This guy made $80M in profit. Here's his next 3 stock picks

24:18Sam Parr:Can you say, generally speaking, these businesses, what do they sell for? not yeah like like on the EBITDA like what's the EBITDA multiple they don't sell for big multiples because it's a physical business it's not like a software business but the amount of money we were generating from these shows was enormous it was really profitable very profitable because we care deeply about the shows and we ran great shows we actually I mean just doing back of the envelope math, 700 ,000 times, let's say 60 bucks, that's, you're getting close to$50 million in revenue, let alone vendors. I can't disclose exact numbers, but I'm going to tell you the numbers were huge and we started from nothing and we built this all up over four years, but it wasn't easy guys.

25:07Like we, we were so frugal that we had our own rig. Cause you know, the most expensive part of throwing a convention is buying, renting pipe and drape at all the conventions. So we bought our own pipe and drape, put it in a 18 wheeler and the founder operator of this business, Matthew, would drive the truck himself from city to city. It was crazy. Okay. And then we would unload the truck with some local help. Right. And we would set up the shows ourselves. I mean, there were points because I have a bad back where after the first day I was almost, I couldn't walk. And there were some shows I'd have to go home on day two because I hurt my back so bad from just like leaning over ticketing thousands of people at the show.

25:56Because we would hire contract workers to help us, but we needed every hand possible.

26:00Sam Parr:That's pretty crazy. And so we ran it like a family business. We were deeply passionate about the attendees. We would throw a concert every Saturday, midday. We had like Vanilla Ice would perform or like it was so fun. And meanwhile, to this day, I've never bought a Pokemon card. So, like, I was an observer of this sector. But long story short, like, I had deep conviction in nerd culture and Pokemon specifically. And I think Wall Street doesn't, and just business, the business community generally doesn't appreciate the fact that there are millions of people that like collecting these cards. and no one had provided a fun place for them to physically go to once a year to connect with other people like them and trade these cards.

26:52Like we have sports card shows. We've had them forever, right? With baseball cards and whatnot. But no one had ever really established a big show for TCG, for like these table card games, right? Like no one had ever done it before. So it just intuitively made sense to me. Hey, let's take a quick break. You know that feeling when strategy is done, the brief is written, everyone's aligned, and you realize someone still has to sit down and actually create all the content? That someone is usually you, and it's due tomorrow. Well, the Breeze Assistant from HubSpot can help. It works right inside HubSpot.

27:24You can draft a campaign copy, blog posts, emails, all in your brand voice, all using your actual customer data. So you don't create just content. You create content that converts. Check out HubSpot.com, the agentic customer platform for growing businesses. So I'm curious if this is something that others have been doing or there's people you look up to. So, for example, somebody who you wouldn't think is an observational traitor, wouldn't call that, is Warren Buffett. But there's some great stories of where he did exactly what you're talking about. There's a story of the salad oil crisis with American Express.

27:57I don't know if you guys know that story, but it's basically, you know, at a given time, they were lending money. And they were lending money to this guy who was supposed to have salad oil dressing. and then they went and they checked the barrels and the barrels were just full of water, salt water, like seawater. And there was no salad oil at all and the stock is plummeting. And Buffett, he figured out what the central question was, which is, is this a temporary setback or is this actually going to be damaging to the trust of the brand long-term? And he believed in brands, right? That's why he has been on Coca-Cola and Geico and these other companies that he feels like have brands that have power.

28:32Sam Parr:It's the exact opposite of what Chris is. It's like, what won't change? Yeah, so he, well, he was, but still the market research part of this is kind of shared, right? So the story is he goes into a store and he just watches the clerk and he watches customers with their credit card and he's basically trying to figure out, are people going to stop taking American Express because they no longer have faith in the good standing of American Express? Or is the American Express brand going to endure this? And really the asymmetry was the market believed that this would damage the future of American Express and the quality of the brand.

29:07And what he observed in watching people was that the stores and the customers had no problem using American Express and that there was no issue. And he did the same thing. He did a very similar thing with Apple, where he had stayed away from technology companies for a long time. And then he realized like, oh, when he talked to Apple customers, he's like, not only would they not trade their current device for a cheaper equivalent device by somebody else. You can't pay these people to switch off Apple. And it was more of a social, psychological observation, not a technical or fundamental analysis of the business that led him to invest in those companies.

29:45So Chris, it's a long-winded way of asking, who else has been great at this? What are the great stories that inspire you on this? Or do you feel like you're kind of the first one to popularize this? No, the concept of information asymmetry is not new to investing methodologies. The most famous person to adopt it widely would have been Peter Lynch with the Magellan Fund in the 80s. The difference is being a pure observational social arb investor is this concept that it shouldn't be part of an investing methodology, but it should be the only thing that you take into consideration, right? So Peter Lynch kind of blended this observational investing approach.

30:30He would famously walk the malls and kind of look at what stores had the longest lines at the cash register. Seems pretty simple, right? And he would combine that with massive amounts of fundamental research. You have to ask yourself, though, if the market is relatively efficient. And we know the market's never perfectly efficient, but if it's relatively efficient in terms of taking into account all the fundamentals and all the technicals and you have all these investors that are trying to price a company based on all the known things, then if you're able to surface something that's unknown, that is meaningful, you don't need to worry about all the other stuff.

31:20You don't need to have this robust, fundamental, technical approach that also happens to apply information asymmetry when you come across it. You can focus all of your energy and all of your research on just finding new information that the market hasn't discovered yet and making an assumption that the particular company that you're trading is relatively efficient with all the known information and investors haven't fully priced in this new piece of information. So all you care about is that one piece of information asymmetry. It simplifies the way that investors can approach this game because most of us are never going to be technically proficient investors and never going to be able to compete with the absolute best, most pedigreed Wharton graduated, like fundamental investors, right?

32:20That are doing deep, deep fundamental analysis. And they've come to terms with the fact that this company should trade at a 29 PE as opposed to the 24 PE it's trading at today. I mean, I don't want to play that game. The easiest game to play, because you can invest a million different ways. So the question is, what is the best approach to investing? That the largest chunk of ordinary people can actually apply efficiently to markets and regularly do that in a fruitful way. And I strongly believe it's pure observational social arm investing.

32:57Sam Parr:Sean, I actually just Googled this and it's funny. I'm quoted as the source of Google for this story. So it could be a little bit wrong. But in 1966, a young Warren Buffett visited a movie theater on 45th and Broadway in New York to watch Mary Poppins. He went with a briefcase in the middle of the afternoon, later joking that it almost felt like he needed to rent a kid to fit in. This trip was his way of researching Disney to see if they had lasting brand appeal. And later that day, he bought 5 % of the company at$4 million, and it was a 50 % gain over the next year. And he says selling it, which he did after one year, was one of his biggest mistakes that he's ever made.

33:30And by the way, so if he really believed that lasting, durable brand appeal was there for Disney, right? Did he also believe that the rest of the world came to that acknowledgement after a year? And if he did, then he didn't have any alpha after a year. And he was probably right to sell Disney.

33:53Sam Parr:And Disney might— He was only 35 when he did that, by the way. So, I mean, you could also say maybe he just made a mistake. But you have to understand something. Whether a stock goes up or down after you sell might have nothing to do with you making a mistake. Because that's not your thesis. That's not why you invested. You don't have any alpha. So it could have gone up for a completely different reason. So you got to get out of the headspace of saying because a stock continued to go up after you exited, you made the mistake. That could be completely coincidental. It went up for something that you had no knowledge into, that you had no take on.

34:29Sam Parr:How do you quantify that, though? Because, like, for example, Sean and I or the average Joe might have, like, an opinion on one company. Their sales, we think, are going up. But that doesn't necessarily mean the stock will change. Okay, let's take a step back. If you are correct that a company is being impacted by something meaningfully and their revenue is going to go up and the rest of the investor class is not aware of that yet, If there's nothing else impacting that company during that trade window, it is highly likely. Again, there are a lot of factors. There's the macro market. The market could come down, right?

35:11But in a vacuum, that piece of information will almost always, in a vacuum, will almost always result in the stock going up. Because when a company makes more money than the market anticipates, the stock will go up. If you're able to surface something that will impact a company's sales that the rest of the market is not aware of, when the rest of the world comes to terms with that piece of information, that will positively impact the stock price. Assuming that there's nothing else going on with that company or the market at large. But I wouldn't overthink it. Too many investors overthink this.

35:50It's not that complicated, guys. Can you give a sense of volume? So I think you said something like 80 investment decisions, 17 years. Does that mean you're making four-ish buy-sell trade decisions per year? Or did I hear that wrong? Because my hunch was that you're a little more active than that. Seems like in a given year, how many investment decisions are you making? So I'm referring to high conviction trades. You know, trades where I have a lot of conviction and I'm generally allocating 5 % to 30 % of my total portfolio to buying that stock. Or I'm allocating, call it 2 % to 15 % of my portfolio to buying options in that stock.

36:35By the way, when you say portfolio, is this like I have my trading, my fun, my fun slush fund, and then I have my boring safe nest egg over here? No, entire portfolio.

36:45Sam Parr:Entire portfolio, yes. I think what Sean was getting at was like, do you have like a safety net? No. I mean, my public equity portfolio is my public equity portfolio. It's just one portfolio. So when I have high conviction in a trade, I will allocate between, like I said, I don't know, up to a third of my portfolio might be in that single stock for that period of time that I'm in that trade. And Sean, to answer your question, in the early years, I would average one to two high conviction trades a year. Uh, now as we have more social media today than we had back 13 years ago and the world is more digitally connected today and there's, it's actually easier than it's ever been to read into the world's conversations as they're happening.

37:39like as you guys know I spend hours a night reading comments on tiktok videos because that's where most of the world organically shares what they're doing what they're buying you know where they're going like on a daily basis I've increased the velocity of my high conviction trades so there have been years now where I've had six or seven high conviction trades in a year where it used to be one or two. Right. And by the way, the more change that's happening in the world, the more opportunity to surface a high conviction trade. So probably the biggest year I ever had was during the pandemic because the year of the pandemic, there was a tremendous amount of change happening in the world.

38:24We all started living at home, you know, working from home, right? We stopped going out. We started buying things that we would ordinarily never buy. we stopped spending money on those things and started spending money on these things because we're living inside of our house for a year straight. You know, we're buying bicycles and cameras for our computers and printers because the kids are doing homeschooling and all of these things. So we're buying Peloton because we're not going to the gym and we're working out at our house now. So, you know, we're shopping more on Amazon and Spotify. So like the more change, the more opportunity for an observational investor to surface that change and connect the dots to investable opportunities.

39:09When there's not a lot of change in the world, then there's less opportunity for us. So what I've been telling people is in the age of AI, we've never experienced this type of global change before, other than the pandemic, because AI is radically changing the way that we think about work, that we think about intelligence. Every company in the world is going to get hit positively or negatively due to the way that AI and unlimited intelligence is going to impact their sector over the next few years. So this is an amazing time to be an observational social arb investor because the world is changing so quickly.

39:52There's going to be so many winners and losers. So the game here is to figure out what's changing and the degree to which that change is good or bad for any given company at any given period of time.

40:09Sam Parr:Does this influence you, Sean? This is your second time talking to him. Has your actions changed since December? Not necessarily because the main thing I do isn't like active investing in public equities. If I did, maybe it would be a little more. But I don't know. I find it fascinating. And like you said, we talked to, on one end of the spectrum, sort of the Charlie Munger, Buffett disciples. We've had those value investors on. We've had Howard Marks. He's dealing in debt and bonds. And you have Ray Dalio. You have all these different people. So I'm more of a, right now, in a kind of curiosity mode, not a, oh, great, let me switch up my style.

40:52every time I talk to a really successful, really interesting investor, which for us on this podcast is like every month. But let me ask you a question. Your audience, what do you think the average follower of this show looks like? Do you think the average follower of this show is capable of being a top 1 % fundamental investor competing against literally 100 %?

41:22Sam Parr:No, I don't think that the average listener of this show couldn't be a top 1 % in any type of investing. That's completely untrue. That's ridiculous. I don't think that's ridiculous to say the average person can't be able to. That is patently false. Patently false. Where do you think I graduated in my high school class? Just guess, percent-wise. Either 1 % or the worst percent. I'm not sure where I should guess. No, genuinely. like genuinely, I generated 80 million off a$20 ,000 portfolio. Like, I am who I am. You know, look at the last 15 years of stuff and articles, like genuinely, like objectively, like where do you think I would have graduated in my high school class of public school?

42:09Just back up. The question

42:10Sam Parr:was the average person of our show, are they a 1 % investor? I don't think they are, nor do I think Oh, I'm sorry. I didn't mean that. I meant do they have the capacity to beat? Also no. Okay. Well, I'm asking you. So, like, let's talk about—we talk about IQ. Like, what do you think my IQ—I had an IQ test. What do you think my IQ was, or where do you think I graduated in my high school class? Just objectively, just throw it out there. Middle. Sean? Well, you're asking the question, which tells me it's got to be in the bottom half of your class. It's lower than that. It's bottom 25 % of my high school class.

42:46I barely graduated. And I'll just tell you this. I don't recall my exact IQ, but I will tell you this. When I was in kindergarten, okay, I was the only kid in the class that didn't know what my last name was. And they sent me to Manhattan to get an IQ test. And I still had that piece of paper. It was slightly below average in terms of IQ. Nothing crazy. They kept me in the class. I don't know why I didn't know my last name. I was just saying, I was the only kid that didn't know my last name. I went on to do not a lot better through my senior year of high school, obviously. I was bottom 25 % of my class.

43:29What about temperament?

43:31Sam Parr:Because, again, we've talked to all these amazing people. A huge takeaway that I've had talking to a bunch of the investors in particular is that temperament probably matters more than IQ. And I think your temperament, the way you were born is likely just the way it is. You probably can't change it. I think Sean talked to Manish Pabrai and he said something, I think it was him, Sean. He said something like, I probably can't take anyone and make them great, but we could probably improve you a little bit. You know, I think he didn't say this, but it was like the analogy of you're born seven feet tall and you could be better at basketball at six foot tall, but like, you know, freaks are freaks.

44:07Sam Parr:And so temperament, I actually think, is probably more important than IQ when it comes to this game. Okay, I would say that being a top 1 % observational investor, just a top 1 % investor generally, is easily doable if you're willing to aggressively adopt being an observational purist investor. And the reason I say that is because what I actually do is so simple and so straightforward. And I've seen over the past seven or eight years since I've been public about this on YouTube and I have hundreds of thousands of followers. I have people around the world writing me near daily. They are dentists.

45:00They are janitors. They drive trucks for UPS. They work in a parking lot, checking out cars, okay? And they will DM me, hey, Chris, I've been watching you for five years. I started doing this. I was early to this company or to this company based on what I observed in the world. It's that one investment has changed my entire life. And I tell people, if you have one or two home runs over 20 years, one or two home runs over 20 years, meaning you find something early and you put a meaningful amount of money in it, that could put you into the 1 % or 2 % range of all investors over that two-decade period.

45:46And that's all it takes. And a perfect example of that is Tesla, okay? I actually wasn't early into Tesla. But do you know how many terrible investors otherwise? I mean, these are people that hadn't done anything in their entire life in the investing world and probably haven't done much since. Our 1 % investors, because they were behind the wheel of the Tesla in early days, and they realized this is a game changer, and they put some meaningful, not even that meaningful, just some reasonable amount of money into Tesla stock. and that one investment made them a top 1 % global investor for like a 10 or 15 year period or 20 year period and changed the trajectory of their entire life.

46:27They're not hyper intelligent. They're probably like any regular person. They're probably like most of the people that watch this show or any other show. And it's all about just understanding that that's all it takes because most people never even try this because I think I can't compete with pedigreed investors from Wall Street. I can't spend six hours a day doing technical trading. They don't realize you don't need to. You can just go on with your life, live your life. Just keep your mind open to potentially early discovering the next big thing. That's it. That's literally it. Like, that's all you have to do.

47:03Today's podcast is brought to you by my friends at Mercury. They make the world's best banking product. I think you know this already. I use Mercury for all of my businesses. I think I have like maybe seven or eight businesses. we use Mercury as our business banking across all of them. And now they actually just launched a personal banking account. So I have my personal account there. I moved off of Wells Fargo and Chase. I'm just all in on Mercury. Why? I like products that are easy to use. I like products that get me and the problems that I have. So like very easy to make a joint account with my wife, very easy to spin up virtual cards.

47:32One click and I get savings yield. It just has all the stuff that I need in one place. So if you're looking for the best banking product on the market, it's definitely Mercury. I will fist fight anybody who disagrees with me on that. Go to mercury.com slash personal and learn more. Mercury is a fintech, not an FDIC-insured bank. Banking services are provided through Choice Financial Group and Column NA, members FDIC. What are the things you have most high conviction in right now? My highest conviction trade, I'm like a broken record on this. It sounds so weird because it's not a small company.

48:05It's Amazon, guys. Like I have more money in Amazon. This most concentrated position I've had in a really long time. I always say the most concentrated position I've ever taken was Nintendo when they came out with the Wii. Because I was at the E3 conference and actually saw, this is like a Buffett story, right? I actually saw the line of people interacting with the Nintendo Wii for the first time. I don't know if you remember that game-changing platform. And nobody on Wall Street believed it. Everyone on Wall Street was so hyper-focused on the Xbox coming out and the PlayStation coming out. Nobody thought the Wii was going to be a big deal.

48:42I was there. I saw it in real life. I had 100 % of my portfolio invested in a Nintendo ADR, which is a tracking stock that tracks the Japanese ticker of Nintendo. And I had 100 % of my portfolio, I think, for a full year in Nintendo until Wall Street finally realized how big of a deal that was. But Amazon, I just think it's the company that is best positioned in the world to benefit from the upcoming AI efficiency wave, which is once we actually start to see meaningful productivity jumps from the AI age, there's no company in the world that's going to benefit more from that than Amazon. I also think they are the nucleus of AI infrastructure.

49:30sure. So, sorry, what's the observation you made here? I, I, like what, what, is this not from the TikTok comments in this situation? Is this from? No, this is, this is, this is a kind of a global cultural shift and it's, it's a big observation I've had for three years, which is based in part, I don't know if you guys ever read Nassim Taleb's book, Black Swan, but Black Swan theory essentially says that our minds are not capable of fully recognizing and appreciating anomalies in the market or the world that haven't happened before. I had this thesis in early days AI that AI wouldn't just be the next internet.

50:19It's not just going to be the next mobile phone or smartphone, but that it would be meaningfully larger than anything we've experienced in our lifetime. And as a result of that, we would see the biggest trades of our life happen as a direct result of AI. And even when the information was right in front of us, the market would not believe it until it actually shows up in the numbers because there's no precedent for what we're seeing in AI. There's nothing that has ever happened in our lifetime before AI that we can compare to AI. Now, I might regret saying this in 10 years, but I don't think so.

51:04I think the concept of intelligence becoming infinite and free to the world is going to be the biggest change we've ever seen in humanity. So the reason why Amazon went down and has not really gone up as a company meaningfully, you know, recently, right, is because they have made such an aggressive investment in AI,$200 billion. Now it's like 200, it's more than 200 billion this last year. CapEx investment in AI in a sector that nobody knows if it's going to pay off for them or not.

51:42Sam Parr:Does that mean like, for example, did your Alexa just change? Where now she talks to you, like my Alexa just changed. Now it talks like chat JBT, like I can ask real questions. I would say the biggest example is this. It's this simple. Amazon is betting the entire company on AI. End of story. As is some of the other big tech companies, right? They are leveraging all of their profits. They're leveraging their balance sheet. They are building out massive infrastructure unlike they ever had in the history of the company. They are making the biggest CapEx investment of any company in the world by a big margin in AI.

52:25And the world is still unsure about how this is going to play out. I'm not unsure. I'm willing to bet it all. They think that the infrastructure layer of AI, which is Amazon, okay, because Amazon understand this. They are a chip company, right? They're Tranium. Their chips alone, their Tranium AI chips are generating like$50 billion of revenue this next year. They are one of the largest infrastructure data center companies in the entire world. And their AWS platform and everything that they've constructed in cloud computing over the past 15 plus years sits at the center of this architecture infrastructure for AI.

53:10On top of that, Amazon is the third largest digital advertising company in the world. So as AI makes advertising meaningfully more efficient and targeted and effective and personal and rich for consumers, Amazon is at the center of that wave. Additionally, Amazon has spent 20 years building out the world's largest logistical infrastructure for the delivery of physical product to humans, an investment that no other company has even come close to making. That investment, even moving the margin needle a few points, is a game changer for Amazon. So as we enter this new world of intelligence and automation and robotics, okay, Amazon already has the infrastructure as the world's largest e-commerce company, the largest logistics company, to benefit massively from the increases in productivity and efficiencies that infinite free intelligence.

54:18And eventually what we're going to see is embodied intelligence, right, with robotics, right? This is going to result in productivity and efficiency gains unlike we've ever experienced as humans. And Amazon is the number one company to benefit from all of that. Sound like you're giving a sermon. You're bought in. And by the way, they own like 15 % of Anthropic too. They just, and that's what's so funny here. Now, if Anthropic IPOs between one and two trillion, which who knows, I think there's a reasonable chance they will next year. Amazon will make more money off that IPO than the$200 billion they spent on CapEx that everybody's so worried about, right?

55:01And so, again, we are living in an age when the market has more noise than it's ever had. The stories are changing every day. Like, it's impossible as an investor to cut through the noise. So that's what's so difficult is I think most new investors, they just give up because they're like, I can't keep up with all this stuff. You don't have to keep up with any of it. Just find one company that kind of sits in a place where they stand to benefit meaningfully from something that you're seeing in the world. It could be AI with Amazon. It could be the fact, you know, one of my big trades recently, one of my big trade theses recently is flip-flops are trending this summer, right?

55:44Because last summer there were$750 flip-flops made by a company called Rowe. And now every person in the world wants to wear flip-flops because they're on trend. You can go out at night to a club wearing flip-flops. And so there's a Brazilian company that is one of the largest, you know, makers of flip-flops. There's so many ways to kind of like arb change in the world. When you said Amazon was your most concentrated bet in a long time, what does that mean percentage-wise for you? Amazon right now is about 50 % of my portfolio value. And on top of that... Did you say 5-0 or 1-5? 5-0. On top of that, I have options in Amazon that account for, you know, another 50%.

56:45So theoretically, I mean, yeah, if you count the amount that those options represent, it could be like 70 % of my portfolio is Amazon right now. That's how confident I am in that trade.

56:58Sam Parr:So after you make a bet like that, Ed Thorpe has this cool book, the famous investor, one of the early hedge fund guys, where he kind of like a funny story. He's like, I make my trade and then I just go and hang out for like six months and I just see what happens. And there's like stories of him playing tennis throughout the day and they're like, shouldn't you be at work? He's like, I made the trade. Let's see what's going to happen. So are you making that bet and then kind of stepping away for a little while or are you active every single day then? I love that concept, by the way. I've been saying for months, this is the summer to deep research your trade, make it, and then just walk away.

57:41Because 99 % of the noise hitting this market on a day-to-day basis, week-to-week basis, doesn't matter at all. and there is not that much happening and changing where you need to be that concerned about the market on a day in and day out basis. Now, I'm not completely just going off and playing tennis for the rest of the summer. I'm keeping up with what's happening in the market, but I don't think there's going to be anything that's going to happen over the course of the next few weeks to a couple months that would meaningfully change my thesis on Amazon. Something might. But my thesis on Amazon is fairly large, and it's based on something that I believe is going to unravel over the next few years as opposed to unravel over the next few months.

58:33So it's a massive concentration risk that I'm putting on this trade. But this is what I do, right? Like, you can't generate outsized returns without taking outside risk. You just can't do it. By the way, guys, I don't think that most people should be doing this across their entire portfolio. I always tell people like, and I'm not a financial advisor, obviously, but you got to bucket your assets for different risk categories, right? So I think everybody should have a big money account. I don't care if you start with$50 in that account, but everyone should have an account where they're willing to take big risk for big gains.

59:13and you don't have to take your kids, you know, college savings to put in that account or your retirement money in that account. You could just start making trade-offs in your life. Like, I don't know, mow your own lawn or make your own coffee, but every dollar that you save, put it in this big money account and then use it to actually take a big risk every once in a while in something that you believe in so that you have a chance of becoming a top 1 % investor, but do it with trade-offs. Do it with other people's money, right? Like get your haircut every five weeks instead of every four weeks.

59:51I don't know. Like delay that big purchase six months so the big screen TV is$200 less than it was six months earlier. Take the$200 you saved, put it in your big money investment account. If that's how you fund that account, then you're not afraid to take a concentrated risk. If you're co-mingling your money altogether, together, it could be really hard to take a big risk on something because it's psychologically difficult for you to throw that much money into a risky investment. So you have to bucket your money. This is like one of the most important lessons for investors. I'm willing to do it, right?

1:00:29Like if Amazon is the stock that takes me down as an investor and ruins my reputation, then let it be.

1:00:36Sam Parr:Well, it's definitely not going to take you, it won't take you down. Well, I don't know how leveraged you are, but I mean, it's not like it's like a, it's not like it's not gonna, it ain't going away. No, well, you never know, it could. But here's the thing, guys. I have been so transparent about everything I've ever done in the market. I talk about everything. I talk about the good, the bad, the risk factors. And when I lose, I talk about how much money I lost. I do not advise anyone to try to mirror my trades. I just want people to see how I think. I want them to see how I think about risk, how I think about concentration, how I think about, you know, observational investing.

1:01:18I just share everything with the world. And by the way, you guys, I think, know this. I'm one of the only, I'm sure there's at least a couple others, financial content creators. I've never sold anything. I don't have courses. I don't sell a thing. Is your community free? Dude, I don't even take sponsorships. Do you know that I haven't taken one sponsorship my entire life? I won't take$1 from an advertiser. I won't take$1 from a community member. The only thing that's ever been sold is we sell some t-shirts and hoodies at cost. You know, I take that back. You know, the value I get out of my community is collaboration.

1:01:59I get so many great ideas from our community and they help vet my own ideas. that's probably made me more money than I could have ever made from courses and selling sponsorships and all that stuff. By the way, I have a lot, a lot of respect for that. I think, you know, a, I trust that my trust goes up. Like I said, I was very skeptical of finance and stock influencers and traders on, on YouTube. But you know, the fact that you're not selling courses, not charging for community, not taking sponsors and all that, that, that is, I think, extremely commendable and extremely rare. So I got to give you props for that.

1:02:36To be honest, I mean, here's the deal. Like we always say it, like if you're so great at something, which come on, I mean, I've been great the last 17 years. I make an insane amount of money from my portfolio. Like I don't need to do any of that. Like, like I, the amount of money I make is public, right? So I don't, I'm very fortunate to not have to do that. And I just don't need to do that. So I don't want to do that, but I do have an overriding goal here. My goal, my mission in life is to bring every human on earth into the investor class. And that's why I'm on YouTube. That's why I'm on X. That's why I talk.

1:03:13That's why I do shows like this. And I truly believe that this style of investing, it's something that you could do for fun. You could do it on the side. You don't have to quit your job. You just retrain your brain to start thinking about this stuff. And you might only get one great investment the next 10 years, but that one investment, if you have a big money account and if, and when you find it, whether it's the next Tesla or the next, whatever, you're willing to throw a lot of money behind it. That could be the thing that changes your entire life. Um, and my next big thesis is podcasters, which sounds insane because there's so many podcasters, right?

1:03:54Like, you got to be kidding, Chris. Don't we have too many podcasters? Let me just say this. In the age of AI that we're about to enter into, we are going to deeply appreciate humans, I think. That's my thesis. And while we will embrace technology and AI and efficiencies and all the wonderful things it's going to bring to us, I think we will equally appreciate the most human of human voices and human personalities. And we are going to need that for connectivity to remind us of what's real. So what's the bet? Like, what would the product be? The bet is that we are just getting started with podcasting.

1:04:37And I believe the entirety of the future of media is new media. and podcasters will continue to get bigger and bigger. I think the most human of human voices will become infinitely valuable the next 10 years. I think within the podcasting sector, I think women are slow to become podcasters because we have so many brilliant solo creators that are women on TikTok, but women tend to be really intimidated by friction, by bridging into podcasting when you need to have camera equipment and editors and clippers and you need to have staff, right? And you need to invest money and capital. So I believe the most talented women voices in the world are not yet podcasting.

1:05:30So I'm opening up a podcast incubation studio in Austin, Texas, where we are going to attempt to develop a very boutique studio, but we're going to attempt to identify the most talented women voices in the world that are currently doing content as solo creators and help them bridge into the world of durable, repeatable podcasting, which we believe is just getting started. I think if you move forward five to eight years, there will be hundreds of podcasts that are worth a hundred million dollars or more. I'm not doing this for the money. I'm doing this because I just, I know that this could be really big and I have so much fun working with other creative people.

1:06:17I love podcasters generally. It's all I do is watch podcasts, right? And sit in on podcasts. But when I look at like women's podcasting, you know, 70 % of podcasters are men. So I think there's this huge opportunity the next few years as podcasting becomes more programmatic to help develop podcasts into what they will be. Because I don't think the future of podcasting is like two people in a studio talking on mics. No offense. I mean, my show is three guys in a studio talking on mics. I think it will become, I think it will be that probably for financial podcasters and business podcasts. But I think for like general audience podcast, especially for women, it will become more programmatic.

1:07:07When you say programmatic, what does that mean? Okay. So are you familiar with Financial Audit, Caleb Hammer's show out of Austin? He's the third biggest podcast in the world on YouTube. Okay. His show is programmatic. He has an actual program that expresses itself through a podcast format. Okay? So he has guests on the show, but he has a very formal program of entertainment. Right? And so that is the future of podcasting. So we have to get more creative with podcasting. We have to take risk. Caleb took a big risk with what he did. Have you seen Friends Keep Secrets? No. What is that? You got to check this.

1:07:55You're going to love this. So this is Lil Dicky, the rapper, Benny Blanco, the producer. Yeah, I'm sorry. I have seen it. It's the greatest show ever. Yes. To me, that's an example of what you're talking about. When I saw that, I was like a little bit mind blown. And, you know, I'm doing podcasting twice a week for six years. And what they came in and did, I really feel like the real creatives have arrived into podcasting because now you see Conan O 'Brien's got a podcast and Hasan Minhaj's got a podcast. The real comedians have podcasts. The real creatives have podcasts. And now what they're doing to the format, because they come from a different background, is they're approaching it differently.

1:08:33Like they got a house and they staged the cameras and the guest shows up almost like a sitcom at the door. And then they open the door and then they move from the kitchen to the living room and they have these bits that they do. And the way they do their ad reads, you're like, oh God, their ad read is more entertaining than my actual content. Jesus, I need to up my game. Sean, you got it. You just nailed it. Now, fortunately, again, like the type of podcasting that we do is kind of like, you know, like education and business and finance. I think we can afford to be very slow to change because it's just different for us.

1:09:10A lot of the people that watch your show, that watch my show, they primarily are looking to take something away from that show in terms of education and growth and learning. I think the personality entertainment piece is like 10 to 20 percent of the show. If we tried to make it 50 percent, we might lose our audience, right? but um for the future of podcasting i think it looks very different broader based i think it's going to be exciting and like here's the thing guys like i've been talking about stocks for 10 years like i love it but i kind of like i'm bored by it so like yeah i like diving into these different areas where i get to be a bit more creative with other you know other creatives uh and not just talk about stock that's why i enjoyed the pokemon thing like i didn't collect Pokemon, but it was kind of fun being around other people that were passionate about something.

1:10:03And like in my mind, I'm like, how do I make money off this guys? Like, how do I make money off of Pokemon? That's how I did it. I did it from starting the convention that the Pokemon enthusiasts would come to and enjoy. Right. And you got to be the uncle and not the father, right? Somebody else ran it and you got to pitch in where it was helpful and fun, but not necessarily the day-to-day. Is that right? I didn't have to do the full day-to-day. I got to kind of do the day-to-day when we would have shows, but behind the scenes, I wasn't working full-time for sure. But man, was it a lucrative journey and damn, was it fun.

1:10:39It was so fun.

1:10:41Sam Parr:Thanks for doing this. You're, now I'm like, I have all these notes, like all these rabbit holes I'm going to go down. This, this, the podcast thing, the Collecticon, that's crazy. You, you got layers. Well, you know what, guys, like, here's the thing. I'm really fortunate that I have this insane network of people that I'm constantly meeting with. A lot of them are hyper successful, you know, billionaires in the back half of their career or life. And I'm at a point like, okay, if you've had success and you can kind of do anything you want, like what would it actually be? And I feel that for so many people on my network, it always comes down to having a bigger number.

1:11:18And I'm like, are you sure that you're making decisions driven by the right motivations, because is that bigger number actually going to give you fulfillment in the way that you think it is? And over the last couple of years, I've come to the conclusion that a bigger number for me is going to make no difference in my level of contentment or fulfillment in life. And I like the concept of grinding and creating and building and taking risks, but not if it's to like get a bigger number. So like if I'm going to do something the next three to five years, wherever my next thing is, like I want the journey to be as fun as the outcome.

1:12:00So, okay, my outcome that I want is to land the top 20 global podcasts by developing two or three shows over the next few years with people I believe are unbelievably talented. I want to build a great team around them. I want to like, I want to, It's the gamemanship of, can I do this? There's tens of millions of podcasts. If I landed a top 20, how wild would that be? But I want the journey in trying to figure out how to win, how to get there to be fun. And I know I love working with creative people. Because I've been stuck in podcast world for the last seven years. I kind of get it, right? And I love it.

1:12:41So whether I end up winning or losing. And by the way, if I win, I'm looking at adding to my charitable foundation. That's like my number is not for me. It's for the foundation. But the journey and how we get there will be fun regardless. Like, because I'm going to be around creative people. I'm going to be in a sector that I love. I mean, when in history could you take a few million dollars and start a media company, which is exactly what I'm doing right now? Like, could you imagine like 20 years ago, you couldn't do that? You just couldn't do that, right? Now you can land a top five show globally if you execute in three years, two years.

1:13:21Isn't that wild? You could do that out of one studio with like 10 people, 10 or 15 people. How exciting is that, that you could play in this game and you could have a top five global media show in a couple years if you could find the right person and the right team and the right format? that to me, that, that journey of just attempting to accomplish that is maybe the funnest thing I will ever do in my life. So I'm really looking forward to this next thing that I'm doing. Hopefully we win, but even if we don't win it, damn guys, I'm at a point, I'm going to have fun. I'm going to have fun trying.

1:14:02Okay. And by the way, like I tell this story to a guy I had, I had, I had lunch with a guy, massive exit. I don't know how much he's worth, but it's a lot. And I talked to him about this story. And he said, you know what, Chris? I'm going to buy this bonsai shop that me and my daughter go to. He goes, because it's my favorite thing in the world. Me and her go there and we just hang out there. And I'm going to buy it. And like, this guy's going to end up spending more time with his daughter. He's going to have fun because he's going to take this little bonsai shop. that's been around for 35 years and try to grow it with her, which is kind of cool.

1:14:40He's going to actually, he's an AI guy, right? So like he's going to actually like apply artificial intelligence into the growth strategy for the Bonsai shop. He's going to maybe get some content creators and influencers to try to like take it global through e-com. Like there's all kinds of fun stuff you can do here, starting with a little Bonsai store that you and your daughter love. I'm like, now that's a great way to spend the next five years of your life. there's a lot of people that have made it that have enough money that they kind of can do what they want. Like, we're so set on just like bigger number, more happy, bigger number.

1:15:14No, no, no, no, no. I actually believe that there is a point when the bigger number has the opposite effect. It definitely 100 % makes you less fulfilled and less happy. Well, you know why? Most people think that's like a more money, more problems thing, but I think underneath that is you have no excuse left. You know, basically when you don't have a lot, you can always tell yourself, well, it's on the other side of this. And then once you get there, there's nothing left to blame for any lack, any internal holes, any internal anxieties or feeling of lack or just dissatisfaction. And so you can't blame that anymore.

1:16:02You've lost the excuse. And I think that is a very tough moment for people when you no longer can say, well, it's because I don't have that. That's why I feel this way. It's like, no, no, I feel that way because that's how I am. And I think that's a pretty brutal realization. At least that's what I felt and what I've seen. That's part of it. I think a big part of it is that you become disconnected with other humans and you can't relate anymore. And people treat you differently. and it gets harder to maintain and develop authentic, real relationships. You can't do anything about this. When you become excessively wealthy to the point where nothing matters anymore, you just don't relate to daily things the same way as the rest of your family and friends and colleagues do.

1:16:53And they sense that. And then also when you meet new people and like you like, listen, you start going to certain types of vacations and certain types of dinners and you hang out. Maybe you have a yacht and maybe you fly private. And then it's like, well, this is what I want to do with my time, but I want to spend time with my friends. So maybe your friends are now on your yacht and doing$5 ,000 dinners and your friends, or maybe you have to bring them on your private jet and like you're paying for them. and it makes things really weird because then it's like, wait a second, are these people, they don't even rip on me anymore.

1:17:29They don't even treat me the same anymore. Maybe because they're worried that like, they're not going to be part of this lifestyle that I'm paying for only because they can't be here unless I pay for it. And I don't want to, I want to live the lifestyle and I want my friends to be with me. There's just so many problems that organically surface when you enter that stratosphere, which used to be like this many people, but in 2026, guys, there are a lot of people with excessive wealth. Let's be honest. Like the number of people that have excessive wealth in 2026 for a variety of reasons, okay, are enormous.

1:18:09The number of people that fly private, the number of people that spend$3 ,000,$2 ,000 a night on hotel rooms and resorts, The number of people that are going out to dinners at these places where they're spending just wild amount of money on a regular basis. The wealth class is huge. And I think that ultra high net worth wealth class is probably miserable because of all these factors. And it's really hard to stay grounded. It's exceptionally difficult to like stay connected. and you guys know there's nothing more important in life than being deeply connected with other humans. Nothing. And this thing makes it very hard to stay deeply connected.

1:18:55So it's almost like a hack, not letting yourself get to that point. Like, I know it sounds crazy. There is, there is a sweet spot. I think there is a sweet spot for wealth and it's different for every person. And you can kind of sense when you kind of get out of the range of that sweet spot, because you can kind of sense these things starting to happen. And there are a lot of ways to knock yourself back down. One of them is starting a foundation and just giving money into the foundation, right? Like it's not yours anymore. It's enough. It's not yours. You give the foundation, it belongs to the foundation and you get to do good things with it.

1:19:32Also, you can take that money and like you can invest it in other things that puts it at risk. But again, It's not yours when it's invested and illiquid and put at risk. So now your access to like liquidity and your access to money that you know is bankable becomes more reasonable. And like, you don't push yourself into that stratosphere of overspending on a regular basis. I agree with every word you just said. Every word you just said, I totally agree with. So I, but I think it's a topic that quite honestly, not only people don't talk about, but I think most people don't even think about it because like your brain doesn't, my brain for some reason.

1:20:10Sam Parr:Well, if you don't do it appropriately, it sounds kind of douchey if you talk about this stuff publicly. I mean, that's like the easy, like that doesn't mean it shouldn't, it's not an important, I mean, like it's super helpful. It's just helpful to like maybe a small group of people. There was a great blog post on this by Julie, I think Zhao was her name. She wrote a thing to all the folks who are about to get rich. It was right before the SpaceX IPO and she was at Facebook right before Facebook had its IPO and she talked about what she observed and saw of the people who, you know, had been working really hard for a long time and suddenly the sort of shackles of liquidity were off them.

1:20:42And now they had the money. And what did you do? And she talked about how people play that game. And Chris, your point on disconnection is one that she made. I'll read you a little part of it. She's like, once money can buy you anything, you become a bit of a character. You can eat at fancy restaurants all the time. You bring a full zoo and carnival and a chocolate train to your kid's three-year-old birthday party. You know, you become so cloaked by these fancy things the shiny things that you can buy. And that sparkling cloak can become so distracting that people can no longer see you. You become harder to connect with.

1:21:12And she talks about like, the disconnection can lead to, is a great source of unhappiness. You know, I saw this with, I have a friend who got very, very wealthy through real estate, bought a mega mansion, 18 ,000 square feet. He's literally, not only did he move away from his friends and family because we don't afford to live in that place, that neighborhood, That neighborhood has acres in between houses. But then even in his own house, he was disconnected from his own kids, you know, in the west wing. And he's on the east wing, 10 ,000 feet apart. The money literally, I watched it make him less happy because it created an immense amount of social disconnection on many, many levels.

1:21:52And I remember when I first moved to San Francisco, I worked for this guy. He's a billionaire. And we went out to lunch as a group of us, five of us. and at the end he was like, you know, he tossed his card in, but he basically was like, oh, should we all just put our cards in? And I was like, man, this guy, what a cheap billionaire. This guy didn't even pick up the tab. And I realized like, actually, it wasn't because he's cheap at all. He's not a cheap guy at all. He's very generous. But he didn't want to change the social dynamic between us where it became this weird power dynamic or this weird like subservient thing.

1:22:23And he was actually doing us all quite a big favor by not doing that. So you start to see these little moments of possible disconnection versus connection. Facts. I always wondered, like, why am I seeing this? And none of the other people or very few that are in the same place seem to see it. I think it's because I've like retrained my mind to be an observational investor. So I'm constantly observing life and culture and like everything I'm just being hyper observant about. And it kind of translated to this. And I was hyper observant about this, the part, the birthday, like all this stuff. Right.

1:22:56And I was like, damn, I cannot fall into that trap. I do not want to be miserable. Like a lot of the people that I see, and you know, you've seen this, right? Like they fall into the traps and then it's like, it never leads to a good place. But I will say this also, because a lot of people will see shows like this. I'm like, oh, it's so easy for you guys to talk about, you know, this when you have it. I will, admittedly, the sweet spot is pretty sweet. Okay. So like, so I'm just going to say The sweet spot of wealth is pretty sweet. So don't mischaracterize what we're talking about. Gaining financial independence is one of the most amazing things one could ever experience in life.

1:23:41What that buys you is actually insane. Being in full control over your time, how you spend it, who you're with, where you go, and never having to work for someone else again, that is magical. That actually is as good as you think it is. It really is. It's actually better. It's better, okay? I remind myself, I talk to some of my friends, I'm like, hey, dude, I just feel like a reminder, dude, we hadn't worked a real job in like 15 years. Like, it's pretty freaking nuts. And my buddies are like, yeah, dude, we forget how good we have it. I'm like, do you know like how many of our friends and colleagues are still getting up every day and going to the job we had 15 years ago.

1:24:26And because we became independent investors and became part of the investor class and aggressively invested money in equity markets, and now we're independently, financially free, we're podcasters and we're investing and we're working really hard. We're starting businesses and backing other businesses. We're probably working harder than we've ever worked in life, but it's optional. It's optional. And we're doing it because we enjoy it. And we're financially free to be at every kid's soccer game. We're financially free to be with our family and our friends whenever we want, however we want. Like, I used to have the cubicle job for many, many years, guys.

1:25:07Many, many, many years I had the job in the cubicle doing sales calls, right? And so I try to never forget how awesome it is to like not be in that position. So yeah, I don't mean to rip on getting wealthy because it's pretty damn awesome. It's just keep it manageable because there is a point of diminishing returns. And then there's a point of deeply, deeply negative returns on every dollar you spend. Not every dollar you make, but every dollar you spend after that point. You're cool, man.

1:25:42Sam Parr:Chris, this was fun. I like having, we like having you on. We like talking to you. You got to do a part three now. Dude, you guys are the best. I'm always up for it. I love it. Well, we appreciate you so much. That's it. That's the pod.

1:26:04All right, let's take a quick break to talk about a podcast. Because if you're listening to this, you like podcasts. And what's better than one podcast? Another podcast. And let me tell you, another podcast you should check out. It's called Success Story. If you like hearing about different success stories and hearing Q &A sessions with successful business leaders or hearing keynote presentations or just checking out conversations about sales and business and marketing tactics, this is a great podcast for you. So check it out wherever you get your podcasts.