Indexing & Hedging: The guest repeatedly favors broad indexing coupled with a tail risk overlay or permanent portfolio approach to manage uncertainty and behavioral pitfalls.
Dividends vs Buybacks: He highlights Dividend Investing for “mailbox money,” noting preferences for steady cash returns versus buybacks despite tax nuances.
Tobacco Yield: The Tobacco sub-industry is cited as a potential source of higher current yield, albeit with underperformance risk, fitting an income-oriented strategy.
Florida Real Estate: Advocates Florida Real Estate as a secular winner, discussing leverage, rental income, mark-to-model benefits, and avoiding forced liquidation as key risk controls.
Companies Mentioned: Concentration risks discussed via Microsoft (MSFT) and Berkshire Hathaway (BRK.B); a past thesis on Qurate Retail (QRTEA) is dissected for lessons on underwriting, taxes, and sell discipline.
Market Outlook: He suspects rates have likely peaked but with modest confidence, remains agnostic on value vs. growth, and emphasizes patience and humility in forecasts.
Options & Retail: Cautions on options trading for retail investors, praising education-first platforms while noting pro-level advantages and the frequent superiority of linear instruments.
Transcript
[Music] hello and welcome this is the mutiny investing podcast this podcast features long-form conversations on topics relating to investing markets risk volatility and complex systems so you just called me from the car a few days ago and you're on this epic road trip with your phone family across the country so tell me about what you saw what you're exposed to what you learned what's your takeaways for america these days tell us about the trip i don't know man i you know we saw um i got three kids and it was fun for the oldest to see dc i got to tour um my mom's sister was married to a captain in the navy and his father was vice admiral and his father has a uh destroyer named after him that is going to um spain and we got to tour that and that was pretty sweet i like that uh pretty wild to walk a boat that cost four billion dollars in today's dollars uh which are not the dollars that they used to be but still still a lot nonetheless um i'm sure the size was overwhelming but like what were like little details that you noticed and i'm sure you noticed that that were really surprising to you or stood out to you uh it was just really cool to stay like to go down into the command center and the woman that uh she's one of four people that defend the ship and she was just telling us like you know there's 96 missiles on there and then they've got these bullets that i guess are five inches around and they're like three feet tall and that's what they fire up boats um if a boat is coming after him it was just you know it's i guess the other thing is uh the um satellite system that's part i forget what it's called maybe it's the aegis uh edgiest or whatever uh satellites it's like a mesh satellite system all the boats communicate with each other it's just wild man uh i'm glad america has the military we have it made me feel safe uh even if that's a false sense of security it's a sense of security could you help yourself what do you think about like peter's eye hand and like a blue ocean navy you know and us protect the waterways yeah i you know i i just think um i think it's incredible the commitment that people in america put uh you know they literally put their lives on the line right for us and that lifestyle would absolutely suck when you're out at sea and you know it's just a lot of people that um i don't come in contact with too often and it was nice to see and i i guess one of my takeaways is driving through america and around and whatnot is uh i think i understand why we're a little bit more divided i don't know i guess i i get i think i understand the red states and the blue states a little bit better i think people if they had the chance to get in the car and drive around they might they might understand it a little bit better at least i won't come back to that dif division divisiveness if i can't even say the word but uh what are some of the other stops in the itinerary without doxing your family members oh it's all good we did it we did savannah uh virginia beach dc then ohio and amish country for a night or two nights stayed in a tree house and had a tornado warning in the tree house that was super fun where you don't want to be in a tornado warning uh and then uh and then we went to lake geneva and then we had a wedding in chicago and then i drove back so it was a good eastern loop how were the how are your boys on the trip were they like are we there yet or are they excited they staring out the window they're playing games they watch movies the whole time yeah they're appled out they uh they have their ipads for in case of emergency break open ipad and it was an emergency so they were actually quite good what did you think they enjoyed the most i know my oldest like dc i'm certain of that uh my my youngest said that his favorite part of the trip was the soup in lake geneva which was good soup but uh i hope that's not actually his his response and i don't know what my middle would say um i don't know but we had a good time it was good family stuff so part of it when you were saying thinking about the politics of the country did you feel is just different from your community in florida versus what you saw driving across the country and were you reminded of what it was like back when you lived in chicago or like what was really stood out to you to make you think about that you know political opinions and the the frictions we have in this country well i've been thinking about it a decent amount anyway actually so chicago i lived north of the city i lived in a town um called wilmette and i think i think it's not unfair to say that it's pretty blue uh where i moved in florida is quite and i've been listening to the audiobook that david french wrote called divided we fall and regardless of people's opinion on david french i think that the book has a lot of good data and it's just like um even even within counties now if you go if you break down county by county there's just fewer purple counties than there used to be so there's just like people aren't bumping into each other as much and i don't know man i was just driving through west virginia and i couldn't help but think like you know i kind of understand why somebody living in rural west virginia may not be too into the idea of the federal government uh you know mandating what they can and can't do uh whether or not that's a valid view is sort of everybody's own idea and they can vote uh as they want but i just think a little bit more empathy goes a long have you ever seen the documentary the wild wonderful white soul of west virginia no oh man it's an unbelievable documentary i want to say like johnny knoxville was in baldwin maybe a decade ago and i know it doesn't represent the total people of west virginia but it was about this one family of like coming from bootleggers and then now doing with pills and everything and it was just it's just a really fascinating documentary i know about rural west virginia if you get a chance to see it yeah i mean it's dude it's a totally different life you know uh at least it appears right uh i didn't i didn't spend a ton of time but i i've done a couple road trips now and each time i've gotten a little bit more uh i guess appreciation on my perception of where people are coming from is probably the best way to say it but my perception is almost certainly flawed you were mentioning almost like gerrymandering of districts so we don't have the purple anymore but do you think that's what has changed like i always wonder when people will say that that we're in such conflict now and nobody can get along i'm like when has it been any time different any time in history yeah i don't know i mean i i think uh i i don't know but i i think now i guess i guess what i would what i fear uh today is there's there appears to be more of a fear of the other party than a acceptance that we're all americans there's just a lot of negative politics going on and i'm and i'm kind of worried about what that does for us but you know these are big questions and i don't have the answers well i i definitely don't have the answers either did you uh think of any like peter lynch ideas like in the sense of like thing things you saw when you drive around there in the country that made you think about investments and equities no the only thing that i keep thinking about is that i should index because i'm a bigger idiot than i used to think i was and then i should have some sort of overlay to hedge out tail risk that's uh why do you think that i keep coming because i think i have a sense of how dumb i was right i think when i was younger i read you know buffett and value investing and i didn't even understand the buffett like what buffett was saying and what i was reading were not the same things but i thought they were the same things and as uh as i was younger i was convinced i knew the answers and now i'm not even convinced i know the right questions and isn't that just age yeah i think so but it's made me terrified of what i don't know everybody always says like that with age comes wisdom and i don't i don't think it's just it might not be that way especially for males it just might be a loss of testosterone and it's not that you're wise you're just so dumb when you're younger yes and then now you're losing testosterone so you're not as aggressive yeah i think there's a lot to that a lot to it and the other thing that i think about is like um you know i i uh for my background like i i only came into finance i think well i shouldn't say only because i do enjoy it a lot but one of the reasons i had to figure out what was going on is i inherited something or you know some wealth uh and part of what i inherited is like this massively concentrated position in microsoft and uh a pretty decently sized one in berkshire and i think about like okay well let's say i'm really doing this for my kids right so like let's say i i continue to pick single stocks and i have some winner then they gotta inherit some massively outsized position it's not like that fun it's it's uh you know if they had an index it'd be much easier on them uh so i don't know all all uh all answers are pointing me back to the fact that i'm pursuing a stupid path nah then you know the cycle continues give them a concentrated position for them to deal with yeah that's fair and then don't help them out yeah that's fair but then they'll be like i don't know why dad owned this dad's you know whatever yeah but but so one of the things that you and i always talk about privately and you kind of hinted at earlier is a lot of people read buffet monger etc and they they try to copy what they do and they think it only applies to value investing but you and i always talk about watch what buffett does not what he says so what do you how big do you think that divergence is and has that changed in your opinion the last few years well i think i think that the thing that i have morphed the most on uh is that like if you don't have control of a situation then like betting on on something because it's cheap is probably just better left a computer and i'm not sure that i think that people have the ability to i mean i'm sure there are some value managers that can do it don't get me wrong but i just think that there's so many adverse incentives in a lot of the companies that currently screen cheap that they're either sort of like a crappy company qualitatively um or they're like management uh is just kind of not there to reward shareholders um i just think it's a really tough game to do as a person looking at value stocks um i think all the games are tough to be fair but i i just think with all the with all the money and private equity i really think especially if something small and it's cheap uh there should be a huge rebuttable presumption of like why am i the person that found this and not you know i think the first question should be why has this not been taken out yet and then why is it this cheap and i think more often than i used to appreciate there's really good reasons how much do you think and i don't want to beat a dead horse but the idea of technology with value investing is like a lot of people forget that buffett you know is going to library writing to companies calling companies now with technology you can run your screeners everybody has crisp data there's no edge in that is there if it's that easy that's why it's almost been armed away like what are your thoughts on that yeah i think there's some of that i think some of it's too like he would get control and he would liquidate companies and he would divert cash flows and um you know the he uh i just don't think he hasn't my perception of his track record is not a guy that was buying value stocks that couldn't control the outcome and i think a lot of people read him and end up in that path and the the way that i have um sort of changed my thinking is i i think it's better left like i said to some sort of etf vehicle or you know whatever that can can do the screen and rebalance at the appropriate times and you're not paying the taxes on the rebalance and over time maybe that works i wonder you and i have talked a lot privately about the idea harry brown had this permanent portfolio but people forget that you also had a variable portfolio so he said put 80 to 90 this boring permanent portfolio that kind of covers all the global macro environments but he realized that human nature and behaviorally we need to make our own beds and so you need like 10 to 20 percent of our portfolio so like you're just saying almost go almost like just like you're half joking and be a defeatist about saying index but would you maybe combine that with still still your own proprietary security selection because you need something to do maybe but i don't know if that's a valid reason to do things right like needing needing purpose is not uh that doesn't pass the like why should i do this test um i i guess that that i'm not uh it's it's been an interesting 24 months because i i think that i made a series of reasonably good calls for the right reasons i think i obviously benefited from liquidity exploding but um you know i was loud on on this idea curate retail and i still think that was a really good bet to make but you know i didn't sell it when i probably should have when i when i underwrote it for the in the beginning i thought it was maybe worth nine bucks it gets to 11 and i convince myself that it's worth 20. and then i round trip it and then there's a bunch of cash that got distributed in the interim that now i have to write a tax bill on because i delayed my taxes and uh subsequently i've made some some mistakes and uh you know now i'm underperforming and i get to pay tax and isn't that fun so it's just kind of like uh you know it's it's um i i felt a little bit of the top of the mountain and now i'm feeling the bottom and some of it's managing emotions and some of it's just being like is this even worth it yeah it's funny how you have multiple emotional swings depending on how your piano is but i remember my my problem is always like when you come out with a curate thesis i have all the behavioral fallacies in the sense that like i'm like he bill's right this is great right curate's the way to go like like i'm gonna fall for it every time yeah so i just try to set up structures that will like prevent myself or position size it's so small that i can't hurt myself because i'm i'm liable to fall for that great story yeah no i i think um i don't i don't know how not to fall for it yet um i do i do objectively think that was a good bet still i i don't think the result i think that uh i can criticize myself for holding though at the time um you know i i guess one thing that i've been thinking about and it's related so i don't think this is totally jumping topics but um you know there's there's a point in any thesis where the facts have changed and knowing what that point is first of all there's probably a decent probability that uh that the price is going to show you that the facts are changing um but uh you know knowing when that point is is very difficult um and i and i think you know part of this game is continuing to try to set yourself up in situations where you're getting rewarded um for taking the bet but you know getting out of the bed is also tough and i i think uh the idea of never sell and and all that at least in the equity markets got certainly overdone i don't think that that's uh you know in hindsight that's easy to say i i think you know i'm with toby and jake i do think that we've been fairly consistent that that's overdone but selling is really really hard man but selling or even buying like i i think about all the time like what if if you're a true value investor and you bought it 10 it goes down to seven you said some material or change so maybe i should rethink my thesis but if you still feel you have the same thesis you should be like doubling down in martingale right yeah right if i like to attend i should love it at seven but but you have all these fallacies on both sides they'll leave you to making a bad decision and then the sell side's even harder like you said but like i'm curious like once you have a certain amount of positions on how do you manage those positions do you tran do you trim do you do rebalance between them like how do you manage the position once you get it in especially when it's moved against you or it's moved for you are you working looking at a position in isolation or are you looking across the other equities that you have at aggregate portfolio i think the answer that i have uh that i'm starting to come up with is uh develop a source of mailbox money probably bet a little bit smaller than you think that you should and uh i mean once you lay or once i lay a bet um i'm gonna try to wait until it's blatantly obvious to exit and then have the mailbox money be my next source of bets um because i think there's a lot like there's a lot of times that it's just difficult you know and and i think unless the answer is clear the default position should probably just be to hold but i had like an index no i love this idea of problems yeah well except for i i love to have these bets and this mailbox money and how the two can feed each other you can have this amazing like virtuous feedback loop but at the same time i almost had to push back is like have you found any mailbox money that's easy that doesn't require management no it's like that's the fallacy too right yeah that is um but i i think uh there there are different asset classes like you know tobacco for instance may underperform but you can get decent current yield i don't know that that's the answer but there's there are things like that have you read like uh was it danielle paris's book and was kind of reassessed this idea of dividends and and if we're potentially moving back more to dividends driving value of equities or how do you think about that because you brought up the tobacco stocks yeah i don't think so i i once suggested that i thought that commodity companies should pay dividends instead of buybacks and the amount of people that pointed out to me that you can just sell pro rata and a buyback which i already knew uh i think that there's like a strong strong bias against dividends i happen to like the fact that i think that they reduce the amount of thinking that all the participants have to uh like it just reduces decisions which i think is a good thing now somebody's going to tell me or listen to this and say well so does selling pro rata i get that uh i just you don't have perfect information on when the buyback is occurring and i just i i don't know i kind of uh i'm old school man i kind of think even if it's a little less tax efficient some some cold hard cash coming back is a good thing yeah there's two things that makes me think about that a lot is you know a lot of people like you said try to show there's no difference between buy-backs and dividends but that's only because of the tax consequences because we changed the tax law on dividends but pre-world war ii this and this is what daniel perez's book's about is most investors used to invest based on dividends and cash flow but as the laws change over the years that's what makes us go for just growth instead of dividend but at the same time the one i deal with a lot of high net worth individuals and you may make a less optimal trade than somebody with a cfa would tell you but you want because you want cash flow a mailbox fund yeah and that to me is perfectly rational so i i think one way is like we just bought this rental house i don't know i mean i've got like a little amateur model or whatever but we'll see how it all it's all built on assumptions right we're gonna live there for a year and then we're probably gonna rent it out we'll see what rents i hit and the uh the budget to improve it is already over so there goes part of the cash on cash return but um you know we're gonna hold it and rent it out and i think uh over the long term the probability that i'm disappointed with buying that house is probably i think it's a good piece of real estate so i think it's low so it's not um you know some public market investment it's not i can't market it to people but uh i think it's going to provide me some level of comfort in my life that i'm going to value so it's probably worth a little less return if that's the case well it's also the beautiful thing about illiquidity and uh marked a model asset yeah right you don't have to take that hit and it's less psychologically destruct i was thinking about uh michael maubeson was on meb's pod reading his thing about it's just dcf models all the way down yeah and if there's anything is i hate is dcf models right because i come from a commercial real estate background as well and it's like you figure out your cost of capital you figure out your net income you then think about how big that delta is and then what's your fudge factor on the future of what could go wrong yeah you can't really discount the cash flows all the way back like you wouldn't have covet in there etc yeah i i uh i want i need to interview him um i i want to i wish i could figure out uh and i wish i just need to work on trying to figure out how to have a program that would bring me like i put in uh uh just the math right and then maybe some base case assumptions it would be nice to have a monte carlo simulation of like the distribution of ways that the cash flow could justify the current price um and then then i think i could actually visually see what the possible outcomes are now i i have not run tons of monte carlo simulations in my past and i'm sure they're only as good as the uh the inputs on how wide the distribution is and how quickly yeah i mean like there's a lot of problems in that approach too but i think that uh it would it would get a lot closer than a lot of people and myself historically have just sort of like tried to back into what what a stock gives you i'd like to have a wider range of outcomes without all the time uh that it takes right that i could yeah like to me it's it's like scientism it's it's a false conceit of science and and getting an accurate number and a dcf when the only thing that really matters is your margin is safety like if you ran the monte carlo simulator you would look at that and so and determine your margin of safety but what we what we're not admitting is that is there's a bit of a finger in the air to figure out figure out what your margin of safety is is that going to accommodate any future you think can happen and you're just guessing yeah yeah we don't admit that yeah but that is objectively the truth but then that's what happens that entire industry of value investing in tcf models well i mean look i i think um i think that there are certain i do think there are certain spots where there are situations that people either don't want to touch or can't touch or you know like it's easy to say this in hindsight but i i said this to myself at the time i did not act on it so you know words with that action aren't worth anything but like when kramer said you can't invest in energy stocks that's probably a decent time to buy energy stocks and then when when every single space on twitter is interrupted by somebody who's bullish energy that's probably a decent time to stop start trimming energy stocks um and i don't i mean that's just like one uh example but i i do think that there are like these times where sectors are untouchable and that doesn't make any sense to me um now so it's if it's overheated or it's going to run on forever and it can take it irrational long and you say sun like that's the problem with all of these quips as like they make in hindsight that makes sense but it never really works out in the real world yeah no it's a very hard game i mean you know i i don't know how many people that listen to this will listen to value after hours but like toby and jake and i are always talking about the valueverse growth thing and my answer is always like i have no idea like i have i don't know how long growth can outperform value i don't know how we're defining these things i don't know whether the composition of value has changed over time like i just simply don't know uh and it's not a very sexy thing to say because people like when people know things but i just i i just realized how much i don't know over the past i don't know how many years but i've just like i said i i i have far less confidence in making predictions than i used to well especially it's not a sexy thing to say when your show is called value after hours yeah you know how i feel about this stuff it's like it's why it can't be option c both why are they originally really just camps of value or growth it's why not have both and rebalance between them yeah well i think that's a i think that's a fair question um over the past decade i don't know that you've wanted to rebalance into value at all but i i do agree with you in theory but at least diversifying your exposures um thinking about this rental property i don't want to get all up in your business but did you use a loan to purchase it because i want to talk about like maybe leverage and stuff uh i did not to purchase it we're going to put some leverage on it uh post close so that's what i'm saying almost like we're saying figuring out dcf or like it's like you figure out your cost of capital what your rent what you expect your rental income net of all costs you fee a fudge factor there for margin is safety and then you think the biggest uh wins from that that people are really not talking about so much some people highlight it it's the amount of leverage you can get it's the mark to model and then using your renters to pay down that mortgage over there so it's a for savings as a leverage for saving mexico yeah yeah and it makes sense right i don't know how much harder than that but i thought things can go wrong you could you know have terrible renters you can may not be able to rent it and be sits vacant for three six months and erases three years of income yeah yeah but i think over time owning uh productive assets is the way to go and uh at least since the 80s having leverage has been a good bet and then you have the kicker of appreciation if you're living in a good community yeah which i i happen to think um florida is a structural winner whether or not you know people agree that's they're fine to disagree but i've actually put some chips on that bet exactly for putting money away in my office but like you said it's a it's a long term your secular winner what maybe some cyclical validity yeah yeah and and you know the key is uh we're not gonna get over our skis on it and we're not gonna put ourselves in a spot where we gotta be a force liquidator so you know we'll see um but that's yeah i mean that's that's kind of i'm just trying to figure out my way through life and uh it's it's weird man i feel like i have no answers anymore but that's uh it's the truth yeah that's my favorite answer i don't have an answer i don't know i'm just groping through here like everybody else yeah and and looking for like one you know i i think what i've come to appreciate um as i've gotten older that i think you know i've heard buffett say a number of times i've admired this from afar i like he doesn't um i think the amount of situations that he pays attention to and is just comfortable saying like other people can make money there like that that doesn't have to be my game that's that's like a really really tough skill to develop uh but i think it's a very important one and i i think uh you know part of why i'm i'm reiterating so much that i don't know any answers is i don't want to pretend that i know false answers because of how hard it is to change your mind um so i'm just trying to wait to see when i think i have an answer do you think it'll scream out of you uh no i think this i think this past six months has been particularly tough because i haven't had many uh like really good insights i do i do think rates are probably have peaked uh and i'm not in the rates or going up camp but my my confidence interval on that is like no higher than 60 percent so uh that's that's not like a resounding bet right i was thinking about what's the quote uh all a man's problems stem from not being able to sit alone in a room quietly yeah like you can't sit on your hands for a long period of time yeah and was it munger or somebody else no i don't think it was one girl talked about i just wait for the money sitting in the corner i just have to bend down pick it up and that might only be once every 10 years yeah but man that's tough like that is not easy to wait 10 years to do anything um and the other thing is the way those guys swing when they do swing like i just i don't you know that that would be a great way to uh lose everything for me i i don't have that mental capacity i was thinking about i think this ties back perfectly talking about mobison and dcfs and cfa's and all the value investing models i always ask those people have you ever run a business to know how difficult it is how difficult decision making is in all my opacity and you talked about earlier about buffett having control i wanted to go back didn't you do you own a flooring franchise like business describe to me what that business i didn't own it it owned me that's what i'm saying this is this is key yeah dude i first of all it was the financial crisis it was 09 and my dumb ass thought oh well if i come into the market when everybody else is going out of the market i'm going to own chicago i mean it was so stupid that i even had that thought given how skilled and well capitalized some of the competition was but um i mean just getting the ball rolling was so hard it was so hard to get leads at one point the company that i was at you know it's a franchise right so their their grand theory of getting in the door was they would give people if you would let us give you a bid we would give you fifty dollars in cash so people call up and they would say you're literally gonna give me fifty dollars in cash just to bid on my floor and i did this twice and then i was like i'm done with this but the idea was you know they had like this elaborate sales process uh and they had what they thought was some good technology to show you what you know your house would look like with a new floor and um long story short uh there was there was a i don't think i was good at selling the dream of the new floor i think that we had uh not the right inventory to do it and and more importantly in 09 like no one gave a [ __ ] about how nice their floor looked on a computer screen they they were not going to spend the money on a floor uh i mean so you know then it was just going out and pounding the pavement trying to get business to business referrals and my cost structure was all out of whack because i had to send you know stuff off the top line to the franchisor then the franchisor is screaming at me about i'm not selling enough and i'm like i don't i don't know what to tell you guys like this is actually a lot of our leads uh ended up coming from the company that is now uh angie's list but angie's list back then was a much uh i i'm gonna call it a better product i don't want the people that own angie's stock to get mad at me but it was uh it was like a really good referral source that had a lot of trusted reviews and if you could get an angie's list referral the probability that you were in a competitive bid was very low uh i'm almost certain they have since bought this company uh it's not service master uh but anyway it was the lead gen company that used to send us bids and that you get like three contractors they'd have to call they'd all call i'd be calling people at like midnight right i would get a lead it would hit my phone and i call somebody at midnight and they'd be like why are you calling and i'd be like because i just got a text i have to spend 50 on this lead to get the text and i know you're looking at your computer thinking of floors right now like i know it and then sure enough they'd be there and we'd schedule uh i had one of the higher lead to appointment conversions my appointment to sales ratio was was not good i think some of that was me well i think a decent amount was me i think a lot of it too though was my lead source uh you know being that competitive bid all the time i didn't have the cost structure in place to be able to really drive costs down so it was interesting man it was a it was an expensive lesson i wish uh i don't know if i wish i didn't do it i guess i i guess i i'm glad i did but that that was a real experience of getting kicked in the teeth every day and waking up early and sleeping at the office to have the privilege to get kicked in the teeth the next day i'm i'm i'm assuming the the cat model the customer i asked using costly model was like even though you're paying them 50 bucks it was like for every 10 for 500 bucks you spend you get one lead that give me five grand because that was it yeah that's that was the thought um but not in 2009 yeah that's right that's right i mean look i you know i will give them i think at that time you had to be really kind of crazy creative uh but the one of one of the issues that we had is i was like oh well i want to be in the north shore of chicago i for that product you don't actually want to be up there uh those houses are like too nice for that product uh i think i actually wanted to be a little bit further west um so i don't know that was that's uh that was a nightmare but but it was i don't like to bring up nightmares but you'll see where i'm going with this but like i assume but that that was really creative for you to pick up the phone and call immediately even at midnight oh yeah because nobody else has done that well working hard has historically not been my problem uh over the last i don't know four months some might argue that uh it is a bit of my problem but uh we'll see i'll get i'll get re-motivated here soon enough and then did you go with the franchisee model because the idea was they have lower failure rates yeah i my so i was coming out of law school and i knew i didn't want to be an attorney and i wanted to be an entrepreneur one of the guys in my in my uh family that i look up to the most is an entrepreneur and um you know through talking to him uh we we thought that a franchisor relationship would be good because they had some structure around um me i think uh still not totally a flawed idea but i would have needed a lot more capital to build out the right organization i'm dealing with it a little on the podcast right now this little shitty little business that i have that doesn't make any money uh provides entertainment for people but like you know we were talking to to really do it right uh i don't know i need to invest a lot and i just don't know i don't know that the juice is worth the squeeze um on that particular issue uh to really you know to do it right i need analysts and i'd probably need a marketing person and i need a booking person uh you know if i want to keep it like a smaller little niche podcast then i can probably keep doing what i'm doing but to try to like really blow it up uh you got to invest and i'm just not sure that i really want to do that well yeah it's it's a whole different question of entrepreneurship and biz ownership again where like you said sometimes you can just turn on the mic and you're good to go but like but even even then you and i've talked a lot about wrangling gas is always too difficult but like part of it it's a pain in the ass that's why i'm on your show you needed a guest and you're always waiting at the last minute are they going to show up i'm texting i'm getting on yeah so but part of it is like do you think about when you're building on a podcast biz you need like a bottom of the funnel business to drive them to or else it doesn't make sense to invest all this money in podca yeah i think uh i think that's probably right um and that's what i don't have so i got that going for me so you got to figure that out but you put a podcast your size well crypto money kind of went away but you could sell you can a decent amount of ads but you have to be able to swallow those ads yeah i mean uh i i just um i don't i don't want to hoe myself out for uh something that's not gonna be like a meaningful amount of money right so i've got really cool sponsors to this point uh shout out to my man rob koifman and uh and stream and uh my man uh nader offshore at bastier partners they've all been great um but like those are people i believe in and uh there's a couple people i'm talking to that you know can hopefully help me cover my costs but that's like you know that's not like a business right so the question is then what but you've nailed the model that i always say is like i have a lot of friends that won't do advertising because they think it's like it's all skeevy but if you build partnerships with people you trust and products you use it makes perfect sense but but it's a longer road to go down and you've done it so well well thank you uh i i hope to continue to there's uh you know there's certain products that i i don't mind uh talking about but yeah i don't want to like sell i don't i always use me undies because they advertise on all the podcasts i probably need to buy a pair of me on these because maybe they're great and then i wouldn't mind you you know hawking them but you get like a hawaiian shirt sponsor yeah that's right this is tommy bahama i figured it i figured it was right for your pod this feels like the right mood to talk to you in it's perfect but we should have coordinated outfits but i didn't bring up the flooring because i wanted you to relive your nightmares i bring it up for many other reasons and i love that you said that i always thought about franchisee franchisor relationships just because like it's the training wheels entrepreneurship hopefully hopefully you can't get too outside the lines and hopefully you can make a decent living but you can't really build huge amounts of equity but then part of it why i bring it up is is like all these people that run dss i'm sorry dcfs and they're like run hedge funds in our value ambassadors my question always like have you been entrepreneur have you owned a business because if you think back then you were saying would you have run a dcf model on your business and that would have given you like comfort no but nothing was gonna give me comfort but yeah we i mean we would we would weekly we would talk about the models and i was just like this model's so [ __ ] uh and i didn't mean to be uh fatalist about it but the writing was on the wall but you know probably within the first four months when none of the metrics were going the way that that they were supposed to be going from all the way from top of the funnel right forget about like lead conversion and whether or not customers are happy this is like from the beginning the marketing was not hitting um so yeah that you know i don't want to extrapolate too much off of one experience that i wasn't really uh prepared to succeed in but yes i i generally agree that um that it it can be tough i i do think that there's merit to the idea of there are certain businesses that are almost endowed with winning and if you stick to those businesses and you're disciplined on how you define those businesses i think that that's one potential way to outperform over the long term and then the second way i want to bring it up because you with buffett you brought up control granted in the franchise model you only have like half control and like you said you weren't you're in court in charge of corporate branding or marketing but even then you had at least a modicum of control did you think that helped either well i you know the tough thing about a franchise i think is uh in order to do it well uh you need to believe in like i don't know man i wasn't a good franchisee i think at the end of the day but i i but i i think i was right i obviously would say this but like we we battled over you know stuff like uh some of the branding and um you know i don't want to throw these guys under the bus so but like the name of the franchise was it was really hard and i i would get calls from people and they were like what the hell is this name um and i i probably should have passed based on that i think i think buying the the franchise was a good um exercise in motivated reasoning right and going back to your idea of like you you know you would hear a thesis and you want to just like jump in um i was looking at the upside and i wasn't paying enough attention to the downside and i i think you know what i had a partner at the time um he was like my best friend we almost ended a friendship over it i'm glad that didn't happen but uh you know we we had initially thought about doing like a subway and we steered away from that because of how little money we could have made uh and there's other reasons they're not really particularly great with their regional uh they kind of will put one anywhere but uh i almost think like a sandwich shop would have been a better idea um because there's a lot there's a lot less sort of uh room for creative differences for lack of a better term and uh you know flooring's flooring was just kind of interesting there was another business pure clean that i looked at uh they were like remediation that brand i was a little bit better on but i you know that's it's tough man these guys are out there hustling scooping you know water out of people's houses and they're not glamorous jobs um but you know you can maybe you may make a living doing them yeah i remember like maybe a decade ago another hedge fund manager told me it's like if you ever gonna have a franchise or a small business have a pizza shop you're never gonna be a multi-millionaire but like you're gonna make at least like five to 10k a month just clipping off like like a coupon yeah yeah i mean there's merit to it um you know though i again i i think there was a lot of problems with me i i do i mean if you look at the classes that came in before and after me very very very few survived so i don't i don't think it was all me but then as you brought up too 2009 how much does the macro environment affect like whether you're actually running a business or investing in public trading yeah equities yeah well and and uh and the the real unfortunate thing is had i not started that business and just put it in public equities then i would have a lot more today uh but you know that's how it goes um but yeah i don't i don't know and and you know like part of the strategy was a big initial marketing push and uh you know you spend you spend a lot of your capital on marketing trying to get something out of the gate and don't get that many phone calls and it's 2009 and you know the the red lights start going flashing for lack of a better term so but you made it you made it through yeah yeah yeah yeah but then what about uh you just went and revisit those stopping grounds of chicago in summertime and did that beautiful you know lake geneva wisconsin and wisconsin lake summertime things did you miss the midwest yeah yeah the midwest is dope uh i don't miss the winter at all but uh i i love the midwest i love the people there chicago chicago's like my favorite favorite city in the world um you know there's i gotta go back up there's some guys that i want to meet uh that i didn't get to see but yeah yeah the midwest is fantastic you know i as a function of being there i kind of happened into think or swim and that was my introduction to options and uh you know when i i saw tom uh sasnoff and he said you can come trade options anytime uh so you should probably not do it right after law school because you can just do it another time and why don't you go get some like actual experience uh since there's no barrier to entry here and i you know i was i was grateful for meeting him i was grateful that i got into that learning community and i think it put me on the path that ultimately i went down which will probably end up in indexing and going and figuring out how to teach yoga to people or something i don't know where i'll end up trying to think of like what form of yoga i don't know if people are looking at me they're like you're not teaching yoga dude well no was it that the former wwe he had a wrestler has his form of yoga there's their surf yoga there's goat yoga yeah i'd do golf yoga i you know it's interesting like the more i i talk to people and the more i get into this i i don't i think one of the reasons that i don't have uh an asset management business is i'm i'm a little bit worried about my own discipline the other is that i'm worried whether or not anybody knows anything uh and you know that's where i think you and i connect a lot it's like i just think there's a lot of merit in uh like a permanent portfolio and acknowledging that no one knows anything preach brother us so could you go this way i love talking when you talk about tastytrade you have a very nuanced opinion like post tastery trade you see the kind of problems with hd trade and maybe getting potentially getting clients over trade or trade these weird structures and structures are not a strategy but you also admit the nuance of like they do a great job of education yeah yeah well it's particularly hard for me to you know uh look i guess um i don't think i think options in retail's hands are like giving gasoline to people and telling them to run through fire uh and then i think it's it's a tad disingenuous when that blows up and people are like well who could have seen who got hurt like well i mean it's not like that [ __ ] hard to see uh on the other hand i'm not sure that i agree with saying like from a regulatory standpoint you can't do this right like i i uh i don't know that i'm how do i want to say this i'm not sure that i'm not opposed to saying that but i'm not sure that i'm opposed to it like i'm very i can argue both sides of that so uh given that i think that tasty trade leads with education and i respect how they do what they do um and i think that if you are going to give people uh you know gasoline it's very good to teach them the consequences of playing with it and i think that that tastytrade does that in a way that i respect and you know when i met them it was think or swim but i i think the ethos is the same today yeah and like you and i talk about it's like who are we to tell people they can't go to vegas and gamble or do whatever they want their life like do whatever they want but my one of my favorite parts about finn twitter or vault wit is people like ben ifer or chris abdelmacia people like really geek out about their options stuff and they start asking them questions and first things they say is like like don't do this why do this like it's not for everybody it's it's like it's a terrible way to grind out like a mediocre living well i i don't know uh what their livings are like or what they're saying but i i would tend to agree uh that not doing it is probably the uh answer for ninety eight point seven percent of people and nobody wants to admit either a lot of times you can express the trade better with linear instruments but it sounds cool to use options yeah i you know i don't i i i had a conversation with a jim carson and he was a cool guy to talk to because his his view of like the options market is the underlying right like that's actually the mathematical like when we were talking about i want a dcf his view is basically like the options market is that right it gives you all the probabilities of the outcomes um and i i really liked how he said that uh i don't know how to you know put that in my iq uh and how to use it but i i think i understand what he's saying and i i think there's merit to it and um i i just think there's so few people that can actually execute option strategies profitably that it's best left to the pros right and the tech stack between the pros and amateurs is a huge delta that people don't realize they have teams of phds yeah that you can't have at home and and and just even working the orders like interactive brokers versus professional setups like the bid-ask spreads and everything commissions et cetera people don't realize kind of what's against him when you talked about the podcasting biz earlier you said something about almost hiring analysts in your mind were you kind of maybe thinking of going their direction i think maybe the oshags had started doing this like deep dives on on single name equities is that what you need analysts for or what were you thinking uh i'd i'd kind of like it jamie you know how rogan has a jamie where i can be like okay like look this up uh you know i i wouldn't mind um like uh return i i would like uh to be able to have a conversation with somebody like i go into these conversations without knowing what they're gonna talk about and maybe that's uh not a good idea or maybe it is a good idea but it's the idea i had it's hard to have somebody talk about a name and not have really any clue what's going on also like pull up you know what the financials are but maintain in the conversation like it'd be nice to have somebody in my ear at least say hey you know return on capital is has gone down in this business for a while maybe ask about that or something like that right um that's that's some of what i'm thinking about some of it too is like just doing background prep uh it would it would be helpful to have somebody help me with the time uh to do that so we're gonna it's gonna sound like we're playing the world's smallest violins here but as as fellow podcaster the amount of energy it actually takes the podcast is is very different than people realize and you have this really weird energy after it's really this bipolar energy you have like a manic energy like you have tons of energy and you're completely exhausted at least this is for me and i can't even hold like a thought in my head it kind of evaporates for a few hours after how do you maintain do you have well do you have a similar experience and then how do you maintain your energy around producing these paths not well with your regular light yeah not well uh i i would say that um i leaned in heavy into making sure the pod was was good i i think um i think i'm probably going to reduce the cadence or at least make it a little bit more abnormal which people may or may not like but i uh i think i need to focus on like what makes me happy um more than like putting out something every thursday if that makes sense like i don't think putting something out every thursday is the way i i'm going to sound like david zazlov from warner brothers i don't think that the amount of content is going to matter nearly as much as the quality of content and i think that uh just making sure that everything is high quality is important and you know when i when i set out to do the pod i wanted people to be comfortable talking about like mental health issues or some things that have gone wrong in their life because i felt like so often podcasts are discussions of everything positive and i i feel like life is not that uh and a lot of life is figuring out how to how to persevere in times when um you know things are not good and i have successfully accomplished that and i i i guess i don't know what the next chapter is for it uh and i think i think trying to focus on the cadence of stuff coming out is the wrong focus that's the only strong opinion that i have right now how do you think about the trade-off between being very well prepared versus following the securities angles and offshoots that a conversation can take i think it depends what you're doing uh i don't like not being prepared in finance because i think there's so many shills that you've got to be able to at least call somebody on their [ __ ] now if i was critical of myself as a host which obviously i'm perfect but if i did have a criticism uh in the beginning i think i talked a little bit too much about me i think i'm better than that now uh or better at that now um i i maybe don't push back as much as i should um some of that's a function of you want people to come on your show you know you don't want to uh be combative all the time but uh you know we talked uh the one show that i had with an awful sonalla i mean you know uh i don't know whether or not he uh well here here are the facts that i know i know that there is an allegation against the company he worked on or worked at that they were a ponzi scheme uh i know that i read the complaint and the complaint uh is pretty damning and i know that it was a small shop that had three people and i know that when he was on my podcast he claimed that he was uh responsible for risk overlay uh what i am unsure of is the probability that all those facts are true and he had no idea i find that hard i would put that probability at pretty low that you would be responsible for risk overlay but not know that your shop is losing a ton of money um and it's a ponzi scheme uh so you know like i would like to prevent uh getting defrauded like that again uh if possible and um you know if uh if if he ever wants to come back on uh i would be willing to have a conversation with him but i would pepper him with a lot harder questions uh mostly because that episode would not be a finance episode i would deem it more of a entertainment slash follow-up episode um so you know i don't i don't know and and there's just so many like the you watch people go through now we're watching people cycle um and i guess at the end of it maybe you find out who's real but uh there's just a lot of people that got attention over the last cycle that maybe didn't deserve it and um i don't know what responsibility you have as a podcast host but i'd like to to take mine i'd like to do the best that i can i guess is the best way i know how to say it uh and i feel like your reference requires preparation well it's not just preparation like you don't have a team of investigative journalists to have gotcha journalism to find out if somebody's fraudulent or not i mean you can do as much background as you can but somebody that's good is going to going to figure out a way or where but also like in related to what you're saying i think it's the dichotomy between an interview and a conversation where you said you needed to talk about yourself less but that would be more of an interview yeah where i always loved you had more of a conversation yeah no i think that's fair uh but you know like when you came on people were like i wish he talked more and i do too it's you know i just we talked i don't know but then we went to the kitchen and i ate cold chicken over a sink sue me come on man you're gonna blow both of our spot now because i have to i have to admit that we found out we both like to stand over a kitchen sink and just shovel a cold chicken that's right why because it's dense in protein and it saves a lot of time it makes perfect sense to me i don't care if it's disgusting to something and i admitted to it last time sometimes i'll get my ass saladed i'll just create it i'll grab it in the bin grab a handful of regular shove it in my mouth over over this thing makes perfect sense to me exactly we're just two lunatics so you kind of referenced it earlier and we've talked about many times um reading what buffett says and watching what he does but if i think about there's this triangle right and this is related to your just taking a family trip it's like you can either be the world's greatest value invest you can be a great husband or you can be your great father yeah like choose two out of three do you think that's basically the trade-offs uh yeah i kind of do i mean you know something that um god i'm kind of afraid this is [ __ ] weird but i'm gonna say it but i'm afraid to say it because i'm afraid of like what the algorithms are gonna do to my oldest kids college applications as a result of the conversation that we're currently about to have but like um my oldest uh is now eight um and he's uh he's got add and i think it i think it's hard for him to accomplish tasks i see a lot of myself in him um but that like that should not be as hard on him and i think it's going to be on me to and my wife but uh you know he needs a father too to be there for him uh more than you know selfishly maybe i would like to be right um and and there's only so much time in the day so uh you know the one thing that i know about myself is if the choices between being there for my family or working more i'm gonna sacrifice work at this stage so that probably isn't fantastic from a marketing standpoint but it's also the truth um so i don't know i got to figure it out but yeah i do think that that's a lot of the william green and i talked about this um he came back on and he said that he i i think the story is that monish sent charlie the book and then charlie's response munger was that like one of the commonalities that he saw among all the good investors is how dysfunctional their personal lives were um you know i i kind of get it but i don't know that i want to live it yeah i think that you know when you and i first had time to hang out in person years ago it was you know i think a rough time for everybody but it's also you know like you know cove it's going on we i don't think a lot of us realize how much a toll that was taking on a subconscious you know launching businesses and running businesses during drinker drinking cove but you also had a lot of um like personal stuff with extended family i don't want to get into and you know we're walking along the beach talking about is maybe the only goal to raise decent human beings yeah like is that okay is that go is that good enough yeah yeah uh i think so and then the other you know i don't know the other thing that um you know i don't know i had featured uh kyle cernara and you know people were giving me [ __ ] about featuring a micro cap guy and um i'd still feature him i mean i i i've now known him for over a year and a half or whatever and uh i think it was the right decision i i still go to bat for him but you know i still get people that send me like his uh the performance of his stocks right it's like you know i just uh i don't i don't know uh [Music] you know he that episode in particular gave me a lot of [ __ ] and um it's like i here's a guy that was doing my perception of what i thought i might want to do someday and uh i like featuring that guy right uh and i think some of his stock performance uh can explain how hard it is to do that right i mean i think some of the situations uh he's inherited or or has bought into have been really tough uh i think they're doing the things that i would do in the same situation but um long story short it was just kind of one of those times i was like what the hell am i doing all this for and i think if i'm not mistaken wasn't it during 2021 uh the last time that we met i think it was and i think you were like dude you should probably just like sell everything and go into some all-weather fun then that would have been great financial advice i give a terrible financial moment that was just that was just luck or your fault you're right i'll tell you the other thing man that that was wild about that time is uh mike mitchell and i we went to new york uh we did like a happy hour and after the happy hour we looked at each other and i swear to god that this happened we were like we should just sell everything like there's just the mood was like euphoric and um i i don't i mean i know why i didn't right i didn't one because i wanted more right that was the greed two i was like well [ __ ] if i go into cash and everything doubles from here then what right then i've lost a lot of wealth and there's no guarantee i mean i know that people will say like through history there's always bus after bubbles but that doesn't mean there always has to be right i mean i don't know what the total n is in this in the uh survey right but like since we've had a modern financial system what you've got like six is your sample size or something for crashes i may be smaller but it's definitely not 30. so um it's just kind of wild to think back to that time and then to look at what's happened since and be like oh it was all obvious in hindsight you know yeah some of it was but i'm not sure all of it was and i i bring up those first times walked along the beach because i also was telling you stories about my arranged emotionality as well but do you think part of it is just making me think about when we're talking about this like having a daily p l and then a lot of other stress and anxiety like is is maybe a terrible choice i don't even know how to log into my account right now and i don't care uh and i think it's actually probably made me quite a bit better as an investor and i'm certain it's given me a clearer mind um so that's nice that's the classic coffee can portfolio but so you might is that the answer so i brought up all those times from years ago because i wanted to say that i've noticed in our last several conversa for lack of a better word you seem a lot calmer yeah so what is that attributed to like what it what are the different things you've done i mean it sounds like maybe not checking your portfolio everything no it's helpful what else i don't know man i think some of it's just kind of becoming a man uh i mean i i think like you know the some some feedback that i get now when i talk to people is they're like why well i went through a period on value after hours where i was kind of angry um and uh you know i'm sorry for that to anyone that's listening but also like [ __ ] the people that made me angry um but it was like i felt like i was getting trolled and i felt like i finally knew who i was and i felt like i was beating my head up against a wall a little bit um and then i guess uh you know toby and i had a conversation after a show and after that conversation i kind of like thought about why i'm doing any of this um and i i think that i've just stopped caring as much uh and i've stopped like trying to you know like my twitter feed is my twitter feed uh it's not you know there's i'm not some thread boy i'm not trying to build some audience uh i don't give a [ __ ] if people don't want to see my hip-hop recommendations though now i've started to post in the hip-hop community uh because i do i do recognize that can bother some people um but like i i think uh i've stopped i think i'm more comfortable with the internal validation uh though i've got a long way to go i still i still feel like i am not nearly what i should be but the external validation i think i've i've let go of a fair amount of do you think it's possible to ever have the negative comments not have at least a tinge of sting uh probably not i mean one of the things that i did at least during value after i was i stopped reading the live comments which helped i mean the live comments and some add is a bad combination on a podcast and it wasn't quite and i realized we can't look at them because because they would not listen to each other yeah well that was just distracted and then people would come at me and then i'd respond and then it's like i'm talking to one guy on youtube rather than like an audience yeah i was in a weird spot so i'm glad i'm out of that uh but i don't know man it was it's been a it's been a wild ride and then i hopefully speaking of hip-hop that we were a slight uh uh influence or inspiration for you changing up your intro music you think that we were cause we were using hip-hop on pirates of finance and hopefully that was one of the influencers i don't know that that was uh i i don't know that you guys influenced my my music i do really want to potentially do a riff on a two change you've got me thinking about whether or not it's the right uh intro music that is a hundred percent factual um and then because we haven't talked about it what did you think of the kanye documentary oh i liked it i you know he's uh yeah i talked about the mental issue i think i talked about the mental health thing you know um i mean my dad went through a manic uh episode so i have uh a fair amount of empathy i think for people that are around people that are manic um and i think a lot of people can look you know at kanye and i mean look i i it's it's very very complicated and without knowing the situation uh i obviou i don't even know how to opine on it but i think that that documentary did a good job of showing where he came from to almost where he is um and i think that if you have manic tendencies in your body i can't imagine how hard it is to get that famous like that amount of dopamine with any type of mania seems like a potentially very toxic combination and i think at least parts of his life have seen that toxicity in a way that documentary is perfect for people like like you i mean it's like hip-hop uh mania striving to be to do something great yeah it's like all of those then you and i've talked about the hardest part about a manic state is you can't recognize that you're in one yeah even if people are telling you that you're not listening and you think you're crushing it yeah not just yeah not just that you think everybody else is insane right it's like oh no i'm not i'm not the one that's crazy you're all crazy like i i'm the one that sees the ball um so yeah i thought that that was quite good i don't know i remember it's great it's part of it too like do you think we subconsciously document via podcast or whatever so almost like kanye would go back to those days before before he really made it and you can look at that trajectory i i i do like having um i like having the record right i like being able to listen to stuff and be like uh i didn't really sound good there right or i am proud of that um it's fun man i like it i like audio art uh it's something that i enjoy a lot well you're very good at it and and what i've learned is my biggest mistake is doing podcasts for like you and corey and your beautiful baritones like i just sound like an amazing little liner dude i was listening to flirting with models the other day and i was like god cory sounds good it's insane it's upsetting good looking and good sounding i mean it's it's a guy's triple threat yeah he deserves a uh like a helium voice that would be so good wouldn't it in talking about horse racing and a little helium uh crypto horse racing and helium voice that would be hilarious um so you got to get back to your family i'm good is there anything else you want to touch on no we can chat i got i got 15 more minutes if you need the material i know how it is it's cold in these streets i don't need any material i hope this records that's a man you just give me a panic attack yeah well i hope it does otherwise you gotta talk again which would be totally fine with me but i've been down this road oh i have actually a great question for you that you're on the few people can answer this is you know you and i talk a lot privately but as soon as you hit record it's always gonna be slightly different yeah and especially for me that has like compliance in my and and back in my mind like how do you get good at being yourself well the nice thing is it seems so weird i don't have compliance that helps uh now you know i don't know what that opens me up to but i've had attorneys that have told me i'm pretty good uh so i i try i mean what i would what helps i what i tell people is i'm like i'd like you to just talk and if something comes out like any time i hear the word returns i just know to flag it and cut it um but i i try to make sure that like people know it's not like a gotcha pod if you say something that you don't agree with necessarily like then we have to talk about cutting it because i'm not sure that i really want to cut that because that's like an honest moment but if it's something that's like you know career threatening or something or it's against compliance i'd always cut that um and i think that helps you know in the beginning booze helped uh now now i don't drink uh usually when recording um and i'm gonna try to drink a lot less i may try to get a little high on some but we'll see if that works uh but i don't know man i'm pretty good at talking to people um you know i just have to figure out what that means and what i want to do with it that's the part that i'm not that great at yeah i think about it in the sense like i'd hate for somebody to meet me in real life and be like wow you're so different than you are podcast right but like but part of it is like you you could be yourself but you always have to like turn up the energy a little a little bit because we have to have a conversation and you can't have dead air we're like when you and i are sitting and hanging out we might be staring out the ocean for 15 minutes and i'm a lot quieter yeah in real life yeah no doubt um yeah there is there is pressure to keep the conversation going sometimes when i listen to myself i'm like dude can you finish a thought like why are you jumping to the next thought before you finished the thought what are you doing but oh the other thing i want to ask you about that forgot about is um you have this rental property now but for a while you're going to build your family a new house but let's say you put a pause on that is that a macro call no we're still building it we have the brewster household right now has a ton of stress and maybe part of my maybe part of my calmness is just like i hit enough stress that i was just like [ __ ] it um no we're still building it uh you know let's see if we can uh we'll see if we can keep it uh i hope so if not i think it's gonna be a reasonably good spec property uh of course that's easy to say before you go to sell something um but i think that house we bought that land really right um and we bought it in september 2020 and i i think i think the probability of losing more than 10 percent on that build is very low and i think the probability of making 50 uh could be like i i don't know it could be as high as 40 percent so uh you know and then i think there's the the rest is a range of satisfactory outcomes also but i remember after you bought it you were you were texting me almost like every other month about the lumber prices going down from what the lumber was has that come back down for you yeah that did i mean we you know we missed with it we've had like real uh we missed two concrete deliveries and that's caused eight weeks of delay the cabinet pricing that we just got is insane um so you know let's put it this way if if it is worth the replacement cost it will be a good investment if it's not then it's going to be a horrible one but i know florida real estate reasonably well and i think this is going to be pretty you okay i don't think we're gonna have a disaster here yeah hopefully not that's right well and hopefully are you are you able to get like contractors now i know for a while like it's impossible yeah but we've been building i mean we bought the lot uh september of 2020. so we've been in the process for that long and we won't be in the house for at least another year and that's a long time man that's what i was gonna break up it's like about stress like you're saying your head hitting so much stress you're just calm and i was like i remember there was a er doc that wrote this 10 rules for life but i only remember three of them uh one was never get on a ladder if you could pay somebody else to do huh uh roads are for cars only no bicycles no motorcycle and then after you retire don't build your dream house unless you've been in like construction in real estate your whole life because like the stress of construction and dealing with subcontractors yeah it's just gonna just kill you the nice thing is my wife handles most of that um and look i think there's a good shot that my kids like get to grow up in that house and that would be really nice but uh yeah i if i had to do it again if if i had to tell other people whether or not i would do it i would tell them probably not which is why developers make money right it's actually worth the money to pay somebody to do this for you uh there have been a lot of things that as i've gotten older i've been like ah that's stupid to pay for and now i've realized like actually they're removing a lot of stress from your life so we'll see how it all goes um you know i don't it's something that i'm i'm just thinking about like part of why i am so uncertain i'm reading i've got right here and i think you'd like this it's called the psychology of intelligence analysis i think i think jake taylor recommended this book and when you hear it think like cia and uh it just talks about like how many mental errors are made in intelligence communities because of preconceived notions and biases and not seeing what's right what's there right and i'm simultaneously listening to thinking in bets and the two have me convinced that i don't know anything did you ever see the documentary fog of war i have seen that that is robert mcnamara yes that is a very good documentary that's what i remind you about the intelligence and an analyst is that like during the fog of war even if robert mcnamara is getting the best data in the world it's still decision making no opacity yeah and everybody's making mistakes and you don't know what's good data what's bad data how do you aggregate that yeah but everybody thinks that like politicians or the pentagon has like perfect knowledge and perfect foresight it just doesn't work that way yeah that's right and and at the end of the day everybody else is going to look back and the future or the the past will look like it was certain but at the time like who the hell knew i we went to in dc we went to the spy museum and they have a very cool exhibit like towards the end where you get to see uh how they how they deduce that osama bin laden might have been in the house that he was in and you get these facts like okay there's two gates right and they're both of the walls on either side are 12 feet tall or 10 feet tall whatever you can't see over them who would want that uh the house has a balcony but there's a huge wall in front of the balcony who would want that right normally you want a balcony you want a view the windows are boarded up like why would somebody board the windows uh you have a satellite but there's no telephone wires right so it had its self-contained internet uh on that property who would want that and like they they take you through the analysis and according to this uh they said obama was only 50 50 that it was osama bin laden like he knew that it was probably somebody that was bad but he didn't like you know he didn't know that it was bin laden um and one of the other advisors that was in the room said that he thought that the evidence for the weapons of mass destruction was stronger than the evidence that osama bin laden was in that house right the weapons of mass destruction in iraq and that turned out to be wrong so like you know it all goes back to just index some sort of overlay in an all-weather portfolio it's so perfect because could you imagine you imagine being obama and having to make that decision no i can't either i mean i think you probably i think if i was in his situation i would say okay there's high probability that there's some bad dude there but you're flying helicopters into somebody else's country and taking somebody out like could have gone real wrong and those are like extremely decisions that have real consequences right not like little consequences yeah so when you're talking about i picked up i picked up equity and i could have traded it better yeah yeah that's right yeah so i think that's actually the the perfect place to end this i'm just thinking about that fog of war decision making a real path yeah and perspective it's like you and i could chill out a little bit that's right that's exactly right it puts things in perspective so thanks for having me man uh i appreciate you talking to you yeah i'm glad we could finally hit record on one of these then share it with people for the six listeners to find us entertaining that's right shout out to you six thank you thanks bill all right have a good one man thanks for listening if you enjoyed today's show we'd appreciate if you would share this show with friends and leave us a review on 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Road Trips and Scuttlebutt – Bill Brewster
Summary
Transcript
[Music] hello and welcome this is the mutiny investing podcast this podcast features long-form conversations on topics relating to investing markets risk volatility and complex systems so you just called me from the car a few days ago and you're on this epic road trip with your phone family across the country so tell me about what you saw what you're exposed to what you learned what's your takeaways for america these days tell us about the trip i don't know man i you know we saw um i got three kids and it was fun for the oldest to see dc i got to tour um my mom's sister was married to a captain in the navy and his father was vice admiral and his father has a uh destroyer named after him that is going to um spain and we got to tour that and that was pretty sweet i like that uh pretty wild to walk a boat that cost four billion dollars in today's dollars uh which are not the dollars that they used to be but still still a lot nonetheless um i'm sure the size was overwhelming but like what were like little details that you noticed and i'm sure you noticed that that were really surprising to you or stood out to you uh it was just really cool to stay like to go down into the command center and the woman that uh she's one of four people that defend the ship and she was just telling us like you know there's 96 missiles on there and then they've got these bullets that i guess are five inches around and they're like three feet tall and that's what they fire up boats um if a boat is coming after him it was just you know it's i guess the other thing is uh the um satellite system that's part i forget what it's called maybe it's the aegis uh edgiest or whatever uh satellites it's like a mesh satellite system all the boats communicate with each other it's just wild man uh i'm glad america has the military we have it made me feel safe uh even if that's a false sense of security it's a sense of security could you help yourself what do you think about like peter's eye hand and like a blue ocean navy you know and us protect the waterways yeah i you know i i just think um i think it's incredible the commitment that people in america put uh you know they literally put their lives on the line right for us and that lifestyle would absolutely suck when you're out at sea and you know it's just a lot of people that um i don't come in contact with too often and it was nice to see and i i guess one of my takeaways is driving through america and around and whatnot is uh i think i understand why we're a little bit more divided i don't know i guess i i get i think i understand the red states and the blue states a little bit better i think people if they had the chance to get in the car and drive around they might they might understand it a little bit better at least i won't come back to that dif division divisiveness if i can't even say the word but uh what are some of the other stops in the itinerary without doxing your family members oh it's all good we did it we did savannah uh virginia beach dc then ohio and amish country for a night or two nights stayed in a tree house and had a tornado warning in the tree house that was super fun where you don't want to be in a tornado warning uh and then uh and then we went to lake geneva and then we had a wedding in chicago and then i drove back so it was a good eastern loop how were the how are your boys on the trip were they like are we there yet or are they excited they staring out the window they're playing games they watch movies the whole time yeah they're appled out they uh they have their ipads for in case of emergency break open ipad and it was an emergency so they were actually quite good what did you think they enjoyed the most i know my oldest like dc i'm certain of that uh my my youngest said that his favorite part of the trip was the soup in lake geneva which was good soup but uh i hope that's not actually his his response and i don't know what my middle would say um i don't know but we had a good time it was good family stuff so part of it when you were saying thinking about the politics of the country did you feel is just different from your community in florida versus what you saw driving across the country and were you reminded of what it was like back when you lived in chicago or like what was really stood out to you to make you think about that you know political opinions and the the frictions we have in this country well i've been thinking about it a decent amount anyway actually so chicago i lived north of the city i lived in a town um called wilmette and i think i think it's not unfair to say that it's pretty blue uh where i moved in florida is quite and i've been listening to the audiobook that david french wrote called divided we fall and regardless of people's opinion on david french i think that the book has a lot of good data and it's just like um even even within counties now if you go if you break down county by county there's just fewer purple counties than there used to be so there's just like people aren't bumping into each other as much and i don't know man i was just driving through west virginia and i couldn't help but think like you know i kind of understand why somebody living in rural west virginia may not be too into the idea of the federal government uh you know mandating what they can and can't do uh whether or not that's a valid view is sort of everybody's own idea and they can vote uh as they want but i just think a little bit more empathy goes a long have you ever seen the documentary the wild wonderful white soul of west virginia no oh man it's an unbelievable documentary i want to say like johnny knoxville was in baldwin maybe a decade ago and i know it doesn't represent the total people of west virginia but it was about this one family of like coming from bootleggers and then now doing with pills and everything and it was just it's just a really fascinating documentary i know about rural west virginia if you get a chance to see it yeah i mean it's dude it's a totally different life you know uh at least it appears right uh i didn't i didn't spend a ton of time but i i've done a couple road trips now and each time i've gotten a little bit more uh i guess appreciation on my perception of where people are coming from is probably the best way to say it but my perception is almost certainly flawed you were mentioning almost like gerrymandering of districts so we don't have the purple anymore but do you think that's what has changed like i always wonder when people will say that that we're in such conflict now and nobody can get along i'm like when has it been any time different any time in history yeah i don't know i mean i i think uh i i don't know but i i think now i guess i guess what i would what i fear uh today is there's there appears to be more of a fear of the other party than a acceptance that we're all americans there's just a lot of negative politics going on and i'm and i'm kind of worried about what that does for us but you know these are big questions and i don't have the answers well i i definitely don't have the answers either did you uh think of any like peter lynch ideas like in the sense of like thing things you saw when you drive around there in the country that made you think about investments and equities no the only thing that i keep thinking about is that i should index because i'm a bigger idiot than i used to think i was and then i should have some sort of overlay to hedge out tail risk that's uh why do you think that i keep coming because i think i have a sense of how dumb i was right i think when i was younger i read you know buffett and value investing and i didn't even understand the buffett like what buffett was saying and what i was reading were not the same things but i thought they were the same things and as uh as i was younger i was convinced i knew the answers and now i'm not even convinced i know the right questions and isn't that just age yeah i think so but it's made me terrified of what i don't know everybody always says like that with age comes wisdom and i don't i don't think it's just it might not be that way especially for males it just might be a loss of testosterone and it's not that you're wise you're just so dumb when you're younger yes and then now you're losing testosterone so you're not as aggressive yeah i think there's a lot to that a lot to it and the other thing that i think about is like um you know i i uh for my background like i i only came into finance i think well i shouldn't say only because i do enjoy it a lot but one of the reasons i had to figure out what was going on is i inherited something or you know some wealth uh and part of what i inherited is like this massively concentrated position in microsoft and uh a pretty decently sized one in berkshire and i think about like okay well let's say i'm really doing this for my kids right so like let's say i i continue to pick single stocks and i have some winner then they gotta inherit some massively outsized position it's not like that fun it's it's uh you know if they had an index it'd be much easier on them uh so i don't know all all uh all answers are pointing me back to the fact that i'm pursuing a stupid path nah then you know the cycle continues give them a concentrated position for them to deal with yeah that's fair and then don't help them out yeah that's fair but then they'll be like i don't know why dad owned this dad's you know whatever yeah but but so one of the things that you and i always talk about privately and you kind of hinted at earlier is a lot of people read buffet monger etc and they they try to copy what they do and they think it only applies to value investing but you and i always talk about watch what buffett does not what he says so what do you how big do you think that divergence is and has that changed in your opinion the last few years well i think i think that the thing that i have morphed the most on uh is that like if you don't have control of a situation then like betting on on something because it's cheap is probably just better left a computer and i'm not sure that i think that people have the ability to i mean i'm sure there are some value managers that can do it don't get me wrong but i just think that there's so many adverse incentives in a lot of the companies that currently screen cheap that they're either sort of like a crappy company qualitatively um or they're like management uh is just kind of not there to reward shareholders um i just think it's a really tough game to do as a person looking at value stocks um i think all the games are tough to be fair but i i just think with all the with all the money and private equity i really think especially if something small and it's cheap uh there should be a huge rebuttable presumption of like why am i the person that found this and not you know i think the first question should be why has this not been taken out yet and then why is it this cheap and i think more often than i used to appreciate there's really good reasons how much do you think and i don't want to beat a dead horse but the idea of technology with value investing is like a lot of people forget that buffett you know is going to library writing to companies calling companies now with technology you can run your screeners everybody has crisp data there's no edge in that is there if it's that easy that's why it's almost been armed away like what are your thoughts on that yeah i think there's some of that i think some of it's too like he would get control and he would liquidate companies and he would divert cash flows and um you know the he uh i just don't think he hasn't my perception of his track record is not a guy that was buying value stocks that couldn't control the outcome and i think a lot of people read him and end up in that path and the the way that i have um sort of changed my thinking is i i think it's better left like i said to some sort of etf vehicle or you know whatever that can can do the screen and rebalance at the appropriate times and you're not paying the taxes on the rebalance and over time maybe that works i wonder you and i have talked a lot privately about the idea harry brown had this permanent portfolio but people forget that you also had a variable portfolio so he said put 80 to 90 this boring permanent portfolio that kind of covers all the global macro environments but he realized that human nature and behaviorally we need to make our own beds and so you need like 10 to 20 percent of our portfolio so like you're just saying almost go almost like just like you're half joking and be a defeatist about saying index but would you maybe combine that with still still your own proprietary security selection because you need something to do maybe but i don't know if that's a valid reason to do things right like needing needing purpose is not uh that doesn't pass the like why should i do this test um i i guess that that i'm not uh it's it's been an interesting 24 months because i i think that i made a series of reasonably good calls for the right reasons i think i obviously benefited from liquidity exploding but um you know i was loud on on this idea curate retail and i still think that was a really good bet to make but you know i didn't sell it when i probably should have when i when i underwrote it for the in the beginning i thought it was maybe worth nine bucks it gets to 11 and i convince myself that it's worth 20. and then i round trip it and then there's a bunch of cash that got distributed in the interim that now i have to write a tax bill on because i delayed my taxes and uh subsequently i've made some some mistakes and uh you know now i'm underperforming and i get to pay tax and isn't that fun so it's just kind of like uh you know it's it's um i i felt a little bit of the top of the mountain and now i'm feeling the bottom and some of it's managing emotions and some of it's just being like is this even worth it yeah it's funny how you have multiple emotional swings depending on how your piano is but i remember my my problem is always like when you come out with a curate thesis i have all the behavioral fallacies in the sense that like i'm like he bill's right this is great right curate's the way to go like like i'm gonna fall for it every time yeah so i just try to set up structures that will like prevent myself or position size it's so small that i can't hurt myself because i'm i'm liable to fall for that great story yeah no i i think um i don't i don't know how not to fall for it yet um i do i do objectively think that was a good bet still i i don't think the result i think that uh i can criticize myself for holding though at the time um you know i i guess one thing that i've been thinking about and it's related so i don't think this is totally jumping topics but um you know there's there's a point in any thesis where the facts have changed and knowing what that point is first of all there's probably a decent probability that uh that the price is going to show you that the facts are changing um but uh you know knowing when that point is is very difficult um and i and i think you know part of this game is continuing to try to set yourself up in situations where you're getting rewarded um for taking the bet but you know getting out of the bed is also tough and i i think uh the idea of never sell and and all that at least in the equity markets got certainly overdone i don't think that that's uh you know in hindsight that's easy to say i i think you know i'm with toby and jake i do think that we've been fairly consistent that that's overdone but selling is really really hard man but selling or even buying like i i think about all the time like what if if you're a true value investor and you bought it 10 it goes down to seven you said some material or change so maybe i should rethink my thesis but if you still feel you have the same thesis you should be like doubling down in martingale right yeah right if i like to attend i should love it at seven but but you have all these fallacies on both sides they'll leave you to making a bad decision and then the sell side's even harder like you said but like i'm curious like once you have a certain amount of positions on how do you manage those positions do you tran do you trim do you do rebalance between them like how do you manage the position once you get it in especially when it's moved against you or it's moved for you are you working looking at a position in isolation or are you looking across the other equities that you have at aggregate portfolio i think the answer that i have uh that i'm starting to come up with is uh develop a source of mailbox money probably bet a little bit smaller than you think that you should and uh i mean once you lay or once i lay a bet um i'm gonna try to wait until it's blatantly obvious to exit and then have the mailbox money be my next source of bets um because i think there's a lot like there's a lot of times that it's just difficult you know and and i think unless the answer is clear the default position should probably just be to hold but i had like an index no i love this idea of problems yeah well except for i i love to have these bets and this mailbox money and how the two can feed each other you can have this amazing like virtuous feedback loop but at the same time i almost had to push back is like have you found any mailbox money that's easy that doesn't require management no it's like that's the fallacy too right yeah that is um but i i think uh there there are different asset classes like you know tobacco for instance may underperform but you can get decent current yield i don't know that that's the answer but there's there are things like that have you read like uh was it danielle paris's book and was kind of reassessed this idea of dividends and and if we're potentially moving back more to dividends driving value of equities or how do you think about that because you brought up the tobacco stocks yeah i don't think so i i once suggested that i thought that commodity companies should pay dividends instead of buybacks and the amount of people that pointed out to me that you can just sell pro rata and a buyback which i already knew uh i think that there's like a strong strong bias against dividends i happen to like the fact that i think that they reduce the amount of thinking that all the participants have to uh like it just reduces decisions which i think is a good thing now somebody's going to tell me or listen to this and say well so does selling pro rata i get that uh i just you don't have perfect information on when the buyback is occurring and i just i i don't know i kind of uh i'm old school man i kind of think even if it's a little less tax efficient some some cold hard cash coming back is a good thing yeah there's two things that makes me think about that a lot is you know a lot of people like you said try to show there's no difference between buy-backs and dividends but that's only because of the tax consequences because we changed the tax law on dividends but pre-world war ii this and this is what daniel perez's book's about is most investors used to invest based on dividends and cash flow but as the laws change over the years that's what makes us go for just growth instead of dividend but at the same time the one i deal with a lot of high net worth individuals and you may make a less optimal trade than somebody with a cfa would tell you but you want because you want cash flow a mailbox fund yeah and that to me is perfectly rational so i i think one way is like we just bought this rental house i don't know i mean i've got like a little amateur model or whatever but we'll see how it all it's all built on assumptions right we're gonna live there for a year and then we're probably gonna rent it out we'll see what rents i hit and the uh the budget to improve it is already over so there goes part of the cash on cash return but um you know we're gonna hold it and rent it out and i think uh over the long term the probability that i'm disappointed with buying that house is probably i think it's a good piece of real estate so i think it's low so it's not um you know some public market investment it's not i can't market it to people but uh i think it's going to provide me some level of comfort in my life that i'm going to value so it's probably worth a little less return if that's the case well it's also the beautiful thing about illiquidity and uh marked a model asset yeah right you don't have to take that hit and it's less psychologically destruct i was thinking about uh michael maubeson was on meb's pod reading his thing about it's just dcf models all the way down yeah and if there's anything is i hate is dcf models right because i come from a commercial real estate background as well and it's like you figure out your cost of capital you figure out your net income you then think about how big that delta is and then what's your fudge factor on the future of what could go wrong yeah you can't really discount the cash flows all the way back like you wouldn't have covet in there etc yeah i i uh i want i need to interview him um i i want to i wish i could figure out uh and i wish i just need to work on trying to figure out how to have a program that would bring me like i put in uh uh just the math right and then maybe some base case assumptions it would be nice to have a monte carlo simulation of like the distribution of ways that the cash flow could justify the current price um and then then i think i could actually visually see what the possible outcomes are now i i have not run tons of monte carlo simulations in my past and i'm sure they're only as good as the uh the inputs on how wide the distribution is and how quickly yeah i mean like there's a lot of problems in that approach too but i think that uh it would it would get a lot closer than a lot of people and myself historically have just sort of like tried to back into what what a stock gives you i'd like to have a wider range of outcomes without all the time uh that it takes right that i could yeah like to me it's it's like scientism it's it's a false conceit of science and and getting an accurate number and a dcf when the only thing that really matters is your margin is safety like if you ran the monte carlo simulator you would look at that and so and determine your margin of safety but what we what we're not admitting is that is there's a bit of a finger in the air to figure out figure out what your margin of safety is is that going to accommodate any future you think can happen and you're just guessing yeah yeah we don't admit that yeah but that is objectively the truth but then that's what happens that entire industry of value investing in tcf models well i mean look i i think um i think that there are certain i do think there are certain spots where there are situations that people either don't want to touch or can't touch or you know like it's easy to say this in hindsight but i i said this to myself at the time i did not act on it so you know words with that action aren't worth anything but like when kramer said you can't invest in energy stocks that's probably a decent time to buy energy stocks and then when when every single space on twitter is interrupted by somebody who's bullish energy that's probably a decent time to stop start trimming energy stocks um and i don't i mean that's just like one uh example but i i do think that there are like these times where sectors are untouchable and that doesn't make any sense to me um now so it's if it's overheated or it's going to run on forever and it can take it irrational long and you say sun like that's the problem with all of these quips as like they make in hindsight that makes sense but it never really works out in the real world yeah no it's a very hard game i mean you know i i don't know how many people that listen to this will listen to value after hours but like toby and jake and i are always talking about the valueverse growth thing and my answer is always like i have no idea like i have i don't know how long growth can outperform value i don't know how we're defining these things i don't know whether the composition of value has changed over time like i just simply don't know uh and it's not a very sexy thing to say because people like when people know things but i just i i just realized how much i don't know over the past i don't know how many years but i've just like i said i i i have far less confidence in making predictions than i used to well especially it's not a sexy thing to say when your show is called value after hours yeah you know how i feel about this stuff it's like it's why it can't be option c both why are they originally really just camps of value or growth it's why not have both and rebalance between them yeah well i think that's a i think that's a fair question um over the past decade i don't know that you've wanted to rebalance into value at all but i i do agree with you in theory but at least diversifying your exposures um thinking about this rental property i don't want to get all up in your business but did you use a loan to purchase it because i want to talk about like maybe leverage and stuff uh i did not to purchase it we're going to put some leverage on it uh post close so that's what i'm saying almost like we're saying figuring out dcf or like it's like you figure out your cost of capital what your rent what you expect your rental income net of all costs you fee a fudge factor there for margin is safety and then you think the biggest uh wins from that that people are really not talking about so much some people highlight it it's the amount of leverage you can get it's the mark to model and then using your renters to pay down that mortgage over there so it's a for savings as a leverage for saving mexico yeah yeah and it makes sense right i don't know how much harder than that but i thought things can go wrong you could you know have terrible renters you can may not be able to rent it and be sits vacant for three six months and erases three years of income yeah yeah but i think over time owning uh productive assets is the way to go and uh at least since the 80s having leverage has been a good bet and then you have the kicker of appreciation if you're living in a good community yeah which i i happen to think um florida is a structural winner whether or not you know people agree that's they're fine to disagree but i've actually put some chips on that bet exactly for putting money away in my office but like you said it's a it's a long term your secular winner what maybe some cyclical validity yeah yeah and and you know the key is uh we're not gonna get over our skis on it and we're not gonna put ourselves in a spot where we gotta be a force liquidator so you know we'll see um but that's yeah i mean that's that's kind of i'm just trying to figure out my way through life and uh it's it's weird man i feel like i have no answers anymore but that's uh it's the truth yeah that's my favorite answer i don't have an answer i don't know i'm just groping through here like everybody else yeah and and looking for like one you know i i think what i've come to appreciate um as i've gotten older that i think you know i've heard buffett say a number of times i've admired this from afar i like he doesn't um i think the amount of situations that he pays attention to and is just comfortable saying like other people can make money there like that that doesn't have to be my game that's that's like a really really tough skill to develop uh but i think it's a very important one and i i think uh you know part of why i'm i'm reiterating so much that i don't know any answers is i don't want to pretend that i know false answers because of how hard it is to change your mind um so i'm just trying to wait to see when i think i have an answer do you think it'll scream out of you uh no i think this i think this past six months has been particularly tough because i haven't had many uh like really good insights i do i do think rates are probably have peaked uh and i'm not in the rates or going up camp but my my confidence interval on that is like no higher than 60 percent so uh that's that's not like a resounding bet right i was thinking about what's the quote uh all a man's problems stem from not being able to sit alone in a room quietly yeah like you can't sit on your hands for a long period of time yeah and was it munger or somebody else no i don't think it was one girl talked about i just wait for the money sitting in the corner i just have to bend down pick it up and that might only be once every 10 years yeah but man that's tough like that is not easy to wait 10 years to do anything um and the other thing is the way those guys swing when they do swing like i just i don't you know that that would be a great way to uh lose everything for me i i don't have that mental capacity i was thinking about i think this ties back perfectly talking about mobison and dcfs and cfa's and all the value investing models i always ask those people have you ever run a business to know how difficult it is how difficult decision making is in all my opacity and you talked about earlier about buffett having control i wanted to go back didn't you do you own a flooring franchise like business describe to me what that business i didn't own it it owned me that's what i'm saying this is this is key yeah dude i first of all it was the financial crisis it was 09 and my dumb ass thought oh well if i come into the market when everybody else is going out of the market i'm going to own chicago i mean it was so stupid that i even had that thought given how skilled and well capitalized some of the competition was but um i mean just getting the ball rolling was so hard it was so hard to get leads at one point the company that i was at you know it's a franchise right so their their grand theory of getting in the door was they would give people if you would let us give you a bid we would give you fifty dollars in cash so people call up and they would say you're literally gonna give me fifty dollars in cash just to bid on my floor and i did this twice and then i was like i'm done with this but the idea was you know they had like this elaborate sales process uh and they had what they thought was some good technology to show you what you know your house would look like with a new floor and um long story short uh there was there was a i don't think i was good at selling the dream of the new floor i think that we had uh not the right inventory to do it and and more importantly in 09 like no one gave a [ __ ] about how nice their floor looked on a computer screen they they were not going to spend the money on a floor uh i mean so you know then it was just going out and pounding the pavement trying to get business to business referrals and my cost structure was all out of whack because i had to send you know stuff off the top line to the franchisor then the franchisor is screaming at me about i'm not selling enough and i'm like i don't i don't know what to tell you guys like this is actually a lot of our leads uh ended up coming from the company that is now uh angie's list but angie's list back then was a much uh i i'm gonna call it a better product i don't want the people that own angie's stock to get mad at me but it was uh it was like a really good referral source that had a lot of trusted reviews and if you could get an angie's list referral the probability that you were in a competitive bid was very low uh i'm almost certain they have since bought this company uh it's not service master uh but anyway it was the lead gen company that used to send us bids and that you get like three contractors they'd have to call they'd all call i'd be calling people at like midnight right i would get a lead it would hit my phone and i call somebody at midnight and they'd be like why are you calling and i'd be like because i just got a text i have to spend 50 on this lead to get the text and i know you're looking at your computer thinking of floors right now like i know it and then sure enough they'd be there and we'd schedule uh i had one of the higher lead to appointment conversions my appointment to sales ratio was was not good i think some of that was me well i think a decent amount was me i think a lot of it too though was my lead source uh you know being that competitive bid all the time i didn't have the cost structure in place to be able to really drive costs down so it was interesting man it was a it was an expensive lesson i wish uh i don't know if i wish i didn't do it i guess i i guess i i'm glad i did but that that was a real experience of getting kicked in the teeth every day and waking up early and sleeping at the office to have the privilege to get kicked in the teeth the next day i'm i'm i'm assuming the the cat model the customer i asked using costly model was like even though you're paying them 50 bucks it was like for every 10 for 500 bucks you spend you get one lead that give me five grand because that was it yeah that's that was the thought um but not in 2009 yeah that's right that's right i mean look i you know i will give them i think at that time you had to be really kind of crazy creative uh but the one of one of the issues that we had is i was like oh well i want to be in the north shore of chicago i for that product you don't actually want to be up there uh those houses are like too nice for that product uh i think i actually wanted to be a little bit further west um so i don't know that was that's uh that was a nightmare but but it was i don't like to bring up nightmares but you'll see where i'm going with this but like i assume but that that was really creative for you to pick up the phone and call immediately even at midnight oh yeah because nobody else has done that well working hard has historically not been my problem uh over the last i don't know four months some might argue that uh it is a bit of my problem but uh we'll see i'll get i'll get re-motivated here soon enough and then did you go with the franchisee model because the idea was they have lower failure rates yeah i my so i was coming out of law school and i knew i didn't want to be an attorney and i wanted to be an entrepreneur one of the guys in my in my uh family that i look up to the most is an entrepreneur and um you know through talking to him uh we we thought that a franchisor relationship would be good because they had some structure around um me i think uh still not totally a flawed idea but i would have needed a lot more capital to build out the right organization i'm dealing with it a little on the podcast right now this little shitty little business that i have that doesn't make any money uh provides entertainment for people but like you know we were talking to to really do it right uh i don't know i need to invest a lot and i just don't know i don't know that the juice is worth the squeeze um on that particular issue uh to really you know to do it right i need analysts and i'd probably need a marketing person and i need a booking person uh you know if i want to keep it like a smaller little niche podcast then i can probably keep doing what i'm doing but to try to like really blow it up uh you got to invest and i'm just not sure that i really want to do that well yeah it's it's a whole different question of entrepreneurship and biz ownership again where like you said sometimes you can just turn on the mic and you're good to go but like but even even then you and i've talked a lot about wrangling gas is always too difficult but like part of it it's a pain in the ass that's why i'm on your show you needed a guest and you're always waiting at the last minute are they going to show up i'm texting i'm getting on yeah so but part of it is like do you think about when you're building on a podcast biz you need like a bottom of the funnel business to drive them to or else it doesn't make sense to invest all this money in podca yeah i think uh i think that's probably right um and that's what i don't have so i got that going for me so you got to figure that out but you put a podcast your size well crypto money kind of went away but you could sell you can a decent amount of ads but you have to be able to swallow those ads yeah i mean uh i i just um i don't i don't want to hoe myself out for uh something that's not gonna be like a meaningful amount of money right so i've got really cool sponsors to this point uh shout out to my man rob koifman and uh and stream and uh my man uh nader offshore at bastier partners they've all been great um but like those are people i believe in and uh there's a couple people i'm talking to that you know can hopefully help me cover my costs but that's like you know that's not like a business right so the question is then what but you've nailed the model that i always say is like i have a lot of friends that won't do advertising because they think it's like it's all skeevy but if you build partnerships with people you trust and products you use it makes perfect sense but but it's a longer road to go down and you've done it so well well thank you uh i i hope to continue to there's uh you know there's certain products that i i don't mind uh talking about but yeah i don't want to like sell i don't i always use me undies because they advertise on all the podcasts i probably need to buy a pair of me on these because maybe they're great and then i wouldn't mind you you know hawking them but you get like a hawaiian shirt sponsor yeah that's right this is tommy bahama i figured it i figured it was right for your pod this feels like the right mood to talk to you in it's perfect but we should have coordinated outfits but i didn't bring up the flooring because i wanted you to relive your nightmares i bring it up for many other reasons and i love that you said that i always thought about franchisee franchisor relationships just because like it's the training wheels entrepreneurship hopefully hopefully you can't get too outside the lines and hopefully you can make a decent living but you can't really build huge amounts of equity but then part of it why i bring it up is is like all these people that run dss i'm sorry dcfs and they're like run hedge funds in our value ambassadors my question always like have you been entrepreneur have you owned a business because if you think back then you were saying would you have run a dcf model on your business and that would have given you like comfort no but nothing was gonna give me comfort but yeah we i mean we would we would weekly we would talk about the models and i was just like this model's so [ __ ] uh and i didn't mean to be uh fatalist about it but the writing was on the wall but you know probably within the first four months when none of the metrics were going the way that that they were supposed to be going from all the way from top of the funnel right forget about like lead conversion and whether or not customers are happy this is like from the beginning the marketing was not hitting um so yeah that you know i don't want to extrapolate too much off of one experience that i wasn't really uh prepared to succeed in but yes i i generally agree that um that it it can be tough i i do think that there's merit to the idea of there are certain businesses that are almost endowed with winning and if you stick to those businesses and you're disciplined on how you define those businesses i think that that's one potential way to outperform over the long term and then the second way i want to bring it up because you with buffett you brought up control granted in the franchise model you only have like half control and like you said you weren't you're in court in charge of corporate branding or marketing but even then you had at least a modicum of control did you think that helped either well i you know the tough thing about a franchise i think is uh in order to do it well uh you need to believe in like i don't know man i wasn't a good franchisee i think at the end of the day but i i but i i think i was right i obviously would say this but like we we battled over you know stuff like uh some of the branding and um you know i don't want to throw these guys under the bus so but like the name of the franchise was it was really hard and i i would get calls from people and they were like what the hell is this name um and i i probably should have passed based on that i think i think buying the the franchise was a good um exercise in motivated reasoning right and going back to your idea of like you you know you would hear a thesis and you want to just like jump in um i was looking at the upside and i wasn't paying enough attention to the downside and i i think you know what i had a partner at the time um he was like my best friend we almost ended a friendship over it i'm glad that didn't happen but uh you know we we had initially thought about doing like a subway and we steered away from that because of how little money we could have made uh and there's other reasons they're not really particularly great with their regional uh they kind of will put one anywhere but uh i almost think like a sandwich shop would have been a better idea um because there's a lot there's a lot less sort of uh room for creative differences for lack of a better term and uh you know flooring's flooring was just kind of interesting there was another business pure clean that i looked at uh they were like remediation that brand i was a little bit better on but i you know that's it's tough man these guys are out there hustling scooping you know water out of people's houses and they're not glamorous jobs um but you know you can maybe you may make a living doing them yeah i remember like maybe a decade ago another hedge fund manager told me it's like if you ever gonna have a franchise or a small business have a pizza shop you're never gonna be a multi-millionaire but like you're gonna make at least like five to 10k a month just clipping off like like a coupon yeah yeah i mean there's merit to it um you know though i again i i think there was a lot of problems with me i i do i mean if you look at the classes that came in before and after me very very very few survived so i don't i don't think it was all me but then as you brought up too 2009 how much does the macro environment affect like whether you're actually running a business or investing in public trading yeah equities yeah well and and uh and the the real unfortunate thing is had i not started that business and just put it in public equities then i would have a lot more today uh but you know that's how it goes um but yeah i don't i don't know and and you know like part of the strategy was a big initial marketing push and uh you know you spend you spend a lot of your capital on marketing trying to get something out of the gate and don't get that many phone calls and it's 2009 and you know the the red lights start going flashing for lack of a better term so but you made it you made it through yeah yeah yeah yeah but then what about uh you just went and revisit those stopping grounds of chicago in summertime and did that beautiful you know lake geneva wisconsin and wisconsin lake summertime things did you miss the midwest yeah yeah the midwest is dope uh i don't miss the winter at all but uh i i love the midwest i love the people there chicago chicago's like my favorite favorite city in the world um you know there's i gotta go back up there's some guys that i want to meet uh that i didn't get to see but yeah yeah the midwest is fantastic you know i as a function of being there i kind of happened into think or swim and that was my introduction to options and uh you know when i i saw tom uh sasnoff and he said you can come trade options anytime uh so you should probably not do it right after law school because you can just do it another time and why don't you go get some like actual experience uh since there's no barrier to entry here and i you know i was i was grateful for meeting him i was grateful that i got into that learning community and i think it put me on the path that ultimately i went down which will probably end up in indexing and going and figuring out how to teach yoga to people or something i don't know where i'll end up trying to think of like what form of yoga i don't know if people are looking at me they're like you're not teaching yoga dude well no was it that the former wwe he had a wrestler has his form of yoga there's their surf yoga there's goat yoga yeah i'd do golf yoga i you know it's interesting like the more i i talk to people and the more i get into this i i don't i think one of the reasons that i don't have uh an asset management business is i'm i'm a little bit worried about my own discipline the other is that i'm worried whether or not anybody knows anything uh and you know that's where i think you and i connect a lot it's like i just think there's a lot of merit in uh like a permanent portfolio and acknowledging that no one knows anything preach brother us so could you go this way i love talking when you talk about tastytrade you have a very nuanced opinion like post tastery trade you see the kind of problems with hd trade and maybe getting potentially getting clients over trade or trade these weird structures and structures are not a strategy but you also admit the nuance of like they do a great job of education yeah yeah well it's particularly hard for me to you know uh look i guess um i don't think i think options in retail's hands are like giving gasoline to people and telling them to run through fire uh and then i think it's it's a tad disingenuous when that blows up and people are like well who could have seen who got hurt like well i mean it's not like that [ __ ] hard to see uh on the other hand i'm not sure that i agree with saying like from a regulatory standpoint you can't do this right like i i uh i don't know that i'm how do i want to say this i'm not sure that i'm not opposed to saying that but i'm not sure that i'm opposed to it like i'm very i can argue both sides of that so uh given that i think that tasty trade leads with education and i respect how they do what they do um and i think that if you are going to give people uh you know gasoline it's very good to teach them the consequences of playing with it and i think that that tastytrade does that in a way that i respect and you know when i met them it was think or swim but i i think the ethos is the same today yeah and like you and i talk about it's like who are we to tell people they can't go to vegas and gamble or do whatever they want their life like do whatever they want but my one of my favorite parts about finn twitter or vault wit is people like ben ifer or chris abdelmacia people like really geek out about their options stuff and they start asking them questions and first things they say is like like don't do this why do this like it's not for everybody it's it's like it's a terrible way to grind out like a mediocre living well i i don't know uh what their livings are like or what they're saying but i i would tend to agree uh that not doing it is probably the uh answer for ninety eight point seven percent of people and nobody wants to admit either a lot of times you can express the trade better with linear instruments but it sounds cool to use options yeah i you know i don't i i i had a conversation with a jim carson and he was a cool guy to talk to because his his view of like the options market is the underlying right like that's actually the mathematical like when we were talking about i want a dcf his view is basically like the options market is that right it gives you all the probabilities of the outcomes um and i i really liked how he said that uh i don't know how to you know put that in my iq uh and how to use it but i i think i understand what he's saying and i i think there's merit to it and um i i just think there's so few people that can actually execute option strategies profitably that it's best left to the pros right and the tech stack between the pros and amateurs is a huge delta that people don't realize they have teams of phds yeah that you can't have at home and and and just even working the orders like interactive brokers versus professional setups like the bid-ask spreads and everything commissions et cetera people don't realize kind of what's against him when you talked about the podcasting biz earlier you said something about almost hiring analysts in your mind were you kind of maybe thinking of going their direction i think maybe the oshags had started doing this like deep dives on on single name equities is that what you need analysts for or what were you thinking uh i'd i'd kind of like it jamie you know how rogan has a jamie where i can be like okay like look this up uh you know i i wouldn't mind um like uh return i i would like uh to be able to have a conversation with somebody like i go into these conversations without knowing what they're gonna talk about and maybe that's uh not a good idea or maybe it is a good idea but it's the idea i had it's hard to have somebody talk about a name and not have really any clue what's going on also like pull up you know what the financials are but maintain in the conversation like it'd be nice to have somebody in my ear at least say hey you know return on capital is has gone down in this business for a while maybe ask about that or something like that right um that's that's some of what i'm thinking about some of it too is like just doing background prep uh it would it would be helpful to have somebody help me with the time uh to do that so we're gonna it's gonna sound like we're playing the world's smallest violins here but as as fellow podcaster the amount of energy it actually takes the podcast is is very different than people realize and you have this really weird energy after it's really this bipolar energy you have like a manic energy like you have tons of energy and you're completely exhausted at least this is for me and i can't even hold like a thought in my head it kind of evaporates for a few hours after how do you maintain do you have well do you have a similar experience and then how do you maintain your energy around producing these paths not well with your regular light yeah not well uh i i would say that um i leaned in heavy into making sure the pod was was good i i think um i think i'm probably going to reduce the cadence or at least make it a little bit more abnormal which people may or may not like but i uh i think i need to focus on like what makes me happy um more than like putting out something every thursday if that makes sense like i don't think putting something out every thursday is the way i i'm going to sound like david zazlov from warner brothers i don't think that the amount of content is going to matter nearly as much as the quality of content and i think that uh just making sure that everything is high quality is important and you know when i when i set out to do the pod i wanted people to be comfortable talking about like mental health issues or some things that have gone wrong in their life because i felt like so often podcasts are discussions of everything positive and i i feel like life is not that uh and a lot of life is figuring out how to how to persevere in times when um you know things are not good and i have successfully accomplished that and i i i guess i don't know what the next chapter is for it uh and i think i think trying to focus on the cadence of stuff coming out is the wrong focus that's the only strong opinion that i have right now how do you think about the trade-off between being very well prepared versus following the securities angles and offshoots that a conversation can take i think it depends what you're doing uh i don't like not being prepared in finance because i think there's so many shills that you've got to be able to at least call somebody on their [ __ ] now if i was critical of myself as a host which obviously i'm perfect but if i did have a criticism uh in the beginning i think i talked a little bit too much about me i think i'm better than that now uh or better at that now um i i maybe don't push back as much as i should um some of that's a function of you want people to come on your show you know you don't want to uh be combative all the time but uh you know we talked uh the one show that i had with an awful sonalla i mean you know uh i don't know whether or not he uh well here here are the facts that i know i know that there is an allegation against the company he worked on or worked at that they were a ponzi scheme uh i know that i read the complaint and the complaint uh is pretty damning and i know that it was a small shop that had three people and i know that when he was on my podcast he claimed that he was uh responsible for risk overlay uh what i am unsure of is the probability that all those facts are true and he had no idea i find that hard i would put that probability at pretty low that you would be responsible for risk overlay but not know that your shop is losing a ton of money um and it's a ponzi scheme uh so you know like i would like to prevent uh getting defrauded like that again uh if possible and um you know if uh if if he ever wants to come back on uh i would be willing to have a conversation with him but i would pepper him with a lot harder questions uh mostly because that episode would not be a finance episode i would deem it more of a entertainment slash follow-up episode um so you know i don't i don't know and and there's just so many like the you watch people go through now we're watching people cycle um and i guess at the end of it maybe you find out who's real but uh there's just a lot of people that got attention over the last cycle that maybe didn't deserve it and um i don't know what responsibility you have as a podcast host but i'd like to to take mine i'd like to do the best that i can i guess is the best way i know how to say it uh and i feel like your reference requires preparation well it's not just preparation like you don't have a team of investigative journalists to have gotcha journalism to find out if somebody's fraudulent or not i mean you can do as much background as you can but somebody that's good is going to going to figure out a way or where but also like in related to what you're saying i think it's the dichotomy between an interview and a conversation where you said you needed to talk about yourself less but that would be more of an interview yeah where i always loved you had more of a conversation yeah no i think that's fair uh but you know like when you came on people were like i wish he talked more and i do too it's you know i just we talked i don't know but then we went to the kitchen and i ate cold chicken over a sink sue me come on man you're gonna blow both of our spot now because i have to i have to admit that we found out we both like to stand over a kitchen sink and just shovel a cold chicken that's right why because it's dense in protein and it saves a lot of time it makes perfect sense to me i don't care if it's disgusting to something and i admitted to it last time sometimes i'll get my ass saladed i'll just create it i'll grab it in the bin grab a handful of regular shove it in my mouth over over this thing makes perfect sense to me exactly we're just two lunatics so you kind of referenced it earlier and we've talked about many times um reading what buffett says and watching what he does but if i think about there's this triangle right and this is related to your just taking a family trip it's like you can either be the world's greatest value invest you can be a great husband or you can be your great father yeah like choose two out of three do you think that's basically the trade-offs uh yeah i kind of do i mean you know something that um god i'm kind of afraid this is [ __ ] weird but i'm gonna say it but i'm afraid to say it because i'm afraid of like what the algorithms are gonna do to my oldest kids college applications as a result of the conversation that we're currently about to have but like um my oldest uh is now eight um and he's uh he's got add and i think it i think it's hard for him to accomplish tasks i see a lot of myself in him um but that like that should not be as hard on him and i think it's going to be on me to and my wife but uh you know he needs a father too to be there for him uh more than you know selfishly maybe i would like to be right um and and there's only so much time in the day so uh you know the one thing that i know about myself is if the choices between being there for my family or working more i'm gonna sacrifice work at this stage so that probably isn't fantastic from a marketing standpoint but it's also the truth um so i don't know i got to figure it out but yeah i do think that that's a lot of the william green and i talked about this um he came back on and he said that he i i think the story is that monish sent charlie the book and then charlie's response munger was that like one of the commonalities that he saw among all the good investors is how dysfunctional their personal lives were um you know i i kind of get it but i don't know that i want to live it yeah i think that you know when you and i first had time to hang out in person years ago it was you know i think a rough time for everybody but it's also you know like you know cove it's going on we i don't think a lot of us realize how much a toll that was taking on a subconscious you know launching businesses and running businesses during drinker drinking cove but you also had a lot of um like personal stuff with extended family i don't want to get into and you know we're walking along the beach talking about is maybe the only goal to raise decent human beings yeah like is that okay is that go is that good enough yeah yeah uh i think so and then the other you know i don't know the other thing that um you know i don't know i had featured uh kyle cernara and you know people were giving me [ __ ] about featuring a micro cap guy and um i'd still feature him i mean i i i've now known him for over a year and a half or whatever and uh i think it was the right decision i i still go to bat for him but you know i still get people that send me like his uh the performance of his stocks right it's like you know i just uh i don't i don't know uh [Music] you know he that episode in particular gave me a lot of [ __ ] and um it's like i here's a guy that was doing my perception of what i thought i might want to do someday and uh i like featuring that guy right uh and i think some of his stock performance uh can explain how hard it is to do that right i mean i think some of the situations uh he's inherited or or has bought into have been really tough uh i think they're doing the things that i would do in the same situation but um long story short it was just kind of one of those times i was like what the hell am i doing all this for and i think if i'm not mistaken wasn't it during 2021 uh the last time that we met i think it was and i think you were like dude you should probably just like sell everything and go into some all-weather fun then that would have been great financial advice i give a terrible financial moment that was just that was just luck or your fault you're right i'll tell you the other thing man that that was wild about that time is uh mike mitchell and i we went to new york uh we did like a happy hour and after the happy hour we looked at each other and i swear to god that this happened we were like we should just sell everything like there's just the mood was like euphoric and um i i don't i mean i know why i didn't right i didn't one because i wanted more right that was the greed two i was like well [ __ ] if i go into cash and everything doubles from here then what right then i've lost a lot of wealth and there's no guarantee i mean i know that people will say like through history there's always bus after bubbles but that doesn't mean there always has to be right i mean i don't know what the total n is in this in the uh survey right but like since we've had a modern financial system what you've got like six is your sample size or something for crashes i may be smaller but it's definitely not 30. so um it's just kind of wild to think back to that time and then to look at what's happened since and be like oh it was all obvious in hindsight you know yeah some of it was but i'm not sure all of it was and i i bring up those first times walked along the beach because i also was telling you stories about my arranged emotionality as well but do you think part of it is just making me think about when we're talking about this like having a daily p l and then a lot of other stress and anxiety like is is maybe a terrible choice i don't even know how to log into my account right now and i don't care uh and i think it's actually probably made me quite a bit better as an investor and i'm certain it's given me a clearer mind um so that's nice that's the classic coffee can portfolio but so you might is that the answer so i brought up all those times from years ago because i wanted to say that i've noticed in our last several conversa for lack of a better word you seem a lot calmer yeah so what is that attributed to like what it what are the different things you've done i mean it sounds like maybe not checking your portfolio everything no it's helpful what else i don't know man i think some of it's just kind of becoming a man uh i mean i i think like you know the some some feedback that i get now when i talk to people is they're like why well i went through a period on value after hours where i was kind of angry um and uh you know i'm sorry for that to anyone that's listening but also like [ __ ] the people that made me angry um but it was like i felt like i was getting trolled and i felt like i finally knew who i was and i felt like i was beating my head up against a wall a little bit um and then i guess uh you know toby and i had a conversation after a show and after that conversation i kind of like thought about why i'm doing any of this um and i i think that i've just stopped caring as much uh and i've stopped like trying to you know like my twitter feed is my twitter feed uh it's not you know there's i'm not some thread boy i'm not trying to build some audience uh i don't give a [ __ ] if people don't want to see my hip-hop recommendations though now i've started to post in the hip-hop community uh because i do i do recognize that can bother some people um but like i i think uh i've stopped i think i'm more comfortable with the internal validation uh though i've got a long way to go i still i still feel like i am not nearly what i should be but the external validation i think i've i've let go of a fair amount of do you think it's possible to ever have the negative comments not have at least a tinge of sting uh probably not i mean one of the things that i did at least during value after i was i stopped reading the live comments which helped i mean the live comments and some add is a bad combination on a podcast and it wasn't quite and i realized we can't look at them because because they would not listen to each other yeah well that was just distracted and then people would come at me and then i'd respond and then it's like i'm talking to one guy on youtube rather than like an audience yeah i was in a weird spot so i'm glad i'm out of that uh but i don't know man it was it's been a it's been a wild ride and then i hopefully speaking of hip-hop that we were a slight uh uh influence or inspiration for you changing up your intro music you think that we were cause we were using hip-hop on pirates of finance and hopefully that was one of the influencers i don't know that that was uh i i don't know that you guys influenced my my music i do really want to potentially do a riff on a two change you've got me thinking about whether or not it's the right uh intro music that is a hundred percent factual um and then because we haven't talked about it what did you think of the kanye documentary oh i liked it i you know he's uh yeah i talked about the mental issue i think i talked about the mental health thing you know um i mean my dad went through a manic uh episode so i have uh a fair amount of empathy i think for people that are around people that are manic um and i think a lot of people can look you know at kanye and i mean look i i it's it's very very complicated and without knowing the situation uh i obviou i don't even know how to opine on it but i think that that documentary did a good job of showing where he came from to almost where he is um and i think that if you have manic tendencies in your body i can't imagine how hard it is to get that famous like that amount of dopamine with any type of mania seems like a potentially very toxic combination and i think at least parts of his life have seen that toxicity in a way that documentary is perfect for people like like you i mean it's like hip-hop uh mania striving to be to do something great yeah it's like all of those then you and i've talked about the hardest part about a manic state is you can't recognize that you're in one yeah even if people are telling you that you're not listening and you think you're crushing it yeah not just yeah not just that you think everybody else is insane right it's like oh no i'm not i'm not the one that's crazy you're all crazy like i i'm the one that sees the ball um so yeah i thought that that was quite good i don't know i remember it's great it's part of it too like do you think we subconsciously document via podcast or whatever so almost like kanye would go back to those days before before he really made it and you can look at that trajectory i i i do like having um i like having the record right i like being able to listen to stuff and be like uh i didn't really sound good there right or i am proud of that um it's fun man i like it i like audio art uh it's something that i enjoy a lot well you're very good at it and and what i've learned is my biggest mistake is doing podcasts for like you and corey and your beautiful baritones like i just sound like an amazing little liner dude i was listening to flirting with models the other day and i was like god cory sounds good it's insane it's upsetting good looking and good sounding i mean it's it's a guy's triple threat yeah he deserves a uh like a helium voice that would be so good wouldn't it in talking about horse racing and a little helium uh crypto horse racing and helium voice that would be hilarious um so you got to get back to your family i'm good is there anything else you want to touch on no we can chat i got i got 15 more minutes if you need the material i know how it is it's cold in these streets i don't need any material i hope this records that's a man you just give me a panic attack yeah well i hope it does otherwise you gotta talk again which would be totally fine with me but i've been down this road oh i have actually a great question for you that you're on the few people can answer this is you know you and i talk a lot privately but as soon as you hit record it's always gonna be slightly different yeah and especially for me that has like compliance in my and and back in my mind like how do you get good at being yourself well the nice thing is it seems so weird i don't have compliance that helps uh now you know i don't know what that opens me up to but i've had attorneys that have told me i'm pretty good uh so i i try i mean what i would what helps i what i tell people is i'm like i'd like you to just talk and if something comes out like any time i hear the word returns i just know to flag it and cut it um but i i try to make sure that like people know it's not like a gotcha pod if you say something that you don't agree with necessarily like then we have to talk about cutting it because i'm not sure that i really want to cut that because that's like an honest moment but if it's something that's like you know career threatening or something or it's against compliance i'd always cut that um and i think that helps you know in the beginning booze helped uh now now i don't drink uh usually when recording um and i'm gonna try to drink a lot less i may try to get a little high on some but we'll see if that works uh but i don't know man i'm pretty good at talking to people um you know i just have to figure out what that means and what i want to do with it that's the part that i'm not that great at yeah i think about it in the sense like i'd hate for somebody to meet me in real life and be like wow you're so different than you are podcast right but like but part of it is like you you could be yourself but you always have to like turn up the energy a little a little bit because we have to have a conversation and you can't have dead air we're like when you and i are sitting and hanging out we might be staring out the ocean for 15 minutes and i'm a lot quieter yeah in real life yeah no doubt um yeah there is there is pressure to keep the conversation going sometimes when i listen to myself i'm like dude can you finish a thought like why are you jumping to the next thought before you finished the thought what are you doing but oh the other thing i want to ask you about that forgot about is um you have this rental property now but for a while you're going to build your family a new house but let's say you put a pause on that is that a macro call no we're still building it we have the brewster household right now has a ton of stress and maybe part of my maybe part of my calmness is just like i hit enough stress that i was just like [ __ ] it um no we're still building it uh you know let's see if we can uh we'll see if we can keep it uh i hope so if not i think it's gonna be a reasonably good spec property uh of course that's easy to say before you go to sell something um but i think that house we bought that land really right um and we bought it in september 2020 and i i think i think the probability of losing more than 10 percent on that build is very low and i think the probability of making 50 uh could be like i i don't know it could be as high as 40 percent so uh you know and then i think there's the the rest is a range of satisfactory outcomes also but i remember after you bought it you were you were texting me almost like every other month about the lumber prices going down from what the lumber was has that come back down for you yeah that did i mean we you know we missed with it we've had like real uh we missed two concrete deliveries and that's caused eight weeks of delay the cabinet pricing that we just got is insane um so you know let's put it this way if if it is worth the replacement cost it will be a good investment if it's not then it's going to be a horrible one but i know florida real estate reasonably well and i think this is going to be pretty you okay i don't think we're gonna have a disaster here yeah hopefully not that's right well and hopefully are you are you able to get like contractors now i know for a while like it's impossible yeah but we've been building i mean we bought the lot uh september of 2020. so we've been in the process for that long and we won't be in the house for at least another year and that's a long time man that's what i was gonna break up it's like about stress like you're saying your head hitting so much stress you're just calm and i was like i remember there was a er doc that wrote this 10 rules for life but i only remember three of them uh one was never get on a ladder if you could pay somebody else to do huh uh roads are for cars only no bicycles no motorcycle and then after you retire don't build your dream house unless you've been in like construction in real estate your whole life because like the stress of construction and dealing with subcontractors yeah it's just gonna just kill you the nice thing is my wife handles most of that um and look i think there's a good shot that my kids like get to grow up in that house and that would be really nice but uh yeah i if i had to do it again if if i had to tell other people whether or not i would do it i would tell them probably not which is why developers make money right it's actually worth the money to pay somebody to do this for you uh there have been a lot of things that as i've gotten older i've been like ah that's stupid to pay for and now i've realized like actually they're removing a lot of stress from your life so we'll see how it all goes um you know i don't it's something that i'm i'm just thinking about like part of why i am so uncertain i'm reading i've got right here and i think you'd like this it's called the psychology of intelligence analysis i think i think jake taylor recommended this book and when you hear it think like cia and uh it just talks about like how many mental errors are made in intelligence communities because of preconceived notions and biases and not seeing what's right what's there right and i'm simultaneously listening to thinking in bets and the two have me convinced that i don't know anything did you ever see the documentary fog of war i have seen that that is robert mcnamara yes that is a very good documentary that's what i remind you about the intelligence and an analyst is that like during the fog of war even if robert mcnamara is getting the best data in the world it's still decision making no opacity yeah and everybody's making mistakes and you don't know what's good data what's bad data how do you aggregate that yeah but everybody thinks that like politicians or the pentagon has like perfect knowledge and perfect foresight it just doesn't work that way yeah that's right and and at the end of the day everybody else is going to look back and the future or the the past will look like it was certain but at the time like who the hell knew i we went to in dc we went to the spy museum and they have a very cool exhibit like towards the end where you get to see uh how they how they deduce that osama bin laden might have been in the house that he was in and you get these facts like okay there's two gates right and they're both of the walls on either side are 12 feet tall or 10 feet tall whatever you can't see over them who would want that uh the house has a balcony but there's a huge wall in front of the balcony who would want that right normally you want a balcony you want a view the windows are boarded up like why would somebody board the windows uh you have a satellite but there's no telephone wires right so it had its self-contained internet uh on that property who would want that and like they they take you through the analysis and according to this uh they said obama was only 50 50 that it was osama bin laden like he knew that it was probably somebody that was bad but he didn't like you know he didn't know that it was bin laden um and one of the other advisors that was in the room said that he thought that the evidence for the weapons of mass destruction was stronger than the evidence that osama bin laden was in that house right the weapons of mass destruction in iraq and that turned out to be wrong so like you know it all goes back to just index some sort of overlay in an all-weather portfolio it's so perfect because could you imagine you imagine being obama and having to make that decision no i can't either i mean i think you probably i think if i was in his situation i would say okay there's high probability that there's some bad dude there but you're flying helicopters into somebody else's country and taking somebody out like could have gone real wrong and those are like extremely decisions that have real consequences right not like little consequences yeah so when you're talking about i picked up i picked up equity and i could have traded it better yeah yeah that's right yeah so i think that's actually the the perfect place to end this i'm just thinking about that fog of war decision making a real path yeah and perspective it's like you and i could chill out a little bit that's right that's exactly right it puts things in perspective so thanks for having me man uh i appreciate you talking to you yeah i'm glad we could finally hit record on one of these then share it with people for the six listeners to find us entertaining that's right shout out to you six thank you thanks bill all right have a good one man thanks for listening if you enjoyed today's show we'd appreciate if you would share this show with friends and leave us a review on itunes as it helps more listeners find the show and join our amazing community to those of you who already shared or left a review thank you very sincerely it does mean a lot to us if you'd like more information about mutiny fund you can go to mutinyfun.com for any thoughts on how we can improve the show or questions about anything we've talked about here on the podcast today drop us a message via email i'm taylor at mutinyfun.com and jason is jason immunityfun.com or you can reach us on twitter i'm at taylor pearson m e and jason is at jason mutiny to hear about new episodes or get our monthly newsletter with reading recommendations sign up at mutinyfun.com newsletter [Music] this podcast is provided for informational purposes only and should not be relied upon as legal business investment or tax advice all opinions expressed by podcast participants are certainly their own opinions and do not necessarily reflect the opinions of mutually funds their affiliates or companies featured due 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