My First Million
00:06:23 · Bill Perkins
[00:06:23] S0: I would say we were one and two. We weren't the arbitrage. We were one and two. So the idea is is that, you know, the market is comprised of a lot of people who who are, you know, some people punting around and just just straight gambling. People that need to hedge, and then people who really, really understand the market very well, study every single aspect that drives supply and demand. Right? And then what may happen, and then we'll have a position based on that irrespective of your superior knowledge. If you are not stoic about losses and can handle that, your prefrontal cortex will not work while your amygdala is going crazy. Right? Or you're thinking about, wow, I lost a bunch of money, or you're that type of person that needs five wins for every loss because that doesn't exist in trading. And so no matter how how bright you are, you need to have that temperament, that stoic temperament, that ability to handle losses, or be robotic about trading.
00:07:28 · Sam Parr, Bill Perkins
[00:07:28] S2: But your temperament is a little bit different, and I kind of find it more interesting. So like we've had, like you said, Howard Marks, let's say. Howard is sort of an academic. He's like part philosopher, part academic. Same with Ray Dalio. Like they're sort of this very unique type of thinker. Your attitude from just reading about you, you appear far more Texas cowboy. Like when I read books about like H. L. Hunt, you know, one of the guys who like got oil going in Texas in the mid, you know, 1900s, It seems like you have that energy because it seems like you are way more risk on than some of these other guys that we've mentioned. Is that accurate? [00:08:10] S0: To certain, it depends on the product you're pushing, right? Like our product is like a high vol product. And so like, I always say that, hey, this is a fund to get rich, not stay rich, and get rich is concentration risk. So it comes off as yeehaw, but it's really a thought out thing. Can invest in my fund and you can lose 100, but my fund can also return 300, right? So like, it's really the expected outcome and what are you trying to do here? [00:08:40] S2: Did you ever almost lose it all? [00:08:41] S0: Yes, couple times.
00:08:41 · Bill Perkins, Sam Parr, Shaan Puri
[00:08:41] S0: Yes, couple times. [00:08:43] S2: Hey. This is one of those episodes. So I don't wanna show you my notes, but just imagine this is full of notes because the other pages are. Shaan and I have been sitting here taking notes for this episode. And whenever that happens, what we decide to do is make life easier for you and put all of our notes into a document that you can just click here in the link below and download. It just makes your life a lot easier. So no need to take notes. Just download what we did. And we made it pretty actionable, very easy to understand. Click the link below and get it. Now enjoy the rest of the episode with Bill. What were the what were the swings in numbers? [00:09:15] S0: Down 50% to plus 250. [00:09:18] S1: On how much money are we talking about?
00:09:18 · Shaan Puri, Bill Perkins, Sam Parr
[00:09:18] S1: On how much money are we talking about? [00:09:20] S0: 100 and something million, 200,000,000, you know? So a 100,000,000 to 250,000,000. Yeah. But, you know, in a year and then we go through the winter, we build that up, we chop wood, and we go there. And that's why I like to, you know, we say... I said the name of the game is to stay in the game. You know, we're in a market that provides edge to people that really study it and keep their wits about them. And so if you are able to not completely blow up and get knocked out of the game, you will eventually have outsized returns. It's the same thing with insurance. Right, like you're saying like, oh, they're cowboys. These insurance insurance guys wrote these insurance policies against hurricanes, and then two hurricanes came, and they have a terrible year. Like, some almost get wiped out. Right? But then they keep writing insurance the next year. The insurance goes up, and they just print money and print money. And so unless you're in the arbitrage game, you will have a bad you will have a very bad year. [00:10:13] S2: Shaan, this seems like your style a little bit. How does it look? [00:10:17] S1: Do enjoy myself a little gamble. Now, let me ask you a question. You seem today like you're a pretty chill guy and you have all these hobbies and interests and friends and a kind of well rounded life. But everything I know about traders is that they... I asked one guy, Were you kind of a maniac back in the day? He's like, dude, we were pissing [00:10:36] S2: in Coke bottles on the floor.
00:10:36 · Sam Parr, Shaan Puri, Bill Perkins
[00:10:36] S2: in Coke bottles on the floor. [00:10:37] S1: You don't... You know, it was intense. Like, the intensity of trading is crazy. You know, you wake up at certain times to check what's going on in Tokyo and blah blah blah. [00:10:46] S0: Yeah. [00:10:46] S1: Were were you... Did you have a decade of your life where you had to be a bit of a maniac or no? [00:10:50] S0: Yeah, you become obsessed with the puzzle and that obsession helps you to have informational knowledge edge or to think about things that could happen that other people are not thinking about and scoop up the money. And so I think that happens to all traders to whatever they're trading, right? Like, it is a very, very difficult thing to do, it's complex, there's many variables moving around, and you have capital at risk, so you're always whenever you have a position, you're always working. You're never off, right? [00:11:22] S1: Knowing what you know now, would you have advised your younger self to go into that field or would you have said, Hey, just build a company that's gonna sell a product? [00:11:29] S0: Knowing what I know, I would've went into equities. It's just much bigger. And it's... You know, guys have $6,000,000,000 funds, $10,000,000,000 funds, right, with, like, what I would consider okay track records. You know what I mean? Or not that exciting track records, and you get positive drift on your side from the stock market. [00:11:47] S2: Does the skill set translate? So equities meaning you would you would evaluate different companies and figure out which ones are
00:11:47 · Sam Parr, Bill Perkins
[00:11:47] S2: Does the skill set translate? So equities meaning you would you would evaluate different companies and figure out which ones are [00:11:53] S0: bringing to stocks. There's just so much more capital available for people to invest in equities. It's kinda like, you know, there was a period where there's nowhere else to go type of mentality. Like, we have to be allocated equities. And so... And, you know, the fees they charge in equities are are are quite amazing on these giant funds. Right? Like, you have a $6,000,000,000 fund charging one, one and a half. I'm like, what fund costs that much money to run? You know I mean? Like, it doesn't. Right? So like your maintenance becomes a profit center, and then your upside is just amazing, just in terms of the notional dollar amounts. And so in terms of like personal wealth, like how could I have been much richer would have went into equities. [00:12:35] S2: Do you do that now with your personal money? [00:12:38] S0: Yeah, I do, but I'm 57. I'm not here trying to have a party at 85. You know what I'm saying? Like, my life is now, you know, like, if I were younger, that makes sense. But like for me, I'm at the back quarter of my life, and so it doesn't make sense for me to be wasting my current years to earn a bunch of capital for future years, given my age.