WTT: 5.5 Lessons at 55.5

0:05This What's Heads Thinking, 5 1⁄2 Lessons at 55, shares what 5 1⁄2 decades of investing, podcasting, and mistakes have taught me about people, markets, and myself. I turned 55 1⁄2 recently. I gave up celebrating half-birthdays a long time ago, but this one made me pause. I'm probably past the midpoint of my life, though hopefully nowhere near the end. Along the way, I've interviewed thousands of investors, made plenty of mistakes, and changed my mind more often than I expected. These are the five and a half lessons I'd keep if I had to throw everything else away. On Understanding Others 1. Listening is a Superpower David Swenson once told me about his reference checking for Investment Committee member Parker Gilbert, then Chairman of Morgan Stanley.

1:05Parker didn't talk much, but when he did, he wanted to listen to every word he said. As a middle child, I was a natural talker, a euphemism for a yapper. David's point was simple. Even if I had something worth saying, too much talking would drown out the signal. We frequently hear that listening is important, but we rarely learn how to do it effectively. Great listening comes from quieting your mind and focusing exclusively on understanding someone else. Every person you meet has lived a life you'll never experience. Listening compounds understanding. Number two, serve others. It's rare in the investment business that anyone says thank you.

1:57Serendipity brought me to host a podcast where people thank me for my work every week. The podcast tells investors stories so allocators and managers can learn from them. Ironically, people remember me far more today because my work stopped being about me. I've never had more fun, been more fulfilled, or succeeded more professionally. Serving others is the surest path I've found to both happiness and success. On understanding the world. Number three, the future is unknowable. More things can happen than will happen in markets and in life. Whenever you're convinced you know what comes next, remember that Stan Druckenmiller got whipsawed in the waning days of the internet bubble.

2:49Julian Robertson closed Tiger Management just before value worked again. Michael Burry lost most of his business while shorting subprime mortgages a few years early. And the yen sits at all-time weakness today, only 22 years after I first heard a compelling bear case. The hardest day to invest is always today. The hardest day to start almost anything is also today. Waiting for certainty feels safe, but the opportunity cost is often far greater than we realize. On understanding yourself. Number four, thoughts create reality. Paul Salem grew up believing he was the luckiest person in the world. My wife, Vanessa, calls herself a lightning rod of lucky.

3:40Both have been right by all accounts. I also know people who complain regularly and consistently find fault with their circumstances. They're also right. Be grateful, write down your dreams, and embody the energy you want others to follow. The stories we tell ourselves become the lenses through which we interpret the world. Choose yours with intention. Number five, run your own race. I grew up on a track, attending Yale and Harvard, managing capital, and making money. I thought it was what I wanted, but I ended up lost in my mid-40s. I enjoyed most of it, but I wasn't sure if I had chosen it. I started the podcast without any expectation it would become a business.

4:33I just enjoyed talking about investing, and even more, learning about the people behind it. As it grew, I felt pressure to move faster. It took a while before I realized that wouldn't work for me. Silicon Valley entrepreneurs stereotypically thrive on big, audacious goals, moving fast, breaking things, and growing to the sky. It works for them, sometimes spectacularly, and they change the world. But that's not my style. I'm an incrementalist. Do something well, keep doing it, and let compounding take care of the rest. We adapt to the people and circumstances around us. When you get off someone else's track, you create space to find your own lane.

5:22That is when you find flow, thrive, and win the race. There's no right way to go through life except for yours. Be authentically true to yourself. Number five and a half. Emotional triggers derail the rest. Everything I've learned about living a fulfilling life goes out the window when I'm triggered. By difficult people, by my kids, by aging friends and family. At the flip of a switch, I'm no longer my best self as I bicker with my wife, get in my head on the tennis court or golf course, or say something I wish I hadn't. We all hold an idealized version of ourselves. The good news is you are that person.

6:10The bad news is you won't be all the time. Emotions change who we want to be. Reacting instead of responding, making bad decisions, and acting out with those we love. We're hardwired this way. The best we can do is notice it sooner and slow down. The goal isn't perfection. It's shortening the time between becoming someone you don't like and remembering who you want to be. It wouldn't be my style to stick to a round number or even a half one. So there's one final lesson that's fittingly impossible to leave off the list. The best story wins. In Same as Ever, Morgan Housel said, It's not the best idea, or the right idea, or the most rational idea.

7:03Just whoever tells a story that catches people's attention and gets them to nod their heads is the one who tends to be rewarded. That's true in investing as it is in life. I've heard hundreds of terrific strategies. Only a handful ever get traction. It's the ones described with a great story. Past performance doesn't sell the future. Stories do. It's not just in investing. Storytelling has always been how we pass wisdom from one generation to the next. If you remember any of these lessons a year from now, it won't be because the ideas are original. It'll be because stories are how we remember them.

7:47Thanks for listening to the show. If you like what you heard, hop on our website at CapitalAllocators.com, where you can access past shows, join our mailing list, and sign up for premium content. Have a good one, and see you next time.