Episode 56: Gavin Baker - Managing Partner of Atreides Management

31:34The other thing I think is really important to do when you're going through a hard time as an investor, have a hobby of some kind where you can make a number improve. You know, running, weightlifting, in video games, it could be your KT, but you need a number that you can make improve through your effort. I think that's actually super psychologically helpful when you're going through a hard time. And that was the first time I really leaned into that. You know, I lost like 30 pounds. You know, I'd gotten very out of shape. And then I got, you know, without really trying, I got very into shape just because of stress.

32:14And so that was a helpful experience. The other thing that was super formative to me was Fidelity had just hired their first team of quants. A lot of senior PMs are suspicious. They call them the green-eye shade guys. They were suspicious that they were going to be used to take their jobs. And so this team of like seven quants who all have PhDs, they come to meet with me. And they start telling me about quantitative risk management. And I'm like, oh, my God, this sounds amazing. Like I've never – this makes so much sense, you know, like that there are these common factors between stocks that you wouldn't think were correlated.

32:52And I was a month into running the font. And I was like, when is the next time I can meet with you guys? Like, well, anytime you want, because so far you're the only person who wants to meet with us. And so I literally met with these like seven PhDs for an hour or two every day for a year. Like I read the Barrett Risk Manual and that was incredibly lucky. And then I covered, but after the experience on pharma, they gave me tobacco. and tobacco was all about litigation risk. And I don't know how clearly they spelled out to me, but there were three cases you had to get. There were three cases that were existential risks to the stocks because Marlboro Lights, the DOJ, and then something else.

33:39I can't remember.

33:43But my feeling was, because they only gave me tobacco and normally people got more than tobacco, was that if I didn't get all those cases right, I was going to be fired. So I had to call three litigation cases correctly or I was going to get fired. That was my belief structure.

34:04And that was super cool because, you know, necessity is the mother of invention and you do have a lot of resources at Fidelity. And so I went to every single trial, hearing, everything that was public, I found people who had been clerks who'd like worked for each judge to help me interpret it. You know, I read thousands and tens of thousands of pages and I got the stocks right. Call the cases right. And you can for sure get an edge in litigation if you do that kind of work. Even though it's obviously binary and in a jury trial, anything can happen. but like when you're at the DC circuit and it was so cool to me to go to like the, um, the DC, you know, circuit, uh, which is the second highest court after the Supreme court.

34:56Anyways. Um, yeah. And, uh, so I got those right. And then they gave me the rest of HBC and retail. And this was another like incredible experience because back then HBC was all about globalization and the bricks. And so, you know, I would go to the, each of the bricks once a year, You know, so I'd go to Russia once a year, I'd go to China once a year, I'd go to India once a year, Brazil once a year. And then, you know, you'll go hit these other countries. And that was like an incredible experience about learning, you know, like it's a big world.

35:31And that was great. Learned a lot. Retail was incredible. And I did have the benefit, you know, Fidelity, if you love the stock, if you love the story, if you love the product, you'll love the stock. like that's Peter Lynch who like Peter Lynch and with the same way Churchill and Shakespeare said everything quotable in English like it's kind of like Peter Lynch and book Buffett yeah they're really all you need in investing um along with maybe the concept of reflexivity from Soros but um so um I was doing all my shopping at Amazon and I would ask every retailer why aren't you guys investing in e-commerce and like they all said well we don't like the margins and I'm like but it's obviously the future and they're like no it's not what do you know little kid and then like you know you learn these things at fidelity like i'll never forget there's um tim cohen um it's so all all good ideas are so obvious once you hear them but like it had never occurred to me how powerful it was if you're a retailer and what you sell is inflationary and how different that is than if you're selling deflationary stuff.

36:39And this is why e-commerce got started in things that was where there's a deflationary aspect and the working capital cycle really worked for you and gave you a pricing advantage for us like Home Depot, where like the stuff doesn't deflate really. Tim Cohen taught me that. But so you're just always learning these things of fidelity. Then I covered telecom, and those were the early days of smartphones. Like I was kind of the TMT analyst when the iPhone came out. I covered telecom and media, and that was really exciting. And then from 2007 through 2021, I was essentially asked about the bubble in 90 % of client meetings.

37:32you know, the internet bubble and like, you know, you know, Google and meta and Amazon and Apple, you know, like, why would you, you know, like, you know, they're clearly in a bubble. And, you know, from the time I was first asked about a bubble and during, you know, for the next 15 years, you know, your performance as an allocator or fund manager, whatever it really came down to, we overweight or underweight the internet. Before we go back to the episode, I want to take a short break to talk about my sponsor, Roe. The Generating Alpha podcast is presented by Roe, the all-in-one banking platform for startups.

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38:43Terms and conditions apply. To learn more, visit rho.co slash generating alpha. Rho is a fintech, not a bank. Checking and card services provided by Webster Bank, member fdic see your award terms for details thank you and back to the episode um and i'd love to take the opportunity to to bridge across to ai um yeah let's go to ai man and so before you talked about kind of your love for investing and one of the things it stemmed from is having a deep deep understanding of history um what does history tell us about living through this kind of transformation or transformation of this magnitude um so i actually think it's it's it's a very good question.

39:22There's a great book written by Carlotta Perez, which is kind of foundational to my thinking called Financial Capital and Technological Revolutions. And the conclusion based on that book and really the last three or 400 years of human history, as we've had markets for a long time, right, is that anytime you get a truly revolutionary new technology, you always get a bubble. Financial markets, they correctly get excited about the new technology. You know, financial markets are efficient most of the time. So they correctly identify it as being revolutionary and world transforming. And then you have a, what Michael Mobison calls a breakdown of diversity and opinion and that's what fuels a bubble um and then um that bubble leads to um you know an overbuild of the new technology and then that overbuild leads to a pause in demand which leads for to a crash and a very important distinction we'll come to is whether or not um that build out is funded out of debt or cash flows.

40:39It's a critical distinction for AI. And so just if you look at everything, you know, canals, railroads, radio, the internet, PCs, you know, it's like, you would think we will have an AI bubble. And a bubble is a disaster. If you're me, if you're particularly, you know, I'm very valuation conscious. I'm extremely disciplined on valuation. And a bubble's a nightmare. Like, nobody wants that. And I do think we're obviously not in a bubble. Like, anyone who says we're in a valuation bubble is just not paying attention. You know, tech's at the same multiple it was at five or six years ago. Like tech multiples have compressed since the beginning of 25.

41:32Tech is now, you know, at a discount to staples, which happens very rarely. We're not in a bubble from a valuation perspective. But given the scale of this buildup is, are we in a capex bubble? Are we in, are we overbuilding? um and i am and you know the simplest answer thus far is you know the roi on all this has been thus far has been really positive we're in a little divot of roi right now because blackwell is such an immense expenditure and is being used for training which doesn't generate an roi but i think it's pretty clear when you look at cloth you know uh chat gpt 5.2 grok 4.20 codex 5.3 which are all just very early checkpoints of black white models that like agentic ai is here and the ROI on Blackwell is going to be very high.

42:23It's a little bit funny that the market is simultaneously worried about AI putting everyone out of jobs and you have the most AI exposed mega caps at pretty attractive valuations. Maybe that's because there's some fear that there's going to be the Satrini scenario of a global depression. And what do you think about that? I think it's unlikely and I hope it's unlikely. But I do think the fundamental differences are one, the scars of the bubble are so deep. You know, like 09 was terrible. You went down whatever it was, 60, 65. And, you know, 60 to 65 sounds different than 40 or down 30, but it's very different.

43:04In the bubble, you went down 80 or 85. Dramatically different. and um so the scars are so deep from that bubble um that just that puts a lid on tech valuations and um i think that's one reason tech has compounded at such a high rate really since you know google went public in wherever that was was that or four, I believe, or three or four. We were in Salesforce in public the same year. But, and by the way, it's awesome. You get to go to the Google IPO, even if you're covering pharma, you know, it's incredible. And so these fears of another bubble have kind of kept a lid on tech valuations. You know, if you like take any tech company, it's a good company and you just transform its size.

44:00And then you put those financials, like those level of margins, revenue growth, ROIC. And to any other industry, it traded a massive premium. So valuations have been constrained by this.

44:16And second, we are fundamentally short watts and wafers. And no prior and just that are going to prove, and I think that shortage may prevent an overbuilt. But even if we solve the shortage of watts with orbital data centers, the TSM is still a bottle. And SIMIs and semiconductor manufacturing, you have a big advantage if you are ahead. Everybody, it's like baking. Everybody uses the same ingredients or, you know, whatever. You used to be able to choose between like the Nikon scanners and the ASML scanner. Now everybody uses ASML. or um you know you can make different choices for litho and etch but generally people are using the same equipment but it's how you put it together the recipe the steps there's a lot to it there's a lot of trial and error so if your head you have a big advantage it's hard to catch up and they caught up because intel made a terrible mistake mostly because of um ego but um they're just not gonna you know and the tsm executives are the people who met with sam altman and they just missed him as a podcast bro um and um so they're tough guys and they're just not going to expand capacity as fast as the world wants them to and so i think this fundamental shortage of watts and wafers along with the scars of the bubble i hope will keep us from a bubble so I'm optimistic and hopeful that watts, wafers and scars of the internet bubble keep a true bubble from happening because that's the enemy of every long-term investor I try hard to be grateful every day for different things I'm a big student of the science of happiness which by the way comes down to like a lot of it comes down to the words you use to describe yourself so when people ask how i'm doing i'm great awesome fantastic superb or phenomenal that's it you know and just saying that makes you feel better um it's about how you react to things it's about having views of the water or mountains it's about having indoor plants um and then it's about like feeling grateful and so i make a big effort to be grateful every day and in that spirit i'm so grateful to michael Burry like his Substack it's a godsend and he's a really smart intelligent guy who's like making a really credible bear case every day and I'm grateful to him man we want that we want a really smart person incredibly banging a bearish drum yeah but AI it's I mean I think it's you know for sure AI along with you know, the colonization of the solar system.

47:16It's going to be the most exciting things that happened in my lifetime. Maybe the most exciting things that, you know, happened in human history. And I'm so grateful for the position I'm in. A lot of my peers are a lot of people who run tech funds in general. They started off either they just bet on the internet early, or they bet on their media analysts who bet on Netflix or their software investors bet on SaaS. For me, semiconductors are my first love. Deep tech is my first love. And the nature of AI is just, as AI eats the world, silicon is going to eat the world because it's so much more computationally intensive than software, deterministic software written by humans.

48:02AI even if you put a harness on it even if you do the chain of thought even if you have multiple agents it's probabilistic and it is recomputing the answer each time and that lets it do superhuman things that software written by humans can't do but it does mean it's extremely computationally expensive so just semiconductors, watts and wafers are everything and wafers are my first loves. And then, you know, for sure, there was a bus tour of Silicon Valley right before Tesla came off the lockup. And I had missed the IPA. But I'd always kind of been into cars, like I was kind of into cars and like, you know fighter jets and tanks and like mechanical engineering um and so there's a like a 6 p.m meeting with tesla with elon because you know it's like a 1.5 billion dollar market cap and a lot of people don't show up and i show up and it just you know elon is talking about how from first principles evs are superior um first it's the only car or type of transportation where the core inputs were deflationary.

49:29The engine, everything in a car is kind of inflationary over time because we're in a resource-constrained world. But the price of a battery, the energy density of batteries has been compounding mid to high single digits for a long time, maybe 200 bps below solar photovoltaic cell efficiency. And so it's going to get cheaper. Everything else is going to get more expensive because you can put the battery on the bottom. You can give it both a lower center of gravity and a lower polar moment of inertia, which means it's going to handle better than an internal combustion engine car. Because an electric motor can so precisely control millisecond by millisecond traction, it's going to accelerate faster.

50:13And by the way, a two-wheel drive, you know, rear wheel, front wheel drive, EV probably has better traction than an all-wheel drive ICE car. and because you don't have you don't have to put a big 800 pound block of metal either between and front of or behind the passengers you know all ICE cars are generally front engine and rear engine with the sports cars being rear engine for that polar moment of inertia reason you can have a front and rear crumples up this just means it's going to fundamentally be safer you know the survival rate of Teslas and high speed collisions over 80 miles an hour is so much higher than And, you know, I'm sure other EVs are safe too, but Tesla's, you know, they are, to the best of my knowledge, by far the safest cars.

51:01And, you know, no matter how well you engineer an ICE car, if you're in a front engine car and you get in a head-on collision, it doesn't matter that you have an airbag and a seatbelt because an 800-pound block of metal, you know, that's, you know, operating at whatever it is, 1 ,600, 2 ,000 degrees Fahrenheit or 1 ,200 degrees Fahrenheit, you know, all the ex-nerds will be on me for not getting the temperature. right um you know rotating and you know in some cases you know you know very high rpms it's going to be in your lap and you're going to be dead so they're safer they're faster they handle better they have more storage space because the frunk and the trunk they're quieter they have less mvh noise vibration harshness it made so much sense to me like for sure like the greatest honor and most fun I've had is just kind of being along for the ride for Tesla, for NVIDIA, because when you identify an exceptional company, you always stay close to what's happening.

51:57You know, I don't think there's ever been a transcript of Tesla speaking publicly that I haven't read. Same for NVIDIA. You know, even when I wasn't covering Cine's, I would, you know, a non-tech.com was a big thing. When they came out with a new GPU, I'd read the head-to-head and I'm a big gamer. So, you know, I always wanted to have the best GPU because I'm not a very good gamer. So in gaming, they say that age and treachery can overcome youth and skill. In gaming, age and an incredible GPU can help you begin to level the playing field with youth and skill. Just because the screen refreshes faster, you literally can see your enemy first.

52:34That's why you pay for a big GPU in gaming. And so I've just kind of had the incredible pleasure of, you know, literally following NVIDIA closely for the last 25 years, Tesla for the last 15 years. Nuts. And, you know, Antonio was a giant part of the Tesla story. There's a chapter about him at the Walter Isaacson book. You know, he was on the field having an impact on the outcome, along with the incredibly talented people at Tesla and Elon. but there's a chapter in the Isaacson biography called Antonio and Tim for a reason. It's because they made a contribution. And by the way, you know, that's something, you know, very impressive about them, his people, because, you know, the, the engineers who work at Elon's companies, they're just exception.

53:25And I think this is part of Elon's success that is very, that hasn't been well-documented or as well-explained as it could have been, is that Elon's companies are always mission oriented. And if you're a really talented engineer for a long time, your choices were you can go work on people, making people slightly more likely to click on this blue link for Google search or click on this ad for Meta or show this good looking person in Ibiza in Instagram or you can focus on decarbonizing the world, which is Tesla. For sure, Tesla and Elon have done more to decarbonize the world than all environmental activists combined.

54:12I do think we would have gotten to EVs and solar and batteries eventually, but I think Elon accelerated EVs by 20 or 30 years, which was incredible for the world, for the environment. And SpaceX, making humanity a multi-planetary civilization that can survive an asteroid impact. X, free speech. XAI, understanding the universe. these missions which are authentic and he believes in and serve humanity are I think a huge part of why he's able to attract such exceptional engineers you know he's working grueling hours to make the world better and it's one reason like I'm always so quick to to come to his defense especially you know at when times are tough like i think historians will look at this as the age of elon and if he had stopped working when so many of his you know centibillionaire peers had stopped working that wouldn't have been the case you know we there wouldn't be Starlink.

55:33We wouldn't, you know, I think the odds are pretty high that I'm going to be able to see a blue sunset on Mars. You know, we wouldn't, you know, have, I think, you know, bent the curve on emissions the way we've really bent the curve in America, you know, emissions in America on a per capita basis are like, like, like, you know, 1925 levels. Like, so just, you know, that's one reason, like, I just like, we should all be grateful. it's it's truly inspiring and i wanted to touch on the point you made about um you said you were a gamer you said you played video games and you i think in a podcast with patrick you compared ai video games of like the form of human engagement writing moore's law um i'm interested in where you think human creativity remains irreplaceable going forward i don't know that it is irreplaceable i mean first of all what's happened with um i don't know it may be that nothing about humans is irreplaceable.

56:29Elon says it may turn out that humans are the biological bootloader for digital superintelligence. And I think it's going to be very important as humans, especially for you, Amir, that we may have to find new sources of meaning. For so many people, work has been their source of meaning. And one thing I've learned is when Elon says something, to take it seriously. And just when he says, you know, work will become optional and money will become meaningless. You know, I think that's a real possibility. You know, Antonio talks about the Star Trek future, the Terminator future. And like, I'm so here for the Star Trek future, and I might modify it a little bit to be the, you know, the vision of future for humanity described in Ian Banks' culture books, which are fantastic.

57:21But look, in the short term, AI is going to be amazing for the video game platforms. So I think AI's impact on video games has been very misunderstood. AI world models are going to lower the cost of developing a game by 90%. If it used to cost$300 million to make a AAA title like Call of Duty or$200 million or$100 million or whatever the number is, it goes down 90%. And so this might end up being really bad for companies that make video games because you're going to have a lot more competition. But if you were a video game platform, and we all know what those platforms are, this is going to be really good for you because there's going to be an explosion of content.

58:07But the idea that we are going to use AI to render a video game on the phone instead of the GPU that is on every phone, every iPad, every PC in the next five to seven years is ridiculous. but you know listen ai is like i vividly remember eric schmidt when he was 2010 2011 saying never bet against the internet never bet bet against ai yeah but for the foreseeable future video games are going to be played on engines rendered locally um you know monopoly go is a game where we have the revenue and the hours played and it is to render it using list crisis for something like Bay of three, you know, is more than two orders of magnitude greater than its revenue.

59:05So what is the role for human creativity, man? I don't know. I don't know. Like what I, what I hope, you know, one of the reasons Neuralink is such an exciting company and the Elon stated reason for invading it is to help biological intelligences, i.e. humans coexist with digital intelligences. because what's amazing about the human brain is, you know, we can, you know, get incredible scores on all these AI benchmarks and we do it with 20 or 30 watts, you know, you're, you know, it's like hundreds of megawatts of training to train that model and then way more than 20 or 30 watts for the inference.

59:44So we are extremely energy and efficient, our minds. And in a watt and energy constrained world, I am optimistic that I will have value for a long time. And I'm optimistic that you will too, Amir. Hopefully. Hopefully. But I mean, the right answer for everything related to AI is, you know, maybe. You need to approach AI with a lot of humility. And

1:00:17And so, but anyways, Neuralink, what exists to do is, you know, humans, we have an IO problem. You know, in the same way, I like to read transcripts rather than listen to someone talk because I can read faster than they can speak. That's an IO problem. And Neuralink, if it fixes that IO problem and lets us take in information and output information at a much higher rate than speech, writing, or typing. which if you think about it or those are the, those are the ways that's it. Um, along with all the nonverbal cues that go into human interaction, like that'll be a big unlock, but if you're something else, like I do just want to, um, talk about, cause I feel like I didn't hit it enough.

1:01:02Go ahead. It's just the importance of resilience and tenacity and knowing yourself and, um, Um, just, there's going to be really hard times and you has, I think, as an investor, your goal should be to get to a place and, you know, having a touchstone, like a book that you read, um, remembering, going back and reading the journal, you know, um, you know, at times, you know, earlier in my career, when I was in a big drawdown, I'd always think of, if you've seen the movie, the perfect storm, the perfect storm was actually another movie that i would read that i would uh another book that i read um during drawdowns um and there's a great scene in the movie where george clooney you know the sky is briefly clear and they get optimistic and they're in the sun and then it gets dark again and george clooney says she's not going to let us out and the waves get big again there's times when you were in a drawdown particularly early in your career where you feel like that and you just have to have a mechanism and a system.

1:02:13For me, it's exercise. It's returning to these touchstones. It's looking back at notes I wrote and other drawdowns where instead of getting tense and choking up on the back, you relax. and then what and then another psychologically helpful thing although like this was important to me earlier in my career but but i was going through a really tough time um i actually think it was after the first month on the pharma fund weimer said listen man you got to realize it's just as statistically difficult to be at the bottom decile as it is to be at the top decile like investing because it's probabilistic even if you try really hard to be in the bottom decile you might not end up there in the same way if you try really hard to be the top decile you might not end up there um but that thought was important to me um particularly during the gfc i'd quote to that that to myself a lot but i think in going through a drawdown and dealing with it you have to this goes down this this comes back to knowing thyself and having a philosophy and process that fits your own unique emotional makeup such that you can make good high quality decisions when you're wrong.

1:03:28And definitionally, like if you're in a drawdown, you were wrong, like full stop. You know, I'm not one of these people. Oh, it's just early. It's not wrong. You know, George Vander Heiden, Fidelity PM, being early is the same thing as being wrong. If you're losing money, you're wrong. Okay. You know, and it's not that the market is being stupid. It's not that people are missing something. You're wrong. What decision do you make? But Jennifer, Jennifer The woman I referenced earlier is such a good friend and a mentor. She had this phrase that I just always think about. Ultimately, as an investor, you either have to panic early or double down late.

1:04:06And essentially, no one does both. And know thyself. And I am not a panic early person. I am a double down late person. And I think knowing that is something that kind of helps me go through a drawdown or a tough period of performance. And what is it? How long did it take you to know yourself? Well, at what point did you know yourself? Or do you think you know yourself? Well, I had to find out who I was when I blew up on pharma at the age of 25. you know when you go from

1:04:44you know having been such a star on tech and you know promoted early and you know you get all these accolades and you're like 23 or 24 and because you're you're you're young and silly you start to believe some of them go immediately from the you know kind of a a big star in the department to literally like you know the lowest of the low yeah it's hard like when you're in a drawdown like it's you know you feel you know you feel you know every time you know hindsight's always 20 20 so the mistakes seem so obvious yeah um um and that's why i just think if you were a young investor, the best thing that can happen to you is having an experience like that early.

1:05:40Because it's going to happen. And the earlier it happens to you, the better you will navigate it the next time. And definitionally, almost every time you go through a tough period like that, the consequences for not navigating it well are higher. Because if you're succeeding in your career, you're getting more and more important jobs. So I just feel lucky. And I mean, look, pharma was a very important sector that I had that humbling experience so early, you know, and I had to figure it out. It's not like this was obvious to me. Yeah. Like I like happened. I was feeling I was feeling conscious of how prideful I had been.

1:06:22I thought, oh, a book about pride is the Wizard of Earth. And I read that. And it's about, you know, the guy who, you know, It begins with, you know, this is, you know, it's the Jed is his name. And it's, you know, this is not, these are not the stories when he was a famous archmage. These are not the stories of how he tamed this dragon. This is a story of when he was a young man and failed utterly. You know, so it's a book about utter failure due to ego and then coming out of it. So I probably read that like nine months into like a really tough time. And then I realized, you know what, instead of waking up at 5 a.m.

1:07:07on Saturday and working, I'm going to lift weights or go for a run. And then that makes you feel better. So you have to trial and error the same way you have to find a philosophy and process that suits your own emotional makeup. You have to find what works for you when you're going through a tough period of performance. and ultimately you have to do it yourself. Almost everyone is going to go through a really tough time every two, three or four years and you want to get to a point, which I feel like I'm optimistic that I'm now there, where the decision quality actually improves because you have a bunch of data that I look at all these times I've done this, I've been here before and I made high quality decisions and so you're at your most confident instead of at your most gun-shy.

1:07:56And that's why I thought it was just kind of important to talk about all of it. A hundred percent. And I think this is one of the better ending notes to end off on of to keep going with your line of advice to an investor. This is the one question I ask every single episode. And I'm 16 right now. If you'd give one piece of advice to a 16-year-old today, life advice, career advice, Jeff, if you ask any romantic advice, what would it be? um well so i am the oldest cousin um in my i guess my aunts and uncles generally think well of me so i have gotten asked to speak at an innumerable number of high school graduation dinners you know college graduation dinners for like some of the younger cousins and i always give the same advice be kind and be scrappy.

1:08:46A lot of people who are kind are not scrappy and a lot of people are scrappy or not kind. And I think being kind is super powerful. There is karma in the world. Like I've, I've had hard experiences and you don't always know it, but if you are, if you are kind to people, a lot of people pay it back. And then the great thing is like my rule of someone is, I'll bounce the ball once to anyone. If they don't bounce it back, I'll bounce it back one more time and then never again. And then you end up kind of in a group of like-minded people who help each other, who cooperate. You know, there's a lot of these kairatsu adventure, kind of for sure I'm in a kairatsu.

1:09:32You know, Antonio is like a very important part of the kairetsu that i am in um and i opened and his partners so much i'm so grateful to them for so much but um you end up with like-minded people and i think it's an important thought because particularly as a young person you see a lot of sharky people getting ahead and for sure some sharks end up at the top um but the kind people can succeed too and i just wouldn't underestimate it so that's one second thing is like most important thing like um steve schwartzman's biography is meaningful to me because he talked about how hard it was for him to start the fund you know there was a blackstone there's a famous scene where him and pete peterson who's like one of was one of the icons of American finance at the time they had gone to see a very prestigious endowment in Boston and I was on a hot Friday afternoon and everybody at the endowment had left they got completely blown off and then it started pouring rain and these are in the days of pre-Uber and so they have to walk home and and eventually it floods and so they walk home and to their hotel and water up to their knees.

1:10:51And it is starting an investment firm. It's hard. Like being an investor, that takes a lot of tenacity, resilience and determination. It's also hard starting an investment firm. But I would say the thing that Steve Schwartzman said was you are making your reputation to a degree you do not understand. end when you set foot in an investment bank and a private equity firm and a firm like Fidelity. And people will remember the way that you behaved in your early 20s and your mid-20s. And he said in the book, today there are people who are in my training class and I help them or they help me. And we might not have spoken for 20 years, but then there comes a time when I really need their expertise, I pick up the phone, they answer right away and vice versa.

1:11:45And I think this is also a very important thought and one that I hope can help people avoid sharkiness. It's not investing is a positive sum game. It's not a zero sum game. Even if you're not the best person in your class at Goldman Sachs or Morgan Stanley or JP Morgan, it's going to be okay. And people won't remember that you were the best. They'll remember how you treated the other people in your class. So that's an important thought. Yeah, I'd say be kind, be scrappy. Trust that there is karma in the world. And only be an investor if you love it. And if the first time you go through a really tough period of performance, you kind of can't find a way to be um emotionally and psychologically centered like maybe you know maybe public markets investing isn't for you you know you can go to private equity where there's just not the emotional volatility um yeah i would just um you know in the um in the sun eater series that i just finished to great science fiction series, one of the mantras that the main character repeats is seek hardship.

1:13:07And you want hardship early in your career, especially as a public market investor, because no matter how good you are, you are going to encounter it. Going back to that paper used by Alpha Architect, even God would get fired as an active manager. You're going to encounter hardship and the decisions you make during those times will define your career. Full stop, man. One of the more enjoyable conversations I've had. I really appreciate it. I'm so glad we can make this happen. Yeah, but I really enjoyed this, Amir. And just, man, I just got to say, and please keep this in the episode. I so admire the hustle.

1:13:44You were scrappy, man. You were scrappy. and like you took i mean i think it probably took you a hundred emails before i responded to you you know um by the way here's another piece of advice it is like if you were a young person and you want to be mentored by somebody you don't know like point number one is you got to be persistent you can't give up quickly point number two try and deliver value you know like going back to that Peter Lynch concept, you know, if you're a young person, you know, things that the people who you want to mentor, you don't know, you know, maybe, you know, whatever, you know, that a lot of the cool kids have started wearing the Adidas, you know, Samba Novas or whatever it is, or that the cool kids aren't wearing hair Jordans anymore.

1:14:34Although I am a Michael Jordan maximalist. But so, you know, something and try and try and deliver value when you're asking for value. I think this is also something very important and that I kind of intuited earlier, like always give more than you get. If you're going to ask for something, make sure that you've given a lot before you ask for something. So one, I respect your hustle. I respect the persistence. And I do think that's another good piece of advice. I mean, who knows if it's good advice or not, but yeah, man.