From Fiscal Insights to Wisdom: The Jawad Mian Story.

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0:32I'm really excited to talk to Jawad Mian. Jawad and I have known each other for a long time and he's very inspirational in how he thinks about the world and what I want you to get out of this, this is not a macro interview about what to think, it's a process of how to think and how to live your life and to get the things aligned that make a difference to you. And you'll get most out of yourself by doing so. So it's a philosophical journey through macro, and I really hope you enjoy it. Join me, Raoul Pal, as I go on a journey of discovery through the macro, crypto and exponential age landscapes.

1:14In The Journeyman, I talk to the smartest people in the world so we can all become smarter together.

1:25Jawad good to see you back on Real Vision finally Likewise Real it's been some it's been some time It has been some time look I'm really looking forward to this conversation because you're just a fascinating person to talk to you have a very different way of looking at things and I think people will really appreciate how you think not necessarily what you think as I think you and I both agree it's how people think that's a fascinating thing but before we kick off you've got a great story so give us your story so i'm from pakistan born and raised in dubai um and then i went to university in kaiota and that's where i began my career um unlike most or some people in the industry i didn't go to an i've been school i didn't train at a investment bank i never worked for a hedge fund i started my career as a bank teller but that was one of the best things that happened to me because in that role you're forced to interact with anybody and everybody.

2:22And I was a very shy kid growing up and that sort of helped me break out of my shell. And you learn pretty well, you know, in a quiet neighborhood branch what a bank does, you know, so research, asset management, private equity, investment banking. And I kind of like the idea of asset management where you're reading a lot, learning, understanding the world, but also can get feedback on your decision making. So did my CFA, did my CMT try to maneuver my way into markets? I was a fund accountant for a couple of years. Hold on, hold on, hold on. You're a bank teller. In a small branch in what? Canada?

2:54Yeah. How do you, that's not a normal path to then think, oh, I'm going to do my CFA and I'm going to get into their investment banking operations. What mindset did you have that you thought, you know what, I can do this? Talk me through that because it's fascinating. I used to just pick up the phone and call people in the CIBC directory. I like to see who's a portfolio manager, who's an investment banker. So I spoke to all of them. And there's this one person who met with me for coffee and she told me, this is sort of the path that you need to move forward. So I just signed up for the CFA exam and read all the right books, right?

3:28The Market Wizards, the Classics, the Money Game, the Soros Collection, and realized very quickly that I'm fascinated by the Covner story, the Paul Tudor Jones and Druckenmiller story. So I started thinking about the world in more macro terms. I enjoyed that much more than bottom-up company analysis. And so I didn't want to do equity research, which was at that time very much sector-specific. I wanted to be much more broad in my thinking and understanding of the world. So that was kind of what took me on that path of just learning. It wasn't really until I joined as a fund accountant at CMDC Mellon where I finally met the Bloomberg terminal.

4:05And I fell in love with that machine, right? Just like, what is this? So I used to, like, you know, while other people would be listening to music, doing their work, I used to listen to Bloomberg radio. I'd stay, you know, for hours after work just playing with the terminal, um sitting for my cfa exam so that kind of got me through um i think the ethic the work ethic and the discipline was really something that i took from my father it was very hard working and driven so it was certainly something that i felt was innate to me just to like try to succeed and once i've set my mind on something to try my best to go out and achieve it and so what was it like when you started to then, what was that first job?

4:46So macro was you decided, okay, this is how you think. It fits with the rhythm of your mind and how it works. Talk me through the first job and what you were doing and what you learn in that process because there's an expectation of reading the alchemy of finance and there's a reality. How did the rubber hit the road at that point? The first buy-side role was actually in Dubai in 07. That's when I joined as a research analyst and moved to be an assistant PM. At that firm, they were doing a bunch of different things. They were running a global fund of hedge funds. They had a global equity fund.

5:28They had a Middle East-run equity fund as well. I was involved in all of those products, trying to get a better sense of how to think about markets. um there's also the time when again 07 right so moving economy in the middle east is like a bubble in real estate is already ripping ripping higher and so i started writing also at that time a blog just to make sense of what's going on because what i realized moving to dubai from toronto i could see the cascading sort of signs of an imminent crisis and yet here we were like raising a luxury real estate fund and being max equity. And so I started writing a blog about why I think DUI equities and real estate are overvalued.

6:15And that sort of helped me understand better in my thinking, my writing process. We had the products on one side, but then I was also writing to make sense of the world and sharing it publicly and got feedback from that as well. And that was really a fun experience for me or just being involved in seeing crisis unfold, be on the right side of it in my writings personally, then being unable to do much about it within the firm because I was just a junior kid trying to speak to partners who were twice his age and who I would listen to me. So I kind of realized that it's difficult just working for other people, the conflict, the compromises one needs to make.

6:56And so my dad was an entrepreneur. So being there very early made me realize that I actually want to do my own thing as well. And at some point I was like a naive Jawa, the idea was I used to joke with Don Burbank. I want to pull up Burbank, you know, like basically raise a million dollars and set up my own fund. The same way I and Warren and, you know, tutor and recommended it. That was sort of the idea at the back of my mind. So I used to go to these jobs and run money. At the end of the day, I wanted to do my own thing. And so what did you do? I told myself that whenever I had three years of savings, I would quit.

7:28and do my own thing. I reached that point in 2012. And I gave myself a three-year question because I read somewhere that Sandra Camilla, it took him three years to make more money than his secretary. And then at the same time, Mark Twain said that you should write for three years and after three years, you're not making any money. Sawing wood is what you're intended for. And so like, you know, let me just give myself a three-year question. It seemed like the best decision because, you know, three years later, I'd still be, you know, 31. and I have a CFA, I can go get out of the job. But at that time, I wanted to quit before getting married, before having kids or any liabilities.

8:05So I had tremendous flexibility. So I quit in 2012. And the idea was to, again, raise a million dollars and launch a fund. I raised a million and a half. But then I realized actually through that process, my heart wasn't into it. Something was changing within me. And it just did not make sense. I could not articulate best at that time what it was, but I pulled the plug. and I started writing and reading at that time to just really explore because I realized I'm just this kid sitting in Dubai do I even know what's going on in the world um do I even have a process let me sort of put that down on paper and see where things go let's get with people around the world get their feedback and so that was you know late 2012 I quit Friday 13 was the fundraising journey and realized actually I don't want to go ahead with the fun and 2014 is when I started reflections and I started writing and flipped it into a business.

8:58You approached it in a very interesting manner. You know, both you and I have been around this industry for a while and we know a lot of the same people. How you write is very different. How did you approach it? What did you think when you wanted to come into the business of writing and thinking? Because I think you approach it like I do is like, it is a beautiful thing to be paid to think um how did you approach it what did you think okay what can i do because you you kind of burnt out of the industry as well i think that was the the understanding that you'd had when you were raising the money it's like i don't want to do this anymore so talk me through that and then how stray reflections came to be in in what it is when i started doing this i realized i'm not unique in what i do because there are a lot of people out there with opinions about the markets right but i am unique in who i am just like you're unique in who you are and so i made it a personal pact almost right from the heart from the very personal space and i was also very hesitant to really turn it into a business because i wasn't sure if i'd have something valuable to say on a consistent basis and then i read something where rumi would said that words are just a pretext it's the inner bond that draws one person to another not words and that kind of really gave me the encouragement to just be open and transparent and let it all out so i made it a point at the end of every issue i'd share some personal reflection whether it was the birth of my daughter the death of my grandmother you know visiting a friend you know a reflection from a book and i kept that up consistently from the very beginning and i think that also informed you know this idea that the more clarity we have in life the more clarity we find in markets or in anything for that matter.

10:47So I really steeped myself in the traditions and the wisdom of the ancient sages, poets, philosophers and learning from the East and the West and infusing that through what's happening in the world and markets generally. So I found that fascinating just to be able to read, reflect and approach the present with that understanding because there's nothing really inspiring, frankly, about waking up and looking at Bloomberg News. But waking up every morning, feeling inspired to just be better, help others be better, and approach your work as a devotion, as a duty, not as a job or a career. I think that was a huge difference in the way I started thinking about this.

11:36Because it really was something that I loved doing. I was fascinated by markets, but I just wanted to approach it a bit differently. Hey everyone, we're going to take a quick pause and hear a word from our partners. We'll be right back. Your favourite neighbourhood spot grows with Square. Indeed, my favourite neighbourhood spot has quickly become Todd Snyder in Williamsburg. Todd Snyder is one of my favourite menswear shops and has supplied me with all the clothes I have needed this quite hot summer. Every business has different goals, but Square is the business platform that supports them all.

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12:47partly it's that life is a journey and it's the journey that you create and some of it you don't create and that's how i've always liked about well that's how i've liked to approach all of this stuff so it's not a job it as you say it's a devotion it's a journey it's the journey of life itself and it's just one of the aspects of it and the your personal life and your work life interweave but they're not separated they can't be separated um which is why you know your reflections weirdly fit into a macro you know research service uh i also loved how you know i'm a big fan of kind of that um the kind of islamic philosophy from you know kind of samarkand and that kind of golden age.

13:38And you wove a lot of that in. You know, a lot of the teachings of the Sufis and others, you weave it in, which is the wisdom that maybe other people aren't aware of and bring it together. I think it's a fascinating concept. Why did you think about doing that as well? Because then Stray Reflections, the book, is basically this part of it. Yeah, I mean, the book is actually a collection of all those personal reflections over the years, right? So the book wasn't written in one go. It was basically me collating all of those end notes from each of the issues. And I think, you know, the wisdom you're referring to is, I think, part and parcel of every wisdom.

14:16Like for me, the most inspiring author was Ralph Waldo Emerson. And you learn that he was fascinated by the Bhagavad Gita. But he also had a fascination for Hafez. You know, I'm from the subcontinent and Alam Iqbal is a famous poet. He was in love with Goethe. So all these, you know, wise people from the past, you know, East and West loved each other, found wisdom in each other's traditions. And I feel like there's nothing new in this world. Like everything that is relevant, that matters, that is important has already been said. And we just need to uncover all of that wisdom and bring it to the present.

14:55And so I just find myself really deeply interested in that. Again, if you look at The Money Game written by Adam Smith, in actuality, George Goodman, he talks about the fact that the first rule of investing is to know yourself, right? And if you don't know yourself, the market's an expensive place to find out. So all of these teachings, these learnings, are really just a path to this knowing oneself, right? Successful investing is only possible with knowledge of oneself. And that's kind of the journey, I guess, that I was on, is just getting to know myself. so then how did or how do you approach markets so you've got this broader gaining of understanding of yourself and your journey has been that in itself anyway and you what your writings help other people in their journey but then how how do you look at markets what's what's your methodology and i know these things change over time and they adapt but how do you think about analyzing markets It's the macro, the big, beautiful 3D, ever-changing puzzle.

15:59How do you think about that? Yeah, it's evolved a lot as the business has sort of taken different iterations and grown over the years. And the way I approach it is this. I feel like my job is not to predict the future. It's to see the present clearly. And I do that by having lots of conversations with lots of interesting people within the community. both east and west in different seats, whether they're CIOs of a pension fund or hedge fund, various strategies or a long-awalley equity credit manager. So by speaking to a lot of people, I get a sense of what's going on, what they're concerned by.

16:39And that kind of helps me figure out the research discovery flywheel, just getting that community input of what I need to pay attention to. That's number one. I think number two is my habit and my routine. I've always wanted to work from home and I was inspired by a friend of Thompson who always said be aware of looking for goals look for a way of life and find a living find a way to make a living within that way of life so for me straight reflections is really me wanting to work from home and then kind of thing I don't make yeah I did the same with GMI it's like can I live in Spain how do I solve for living on the coast of Spain's still being in it it's the same it's the same thing right so how do I create a particular habit and a routine which allows me the freedom to think and reflect so i'm very particular about my schedule and my routine and i'm not bombarded with a lot of emails or calls or meetings i don't have a team that i'm responsible for so unlike most or practically every night that we have i've got a very sweet calendar and i've trained myself to understand that i can't know everything.

17:45I don't need to know everything. And the areas where I have knowledge gaps, I'm very comfortable trusting people that I am very fond of and I've gotten to know very personally, right? So if it's crypto, I don't need to get deep down into crypto. There are a few people that I trust, you know, that I can speak with and I'll have a very informed opinion. Same thing with China or biotech or others. I'll do my deep dive and write about a topic when I have a unique angle, I feel, but generally a very comfortable leaning into the community and this idea of all of us are smarter than any of us. So I feel that also helps having this freedom to not be reactionary.

18:23Like we like to think about this industry as being one that is still with visionaries that can predict the future. I feel like we're actually more reactionary. And I think my focus is to be reflective and think about the second and third order effects of what's going on. and so I'm a I'm a I've got a slower pace of life and a slower pace of writing and a slower way to get things done but I feel for our time horizon which is generally six to 18 months very directional in my orientation it helps us get it right and so I also my my relationship with information has changed in the past I used to want to consume everything be on top of everything and now I I would say my relationship with information is more so on an as-needed basis.

19:08So I know exactly what I'm going to do every single day that I wake up, when I'm going to be focused on researching or writing, and everything else doesn't matter to me. If there's anything important beyond that particular topic or subject, I trust that it'll come to me, either through my inbox, or it'll come to me through our Slack community, or through some other message that I'll receive from the clients. So anything that's important that I'm not paying attention to will come to me, I want to just focus on what I need to focus on for a particular view idea and just go deep down in that. Yeah, I guess those are some of the ways, you know, I struggle to answer the question for most people.

19:48They ask, like, what's your process? Because there isn't really, I don't have a model. I don't have a macro bond. I don't have a Bloomberg terminal. You know, initially I couldn't afford it. And then I realized I can live without it. and I kind of like living without it. So I actually have no tools or subscriptions or models. It's just I look at what I do more as a creative thinker and it's developing the creative habit. And I look at writing as a craft and one of pursuing the truth. And through that process, you every now and then come to some interesting discoveries. So my job really is to challenge beliefs that our community may have or people may have to expand their knowledge and to just help them think about the world differently you know um yeah that's how i approach it really if i think about it i get one or two profound ideas a year if i'm lucky um and i love it when that happens it's the the magic happens right the mist clears and you you uncover a new truth and whatever that means um i always love that the information overload thing is is really complex to deal with because you need to i always need seeds now you do it by speaking your community what i try and do is see the mass of humanity and then try and think what is the meta narrative not what is obvious not why are they screaming and look at them screaming and shouting about something, but why are they?

21:25And what does that mean? And to go to those second and third order effects and kind of stand back and watch the crowd screaming and shouting and baying and trading and doing all of these things, and then try and figure out something. And usually there's something really big in that. I'll never forget, I got involved in climate change Twitter, climate change denial Twitter, ended up in an argument with these whole bunch of people and i stopped because there's no point i'm not going to change their minds so what i want to do is understand why so i kind of siloed off a couple of people and stopped asking them questions like who are you where are you from you know how do you think of pascal's dilemma why would that not matter to you that you know the downside of being so wrong is catastrophic and the worst case would be you end up with a cleaner environment you know, where's the downside?

22:24And then it came out from these people that what they were worried about was the taxes going up or being able to refuel their car and it was a reflection of the crushing of the middle classes and the working classes and their disposable income and the fact that real wages hadn't risen that got me down a whole bigger journey of of thinking that through so yeah i love i love that journey that serendipity of finding something that leads to another for me it's also more internal than external what i mean by that is again i think this comes to the design of life right whereby you know the most common wisdom that you hear is know yourself but i think it's missing the next sentence which should be like which version because we all have like different masks and different versions of ourselves running around.

23:11I think one promise I made to myself was that I only want to be one Jawad, the same Jawad that's sitting with you right now, the same person that's going to be with the children later or with friends and family otherwise. And the only way to do that, I felt, was when you're always operating from a place where your heart, mind, and tongue are aligned. And if you think about any conflict, whether it's with your spouse or a friend or a stranger even, it's because your heart saying something else your mind saying something else and your your tongue is speaking words that you don't really honorfully and so i made a point that i always want to be just one person and the only way to do that is to be have your heart mind tongue aligned and the best way to keep that in check is to just stop lying you know not that i was a compulsive liar but it's a nice rule to have for yourself but what do you mean by what do you mean by lying because you i mean that's a big statement but you mean something behind it i mean yourself or lying to others anybody and yourself beginning with yourself right so um something as simple as you know like if your child comes to you and says do you have chocolate and can i have chocolate and instinctively will say you know we don't have any which is a lie because he knows you know there is something right and instead just engage for a longer conversation that's like why you shouldn't have chocolate right now so don't lie there it's come to the point where my wife asked me the time and if it's 8 17 i used to say it's 8 20 now i say it's 17 because even saying 8 20 is a lie Or if I met somebody in London and I told them that I'm going to connect them with somebody and I don't do it or I forget, that's also a lie because they hold my word for what I said it was, right?

24:45But the point is, when you start living from that place of centeredness, when you read, you can pick up the difference between fact and opinion. When you can speak to some people, you can figure out when they're sort of misaligned. So I guess the news that comes to me, I can pick up much more easily, whether it's true or false, or there's a narrative here that doesn't really make sense. And it also applies to myself. So for example, if I'm having a conversation with a client, and I'm talking about how I'm seeing the world, and if I get some pushback, and I see myself behaving in a way internally, where it's misaligned, I'm like, okay, you got to go back and do more work.

25:25so it's for me the process is also much more internal where when I read something I can pick up on this is bullshit or this makes sense or this is too sensational like they're just making a lot of these statements that are just not true so this idea of I think what Byron Katie has this process of the work right where you you ask the question is it true so you read a blog article and you can ask that question multiple times through that article like is it true they're saying this but is it really true do you really know for sure it's true so having that sort of and the accountability to yourselves, to what you read, to how you speak, helps me understand that, you know what, maybe I'm not in my best right now and I need to do more work before I speak or write something.

26:09I think lying to oneself is one of the biggest sources of conflict and stress. Lying to yourself about your capabilities, lying to yourself about a narrative that you've built that you can't let go of. And I find markets are very full of people lying to themselves. A narrative that they once thought to be true, which may not be true, they keep hold of. And as opposed to just reflecting on, okay, that's changed. People dig in. It's fascinating to observe. And that's one of these observations I have about people. Who's digging in and why are they digging in? And a lot of it is because people have lied to themselves.

26:50it's when your expectations don't meet the realities and that's a hard thing and that's kind of why also i feel like i don't care to be consensus or contrarian i don't find the value in being contrarian i feel like i want to be independent and whatever i can so i can have some views that are consensus and some views that are contrarian at the same time so arrive them as long as i arrive at them independently and well thought through so i fundamentally believe in being agnostic not ideological um and empirical not dogmatic i think that's fundamental to who i am and how i approach things i don't have a particular agenda and um i just want to you know try to get closer to the truth right like there's your version of the truth then there's my version of truth and then there's the divine view or the market view so how can you get closer and closer to that right because all the prophets they all have the same lament prayer oh god show us things as they are and the only way to do that is to like let go of your biases right and so that's what i want to do and that's where i guess the idea of knowing oneself um the spatial wisdom that we see you know all comes down to that and i think that's helpful in market and i also think ultimately my job or my my duty to the community is something again that um the writer ad lamott you know she was asked like what's the goal of a writer and she said to help others have this sense of wonder of seeing things anew things that can catch us off guard that break in on our small bordered worlds that's kind of how i see it that's that's my job right so i take it as a craft um i take it very seriously yeah i'm very much the same i'm very cognizant of them you touched upon another point i think is really important and most people fail to do this which like you I don't believe in being contrarian or a consensus.

28:43They're not terms that mean anything to me. So I don't read anybody's research. Just don't. I just refuse because I don't want my thought process polluted by others. If people are paying me to think, the beauty of that is I can do this independently. They're paying me to explain how I see the world, and it doesn't have to agree with them. Many of the global macro investor subscribers over the years have said, I don't agree with you most of the time, but I'm fascinated in how you got to that opinion. And what does that mean for my own framework? Do you read research? I don't get access to anything.

29:22I don't get access to any wall street research. Not that I'm seeking it either, frankly. But yeah, so again, it's this idea of like information on an as needed basis, right? So I'm an inbox zero person, get very limited emails. I mean, I'm subscribed to Wall Street Journal and Bloomberg News, I should say, and FT and all these journals, the papers, but not really any research per se. You get to hear what their views are generally just through the news reporting, right? Like what sort of consensus thinking is around different things. But yeah, I don't get access to research or read research as part of my process either.

30:08now you were before we came on we were talking about a mutual friend who was talking about quiet markets and narratives i thought that was a very interesting observation again it's just because what i'm you know enjoying talking to you about is how people can think because again it's not what to think that's the most important thing it's how to think and everyone will develop their own style but what was the conversation you were having don't mention it was but just talk about what what um what that was yeah i mean he was just saying you know don't force it johad let it come to you and that's part of i feel the luxury of what i do which is that you know in 10 years of this business i can't think of a time when so i got an email from someone saying hey johad where as an obligation.

31:00You know, it allows me to really truly be reflective. And if I don't know, I don't know. And if things aren't clear, I'll happily admit they're not clear. The benefit is I can lean on the community and admit that and allow them to give me ideas. And I think that's something that I'm tremendously grateful for is to be having that back and forth. I make it a point to speak to as many of our clients as possible on a weekly basis. and so that really I travel a lot hosting dinners and breakfasts and events to bring people together Shareflexions has really morphed as much into an investment community and a learning community and so just knowing that it's okay take it easy and let it come to you Hey everyone, we're going to take another quick break and hear a word from our partners and then we'll be right back

31:59I've noticed you have gone through maybe a similar macro journey to me, going from the typical macro way, which is everything being negative, and you've actually become an optimist. I wouldn't say I was ever macro negative. I feel like I've been bullish bearers over the years. Yeah, I'm not talking about the bullish bearers. I'm talking about the mindset. I don't think I would I mean I can't I'm thinking back to when I started writing in 2014 I don't think I've had that mindset either of being negative again it comes down to that you know I want to know the truth and so even for the very beginning I've had this this notion of being independent and I'm okay to be consensus or contrarian agnostic don't care to be ideological whether it's Trump president whether it's Xi for life whether it's you know climate change or anything that's more like for me it's like what's actionable what's the investment implication i don't get into the debates of what's right or wrong you know who knows so i don't feel like um the business has taken different iterations i think we've we've both been um the beginning of our journey has been similar in that steve drop knee was influential he still has been in my life so i think our our macro business journeys have perhaps evolve together thinking wise i wouldn't i'm not sure no i mean well i've i've definitely changed how i look at the world um because i actually found my time horizons have extended it's been a really i always had the the traditional macro six to 18 month time horizon and i've completely moved to secular almost entirely now because i don't know there's something a i think you've got a tailwind it's easier i can be dumber i can just say it's going up you know it's it's simpler than trying to capture the ups and downs and i found that over time it's given me a lot more peace of mind and better returns the longer i've gone out the time horizon the less competition there is for noise and markets and everything else um and you know you you rarely have to make another decision you know i might need to make a decision now about bond yields you know have they changed secondly or not but that's the first time i've had to test that hypothesis in my entire career which has been it's been easy right and so yeah that's what i've found and that's led me to become an optimist because most of the actionable macro trends are actually optimistic trends?