How I Invest with David Weisburd
00:52:38 · David Weisburd, Jack Selby
[00:52:38] S0: Going back to the beginning of the conversation when we talked about... I I followed this company, EyeSocket, into San Francisco. Mhmm. And I was 22 years old at the time, and I I slept on John Ramey's couch, and I was in the office and just seeing people create stuff. But, also, just in San Francisco proper, and you're just standing around. You're talking to people even at a coffee shop, and they're like, yeah. I started this company. I raised 5,000,000. And you see that enough, your brain starts to believe that it's not some crazy thing. It's almost like inevitable. Of course, you go out and raise a pre seed based on some crazy idea. Of course, you raised $5,000,000 on, you know, $500,000 in revenue. Of course, then you have to raise a series. It becomes almost this... Instead of this preposterous dream everywhere but San Francisco... This was the early two thousands, so Silicon Valley culture was not yet as pervasive across the entire country. But there's something just powerful about just being there and literally, like, touching people that that have raised money. It's it's hard to put in words, but it it is something. [00:53:34] S1: It's inspirational. It's, it's truly a national superpower. Our risk on culture is better than anywhere else in the world. It's amazing, and we should embrace it. [00:53:45] S0: You also cofounded Clarium with Peter Thiel, which is a macro hedge fund. I don't oftentimes have macro investors on the podcast, you and Cliff Asness and a few others. What's your view on the macro climate today?
00:53:45 · David Weisburd, Jack Selby
[00:53:45] S0: You also cofounded Clarium with Peter Thiel, which is a macro hedge fund. I don't oftentimes have macro investors on the podcast, you and Cliff Asness and a few others. What's your view on the macro climate today? [00:54:00] S1: I think macro's back. I think, volatility's back. You know, thirteen plus years after the GFC and interest rates were bolted to the floor. We live in a very different world now, I think, whether it's geopolitical, volatility, across the board. So it doesn't mean it's easier. That's for sure. But if you're smart and you can come up with some good theses, in the macro world, I think this is a great opportunity to potentially make money. So I think this is a... I think macro has a... Finally has an opportunity to be in back and being more in vogue. [00:54:30] S0: And kind of the pendulum, you believe, will swing from more passive to more active?
00:54:30 · David Weisburd, Jack Selby
[00:54:30] S0: And kind of the pendulum, you believe, will swing from more passive to more active? [00:54:35] S1: I think so. And, again, with emphasis, it doesn't mean it's easier. But I think the opportunity set is is better now than what it had been for so long. Because after the financial crisis, you know, macro is basically trying to read the tea leaves in so many respects of, you know, what is the Fed gonna do, or what is, you know, some aspect of government gonna do, and that's just impossible. Like, there's no amount of fundamental research you can do to kinda come to any sort of informed conclusion. But now volatility is back. We live in a very different geopolitical world. Traditional trade relationships seem to be breaking down. Geopolitical global order seems to be shifting. So if you can put together an informed perspective on that, that might give you a trading edge. [00:55:12] S0: What do you think about these pot shops that have hundreds of billions of dollars leverage, and some some people believe they're almost like policymakers. You know, they're they're bailing out funds like situational awareness with what Ken Griffin did. What's their role in the market, and how do other investors compete with these pot shops and their resources?
00:55:12 · David Weisburd, Jack Selby
[00:55:12] S0: What do you think about these pot shops that have hundreds of billions of dollars leverage, and some some people believe they're almost like policymakers. You know, they're they're bailing out funds like situational awareness with what Ken Griffin did. What's their role in the market, and how do other investors compete with these pot shops and their resources? [00:55:31] S1: Talent rules everything, kinda going back to my venture capital analogy. And so I think a pawnshop perhaps is a great place to kinda get a career started. But if you're a world class, you know, Ken Griffin aspirant, and you put in your time at a pawnshop, you should spin out and go run your own fund. And why would you stick around? And so so I think they serve a purpose, but I think there's also a degree of kind of adverse selection, and that's a tricky balance. [00:55:55] S0: You've had one of the most fascinating careers spanning PayPal, Clarium, now Copper Sky. If you give yourself one piece of advice, going back to starting out PayPal and the day before you started PayPal, you can give yourself one piece of advice for the rest of your career, what would that be?
00:55:55 · David Weisburd, Jack Selby
[00:55:55] S0: You've had one of the most fascinating careers spanning PayPal, Clarium, now Copper Sky. If you give yourself one piece of advice, going back to starting out PayPal and the day before you started PayPal, you can give yourself one piece of advice for the rest of your career, what would that be? [00:56:10] S1: I was talking to my my business partner, Jason Pressman, at Copper Sky about this, a couple days ago, is that I have not done a good job of playing into momentum orientated markets. And so when the momentum market is going, it's a great way to make money. But I think I've been too boy scout, maybe even too cynical to participate. And looking back, I think that left money on the table. And I'm fine with that and losing sleep on it, but it's annoying all the same. [00:56:42] S0: What's an example of [00:56:43] S1: that? Coming back to the venture industry and all the crazy growth rounds that have been going on and, you know, just basically fake markups. And And it's a hot potato game, and... But you make a lot of money playing it. And as long as the hot potato doesn't land your your lap or to mix metaphors, the music stop, and you don't have a chair to sit in, it's a great way to make money. And I just have... It's just my my personality to to just fight that and not play in that type of momentum market, and that has probably been a costly mistake. But, it is what it is. [00:57:18] S0: So another way you wanna play investing games, not narrative games?
00:57:18 · David Weisburd, Jack Selby
[00:57:18] S0: So another way you wanna play investing games, not narrative games? [00:57:21] S1: I'm an investor. I'm not a trader. The market and venture for the last several years has been a trading market. Like, you can't underwrite Anthropic at $2,000,000,000,000. There's no way you can do that. There's no way anyone can do that. It's a trading market. So I'm an investor. And so I need to be able to get out my pencil and make the assumptions and underwrite the deal. That's what I do. And so that serves me well with what I do. And, you know, when this market currently corrects, which it will happen, it'll be, you know, when, not if, I will be relatively fine. And when our trader friends who are investing in these crazy valuations, they will not. But in the meantime, they've made a ton of money. [00:58:02] S0: Just to go contrarian on your mistake, I study the compounding of things. I'm obsessed with this concept of different things compounding. I think much more things compound than people realize. [00:58:12] S1: Mhmm. [00:58:13] S0: Is there not a compounding to being more of a fundamental investor that could compound throughout your career?