another quote that I think is in the chapter on high performance habits in the book, which comes from an email that Jason's why an old friend of mine once sent

Starting point is 00:31:50 me, where we were talking about Bill Miller and Buffett and Munger. And Jason wrote to me, think of Munger and Miller and Buffett, guys who just won't spend a minute of time or an iota of mental energy doing or thinking about anything that doesn't make them better. Their skill is self-honesty. They don't lie to themselves about what they are and aren't good at. Being honest with yourself like that has to be part of the secret. It's so hard and so painful to do, but so important. So I think here again, you're just seeing, you're seeing this reminder. of the power of self-honesty, of looking at yourself of knowing who you are, finding suitable

Starting point is 00:32:30 paths or paths based on who you are, what you're good at, what you value, sticking at games that play to your strengths, and also very much avoiding games that are likely to expose your weaknesses, but then not denying your weaknesses, being very honest about them, and not being ashamed of them. It's just part of who we are. We all have our strengths and weaknesses, and we shouldn't we shouldn't bury them. And when I talked to Ray about this huge issue that I faced about my weakness with systems and processes, he was like, that's great. Now you know. Now you know, now you can deal with it. And I think instead of being ashamed of this stuff, we need to lean into the pain. We need to lean into the weakness, acknowledge it,

Starting point is 00:33:15 and then we can do something about it. The next clip comes from a wonderful conversation that I had last year with Chris Davis, a renowned investor whose father and grandfather were also legendary investors. Chris also serves on the board of Berkshire Hathaway alongside Warren Buffett. In this conversation, Chris and I talked in some depth about what he learned from his friendship with Warren Buffett and Charlie Munger, who were both very important mentors to him. Let's listen to the clip, and then I'll share a few thoughts of my own. All right. Hi, folks. I'm absolutely delighted to welcome today's guest, who's Chris Davis, and Chris is chairman of an old and renowned investment firm named Davis Advisors, which I think was

Starting point is 00:33:56 founded back in 1969. And he's also a member of the board of directors of a small, obscure company that some of you may have heard of, namely Berkshire Hathaway. It's lovely to see you, Chris. Thanks so much for joining us. Oh, I'm so glad to be here. I've been looking forward to this, which I don't say about a lot of interviews, but I feel like the way you approach life and the universe and everything has made me look forward to this conversation. Thank you so much. And before I forget, since we were talking about it right before we got on, talk to me about this idea of our 30,000 days, because it's such a beautiful idea. And two hours from now, I'm likely to have forgotten that we talked about it. So discuss the significance of this before we get started on, anything else.

Starting point is 00:34:40 Well, I'm going to start, I'm going to go back to my days as an accountant because this is actually when I first sort of started thinking about it. I'm not much of a birthday celebrator. But one of things I'm particularly struck by is the ones that are hallmarks tend to be tied to 10, 20, 30, 40, 50, 60, so on. Not a lot of life changes around those sort of random decades. And when I was working back at State Street as an accountant, I had the worst job, which is I had to, at one part of my job was to calculate the NAV of money market and bond funds. And that meant accruing the interest by the day. And so, Lotus 1, 2, 3 had just come out. And so I was using that to write a little program to make it easier to calculate bond interest and count all the days and so on. And when I was

Starting point is 00:35:35 testing it, I put in my own birthday, and it ended up I was at the time something like 9,500 days old. And that was sort of the genesis of this idea where I started thinking, we live about 30,000 days or generally have 30,000 really productive days. And our life divides much more naturally on the 10,000 day increments. So after 10,000 days, you're about 27 or so, 28, somewhere in there. And you often think that first 10,000 days is about going wide, experimenting, trying new things, new places, new professions, new people, new towns. It's a time of exploration. And 21 years old doesn't capture it or 20. And by the time 30 comes around, usually you're already into what I would call that second phase of life. So right around 10,000 days. By then usually, on average, people have decided what they want to do, where they want to do it, who they want to do it with. And instead of going wide, as they have for the first 10,000 days, it's about going deep. Just the depth of relationships that comes through marriage, through family, through your vocation, your profession, your colleagues.

Starting point is 00:36:52 You sort of had 10,000 days to execute, 10,000 days to accomplish and build what in many ways will be the sort of monuments of your life, your family, your kids, your profession. And then right around 55, 56, 50s, somewhere in this 50s range, what would happen? So your kids are grown and beginning to leave. What you've achieved professionally is fairly settled. And in a funny way, it lifts an enormous weight off many people. I think it's one of the reasons people actually end up growing happier as they get to their 50s, 60s, 70s.

Starting point is 00:37:29 because you're in a time when you can, in a sense, go wide again. You have more perspective, if you have less of that urgent depth of the day to day. So anyway, I know when we started talking, we were talking about this idea of both sort of completing maybe our second 10,000 days and now looking at how we think about this next 10,000, this chapter that sort of gets us from here until around in our 80s. And how does this affect the way that you're actually living? What is this awareness of these three phases due to your view of how to behave and what to focus on and what you're actually optimizing for at this point? Well, this sort of ties in with how I think about investing. It's so much about it is about anticipation and preparation. So I think a lot of people go through unhappiness in their 30s, in part because there's sort of, of thinking, where did my youth go? I used to be able to do all these different things and now I'm

Starting point is 00:38:30 tied down. And if instead you have this mindset, you really look forward to that, the privilege of being able to go so deep to concentrate. And I think how it's affected me thinking about this next 10,000 days is a little bit about this idea of inverting it and thinking about what would stand in the way of this 10,000 days being a very enriching time of life. And of course, health is one of them. So it becomes, as you think about going into this next third, it becomes a time where you think a lot about taking care of yourself. You think about investing in relationships. When you're raising a family, when you're in the office every day, you know, a lot of your life and your social life are structured for you. As you get to the next 10,000 days, people can lose touch. So,

Starting point is 00:39:20 I think it's also been a time when I've really invested in maintaining, invigorating, revisiting, relationships, deeply getting to know my children's partners and spouses, making sure that there are aspects of friendships as people, we may get to this, but the idea of retiring has no appeal to me. I mean, I love what I do. It always seems startling to me that we get paid so well for studying something so interesting. And it should be a profession where we get better over time, provided we're not creating behavioral and psychological roadblocks. And if that is the case, I would like to continue as long as I could. But of course, I also recognize that's not the same for many of my closest and oldest friends. And so as they contemplate retirement and moving

Starting point is 00:40:12 and going to different places, old patterns can dissipate. So I think it's a time to really invest in being prepared for this sort of exciting chapter that's in front of us. And it may not end very well, but 10,000 days is a long time. And so I think it certainly has impacted how I think about preparing for that transition. I thought it was very interesting, the Berkshire annual general meeting, which I guess that's where you and I last chatted, actually. We spoke for a couple of hours on the Sunday, I guess, after it all ended. everyone had left and you and I had the pleasure of sitting down with another friend of mine Ina and chatting.

Starting point is 00:40:55 I was very struck at the AGM that Buffett said a couple of times he talked about the idea of writing your obituary and then trying to figure out how to live up to it. And he said, look, if you want to know how to live your life, write the obituary, then reverse engineer it, go backwards, which is really not dissimilar to what Nick Sleep does with this whole idea of destination analysis of figuring out a happy ending and then, oh, they didn't use that phrase, and then working backwards, thinking of the inputs. I'm starting to feel unsafe. Sorry about that trigger warning here.

Starting point is 00:41:27 And then starting to work backwards to figure out what the inputs are to get that. And obviously, you've been close to Charlie, Manga, and Warren Buffett, and we'll talk about this more. I'm wondering how seeing Warren at 92 and Charlie at 99, seeing how they've looked at lived the sort of the final chapters, the closing chapters in this kind of remarkable way, how that's had an impact on your sense of how you want to live that third stage out of the three, however long it may be. Well, and I could expand that list.

Starting point is 00:42:00 I mean, Warren and Charlie are great examples, but I had an incredibly influential grandmother. In fact, her pictures on the wall here next to me who died at 106. And I had her in a kayak at 104 and had her on a motorbike at 100. And she had a PhD in international relations. I mean, she was an incredible intellect and model. What was your? Catherine.

Starting point is 00:42:26 So that was Catherine Davis. And what did you learn from her? What did you observe? Well, she was magnificent in every way. But this is going to be a tie-in to warn to Charlie to all of the people that I would put on that list. is one was this idea of they kept interested. They kept so engaged with life. My mother has a very close friend who we always admired as kids because she was that powerful sort of irreverent

Starting point is 00:42:55 woman. But one of the things I've watched as she's gotten older is she resents the impact of technology. She doesn't want to learn to use a cell phone. She doesn't want to do email. She does it. It's certainly not going to do Instagram or something. And the result is she is increasingly getting cut off. So this idea of keeping interested, how you stay interested in the world around you. I think the second thing is they all kept optimistic. There's a very common sort of old man disease, which is the world is going to hell. And of course, we feel like that because we're no longer at the center of it. America in particular, but a lot of the world is oriented. every marketing message is oriented towards people in their peak spending years, in their peak

Starting point is 00:43:43 family years. You're at the center of everybody depending on you. And I think what happens is gradually, of course, the world moves on and you become less relevant. And rather than have your ego absorb that reality, people rail that the world is wrong. If only people listen to them. So I think you get a pessimism that begins to take over a rancor. And so I think resisting that is next.

Starting point is 00:44:09 So keeping interested, resisting that pessimistic tendency, which is really simply the extrapolation of the approach of your own demise and projecting it onto the world. A related one to keeping interested. And I've seen this so much with Warren, with Charlie, with my grandmother, other people who are octogenarians and whatever the next two decades that come after that means. Certainly with my father, who's 86 and still skiing. Is this they keep making new friends. They just, it is a very sobering part of life is how dramatically differently people age. I had the enormous misfortune when I was a kid and a teenager of not

Starting point is 00:44:51 hitting puberty. In fact, I didn't break five feet tall until I was a senior in high school. I will just say the loss of other defining milestones happened somewhat later. And that made that time of life very trying. But of course, the other side of that, as Charlie Munger likes to point out, is one of the other than genetics, one of the strongest predictors of age, is how late you hit puberty. And so, of course, you see it with friends aging at different rates. And so that idea of my grandmother very late in her life said to me that it was very difficult for her that she not only outlived all of her friends, she outlived many of her friends' children. And so for her It was keeping making new friends became a very important part of it.

Starting point is 00:45:39 So what I would say when I look at all of these older people that I admire is they're interested, they're optimistic, and they're constantly meeting new people and pursuing relationships. And there's not a lot of time for self-pity. It's one friend said, only one organ recital a day. They don't need to spend a lot of time talking about what's failing. So, look, isn't it ultimately that idea of living? living life backwards from your obituary or from your funeral, it is a very useful way to think. And it is keeping that perspective in the back of your mind, I think is a very useful exercise.

Starting point is 00:46:17 When I started interviewing great investors about 30 years ago, I mostly just wanted to figure out how to get rich without getting my hands dirty and working too hard. But what I gradually realized after interviewing a lot of these people is that they offer incredibly valuable lessons about how to think better and how to live. And in many ways, this clip that I just played from my conversation with Chris Davis is a beautiful example of that, of this kind of worldly wisdom that we can learn from the great investors. I particularly like the moment when he talks in that clip about how to approach the last 10,000 productive days of his life. And he says, you really want to invert and you want to say, how could I screw up

Starting point is 00:47:00 the last 10,000 days of my life. And this is really a great example of what Charlie Munger would often do, where he took this idea from a famous German mathematician called Gustav Jacobi, who said, invert, always invert. And so Munga takes this principle and he says, okay, whenever I'm trying to solve a difficult problem, one of the best ways to do it is to solve it backwards, to invert it. So if you want to figure out how to have a successful life, you start by figuring out how to have an unsuccessful life. So what Chris Davis is doing here when he's thinking about how to approach the last 10,000 days is he's saying, okay, well, if I wreck my health or I wreck my relationships, that's a

Starting point is 00:47:42 pretty good start. That's going to ruin it. So you first figure out what not to do. So I just love this as a very practical application of a particular way of thinking that manga would apply not only to market. but other areas of life. So I think one of the best things that we can do really when we're studying the great investors is to look at what aspects of their life we think are successful and what aspects are

Starting point is 00:48:09 awful and decide what we're going to clone. And so I like studying people like Buffett and Munger, not because they're absolutely perfect, but because they got so much right. And so Chris is a great conduit for understanding them. I mean, this understanding that they continue to learn, that they continue to invest in their relationships, that they never fell into pessimism, or for that matter, self-pity, which is something that Charlie talked about a great deal. So I think for me, I'm just constantly coming back to trying to figure out what these people

Starting point is 00:48:45 already learned so that I don't have to reinvent the wheel. And Chris becomes kind of a great bridge between these greats like Mungra and Buffett and us. Let's take a quick break and hear from today's sponsors. No, it's not your imagination. Risk and regulation are ramping up and customers now expect proof of security just to do business. That's why VANTA is a game changer. Vanta automates your compliance process and brings compliance, risk, and customer trust together on one AI-powered platform.

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Starting point is 00:52:38 a famous blow up during the financial crisis and since then has had an unbelievable rebound driven partly by the fact that he had an immense personal stake in Amazon. At one point, he told me that he was the biggest individual shareholder of Amazon whose name wasn't Bezos. But then he also made an enormous and very contrarian bet on Bitcoin, which most members of the value investing community regarded as kind of insane. And people like Buffett Amunger, who Bill admires greatly, regarded it as rat poison. And when I was speaking to him in early 2022, Bitcoin had just halved and was very much out of favor. And Bill had been buying it very aggressively since the early days. He had told me at one point that he had started buying it $200 per coin. And then his average

Starting point is 00:53:31 price was around $500 a coin. And so in this clip, he's talking really in some depth about Bitcoin, what he saw in it, and how he kind of reduced it to its essence. And it's kind of extraordinarily prescient. And I'm recording this on November 15th on a day when Bitcoin is at 91,235, astonishingly. So this was an amazing contrarian bet, and we're talking to Bill about it at a time where it could hardly have been more out of favor. Let's listen, and then I'll share a few comments about it. I wonder if we could turn to Bitcoin and Crypto, and I have a lot of questions on this front, and I think the obvious context to look at it in is this whole idea of misperception, because as we were talking about with Amazon, you had a very different perception than the rest of the

Starting point is 00:54:24 market. And here again, with Bitcoin, there are just these very, very heated ideological differences about Bitcoin. It's almost like a sort of religious or political difference about Bitcoin. And it seems to me traditionally part of your advantage has been to step back somewhat dispassionately and to say, what actually is this thing? Can you talk first about where this way of thinking about the world comes from? Because it clearly stemmed in part from your study of Wittgenstein and William James and this whole idea of seeing things more clearly, not. not being so biased and trying to say, what actually is this thing? And so before we get to the detail of Bitcoin, I wonder if you could actually talk about that kind of philosophical problem

Starting point is 00:55:03 of how you actually describe things and see things clearly so that you're not just caught up in your own prejudice and bias. Yeah, I would say this came out of a lot of, you know, initially William James, Wittgenstein, and then John Dewey and then Richard Brody in the 20th century. In the sense of, you know, you go back to Kant, for example, or Schopenhauer. And so Schopenhauer is because he spent countless years just studying Kant and concluding that Khan had things mostly right. But he missed a few big things. And the thing that he really missed was when he talked about the Ding-on-Sik, you know, the thing in itself. And so what you have is, you don't have no ability to see things as they are themselves. What you see is effectively your representation

Starting point is 00:55:45 of them, which may or may not fit the way that things actually are. And Schopenhauer's insight was that you don't have any need of the hypothesis of things as they are. are. And it doesn't do any work for you because it's inaccessible. And therefore, all you have is your representation of things as they, you know, as you perceive them. And therefore, if you then go forward to William James, you know, one of the points that he made is it's, or purse made, I guess initially was, yes, that's exactly right. And therefore, what you really care about is just how useful are these views that you have to navigate the world that you're in. And, you know, this is, I think there's a, this part comes to mind about it. I'll get it right. There's a story

Starting point is 00:56:24 of the three baseball umpires and they're asking how they call balls and strikes. And so the first baseball umpire who could be called a, you know, a contian or a near contian, and he says, well, I call them as they are. If there's strikes, I call them strikes. And if they're balls, I call them balls. And then so, you know, that's in philosophy, you call that realism, right? So I call it I call it the way that they are. And then there's basically the coherence theorists who believe that truth is basically things that cohere consistently together. And the coherence theorist umpire says, well, I call them as I see them. If I see them as strikes, I call them strikes. If I see them as balls, I call them balls. So obviously leaving open that he could be calling them the wrong way,

Starting point is 00:57:02 but that's the way he sees them. And then you get the pragmatic umpire. He says they aren't anything until I call them. So I think that's the key. And from my standpoint, when I don't have a particular view, one way or the other about Bitcoin as it is. Charlie Munger thinks to threat to currencies, it's evil. A lot of finance, you know, mavens were very negative on Bitcoin in 2017. Now, Some have come around. Paul Tudor Jones, Larry Fink now, Howard Marks at Oak Tree, who were denouncing it then. And now they're, well, you know, yeah, well, this can be okay. You know, we probably were wrong about that. You know, Jamie Diamond says it was wrong to call it a fraud and stuff like that.

Starting point is 00:57:38 So, but Buffett and Munger are still out there. And my view is, how useful is this thing? Whatever it is. How useful is it? Does it do a job in my portfolio that I can't have done with something else under what circumstances will it do well? Under what circumstances will it not do well? And so that's the, you know, my key.

Starting point is 00:57:54 to Bitcoin is that it's the only economic entity in the world, certainly monitored, it's just called an economic entity in the world that the supply is unaffected by the demand. So if gold, which is, what's gold, $1,800 today, something like that, if gold was $18,000 instead of $1,800, there'd be a lot more gold mined. So gold that was uneconomic to mine today would become economic. And I mean, Charlie Munger has said, I think, at the Berkshire meeting that he expects that any fiat currency in a hundred years will be worth zero compared to what it's worth today. That's because they keep creating more of it. And with Bitcoin, you know, the supply this year will grow about 1.7% maybe. And so the only question you have to ask about Bitcoin is over long term, will the demand exceed, in essence, 1.7 and 1.5%, then all the way down to zero.

Starting point is 00:58:40 And I think it's going to grow, demand's going to grow faster than that. So I'm sorry, Bill, just to explain that for people like me who are not experts on this. This is basically because the supply is fixed at about 21 million coins and about 19 million. have been mine so far. So we know, can you just explain that for, you know, the idiot's guide to Bitcoin? The supply of Bitcoin. It's a little bit like you've ever seen that, who was the inventor who just died recently, who invented that black box, you know, and you flip the switch and the lid came up and

Starting point is 00:59:09 a hand came out and it turned the switch back off again and get one down to the box. So basically that's what Bitcoin is. It's a protocol and effectively the number of Bitcoins has a certain feature that it basically goes in half, the new supply goes in half every four years. And so I think it's, what is it, 12, 12 bitcoins every 10 minutes are created. And that's what, and then all the computers and the miners are solving equations just so they can get those bitcoins, which are given to them if they verify that the protocol is functioning properly.

Starting point is 00:59:40 And there's no, you know, no double counting and stuff like that. So, but that's fixed. And it's 21 million and 2140. That's when the supply will run out. And then for Bitcoin, so who's going to maintain the, what are the miners going to do that? Well, they're still going to maintain the ledger. and they're going to do that, though, they get fees for that instead of getting Bitcoin. So the same process will be underway unless they go from what's called proof of work to

Starting point is 01:00:00 proof of stake, which I think is a potential risk to Bitcoin right now, but not a big one. So when you explain the essence of the bull case for Bitcoin, and you have this kind of gift for simplifying things and reducing the complexity to something kind of more graspable, is the essence of the case basically the supply demand argument that there's very limited supply, the supply is growing, you know, in this kind of poultry way that you just described. And yet there's enormous potential and growing demand. Is that the simple essence of it? It is, but let me make it maybe more concrete.

Starting point is 01:00:34 I give two examples, one that's everybody will understand. The second one, they will understand theoretically, but maybe not the details. So the one that everybody will understand is when, you know, what Buffett says is that Bitcoin is a nonproductive asset. He said, you know, I wouldn't give you $25 for all the Bitcoins in the world. But if I buy farmland, that I can grow stuff with it. You know, if I buy a company, it can generate dividends and earnings and cash for me. Bitcoin doesn't do any of that stuff.

Starting point is 01:00:58 So he says it's like gold. You can sit there and look at it. It sits in a place in your portfolio, but it's not productive. And therefore, he can't value it. And I think fair enough. I mean, if the only thing that you think you can value are productive assets, then no one's making you buy it. Right. So ignore it.

Starting point is 01:01:11 Now, the other maybe the more mundane thing for most people would be that, I've used this. I think I might have told you, I used this with Chris, my good friend Chris Davis. And I said to Chris, who's been in every meeting, major meeting that I've been in on Bitcoin, going back to when it was $200 and he's never bought it. And his argument is, well, you know, yes, I understand that it could be digital gold. In fact, it probably might be better than gold, but I don't own gold either. It's a nonproductive asset. He's got a buffet view on that. So why would it on Bitcoin? And my first answer to him is, well, the objective of investing is not to own productive assets. The objective is to make money. So the question is, can you

Starting point is 01:01:45 make money with this thing? Because it gives you dividends. But if you can make money with it, So what I said to, I said, but look, here's a better way to think of it, Chris. Like, you're an expert in insurance, right? And he's like, yes, my purport to be. My grandfather was the insurance commissioner of New York. And my father, you know, was a long time insurance analyst. And I published a newsletter when I was young called the insurance, you know, analyst observer or something like that. And I said, so how do you evaluate an insurance policy?

Starting point is 01:02:07 And he said, well, you can evaluate an insurance company really easily. You can look at the exposures. You can look at the capital. You can look at the experience they've had. You can look at the quality of their investment portfolio on and on. I said, I didn't say an insurance. company. I said an insurance policy. And he paused a second. And I said, well, here, let me tell you the way I think about that. And you tell me where I'm wrong. I said, you own insurance,

Starting point is 01:02:27 right? You have health insurance, car insurance, have homeowners insurance, life insurance, stuff like that, right? Property insurance. He's like, yeah. I said, what's the intrinsic value of those policies? You write a check every year for those policies. And I said, and what's the value of those? And I said, the way I look at that is you are paying somebody else basically for a policy that you hope is worthless. You don't want to die prematurely. You don't want to get serious illness. You don't want to have your house broken into. And it's valuable to you to have something that will pay you if something really bad happens. Except the company goes bad. It's yours. You own it and it's going to solve your problem with that if that happens. Well, right now, we have something called gold, which could do

Starting point is 01:03:09 that. But again, its supply isn't fixed. But everything else out there is something that if you live in Venezuela, you live in Nigeria, live in Lebanon, you lived in Ukraine when the war broke out, all of that stuff, Afghanistan, when the U.S. pulled out. When the U.S. pulled out of Afghanistan, Western Union stopped sending remittances there or taking them from Afghanistan. But if you had Bitcoin, you were fine. Your Bitcoin is there. You can send it anybody in the world. They have a phone. And so I consider Bitcoin basically, you know, an insurance policy against financial catastrophe of one sort or another. And it doesn't have to be all or nothing. That doesn't have to be like there's some war in the United States or some kind of thing where the banks are all shut and stuff

Starting point is 01:03:47 like that. It's just the case that if there's a, you know, look what happened to the money supply with the pandemic hit. When the Fed stepped in in that pandemic and started gunning the money supply and bailing out, in essence, the mortgage reeks and the other people that are doing commercial paper and stuff like that, Bitcoin functioned fine. There was no run on Bitcoin. It went down a lot initially, but the system functioned without Fed and without any interference and everybody got their Bitcoin and the price adjusted. And then when the Bitcoiners and newer Bitcoiners realized, wait, we're going to have inflation down the road. Bitcoin went through the roof. So that I think is an insurance policy that I look at it.

Starting point is 01:04:21 You also said something that had a profound impact on me. I think the last time or the previous time we talked about Bitcoin, where you explained to me that back in about 2014, 2015, when you first started to get fascinated by it, it was because you heard Wences Kasara's talking about it. And that he was explaining exactly what you were just saying, that if you came from the U.S. where you had a kind of functioning legal system and pretty good financial governance and property rights and the rule of law and all of that stuff. It was actually very hard to understand why this would be so valuable and that he came from Argentina where he had a totally different perspective, which kind of fits into what I'm trying to talk about in terms of perception. Can you talk about what he said? Because that seems to me profoundly important, this idea that he just viewed things differently because he wasn't living in Omaha, for example.

Starting point is 01:05:10 Yeah. I mean, what he said was his family had been in Argentina for 150 years and have been wiped out multiple times by the government, you know, nationalizing the banks and taking the bank accounts away, inflating them away through that. And the fact, there were three different things, nationalizing the banks, inflation. I figure what the third one was. But in any case, the fact that he said, we've been wiped out several times. And he said, but with Bitcoin, we can't be wiped out by the government. They seized, the government just seized your assets at certain points, right?

Starting point is 01:05:36 Yeah. Yeah. And he said with Bitcoin, you know, we can't be wiped out. You know, the government cannot take it away from us. And that's what I might have told you the story of Bob Schiller. They went to, where was it, Estonia, I guess it was. And it met with the business people there. And he was on his way to Davos, where he was going to be on a panel about Bitcoin. And so he was curious about if anybody of the business people that he had met,

Starting point is 01:05:57 he was in a room with, you know, a hundred of them. And given a talk on whatever. And he asked if any of them owned Bitcoin and everybody raised their hand. And he said he was shocked and asked him why. And they said, well, because when Russia took us over after World War II, what they did is they nationalized the banks. And they stole all of our money, not our money, but our grandfather and grandfather's money. And if you actually, that's if you're a regular citizen.

Starting point is 01:06:21 But if you actually owned a business, you were sent to Siberia. And he said, and we sit right up here against Russia. They can do that again. And he said, but they can't take our money this time because we got Bitcoin and we can send it anywhere we want. I mean, that was what happened with also with Bittgenstein's father, who was one of the wealthiest people in the world. And he had money invested outside of Austria. He had the United States and England and everywhere because he said he couldn't trust the Austrian government not to steal it.

Starting point is 01:06:46 And then when Hitler took over Austria, he did. He basically took all the money from everybody. It was, you know, Jewish. And then set of the concentration camps. And the Wittgenstein family actually got some decree where they weren't, you know, sent to the concentration camps because they had all this money outside the country and they agreed to give it to Hitler. So, and he said, okay, well, I'll count you as only partially Jewish then, and you'll be spared. So that's the one of the things about Bitcoin. That's not the case with gold. You can't carry gold around, you know, in sacks trying to get across the border.

Starting point is 01:07:17 So that's the other advantage that Bitcoin has. Fidelity had one of the best pieces they wrote recently on Bitcoin, Fidelity Digital Assets. And one of the points they made was that it was one of the arguments against Bitcoin, one of the perceptions is that Stan Drucken Miller used to say, I don't know, he still says it, but, well, you know, somebody's going to invent something better. There's thousands of these tokens and coins out there. They're technology is always changing in crypto. And so somebody's going to invent one that's better.

Starting point is 01:07:41 Just like Ethereum was better than Bitcoin, according to many people. And Salon is better than Ethereum. And the Fidelity people said, well, that's actually wrong, in our opinion, because basically Bitcoin is like the wheel. Nobody needed to reinvent the wheel after it was invented. Now, Ethereum is actually a specialized type of entity. You know, it's maybe like a wheel for giant tractors, you know, or it's maybe a wheel that's a run-flap wheel. It's got these things that Bitcoin doesn't have, but it's basically a wheel.

Starting point is 01:08:09 And so that Bitcoin is the wheel. It's the perfect wheel. I love this clip from my conversation with Bill Miller because I think it gives you a sense of just what makes him so extraordinary. It's an investor. The fact that he was prepared to invest so heavily in Bitcoin at a time when almost everyone in his community, the world of value investing, disagreed with him and thought it was rat poison. and didn't bother him at all.

Starting point is 01:08:34 What Bill always had was this ability to think for himself and to question everything that everybody believed. There's something extraordinarily open-minded about him and agnostic. And I saw this many, many years ago when I first wrote about him a long profile for Fortune magazine back in about 2001 or 2000, I think, when he had made this enormous investment in Amazon, which most people in his community thought was going to go bankrupt. And again, it just didn't bother him.

Starting point is 01:09:03 him. He at that point had bought 15% of the company, and the stock had gone down from 90 to 6. And the fact that everyone else thought it was going to go under just was not a problem for him. Bill was always interested in these very asymmetric bets where there was tremendous upside. And I remember Bruce Greenwald at one point, a legendary professor from Columbia said to me a year or two ago that Bill was a specialist in explosive upside. And so I think as with Amazon, part of what Bill saw with Bitcoin was this potential for explosive upside, this tremendous asymmetry. And it didn't really bother him that it could go nowhere and he could lose all of his money on Bitcoin because he was able to see that there was this extraordinary upside if it did work out. And so his

Starting point is 01:09:52 willingness to bet on asymmetric situations where the reward, awards were enormous, even if the risks were huge. It turned out to be a huge advantage. And so I think you get a sense of the way great investors think probabilistically, the incredible guts and conviction it takes to go against the crowd to make this sort of bet. And there's just something kind of remarkable about it. And the fact that Bill was drawing on all of these philosophers like Wittgenstein and William James when he was investing always made him very fascinating to me. He wasn't just interested in the money. He was looking at these intellectuals. questions like how are people misperceiving an asset, a company like Amazon? How are they misperceiving

Starting point is 01:10:36 Bitcoin? What really is it? And these are really philosophical questions. But I think there's also an extraordinary ability that Bill has to reduce things to its essence. And one of the parts that I love about this exchange that we had was when really he was able to reduce Bitcoin to its essence and see that there was this supply demand imbalance. And it was just a really, really remarkable perception. Obviously, you know, the case of Bitcoin was much more complex and we'll see what happens with Bitcoin down the road. But I think you have to give Bill a tremendous amount of credit

Starting point is 01:11:14 for seeing this more clearly than almost all of his peers and seeing it earlier than almost all of his peers and also backing up the truck so that he just made, a vast fortune off this bet that he got right. The other thing that I think is really interesting that came up later in this conversation was when I asked Bill what people like Charlie Munger and Warren Buffett, brilliant as they were missed about Bitcoin. And one of the things he said is, and this is an exact quote,

Starting point is 01:11:49 he said, I think everybody's got blind spots in one way or another, and they're error prone. And he said, but certainly one of the blind spots, one of the issues, he said, is that they're old and they're not used to new things. And they're not the type of people who embrace new technologies and different ways of doing things. They look at the tried and true and tested. And they also don't want to take a lot of risk. So I think it's a really interesting observation, just that we all have our blind spots in one way or another, even if you're as great as Warren and Charlie. And I remember once asking Charlie, about Bitcoin and asking what would make him think he was wrong. And he just didn't engage in the question at all. I mean, I think he just regarded it as a social ill. He regarded it as something that was bad for society because, you know, you needed strong currencies and this could undermine the dollar. It could undermine the existing financial system. And so he didn't care whether it was a good investment or not. He didn't care about making money. He thought it was a social ill. So I'm not saying that he's

Starting point is 01:12:55 right, he was right or wrong. I just think he was looking at looking at it through a particular lens. And he saw other ways of making money that appealed to him more. And so one of the great strengths, I think, of Bill Miller always is that ability to look at situations without prejudice, to look at it without bias. And I think Bitcoin, as with Amazon, is an extraordinary example of it. And I think goes a long way to explain what a remarkable investor and remarkable thinker he is. The final clip I'm going to play you today is something completely different. It's from a conversation that I had with Michael Berg. Michael is a great scholar, an author who draws on the ancient spiritual wisdom of Kabbalah to talk about how we can build lives that are truly rich,

Starting point is 01:13:42 wiser and happier. I've studied Michael's teachings pretty deeply for the last 16 years or so, and I've learned an enormous amount from him. So I was very excited and slightly nervous also to get him on the podcast because he's one of the people I admire most in the world. In this clip, he talks about how to extract more pleasure from the wealth we happen to have. Let's listen and then I'll add a couple of final comments. I wanted to talk in more detail about how to increase our enjoyment of the money we have because you did a very interesting podcast a couple of years ago with your wife Monica, the spiritually hungry podcast where you talked about how to enjoy our money in a more

Starting point is 01:14:26 balanced way. And you talked about growing up without money yourself and having to buy clothes in thrift shops and the like, but never having any sense of lack. And so you were saying that the most important thing is not how much. much money we have, but being able to enjoy what money we do have and get pleasure and fulfillment from it. So I wanted to talk in a bit more depth about how actually to do this. And the first thing you said, if I remember rightly, there are a whole slew of points that are worth discussing here. But one of the things you talked about that's kind of a provocative idea is the importance of

Starting point is 01:14:56 recognizing that the money is not yours in the first place, which is something that Templeton talked about there, right? Where he talked about being a steward of God's wealth. Can you talk about that idea and why it's helpful to think this way? Yes, it's very important. So, first of all, you say it's a little controversial, but the reality, of course, is that if you think about it for more than five seconds, you realize it's true, right? No wealthy man ever takes his money into the grave.

Starting point is 01:15:22 I mean, he might be able to physically take it, she does him or her no good. So objectively, philosophically, the money is not ours, right? That's just a factual reality. but more importantly, if we understand that everything is energy and more importantly that none of what we have is actually ours. And this is true again, not just of money, it's true of wisdom. How many wise people have a stroke and in a second all that wisdom, it seems to no longer exist? How many times people have a car that they love and something happens, right? So the times

Starting point is 01:15:58 that people think that they own something and then it goes away is 99% of the time. It might take a year, five years, 50 years, this body within which we live, to think that it is mine is ridiculous, because we all know that unfortunately at a certain point, it no longer continues to serve us. That is all to say that the false view of that which we have acquired, which the ego wants us to take ownership out, which is my wisdom, this is my money, this is my car, this is my child. That thought, which comes from the ego and is false, it is not. is it is objectively not physically true, and more importantly, certainly not spiritually true. All we are given are gifts for purpose, either to enjoy, to partake, to share them.

Starting point is 01:16:47 When we really and truly view everything that we have as not ours, but as given to us, again, to take care of, if it's a tremendous matter, well, a big part of that, of course, will have to be its purpose is to share. but it's true about wealth and even our children. Some of the greatest pain that we ever feel stems from the ego convincing us that this thing is mine. And then when anybody tries to either take it away from me or succeeds in taking it away from me,

Starting point is 01:17:17 that causes great pain because this thing that was mine has now been taken away for me. If you view it as, no, this is not, this was never mine. This was never mine. It was given to me, maybe it was given to me for a day,

Starting point is 01:17:29 maybe it was given to me for a week. First, you have greater enjoyment of it because your appreciation for it never wanes. And again, I don't want to go to this point of appreciation, which I think is foundational to this idea. There's a teaching that says that when we take anything, money, gifts, wisdom as our own, what we're actually doing, and this might be a deep spiritual concept, we're separating it from its source, what we call the light of the creator, that energy that is sustaining, that is flowing all the time. If our ego convinces us, no, this is my money, this is my wisdom, that thought separated from its source. What happens to a flower when you cut it off from the ground, it begins to die.

Starting point is 01:18:17 That it might take a day or a week or a month, but it begins to die. So if we understand that the thought of ownership actually cuts away, our blessing, be it our money, be it anything that we have away from its source, it will of course lose its light force and therefore the pleasure that we are able to extract from it. So the reason, many reasons, but one of the reasons is so important to live with a thought, with a consciousness of not ownership, but again, having it for a certain amount of time, an undeterminate amount of time, it first of all spiritually allows our blessings to be connected to their source, which allows them to be able to be receiving life force.

Starting point is 01:18:58 and therefore we continue to receive pleasure to them. Because again, why we know this again, relationships is probably the most obvious case. And I always use this example because it's sadly true. Almost everybody on the first date is very excited. Almost everybody on their wedding day is very excited. The majority of the world by year five is not as excited certainly. And by year 10, most people aren't happy. So let's look at that continuum.

Starting point is 01:19:23 Right in, I'm sure Daniel Kahneman. And so he writes the fact that marriage is. is the most, is the silliest thing that people do because the facts and the figures tell us it's a terrible choice, right? People still continue to make it. But I think more importantly, it's go to the root of that. Why is that the reality where people have this hope for love, for relationships that almost always dies? It almost always dies. And one of the reasons is because when you marry somebody, you believe that they are yours. Not remembering nobody, certainly, but nothing really is ever mine. And therefore, I have to be earning it every single

Starting point is 01:20:00 day. That appreciation can only truly stem if you would truly believe that you do not own it. And if you understand that you do not own this great merit, not on day one and not in year 10 and not in year 25, then you have the possibility, or I would say the ability to have the love in your relationship grow, taking that back to what we were talking about before as it pertains to, well, the second, and unfortunately, I would say most people, it's an important question to ask themselves, how do I view my relationship with that, which I acquire? Be it money, be it a car, be it a house. Has my ego convinced me that it is mine? Well, that is the first step to its dying. Now, death can come in many ways. It could be that you hold on to that money, but it doesn't give you

Starting point is 01:20:44 pleasure. It can mean, of course, you don't hold on to that money. But the only way to truly maintain and to continuously be able to receive great pleasure from the money and acquisitions that we take in this light is by remembering it is not mine. That, as we said, keeps it connected to its source, which allows the life force that energy to continue to flow through it because money is energy, which is an important topic. Maybe we'll talk about it a little bit later, but it allows it to continue to be in that flow of energy, and therefore I'm able to extract them with more pleasure. And secondly, which is very important, it allows me to maintain appreciation and the understanding that this thing that I have, because it's not mine, I have,

Starting point is 01:21:28 wow, I woke up this morning and this million dollars is still in my banking count or this beautiful car that I enjoy is still in my driveway. I'm sure most of us remember, and I have many clear memories of this as a child when you get a new toy. And usually you play with it all day and you get sort of bored with it. But as a child, often you wake up the next day, it's almost like it's brand new to you and you enjoy it. That's the way our life is meant to be, whether it's our relationship to money, whether it's relationship to the physical things that we enjoy, never ownership, only use for it's undetermined amount of time, and therefore great appreciation. If you're able to maintain those two things, which is the thought that this blessing,

Starting point is 01:22:06 this gift, this money is not mine, but it's connected to a higher source. And second, therefore, I have great appreciation and a growing appreciation for it every day that I wake up, then that is able to maintain the energy within the money and for the pleasure that we receive. And one more point to this, there's a verse from King Solomon. He says that you will find often wealth kept with the individual for their detriment. Oshir Shamur le baalav le raton. There are a lot of people, and unfortunately I've met people like this, I'm sure you have, who have a lot of money, but are not able to extract great pleasure from it,

Starting point is 01:22:41 or at least not the pleasure you would expect them to be able to extract from it. And that is because of these two things. They have taken ownership on it and therefore necessarily will lose appreciation for it. That was a clip from my conversation with Michael Berg, who is one of my absolute favorite guests on the podcast. As you know, I mostly interview hugely successful investors, but if I'm honest, the episodes that are given me the greatest joy and satisfaction have often been the most unexpected ones. For example, I particularly loved interviewing my friend Pico Iyer, a great author, and I very much

Starting point is 01:23:17 encourage you to go dig up that episode if you're interested. I also really loved interviewing Sokney Rimpershay, a great Tibetan meditation master who came on the podcast wearing saffron robes, accompanied by the author Daniel Goldman, who has also become a great role model and friend. And so I think part of the joy of the podcast for me is looking at this whole subject of how to build a richer, wise, a happier life in a broad way, learning as much as we can from great investors about how to get rich, but also learning from them about how to think and how to live. And then also bringing on these more unexpected guests who can shed light on this whole subject in a slightly different and more unlikely and more unusual, but always very thought-provoking

Starting point is 01:24:04 way. So thank you for indulging me in letting me bring on unexpected people wearing saffron robes. It's really just been an incredible pleasure doing this podcast over the last two and a half years. And I hope you've enjoyed it as much as I have and that you've found a lot that's led you to think differently. And I hope you'll go back and dip into the archive and see what you may have missed or see what might be worth listening to again. For me, in many ways, I've come to think of the podcast almost as a second volume of my book, Richer, Wiser, Happier.

Starting point is 01:24:37 It's a continuation of those conversations. And I'm absolutely delighted that I embarked on this venture, and I'm really grateful to Stig Broderson and Preston Pish, and their wonderful team in the Philippines, who've helped me on this journey and have tolerated me whenever I'm late with my episodes, which is pretty much always. In any case, I'll be back very soon with some more great guests.

Starting point is 01:25:00 And until then, thank you, truly. Thank you for listening to TIP. Make sure to follow Richer, Wiser, Happier, on your favorite podcast app and never miss out on episodes. To access our show notes, transcripts or courses, go to theinvestorspodcast.com. This show is for entertainment purposes only, before making any decision consult a professional. This show is copyrighted by the Investors Podcast Network. Written permission must be granted before syndication or rebroadcasting.

We Study Billionaires - The Investor’s Podcast Network - RWH052: Wise Guys w/ Ray Dalio, Bill Miller, Chris Davis & Michael Berg

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