Invest Like the Best with Patrick O'Shaughnessy
· Ric Elias, Patrick O'Shaughnessy
I didn't pick this." It's like, this is a random roulette. It just -- it's the gene pool of I got my grandpa's gene of being a merchant. [00:00:00] S0: Fast forward a number of years, and you and I were on a walk, and you said something to me, which was something to the effect of, be careful about the relentless pursuit of more. Thinking of that in contrast to the story you just told, maybe say a bit more about that idea. It hit me kind of hard.
· Ric Elias
[00:00:00] S1: Society sets us up on a trick. All of this is a mirage. Every time you get to a peak, you'll see higher peaks. There's nothing about a peak that matters. Sometimes, it's what were said about the journey in this and then the other is that inner peace. So it's sense of well-being that really matters. How many days of your life do you have a sense of calm and peacefulness and purpose and you're in a good place, you feel like your energy is in a good place? To me, that's what really matters. And the pursuit of more robs you from that. You can't take it with you. It becomes a responsibility the more you have. And I tell this to a lot of our employees when they're leaving. And I said, okay, great, you're ready to graduate, for you. But when they're replacing happy with happier, that's when they get in trouble. There's no such thing. I had a fun exchange. An employee came in and I was, "Hi, you're back, great." We have a bunch of boomerangs. It's silly how many boomerangs we have. And I'm like, "You're back." And I jokingly said, "Hey, the grass wasn't greener." He goes, "No, I like this brown." And that's true. Everything is a little brown. I've stopped pursuing more. That's why anything I do from here on out with my capital, the return on the capital, I don't invest any more on funds. I don't invest in anything. I don't want to compound capital. I know that sounds like opposite of what you're hearing. I want to use my capital to compound other things that matter to me. So I'm using my capital in Puerto Rico to do things that really matter to me. This whole notion of purpose, my original purpose is through my kids, it's through my friends, it's through my community, but then, I am incredibly privileged to broaden that purpose to things that are good for society. That's all that matters. Capital for capital what? You're never going to be Bezos or whoever else. That's a silly game.
· Patrick O'Shaughnessy
[00:00:00] S0: You flipped something around on me earlier today that was really interesting around this idea of 90-10 in a conversation, where I think maybe you and I both tend to really be curious about other people and ask a million questions. And very often, finish a conversation having only spoken 10% of the time or something like that, which I guess I've always thought is a nice thing to do for somebody else. I'd be genuinely curious about them. I like to think I'm that way. But do you have a different perspective on this? Can you explain that?
· Ric Elias
[00:00:00] S1: Look, somebody that is looking for love, the best thing that you can do is ask a lot of questions because people love people that listen to them. You can ingratiate yourself shortly to somebody who says, oh, how good? It was wonderful because you talked a lot about yourself. That said, one of the beauties of true friendships is allowing the other party to feel that they can love you back. And I told you the story of a dear friend of mine. One of my best, best friends. He's like my first best friend in the U.S. His name was How do you recruit people here? Just shaking hands and talking to some people a couple of hours ago, you get this incredible sense of excitement to be here, front footed-ness. So what are you looking for in the people that you bring to Red Ventures? I think part of that is who you bring here, so I think you making sure that people are comfortable with the way we operate. If you need certainty, if you need predictability, if you need to be the star of the team, if you have all the stuff, it's not going to work. But recruit so many young people, which -- that's really usually not the case. I compare it more to Charlotte. One of the things I love about Charlotte is it's probably one of the greatest places to live, not just because of the weather or the airport or whatever, it's because people are super nice. People here drive nice and whatever else. You take a New Yorker and you move him to Charlotte and within a month, they're saying good morning to you. So the culture of Charlotte is what, people come in and because you feel rude, you go to the third coffee shop in a week, and you walk in and they say, good morning, and you're like, "What do you want," right? And what you realize that that's culture. So in here, ultimately, people behave in a way. So when you walk in, you're like, "Oh, these are the norms on how you behave here." And all of a sudden becomes, "This is how I fit in." And it becomes the way that we operate with each other. We take our work really seriously, not ourselves. There's a ton of humor. We do a lot of things. We have tons of sports. We have tons of stuff just because it's all interconnected.
· Patrick O'Shaughnessy
[00:00:00] S0: If you think about the investing side of your brain or world, I kind of have the same stupid question I have about investing that I did about business. In some sense, you seem like someone that's just intuitively good at this. Yes, you buy the avocados for a 20th of the price you sell them, you make money. But do you have an investing philosophy? Because part of what you've done is allocate a lot of capital. In some very basic way, you're an investor. I'm curious, what do you think makes you good at it and what you like about it?
· Ric Elias, Patrick O'Shaughnessy
[00:00:00] S1: I love to bet. I hate to gamble. And I think life is about understanding odds and edges and risks, and this whole notion of can you win multiple ways also applies on the other side. When I look at a business model, if the business has three variables for it to work, I will never invest in it. There are some great businesses that need three variables. They're going to need a ton of capital, a ton of luck. They're going to have to figure some stuff. If the business has two variables, then you're compounding the risk. So you better be fairly certain that one of those variables you have high confidence on, and the other one you have some visibility. And if the business has one variable and you have an inkling, lean right in. So a lot of this is just decompose risk of what you're investing in, and it applies to everything. So it's both the multiplier and then the discount that you would apply to an intuitive decision. And when we see something, we're like, "Okay, that's worth the bet." But understanding that when you're betting, you're going to lose some. And if you're -- I think if anything, you need to have bad bets to be able to be a good better. Otherwise, you're just taking fastballs, 85 miles an hour down the plate. [00:00:00] S0: What episode of Red Ventures' history do you look back on with the most pride?