Brad Briner - Family Office to Public Service (EP.413)

25:11It's why if I look at Willett, the turnover level is extraordinarily low between the empowerment and the alignment, I don't know that you could find many better places to work in this industry. There are a lot of places that in theory would love to have that economic alignment. And yet, as you said, many don't. What are some of the challenges in making that work? Some of the pitfalls that you have to avoid? I think cherry picking is one. You got to be very careful about that. You sit around and look at enough deals over the years, not with perfect accuracy, but pretty good accuracy. You can tell the no brainers and then the maybes from the not so goods.

25:47And the cherry picking aspect of that is something to be very careful with. What we found, we had a lot of analytical horsepower around our team at Willett was that the investment team wasn't perfect at predicting which ones were the best ones relative to their allocations to those. So that's an interesting fact, but trying to make sure that you have people be consistent in what they're investing in, in the team that they lead is really, really important. One. Two, I think you got to manage the managers. At some level, you're asking a favor from them. You have to, for compliance reasons, separate the investment decision making by the philanthropic entity from any personal entities there.

26:26And that requires a very light touch. These are highly sought after transactions and very important managers to the different vehicles. So you got to be careful there because you wouldn't want to be penny wise and pound foolish as it relates to important investment relationships for your firm. How did you find that it changes your mental intensity of different investments, right? You're investing with a manager, but there's an investment that you're co-investing with them and you only have a limited amount of time speaking with them. I think the best relationships are really hand in glove in that way though, where we all understand we're doing more than just this fund and just this deal.

27:02There's a longer term, hopefully multi-decade relationship that's going on here. So framed that way and not short-term transaction oriented is really important to making sure that you get that balance exactly right. We would often do a deal alongside a manager before we'd invest in their fund, set up an economic structure that allowed us the optionality to not go in the fund if we didn't like what we saw. So the economics would stand on their own and then they would fade away if we did go in the fund. So we had an incentive to come in the fund. that architecture ended up working really well for us, particularly with newer managers.

27:40So people raising their second fund or even their first, where they needed money for the deal, they'd like us in the fund. We weren't sure we were ready to do that. That became pretty well worn over the years and a lot of success for us, but it was part and parcel. The deal was a material piece of the fund. We were just talking about the deal initially, but with the hope that we'd come in the fund and we were encouraged to do so economically, it worked for everybody over and over again. So in your back half of your time at Willett, Alice left, you became the co-CIO. What tweaks in the investment process did you evolve over those last five or six years?

28:17One of my colleagues at Morgan Creek did an amazing thing for us there by setting up an information system that allowed us to share, not quite in real time, but daily everything that everybody was doing in a way that was very user-friendly. So I have never been above shamelessly stealing from people who have great ideas. And so I did that at Willett. The silo architecture where you have a strong lead in each asset category does have the downside of lack of collaboration across those silos. And so that was a big focus for Andrew and I when we took over as co-CIOs. I borrowed heavily from my former colleagues architecture and setting up those backstop was the engine, but we built our own front end to encourage people to share what was going on.

29:04Not that we were trying to second guess them. We were just trying to keep them aware when you have investments that cross categories and one person is looking at it over here and the other person is looking at it over there and they don't know that. That's a real failure for your organization. So how do you still keep the empowerment of the asset categories while having some sense of cross-silo fertilization across the different portfolios. We did a lot of that. We spent a lot of time trying to break those down, but not too far. We wanted to keep people empowered. And the information systems are a real big part of that.

29:34How about on the investment side? The investment side, these investment committees are very important for junior people to be part of. That is where everything happens, but it's not actually where everything happens always. Those sidebar conversations, those individual lunches, there are a lot of things that go on there. So our investment committee got to be essentially the whole firm at one point. And we needed to convene a smaller group to have real question-oriented conversations rather than report-oriented conversations. So what we ended up doing is creating a much smaller group of EMDs at the firm where we'd have actually a proper investment discussion, where we could have open-ended questions, where we could see how we would help each other, where we could just give a report on what we were thinking that wasn't a fully formed thought.

30:21That was really important to what we did on the investment side, specifically having those kind of conversations and that group convene on a regular basis. Because these investment committees do become performative at a certain scale, where it's really just, this is already a done deal and we're just telling you about it. And that's okay, as long as you recognize it. And you create that forum where you can debate and discuss among trusted peers. So we did that as well. How do you think about the structure of investing from asset classes? And now sometimes you see factors and you had funds and then you've got funds and co-invests and direct deals.

30:54How did that all come together over the last couple of years? That was a big topic and remains a big topic of how you get it exactly right. You have a team that is highly asset class oriented. And yet we all know that factors across those teams and no more so than when interest rates rose so dramatically in 2022 and everybody needed to take a serious look at credit in every asset class. We had a head of portfolio strategy who really helped us think this through. And in that director's meeting, we spent a lot of time talking about that and where we wanted the credit factor to show up. And the answer was everywhere.

31:31Anywhere we could find it where, again, first lien was our limit of risk on credit side at a 10 % rate or more, we should talk about that. Willett has a wonderful issue of often too much capital. And so it was never so much that there were pigs at the trough and one was going to get bumped out. It was really, can we deploy enough capital against this theme? Credit was the biggest of all of those from a factor perspective that really changed. We had never bought credit before. It wasn't really in our mandate. Willett is a high risk, high return investor, equity oriented, perpetual life, all those things.

32:05And so it didn't really make sense for a lot of years, didn't want to build a new asset category because we didn't think it was a permanent allocation. So we needed to bring the asset class heads in across the board to address that factor. It's still evolving and it will still evolve from a factor versus asset class orientation, but I think you've got to do both. I think you've got to recognize what your team is and what its strengths are, and then build the compensating item around it in whatever way you can. We're going to take a quick break in the action to tell you about SRS Aquium. Want to make sure your M &A processes aren't stuck in the past?

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33:31P-Q-U-I-O-M.com. And now, back to the show. How did you think about some of the crux issues in public markets, active versus passive? That was a little bit complicated by the idea that so much of Bloomberg LP's business is the active management community. So we tried not to have that be a factor, but we certainly couldn't ignore that. Over time, we appreciated passive more and more. We never got to a large allocation there. And I can't speak to what they're doing today, but perhaps they've changed that. It has been a slog to try to create alpha in developed public markets for a long, long time.

34:11That is not new. Hope springs eternal and managers are always coming through to demonstrate their version of alpha. And so we kept going down that road with largely active. And I think that's proven to be a mistake over time. But what you don't know, and the Magnificent Seven being the obvious example of this is just how quickly that will turn. In the end, you're kind of making a bet on the FTC and what it does. If you're going to be passive, I think you must argue that the FTC is feckless, which they have been. If you're going to be active, then you probably argue that they are going to get it right this time or get it different this time, at least.

34:52It kind of boils down to that in the US, at least. And the private markets, how did you address the challenge of more and more dollars coming into Willett from the business and in that original endowment model, preferring some of the smaller managers to some of the scale as you get more and more scale in your denominator. The direct investment business is a huge compensating item for that. So Andrew largely led that and did a fantastic job of building his team and building out the sourcing capabilities. One of the complications of being a foundation, which well, it ultimately is, is you've got this provision called excess business holdings.

35:30You can't be more than 19.9 % of the equity of any business. So that becomes a big challenge at scale. What it manifested in is more and more transactions, and you needed more and more people to do that. We didn't see diminution in alpha or returns from that. I'm sure there is a point at which you would, but we did not. So it was really scaling the direct investment teams, both private equity, but also real assets to deal with the deployment issues. And we're always conscious of our balance sheet. One of the lessons well learned in the GFC, of course, was unfunded commitments have a cost. And they cause you to do things that are economically disadvantageous, if not worse than that, at the exact wrong moment.

36:11So we're always focused on managing our balance sheet, managing the unfunded commitments, and directs helped with that as well, allowed us to get through COVID without a problem, allowed us to get through other kind of downdrafts without a problem. But at some point, scale will be a problem for Willett. I don't think they're there yet, though. What were your biggest lessons from being in the CIO seat that maybe you hadn't experienced in your career up until that point? It's largely not an investment job. I think people kind of know that, but I'd take it maybe a degree further. There are many functions that make an investment organization work well, and they are all important.

36:47Some of them are important because if you step on that landmine, it blows everything up. Some of them are important because they actually directly create alpha for the portfolio. But all of them need to be managed. And all of them, if you're running a great organization, have great people in them who want your feedback. So if you think about your day-to-day as a CIO, the investing piece should not be a majority of that. Managing your team, managing the other non-investment functions, thinking through strategy are really important pieces. AI is a great example of this. I was talking to a friend of mine who's an investment manager last night.

37:19and he was talking about embedding AI in his investment process has essentially removed the need for analysts. Just think about the evolution of your investment firm. If you can outsource to software, which by the way, costs him a thousand dollars a month, what you would pay$125 ,000 a year for, for at least one, and you probably have more than one. So as a leader of an investment organization, those are the topics you should be focused on. How do I support my team? How do I give them the tools? How do I make us more efficient? How do I make us quicker ahead of the crowd? One of the things that I've seen over and over in my career, and I try to get better at it each time, is sometimes things are obvious, but it just takes the institutional investment community a little while to get there.

38:04So if you can get there faster, then you have a huge competitive advantage. Credit in 2022 was a great example of this. Private credit by early 2023, a lot of people were talking about it, but not a lot of people were doing things about it. By early 2024, they had. But you had a full year where you could deploy at 11%, 12%, a first lien in new buyouts. That number is now probably nine and a half, nine. What are some other obvious examples of things where you could get there faster than other institutions? Secondaries. Over and over again, you see some kind of non-investment reason for people moving on from different categories, traditional energy being the most obvious one in the 2021, 2022 time period.

38:51So all of a sudden there, you've seen a couple of firms now formed to do this. Energy secondaries were on sale. Some of them are trading at 20, 25 cents on the dollar because the owners don't care. They must get rid of them. And there are not many natural buyers of them. But I think we all know, and both candidates in the presidential election now espouse, it's going to be an all of the above solution on energy. There's really no other way. We can hope for something better, but it's going to take a while. So those types of things where people will wake up at some point and realize that maybe the NAVs aren't massively overstated and maybe nothing should trade at 20 cents on the dollar.

39:29We're just not quite there yet. So you spend 11, 12 years in a high performing, highly economically aligned, uniquely interesting seat, and then decide to leave. Talk me through your decision process. I had a wonderful 12 years at Willett and I'm still friends with just about everybody there. And so I do miss them most days. Over time, you develop choices in life in part because of your financial successes. I was commuting back and forth five days a week for most of those 12 years. And that was fine. That did get a little old. So that's part of the decision. The other part of the decision is you think about what you're doing with your skills in life.

40:12And if you're maximizing the use of those skills for humanity and where you'd like to see humanity go. Over time, the answer to that question for me changed where I think that I have been ridiculously blessed and financially I have a lot of choices. So I thought to myself, how can I use my skills in a different way to serve maybe a broader swath of humanity that I'm serving right now? And noodling on that question, when facts and circumstances happened in December of 2023, I had been interested in the state treasurer of North Carolina's job for a long time. A friend of mine reminded me that we wrote a case study in 2006 at Harvard Business School on it.

40:58I'd forgotten that. I found some old emails about thinking about running in 2015, but that was not the right time in my or my family's life. So I've always been interested in it, in part because it's the state I live in and the state I love, in part because it's so irrationally managed. And I'm fascinated by consistent irrational behavior. I always want to understand it and have it explained to me. And the truth is, it's never been explained to me for North Carolina. I was always interested in it. And then the other thing you learn is most of these down-ballot races, the party has organized a year in advance of the filing deadline behind somebody.

41:40So all the endorsements are there, the money is there. Nine times out of 10, that's your nominee. And that had happened in the Republican primary for treasurer here. but then he decided to run for Congress with eight days left until the filing deadline. So you had this wide open primary. You had me thinking about existential issues. And I got a series of phone calls from people I knew in Raleigh saying, Hey, if not now, when that was the compelling logic that got me to do what I'm doing. So what is the role of state treasure that you're running for? It's kind of an 18th century role. It's like captain of the ship.

42:20financially for the state. So anything that touches the finances of the state or the savings of the state, the treasurer runs. And we've got this model called sole fiduciary. So you can do almost whatever you want. And I was just thinking that that's really interesting to me. How do we take what is a model that doesn't make a lot of sense and make it into something that does? I don't get a chance much on the podcast to talk about investment organizations that are really not done well. Not a lot of people want to come and talk about that. I'd love to hear, as you looked at this, you said there are rational decisions about the pension for the state and talk through what does bad investing look like?

43:08I don't want to impugn the investment professionals there. This is a strategy problem. This is not a tactics problem so much. There's two different things going on. One, there's basic confusion. When you are wealthy, which our state is, you can manage your investments very, very conservatively if you want. But what you see in history when people do that, they essentially lose their wealth because they are not keeping up. So in fact, a successful investment strategy is important to staying wealthy. And the state has never really figured that out. The belief, and we had a treasurer for a long time in a different era of interest rates, who is still a larger-than-life figure here, he essentially put the entirety of the pension fund in as many treasury bonds as he could.

44:02We needed to make 7%, 7.5%, depending on the year, to make the math work. And back then, you could do that in the treasury market. So there's this belief that, oh, we could just buy treasuries and we'll be fine. The problem is interest rates changed a little bit. And all of a sudden, in 2021, we're buying 1 % treasuries against a 6.5 % of the time actuarial cost. That is just a good and slow way to go broke. and it's never really been understood for a lot of reasons. Pension math is complicated. Investments are not everyone's cup of tea. I get all of that, but it's been this strategic problem of not taking sufficient risk, which it turns out is a really challenging thing politically to explain.

44:48So the analogy I always use, which has worked for people, is I've got two daughters who are drivers. Now one is 17, one is 16. And the 17-year-old likes to take some risks. So when we were getting on the highway teaching her to drive, she'd love to go 85 miles an hour. That is risky. That is a problem. The 16-year-old though, when we get on the highway, she'd go 45. And that is a problem too, but in a different way. When you put it that way, I think people begin to understand, oh yeah, going too slow can be a problem. You can create other issues like not keeping up with inflation, things like that.

45:21So I'm out there trying to explain that we've got a strategic problem, but it's hard because largely we're talking to retirees who are dependent on the pension plan. And when they hear more risk or a more aggressive investment strategy, then they have no interest in it. And I understand why, but it's important for our state and our taxpayers to get that right. What does the asset allocation look like today? It's roughly 48 % in aggregate equity exposure, including some private equity, but mostly public equity and 52 % investment grade fixed income. There's some other pieces in that, but largely investment grade fixed income.

45:56There's about 7.5 % cash in that 52. So there's just a lot of assets that are not helping us get to 6.5 % rate of return, which makes it very hard to do so. One of the other interesting pieces of it is if you want to make 6.5 % today, it's actually a lot easier than it's been a long time. I was looking at mortgage rates this morning, 6.6 % for a conventional 30-year advertising mortgage today. And if we want to make six and a half, that's a pretty good low risk place to do it. Sure, you have refinancing risk and you have other issues in the lower rate environment, but we can figure those out. So that's what I keep articulating to people is let's make six and a half and here's a low risk way to do it.

46:34And that's resonated pretty well. First, let's start with not carrying 9 % cash. That would be helpful. How do you think about it when you said for a long time rates were zero and now more people are shifting towards credit and fixed income because rates are higher. The timing of when you'd make those asset allocation shifts. Obviously the S &P is close to an all-time high. You have some capability to add to the equity market exposure under the current asset allocation, which I don't think we really want to do. I think you got to be slow and methodical about it, right? I mean, Murphy's law comes into play at some level where just the day you do it is the wrong day to do it.

47:11So you always want to average in and average out. I think we'll start with, it's about$10 billion of cash right now, finding places to deploy that in the single B, double B, or mortgage credit spaces where we can make six and a half, seven, and begin to build that portfolio aggressively as we think through what we're going to do with the alternative investment categories. This plan's got plenty of capacity to do more private equity. To be honest, I can't figure out why we would. In part, you got to recognize who you are. Pension plans are not at the top of the wish list for really successful investors generally.

47:45And so we've got to be respectful of that and think about how we change that over time, but know that that is true right now. So where's the alpha we're going to get from private equity? How does the math work in a four plus percent U.S. treasury environment for leveraged buyouts? So those are real questions that I have around adding more to the private equity portfolio right now. I don't know that we need to do it. Over time, I hope and I think we can build our reputation, our capabilities, our responsiveness in such a way that we will become favored. We'll still be public. We will still disclose a lot of things that people may not want disclosed.

48:19And that's always going to be an issue for a public pension plan. But I think there's a lot to do to build our reputation, our capabilities that allow us to overcome some of that. You mentioned this sole authority fiduciary governance model. And then you're running and assuming you win, that's you. So why would you want to change that if you were the one empowered to be able to make the investment decisions, which is often the bottleneck that people run into in public pensions? It's because you want it to be permanent and more like everybody else. So this portfolio will be around for a long time.

48:53Here's a fun fact for you. Do you know when the last Civil War pension check was cashed? Well, I don't. It's not a Jeopardy answer that's on the tip of my tongue. I have to start guessing. I believe it's 2018. Wow. So it just gives you some sense of the longevity of these pensions and the importance to these states, Illinois being the poster child of how problematic it can become. But for all states, they're struggling with these unfunded liabilities and making sure that they have enough set aside. That is not a four-year problem. That is a 100-plus-year problem. So you want it to be permanent.

49:26You want the architecture to survive you. 47 other states have gone away from this model. The three that are left are Connecticut, New York, and North Carolina. And as a Republican, you can imagine I tell everyone that's not a club we want to be in. And moreover, those three states, not North Carolina, but Connecticut and New York have had pension investment scandals over time where you concentrate this much power in one person with little oversight. And if you get the wrong person, bad things can happen. That doesn't really happen in a committee structure. Yes, committees are slower to make decisions.

49:57Yes, there's more bureaucracy. But without Warren Buffett in the sole fiduciary chair for 100 years, it probably makes sense to go away from it. So you're going through this process now. Elections coming up. We're going to release this before the election, so we won't know what's going to happen. And I'd love to walk through your decision tree. Let's say for whatever reason, you're running in a democratic slate against that. You don't win. What do you do next? I'd probably take a day or two off first and assess. I think I can live with whatever result happens as long as I know two things the morning after.

50:33One is that I've worked my hardest to make it happen. And two is that I haven't compromised my principles. And I'm on track on both of those. So that's good. I will be in the investment business in some way, shape, or form. My wife and I talk about it, what can and will happen. I loved being in the family office market. And so I'd be interested in exploring that. But I'd be interested in other pools of capital as well. I just want to be an investor in the long run. I'm happy managing an investment organization, or I'm happy actually just being an investor. I'm fortunate enough where I have to manage my own investments already.

51:04So I'm kind of already doing it. And I'd love to figure out who to do it with going forward in this ad scenario. Well, let's go to the happy scenario. So if you're in the seat, you've got this sole fiduciary role, unless you decide to change it. But until then, hopefully you're a good guy. So you can go do this the right way. What does it take to go from you're now the treasurer and there are some changes you want to make in the portfolio. how do you get from A to Z of where you want to go? It always begins with team. So November 6th or whenever they'll let me in the treasurer's office, I'll begin sitting down with what the existing team is.

51:44There are a number of vacancies on the existing team. So I've got some positions to fill. There are a number of existing investors there though, who I don't know. So the first is an assessment of what we have. And are these the folks who want on the bus for the journey we're going to take? So far, I've been really impressed and I'm hopeful, but it will be a pretty different regime under Briner for treasurer as opposed to the current guy. And I want to make sure that people can make that transition because I'm going to ask more of them. I fully expect that they are capable of living up to that.

52:12So assessing the team and understanding the vacancies that we need to fill is job number one. Job number two is to begin changing the governance structure. That is a legislative matter. That is not a trivial legislative matter. We in this state really have every other year where you can get material things done. So it's the odd years. You either want to do that in 2025 or 2027, depending on the results of the election, it might be pretty straightforward to do that in 2025 here. I wouldn't want to miss that opportunity because we've looked at this before. Two treasurers ago, they commissioned a study, recommended moving away from sole fiduciary.

52:46It was actually a Democratic treasurer at the time and a Republican governor, probably the opposite of what we've got now. And they concluded that it was the right thing to do. They decided not to do it at the time because performance was fine. That was the only hesitation is quote unquote, it ain't broke. And I think that's different now. So there's momentum behind it. There's some familiarity with it. I'm hopeful to get that done, but that governance change will take a lot of time and effort over 2025 to hopefully achieve. We'll also begin resuscitating the alternative investment program. So they have been out of the market essentially for a long time.

53:20There are things we can do there. It'll be slow because we're not just going to turn on the tap full speed, but we're going to at least open a little bit as another matter that we got to get to in 2025. When it comes to keeping or bringing in people on the team, you've worked in a very economically aligned seat for a long time. State pension funds typically don't have that same level of alignment of compensation. Curious, how do you think about attracting and retaining great people to help you run the portfolio? I think the attracting is actually going to be easier than the retaining. And why I say that, I have been so pleasantly surprised that after it was really the II article came out in February, which goes to our community, so many people reached out to say, I'm in the pension world at XYZ State.

54:08I see what's going on in North Carolina. how can I help? Because this is not good for anyone in our community. So there are a number of people who've reached out in that way. And some of those conversations have evolved to say, well, gee, you know, I've been this place for 20 years or 10 years and it's going fine. It's maintenance mode. That's rebuild mode though. And for a lot of people, that's interesting, particularly at a stage of your career where it's not really about the next dollar, though you need to get paid. It's about leaving a mark and leaving a legacy. And this could be that for our state.

54:42We are 50th best performing out of 50. And so there's a lot of desire to help fix that and move it up the curve that is really appealing to certain people. So that on an attracting side in the phase of fixing everything, I think is really interesting to people. Over time, you get to the retaining once we've fixed it. And that is a compensation discussion. Hopefully with governance reform, we'll get compensation reform to allow not to pay Wall Street salaries, but to pay median pension salaries. We're not there yet. I don't know how many of the people listening to this in the next couple of weeks are going to be North Carolina voters, but I've always been curious in these types of elections, how limited at times turnout is for particularly not the top of the ticket election.

55:32So how have Have you thought about winning where I know the polls are showing your head, even though the Democrat top of the ticket is well ahead? That can be super challenging. How do you take it from here to the finish line to try to make sure you get in the seat? It is a low information voter race. Most people do not show up at the ballot box knowing either of the treasurer candidates. They know the party affiliation, which drives the super majority of votes. That is what it is because that breaks evenly in this state, at least. And so what you're looking to do is those who are high information voters or persuadable voters, just to get your name in front of them.

56:13Some people will do their homework and those who do their homework will look at me versus my opponent and say, wait, the job is managing investments. And one of you has, and one of you hasn't. Okay. That will be 5 % of the vote, maybe. And then I'm hoping another 10 or 15 % of the vote will be people who are just aware. I enjoy a pretty material fundraising advantage to my opponent. A lot of that is people who I've worked with or have made money for over the years who just want to support. And that will allow me to get on TV with a pretty simple message of qualification. I don't want to run a vitriolic, hate-filled race.

56:50That is not interesting to me. What is interesting to me is trying to do it on its merits. And so that's what I've been doing. and that's what I'll do in advertising as well. Maybe I'm naive, but I really do think that'll work. I think that's what people actually want from a lot of their political races. So for those of us who aren't local, what's the core message of those advertisements? It is literally a mock interview. So we're both interviewing for the job and it's pretty humorous. We're asked, what's your experience? And so it just goes from there, but it is a job. This is not making economic policy for North Carolina.

57:23This is not economic development. This is managing the pension plan. There is a scoreboard. There is a way to do this better or worse, as the case may be. I think communicating that message as clearly as we can is really important. But admittedly, there's a lot of noise, so it's hard to cut through it. Well, Brad, I know we're all pulling for you. It's always helpful to have someone who actually understands investing in the seat of an important big pension fund. Before I let you go, before the election, I want to make sure I ask you a couple of fun closing questions. What is your favorite hobby or activity outside of work and family?

57:56College sports. So I live right across the street from UNC and deeply involved in the university, sadly involved in the football program right now, but it's more than that. Our neighbor's the tennis coach, the purity, the joy, the peaks and the valleys of college sports. I love, and my family loves, and we do that together. What's one fact that most people don't know about you? I make amazing biscuits. It's probably why I carry 20 extra pounds.

58:31What's your biggest pet peeve? Inauthenticity. And that is an ironic answer, I suppose, going into the political world. But I've got time for people who disagree with me on everything, as long as they actually believe what they're saying. I get asked two questions everywhere I go when I'm running for office? One, why'd you leave a great job to do this? And two, if you're a Republican, how do you live in one of the most liberal towns in the United States? And the answer to the second question is they're authentic. It doesn't bother me. I disagree. As long as it's coming from a good place, it's fine.

59:07Which two people have had the biggest impact on your professional life? Mark Yusko and Steve Ratner. So Mark hired me out of undergrad, put me on this path. And then Steve made me the CIO for the first time. What's the best advice you've ever received? So I interned at Goldman in the summer of 97, and it was an equity research. And this was when Goldman was still a private partnership. We got to go to the partner's dining room. And we got to hear from a guy named Pete Kiernan, who has become a bit of a media personality these days, but he was a partner at Goldman back then. And he told this story, and I'll try to abbreviate it, about working in a hardware store one summer.

59:44And he was a young guy and he'd get there early and study all the products and it was commission-based. And there was an old guy who would literally just sit on the stool in the hardware store and didn't appear to be putting in much effort. At the end of the first day, the old guy had sold 20 times more than Pete. He's just incensed. So, he got in even earlier the next day. At the end of that day, the old guy had sold 19 times more than Pete. And this goes on for a couple weeks. And Pete finally goes to the old guy and says, man, I'm trying, I'm doing everything I can. Everyone comes in the door, like, what do you need?

1:00:23And I go get it for them as fast as I can. How do you do so much better than me? And the old guy looks at him and says, well, the what isn't that important. It's the why and the how. So if you're coming to the hardware store, I want to know why you're here. Well, you may think you need a paintbrush, but you might need a bunch of gallons of paint too. You might need something to clean it up with. So why and how you're going to do it is usually a lot more important than what you want to do. And I always love that piece of advice. All right, Brad, last one. What life lesson have you learned that you wish you knew a lot earlier in life?

1:00:59Don't move your own goalposts. And it goes a little bit back to the power plant story earlier. So many people find themselves on a path and they don't really mean to be on that path. It's just because it's easy. And if they had talked to their younger self and realized that they'd already kicked the field goal, they would have changed that path. And so don't move your own goalposts is a really important life lesson over time, I think, for everybody. And Brad, we're going to do whatever we can to spread the word. Thank you. And hope we get you in the seat. Thanks so much for sharing your story and taking time.

1:01:33I really appreciate it, Ted. Thanks. Thanks for listening to the show. To learn more, hop on our website at capitalallocators.com, where you can join our mailing list, access past shows, learn about our gatherings, and sign up for premium content, including podcast transcripts, my investment portfolio, and a lot more. Have a good one, and see you next time.

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