MI316: The Making of a Value Investor w/ Kyle Grieve

23:57Yeah, he did that really good podcast about Constellation Software and Robert Leonard. And I was able to just share his work. He reached out and asked me to have a listen to it and see what I thought about it. And I shared his work. And I write about Constellation because I love the business and I also own one of the spinoff companies. And so, yeah, basically that definitely, when you have someone else who loves a stock, just like you do, it's easy to become good friends. And so I think that definitely contributed to strengthening our relationship and him understanding that I have an appreciation for high quality businesses.

24:29So through these interviews that you've done on the podcast, how has your time at TIP changed your investing philosophy or maybe not? Have you kind of stuck to your guns on how you think about value investing or has listening to some of these people and really having them share their wisdom changed how you invest? Yeah. So I definitely, I spend a lot of time on my own investing philosophy, but I've definitely made some changes. And one of the bigger ones has just been looking at smaller and smaller businesses. So even before the podcast, I was already interested in very small businesses. And if you read Chris Mayer's Hunter Beggar books and look at other studies of Hunter Beggars, it's littered with small businesses.

25:13So that always was really interesting to me. And then when I spoke with Paul Andreola, he was my first actual guest ever on the podcast. It really, really opened my mind to the possibilities out there and the mispricings and inefficiencies in these smaller markets. So I've spent a lot of time since August looking at nano and micro caps. And so that's changed my investment philosophy a little bit. But overall, I mean, I'm still looking for high quality businesses that I can hopefully hold for a really long period of time. And one thing that I learned from actually being part of the TIP investment community, when we had Godem Bade on, he talked about how obviously holding onto a business for a long period of time forever is the holy grail.

25:55But in reality, it's really, really hard to do, even if that's what your intent is, is to find businesses that you can hold. So he said that he uses this two to three year timestamp and then reassesses. And so I felt that makes a lot of sense to me because a lot of the businesses that I bought, even a year later, and these are big cap companies, things change rapidly. And you can't really just hold on to your previous hypothesis if the facts are showing you that you were wrong. So I really think I've tightened my outlook to try to find businesses that are going to do really well in the next few years, but also have that optionality to do really well as well in long, long time into the future.

26:36And then it's really sped up my growth as well, especially with sharing ideas. So like you mentioned previously, I like writing on X and I've got a decent sized audience and I can't tell you how many people just reach out to me and tell me interesting ideas or I'll ask a thread in a Twitter question. I'll just say, hey, what's name one business that you think is going to do really well over the next year or whatever? And I'll get like a hundred answers. And it's really cool because I can go through those and try to find a couple interesting names or I'll get people in my direct messages messaging me or through the TIP investment community.

27:09Now I got a ton of people who have tons and tons of really interesting names and I can also reach out to and talk to in detail. So if you really want to get a good influx of names, that's a really good way is to just be social because people will share them for you. But yeah, so I think the TIP has definitely expedited my learning process because like you said, were basically paid to learn. So I learn a lot and I'm just refining, I think, my current process even more. So you had mentioned the TIP mastermind community. I'm not part of it, not necessarily a stock guy. I've got some stocks and that actually was my first love was stock investing.

27:45But tell me a little bit about the mastermind community, what that entails, what it looks like, what you guys are up to there. Yeah. So the mastermind community has been, it's been awesome. It's probably my favorite part of the job actually, because it's obviously way smaller than Twitter or X. We're at around say 90 people, but the quality is super, super high. I mean, it's all people who love investing and care a lot about it and spend a lot of time, not only investing, but also learning and becoming better at investing and just learning in all the aspects of life. And we have a crazy amount of really successful business people on there as well.

28:22So it's been a really cool way to network with other people who are really interested in investing, really interested in learning, really interested just in business and learning from each other, sharing ideas, sharing strategies, bringing on amazing guests like God and Babe, Chris Mayer, Tobias Carlisle, and peppering them with questions. And it's been really good. I definitely underestimated how impactful it would be. I had no idea, but it's been a really, really cool part of my investing journey. And I've met a lot of really interesting people and made a lot of friends. And we had an event in New York that was awesome.

28:52It was really fun to get to socialize with these people in person. We're going to do another one in Omaha for Berkshire. And yeah, so that's a little bit about the community and it's still growing at a nice pace. And we're continuing to keep the quality really high and keep the group nice and small so that, you know, the members can get to know each other really, really well. So how does it work? Like what's the cost of it? How often do you guys meet? Are you doing zoom calls what does if i join the community what what do i get from it yeah so right now i believe we're charging 197 per month or i think it's 1190 70 bucks for a year and basically so for that you you basically get access to the community that means you get you know access to me clay and stig a lot of the time we do weekly videos sometimes more than one weekly and that's no matter where you are, you get access to that.

29:43So it's on Zoom and they're all replayed. So if you miss it, you can watch it whenever you want. We're trying to get basically a cool guest every month. So like I mentioned, we've had God and Bade, Chris Mayer, Tobias Carlisle, Paul Andriola. We got Ian Castle coming in January. So tons of really interesting investors who are doing things at a really high level and you get inside access to, you're not going to find really anywhere else. And then we do things like share ideas with the community, whether that's sharing stock pitches, sharing strategies. There's a huge element of learning. So we have a whole book club that we talk about a new book every month, and that's either hosted by Claire or me.

30:18So we've done Joys of Compounding. We did the Nick Sleep Letters. We just did the book that's going to be my first episode on We Study Billionaires, which is what I learned about investing from Darwin. And then, yeah, and then people will just write about tons and tons of different learnings that they've gotten from different books. So it's really a place to learn with other like-minded of people. And kind of the reason I like it so much is that it's hard to find people who are as enthusiastic about investing as I am in my day-to-day life. I mean, most people aren't interested in it and that's just the way it is and that's okay.

30:48But it's nice to have an outlet to be able to share your thoughts about investing with other people. And yeah, you can go on Twitter and do it for free and that's great, but the experience isn't that good and the quality on Twitter is pretty hit or miss. So we do a really good job of trying to maintain the quality of our members and also just fostering relationships. So we have tons and tons of people who have sold their businesses or are retired and managing their own money and people who have really, really good insights. So for instance, I was researching this business, Hammond Power Supply.

31:22And so they're on the electrical grid and I wanted to learn more. And I just threw the idea out there. And one of the people mentioned that he worked for one of their competitors. So I hopped on a call with them and grilled them with a whole bunch of questions. And it was really cool to get that insider information because that's information I, you know, there's no chance I would have gotten that if I wasn't part of the community. So there's all sorts of people with really diverse backgrounds. There's also professional investors in there as well. So it's pretty cool to be able to get a professional view and see what the pros are doing and how they think as well.

31:48So yeah, that's kind of what you get. And so far people have found a lot of value in the community. Yeah, that's super cool. And there is something to be said, like you mentioned about Clay and you guys have this shared, you become like kindred spirits over a stock. And it's funny how that happens. It's like, oh, you think like me too. And it's definitely an interesting thing that happens with people. I wanted to talk a little bit about investing love stories. I want to hear about in your portfolio right now, what's one investment right now that you're super fond of and why it holds a special place in your heart?

32:25Yeah. So it's funny because a good investing is kind of like being a robot, right? I mean, we're supposed to be unemotional, but you know, the fact is, is that a little bit of emotion is, I think is okay. As long as you don't allow it to consume you. So for me, the oldest holding I have in my portfolio is Aritzia. So it's a business that most people aren't familiar with, but essentially it's a retail brand for mainly for females. And it's actually based out of Vancouver where I'm from. So part of the reason I love it so much is that it's a business that I'm pretty familiar with and not many other people are because it started in Vancouver.

33:00So back when I was in my early twenties, I used to see girls wearing their stuff all the time and I had no idea what it was, but I'm like, man, like I've seen like five girls wearing that exact same thing in the last week. And then, you know, I'd go and ask my girlfriend or whatever, what it was. And she would say, Oh, that's Aritzia. And you know, yeah, everyone has it. It's Aritzia. And so I started understanding the strength of the brand, at least in Vancouver then, because everyone was wearing it. Everyone loved it. It looked good. The quality was good. And so I feel that kind of gave me some unique insight into the strength of the brand that's kind of hard to fathom, especially if you're a guy, because you're not going to be wearing their stuff.

33:35So that's kind of a pet stock I would consider. And it's a stock that lately hasn't been doing very well, but I feel the fundamentals will shine through and they're going through some short-term issues right now and the stock price has been punished, but it's one that I'm hoping I can hold for a long period of time and continues to perform really, really well. You and Clay had covered a Polish company and I wanted to hear more about that. How did you get turned onto that company? I forget the name of it. Dino Polska. Dino Polska. Yeah. So tell me about that. Is that part of your portfolio? Do you look internationally at companies?

34:11Yeah. So that is part of my portfolio. I do look internationally. Actually, so I'm based in Canada, but I actually don't own any US stocks currently. I have in the past and that has nothing to do with the US market. I think the US market is the best in the world. That's just the kind of the way it's played out. And also the US market, given the fact that it is the best market in the world, is also the most known market in the world, which often means that valuations are a lot higher in it. But Dino is a business I completely found from Chris Mayer. Chris Mayer and I DM back and forth. We share a lot of stocks in common and he's helped me with just finding ideas.

34:44So I hopped on there one time, asked him, hey, are there any interesting businesses I should look at? And he listed a couple and one was Dino Polska. When I looked at Dino Polska, I was absolutely blown away. I mean, the business is incredible. And it's kind of one of these typical Chris Mayer businesses where it's just growing at a really steady rate, has a good competitive advantage. The only problem is that it's definitely not cheap. And even though it's in Poland, which is a market most people don't really think about, there's actually quite a few pretty high quality businesses in Poland. and Dino Polska is one of them.

35:18And it had its time where it got crushed a little bit. And so you could have picked it up at really nice prices. But yeah, so international investing, I love it. I mean, it can be a little bit harder to understand things just given different cultures, different geographies, different regulations. But I own a number of businesses that aren't based in North America, and I don't see that stopping anytime soon. And the thing that's cool about international is that there's a lot of times there's less eyes on them. And with the popularity of X and everything, it's hard to find something that no one knows about.

35:48But if you can find something that very few people know about, there's a lot of advantages than that. So I really like international businesses and especially like international businesses that are on the smaller side or less well-known. I wanted to touch on Chris Mayer and the whole idea of a hundred bagger. What are some of the metrics, the concepts that he's looking at to figure out if a company becomes a hundred bagger or not? Yeah. So he has a couple of things. So one of my biggest takeaways from that book was just simply his twin engines concept, which essentially is if you want to look at a hundred bagger, one really good way of doing it is to find number one, a cheap entry multiple.

36:24So if you buy something for a price to earnings of five and it grows to a price to earnings ratio of 20, it four X's right then and there without any changing in its earnings. But if you can change the earnings, if the earnings also increase, well, you can get these businesses where the earnings maybe doubles or triples, But when you multiply that also by the earnings, the change in the multiple that you pay for it, you get just magic and you can make a lot of money. So that was one concept. And then one thing that he also made very, very clear in the book is the importance of returns on equity.

36:56So the reason that's so important is that basically if you have a business that can earn 20 % returns on equity, and let's say it has no debt and reinvests all of its profits back into the business, it should theoretically grow at 20 % forever. I mean, it's pretty impossible to have 20 % ROE forever, but there's some businesses I've been doing it for a really long period of time. So if you can find a business that has a really good return on equity, which is basically just net income over shareholders equity, and then pair that with the ability to reinvest in itself, you can find really, really high quality businesses that can continue compounding their business.

37:33And that's kind of the Holy grail. If you can find that, it's hard to find, It's really hard to find because a lot of times you'll find these businesses that do have a high return on equity, but they can't reinvest it in themselves. So they eventually they'll have to, you know, they basically pay a dividend. And if they pay that dividend, it obviously reduces the amount of money that they can put back into the business, which reduces the effects of compounding. I wanted to talk a little bit about how you construct your portfolio. I want to hear like how many stocks you typically hold in your portfolio and then a little bit about risk management.

38:04management. There's that famous Warren Buffett saying about the first rule of investing is don't lose money. Second rule is don't forget rule number one. So I want to hear a little bit about how you mitigate risks when you construct your own portfolio and just how you size it. Yeah. So risk is huge. And I think that if you don't think about it very often, you're putting yourself at a massive disadvantage because investing is emotional. And if you let your emotions consume you, it's really easy to forget completely about risk. And that's why I think Howard Marks' book is so important. So for me, there's a couple of things I do to mitigate risk.

38:41Number one is I try not to buy things that are ridiculously priced. So sure, I'll buy something that looks expensive. If the market's trading at a PE of 20 and I buy something at a PE of 30, then yeah, that's an expensive business. But certain businesses are so good and it's very small, but there are certain businesses that are so good that you can pay up for them and still get a really, really good return. But the key part there is being right about the business. So I spent a lot of time trying to understand the business, understand its competitive advantages, understand its total available market, and understanding how much market share it can take in the future and its ability to maintain its profits and its ability to stave off competitors.

39:20So that's one way. And then the other way essentially is just through portfolio sizing. So I'm definitely more concentrated, but there's some people who take it to extremes like Charlie Munger. And I think Charlie Munger can do this because he was so brilliant. And I don't think I'm anywhere close to as brilliant as him. He had like four stocks in the Daily Journal, I think, something like that. Yeah. Yeah. He's super concentrated and I try not to concentrate quite as much, but the way I look at it is I want to have as much of my money and my winning stocks as possible. I mean, that's kind of what everyone says they want, but in reality, what they do is they'll have a stock that's a winner and they basically shave off part of their winnings and then put those winnings into other stocks.

40:03But I just don't see it that way. In my opinion, if I have a stock that's doing really, really well, I don't want to stop it from doing really, really well. Paul Andriolo, when I had him on, he had a really good analogy. He said, if you have Wayne Gretzky on your hockey team, if you're trying to win games, are you going to take them off the ice or are you going to put them on the ice as much as possible? And the answer is quite obvious. You're going to play your winners as much as possible. So I want as much exposure to my winners as much as possible. And so what that means is that, yes, I may have winners where their levels of concentration are higher.

40:31For instance, for me, my highest level concentration position is Evolution AB, and that's around 20%. But I sleep fine with that because this business is incredible and it's continuing to grow at high rates. And I don't think there's a chance for me to lose too much on it at this point in time. So I just leave it as is. So that's kind of my other way I mitigate risk. And then another thing I like doing also is I think it has to do with how much intensity you use to research a business. So if you're investing for the long period of time, your biggest risk is not understanding a business. And that's what I'm in for is to invest for long periods.

41:07So if you can really try to focus on finding businesses that are simple and that you can honestly understand. And that's the hard part because you can tell yourself you understand something. But until you lose a bunch of money and realize that there are a whole bunch of risks that you never accounted for, then that's when you can admit to yourself that you don't understand. So I've really been focusing on finding businesses that I can understand really well and that are really simple because another part of that simple versus complex equation is that simple businesses are also easier for the market to understand.

41:37And if you have this super complex idea, if the market doesn't understand it now, there's a reasonably good chance that it's not going to understand it in five years from now. So you might get these businesses that are chronically underpriced. So that's why it's nice having just really simple ideas, simple businesses that hopefully carry lower risks and that the market can understand really easily. So I think doing those kinds of things has really helped me mitigate risk. Let's take a quick break and hear from today's sponsors. Hey, it's Sean O'Malley, just popping in with a quick message. If you like this podcast, well, I've got great news for you.

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45:18That's theinvestorspodcast.com slash tip-finance. All right, back to the show. It's very Buffett-esque to stick with simple stuff. So I wanted to kind of go behind the scenes. When you are researching a potential investment, I want to hear a little more in depth about what your process is like. What are the things that when you're looking at a company, you say, boom, this is it. I'm definitely going to take a position in this company? Yeah. So it's definitely a long process and I kind of draw it out on purpose because I feel like rushing into a position is a horrible idea because you open yourself up to all sorts of risks and mistakes and the analytical process that you wouldn't make if you just kind of take your time.

45:59So my general process is at first I have to get the idea. So where do I get the idea? Like I mentioned, I get tons of ideas from X, from my direct messages, from the mastermind community. That's kind of my primary resource. So after that, I'll look at a business quantitatively. So what I'll do, I have my own kind of little system I like to use where I'll open up this service called FinChat and I'll put the name in and I'll look at metrics like revenue growth, net income growth, operating cashflow growth, free cashflow growth, returns on invested capital, and it's returns on invested capital, conservative financing, what the insider ownership is.

46:34And I'm looking for specific benchmarks. And if the business doesn't meet the benchmarks on one or two, well, maybe I'll keep going. But if it doesn't meet it on 50%, well, it's just a pass. And I can do that in about less than five minutes. So it's really easy for me to say no to an idea. But a lot of times businesses will pass through that. And that's where the real work starts to begin. So after that, I'll begin by just looking at the quarterly annual reports, reading them, reading the Q &As. I might check out Seeking Alpha to see what other analysts say. And I know a lot of people say you shouldn't do that.

47:07But in my opinion, I'm looking at other analysts is just kind of a shortcut because while you may or may not agree or disagree with what they're saying, it can really open your eyes to maybe some of the risks that you're not looking at. And then also, you can always reach out to them and grill them for questions on the business if you don't understand it. And then after that, also looking at competition. A lot of times, these businesses won't tell you who their competition is, but sometimes they do. And then sometimes you just need to figure it out yourself. It's usually not that difficult. You just look at what products they're selling and try to find other products that are similar and go from there.

47:38And then I'll compare numbers. So generally speaking, if the business has passed my first hurdle of being really good quantitatively, it usually means that it's got some sort of special sauce. So I want to see why it has a special sauce and I want to see it quantitatively compared to other businesses in the industry. Because a lot of times you might find a business that looks half decent and then you look at the industry and everything looks good. So in that case, well, they probably don't have any type of advantage. And yeah. And then I spent a lot of time looking at management. So things that really matter to me are how many shares do they own?

48:10Did they get the shares via options or did they buy them on the open market? How much percent of their net worth is in the business? How have they done with previous businesses they've worked at? How have they done on strategies that are currently in the business? Are they open to answering difficult questions or do they just kind of deflect or blame others for it. So yeah, that's kind of my investing process. And then other things I'll do is talk to other owners of the business. It's easy to search a ticker on X and reach out to someone and ask them a couple of questions. And oftentimes you can get really, really good answers.

48:43I've started talking to management a little bit now. It's definitely something I want to get better at. That can be really, really beneficial. Obviously you have to take what they say with a grain of salt because they're all promoters and they're good salesmen. But if you have the right questions, you can get some really, really interesting information that can help you with your decision-making. And then after that, this whole process, unfortunately, I don't have eight to 12 hours a day to take on it. So this can take weeks or months just for one idea. And then after that, I'll start evaluating the business.

49:09So a lot of people, myself included, I think make the mistake of valuing a business first. So they'll be like, well, okay, this business is really cheap. Let's go ahead and buy it or whatever. But the problem with this is, well, you do that. You just skipped all the work I just talked about. And if you're intending to hold the business for a long period of time, all this work is what helps you identify risks and really understand the business. And I don't think you can really evaluate a business without understanding it. So, you know, because I am looking at higher quality businesses, a lot of the time, the valuations are just, unfortunately, they don't make sense.

49:39So I ended up having to wait, but I think that this is a really, really good way of doing it. And so another thing also is that, you know, a lot of times you might not fully understand a business, say 90%, but I don't think you need to get up to that point to make, to enter into position. So you can do, you know, You can make it a smaller, make it 1 % or 2 % to start off with, and then keep doing more and more research. You should still have a very, very good base of what you know. And then as you understand the business better, develop conviction in the business, see that they're executing on things, and you can start adding to the position size.

50:13You've mentioned Gwadam Bade, and one of his ideas is keeping a trading journal. Is that something that you do? Is that part of your toolbox? I want to kind of hear about your toolbox, like your tech toolbox. Talk to me about like, you obviously like to write. So I'm curious if you also journal about your investing mistakes and wins, things like that. Yeah. So back in probably October, I did buy myself just a physical journal. And when I first started, I was doing it every day, but then I realized that my prompts or things that I was writing about were kind of repetitive. So I'm trying to kind of figure out how to word things and everything like that.

50:52But I still journal regularly. I just read Godim Bade's book, which essentially it's a peek into his journal during this bear market in India from, I think it was 2017 till 2020. His second book, right? Yeah, his second book. It was really, really good. And it had some really interesting insights onto what he looks at. And I think for me, the strength of journaling is really understanding where my emotions are because I can identify where my emotions are and write it down and then go back and look back at other periods of time and see. And obviously, I don't have a big history. So, this is going to be into the future where I'll look back, but I can go back and see where I'm going wrong.

51:29But I think it's also a good way to tell you yourself as a signal where your emotions are because a lot of the mistakes we make are based on emotion. And if we can try to identify what those emotions are, then we can also try to hopefully minimize mistakes based off of those emotions. So, yeah, some of the prompts that he wrote in his book were very macro-oriented. And while I think macro is definitely important, I don't really try to be too much of a macro guy, personally. I'm really interested in just specific businesses. So now what I'm doing is I'm trying to focus on prompts that ask me what businesses that I own that I'm my most bullish on, what am I least bullish on, what are developments that I'm paying attention to or KPIs I'm looking at.

52:14And then I'm also not exactly investing related, but another thing I'm really been working on is trying to be better at using multidisciplinary and thinking. So what I'm trying to do is use my journal. I write in it what mental model I want to learn for the next week. And then each day I try to apply that mental model to different areas of my life, whether that's investing a business, family, parenting, relationships, just life in general. And so every day I'm trying to use one mental model on various things. And then, so I'm trying to basically make using thinking in different mental models a habit.

52:47And that's, it's been working really, really well for me. It's a lot of work and it's upkeep, but it's been working well. And I think if I continue doing this for many, many years, I'll hopefully become a fraction as good as Charlie Munger was at it. Yeah. So you mentioned mental models and you've got the book behind you. Is that where you're pulling the, there's a chapter in there that's all about mental models. Is that where you're pulling the, when you're taking a look at mental models, is that what you're looking at? I get them from a variety of sources. So I think you're talking about Charlie Munger's, the psychological misjudgments.

53:17So yeah, I've definitely gone through that multiple times. I probably need to keep going through that to really internalize each and every single one. But yes, so that's one source. Another source that I've been using a lot is actually the Great Mental Models, which is a three-part series written by Farnham Street. It's really good. It has 15 to 20 pages for a whole bunch of different models. It does a really good job of showing the definition and then giving you a case study that could be completely far out there. They make sense. So I kind of use that as a guide and then I'll read about it, try to understand a little better.

53:50But I think the most important part is really internalizing it, thinking about it and using it. Because you can get this list of mental models, but if you don't actually use them on a regular basis, it doesn't really end up helping you very much. I wanted to shift gears a little bit and talk a little bit more about your personal life. You've become a father recently. I know you're a brown belt in jujitsu. So I wanted to talk a little bit about both of those. First off, how has fatherhood changed your investment philosophy? Yeah. So being a father has helped me a lot. I think the most with efficiency.

54:25So a lot of the time I have now, I want to spend with my son. And before that, I didn't have my son. So I'd spend it on other things such as whatever, investing or jujitsu. But now that I want to spend more time with him, I really, really have to focus on my time efficiency and using it in as intelligent a way as possible. So I've gotten a lot better at saying no, especially with investing stuff. I mean, you might get a hundred ideas shot at you and maybe one of them is decent. And so I think it's really important to understand how to identify that one idea because you can waste a lot of time in investing.

55:01And if you don't have some sort of system to use your time more efficiently, then it's really easy to just to waste time. And so having my son has really, really taught me the importance of that because there's only so much time in the day and I want to spend a good portion of that with him. And then the other thing that he's taught me a lot about is compounding. And it's more compounding knowledge because every day it's like he learned something new. And I'm not going to be one of these parents who thinks his kid's a special snowflake. I know most kids go through it, but it doesn't really matter.

55:33It's just the rate of learning that babies go through is just, it's like, it's like almost incomprehensible, like just little things he does one day, he wasn't doing it a week ago. And it's just like, man, this kid is learning so much at such a fast pace. And so it really got me thinking, it's like, you know, just as humans, we learn so much at a young age and, and, you know, we'll never learn as much as probably my son's learning right now. But I think a lot of people kind of close themselves off to the learning process. us usually, you know, whether that's in their late teens or early twenties after they finished school and, you know, you kind of learn whatever you learn and that's it.

56:06And then you just live the rest of your life out. And, but it just goes to show like with my son, it's just like over, you know, a couple months period, it's just like, he's a whole new person. And if he can do that while compounding all these different things that he's learning each and every day, well, why can't adults do it? I mean, granted, it's going to be on a slower pace and that's completely expected, but it just really shows that the power of compounding works and it does have big results. And even though you might not see them on a day-to-day basis, over a long period of time can make rapid, rapid changes in your knowledge.

56:38That's awesome. Yeah. Those are good points. I think the other thing too, with kids is like, it totally lowers your time preference, right? Now you're thinking out 20, 30 years, rather than before when it's just you, your time preference is really high. I wanted to hear about jujitsu too. You're a brown belt. Talk to me about how you got into jujitsu. And I know there's got to be ways that you've applied what you're doing on the mat to investing? Yeah. So jujitsu has been a huge part of my life for the last decade or so. So I absolutely love it. And jujitsu is cool because yeah, you obviously have your coach who teaches you, but just with the blowup of internet, there's been a lot of really, really high level jujitsu players who share their coaching online through videos.

57:23So a lot of my time was just spent researching what other really good people were doing and then trying to apply those lessons to my own game. And so essentially, I started thinking of jujitsu kind of as these small kind of games that you can play against your opponent. And it's really cool because you can get really good at one game of jujitsu and be reasonably new. You could maybe be like a white belt who's been training for a year or a blue belt or whatever, which is the next level up. And if you're really, really, really good at one game, You might even be able to beat someone who's a black belt because if they're playing your miniature game and they're not as good as you at it, you have a huge advantage.

58:01So that alone has taught me so much about investing. And that's because basically in jujitsu, you can find out what your strengths are and you can focus your entire game into amplifying what your strengths are while basically ignoring your weaknesses. And so in investing, it's similar. I mean, obviously there's weaknesses that you have to address, otherwise you're just going to get killed. So I broke down a couple of them in investing. So obviously know your strengths and you should amplify them. So what that kind of comes down to for me in investing is knowing what you know and what you don't know.

58:33So spend time researching businesses that you know, and you can understand and that you might have an advantage of because other people won't have that same advantage. And that's really important because when you're not focusing on your strengths, you open yourself up to risk. And so like that brings up my second point, which is understand your weaknesses. So you obviously, there's some weaknesses that you need to address, but a lot of times you can just focus on what your strengths are and use your strengths to avoid your weaknesses. So in investing, I think that's, you know, you have to have a decent overall game, but if you know you have a weakness in whatever that is, a specific geography, maybe a specific industry, you know, it might just require the humility to admit that, okay, I don't understand that area.

59:17I'm just not going to bother with it. I'll skip it. So I know that like Warren Buffett, he's always said that airline stocks are crap. And then he bought a bunch of them and he says he calls himself an aeroholic, which I found hilarious. So it just goes to show you that there's industries that maybe no one understands, but you personally don't understand well, and you should just stay away from them and just focus on what your strengths are. Another thing that's really important is to do what is fun. So, you know, research, whether that's in jujitsu, I like doing, you know, moves and things that I find really enjoyable and fun and are athletic and other people might find them, they don't like them.

59:53So same thing in investing, you know, find ideas that you find interesting. Don't just find things that are a slog to get through. I mean, one of the easiest ways to, I think, to filter a business is if you read an annual report or you read about their products and you're just, you know, you're starting to fall asleep. Well, that's probably a good example that it's not something that belongs in your portfolio. And then the last thing is, is that just learning never stops. I mean, I've been training jujitsu for 10 years, which isn't even that long, but I still learn new things. Like literally every single time I step on the mats and I think in investing, it's the same thing.

1:00:24I mean, look at Charlie Munger, you know, he was still learning and he was 99 years old and one of the most brilliant people, I think on earth. And it just goes to show you that you can never know everything and you should always be trying to improve because there's always something out there to help you become a little bit better each and every day. This is a great place to put a pin in this interview. This has been really fun, Kyle. I really appreciate your time, your thoughts, your insights here. For our listeners that want to learn more about you, find out maybe about the Mastermind community, find you on Twitter, tell us some ways to get in touch.

1:00:54Yeah. So if you want to find me on Twitter, my handle is irrationalMRKTS. Markets was taken. So it's irrationalMRKTS. If you want to find out about podcasts. I have episodes already on millennial investing. So that's theinvestorspodcast.com slash millennial-investing. And then I will be on the We Study Billionaires feed as well. And if you want to learn more about the mastermind group, we have a waitlist and that's at theinvestors.com slash mastermind. And we have an intake about every quarter or so. So if you're interested, just hop on the waitlist and me or Clay will reach out to you. And then as a teaser, your first We Study Billionaires episode is about...

1:01:37It's about a book. So it's going to be a solo episode. It's just going to be me talking about all the lessons I learned from what I learned about investing from Darwin by Pulak Prasad, which was probably one of my favorite books I read this year. I think you'll get a lot out of that one. Cool. I'm looking forward to it. Kyle, thanks so much for your time. I appreciate it. Thanks for having me. Okay, folks, that's all I had for today's episode. I hope you enjoyed the show and I'll see you back here real soon. Thank you for listening to TIP. Make sure to subscribe to We Study Billionaires by the Investors Podcast Network.

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