Invest Like the Best with Patrick O'Shaughnessy
· Patrick O'Shaughnessy
[00:00:00] S0: In go time, one of the questions that I've been asking everybody – because I'm just selfishly curious about it at this age, feels like the right time to ask – is around the measurement of success. Kevin Kelly, one of the founders of Wired magazine has this amazing idea, which is like your success definition should be extremely bespoke to you. Traditional measures of success are traps, money, power, fame, et cetera. And I heard a founder recently say something like, he measures success through the degree of radical self-respect. Success means complete self-respect. And obviously that then means lots of other things. But I'm so curious how – if I'm going into prime time or something, I don't want to waste that. So the objective function of prime time needs to be success.
· Alan Waxman
[00:00:00] S1: That's good wisdom. Let's hit the mistake that people fall into, this whole idea of money, fame, fortune. Once you start to prioritize that, that's a cup that will never get filled. Keep trying to fill the cup and the cup keeps getting bigger and bigger. That cup never gets full. So I think that's one of the problems people make in our industry, is that they think the cup –people say, "Oh, it's easy for you to say where you are now." This is something my dad taught me when I was ten years old. So this is not new. It was never the thing. For me it's like, I just want to do great things, be excellent, and do it with great people that share my values, and do things the right way. That's on the business side, and I want to do all that in a way and be excellent. Not competing against anyone else, competing against ourselves. But do so in a way where I'm the best dad, the best husband and it's – getting one without the other, I just think you're going to be 80 years old, you're looking at your mirror and what was the purpose of life? There's no purpose. The purpose of life for me – and again, it's certainly not about the cup, that's definitely never been it. It's about all those relationships you form and those experiences you go through with people. When you're 80, 85 years old, you're looking back. Hopefully, I'm healthy because I looked at my sheet a lot of times. And it's those relationships and those experiences that I think drive to a fulfilled life. And obviously, it starts with your family, but I have a lot of Hawaiian friends – your hui. Hui is the term for your group, your posse. Having those experiences of climbing up the mountain together, and that's to me what it's all about. And if you are around the right people, you have the clarity of purpose, you have the right values, you have the right culture, and you're going up the mountain together, it's so fun. And you never have to question first principles. How you're going to do business, trying to do it the right way, and it's what we call clean living. But again, doing that at the expense of not spending time with your family, I think that would be pretty unfulfilling to me.
· Patrick O'Shaughnessy
[00:00:00] S0: Last time I got to ask you my traditional closing question, I had to come up with a new one this time. One of my favorite things from our first discussion, and you sent us the visual, which I loved – is the concept of facing the tiger. Maybe you can remind us what that means. I thought you were kidding in the conversation, but literally off the elevator is a giant tiger in your office, which is so funny. I like the principle a lot, but I'm also curious what it means to apply that principle for you and Sixth Street today in this fascinating dynamic environment.
· Alan Waxman
[00:00:00] S1: Face the tiger – it's one of the core ethe of Sixth Street, which is there's hard things in this world. We're going to make mistakes. We're going to have problems. But when those problems happen, instead of pointing fingers – we have a saying from day one of our firm, is that we look at the problems head on. We look at them together and we don't run from them. We run to them. We run right at them. And that's what Face the Tiger is. For the environment we're in, and this is what I told our entire firm, is that we're in a world that the pace of change is rapidly accelerating. And if you think the pace of change is accelerated now, it's going to just continue and continue to accelerate. Which is why, by the way, from an investing standpoint, going back to what we said earlier – the idea that you're going to have a narrow investment strategy when the world is changing so much. You're going to have oscillating supply demand dynamics of good time, bad time. Like, it's just crazy to raise a too-narrow strategy unless you put a governor on the amount of capital it raises. But I think the biggest thing when you look at the human being is human beings in general don't change. There are a small percentage that thrive in chaos and love it and step up like Michael Jordan. He loved chaos. His heart rate slowed and hit a game-winning shot. But most human beings don't like change. And as we start to go through this pace of change – there's obviously a lot of anxiety. Is AIs going to take my job, is it not? And our whole thing is, you can sit there and be anxious about things or worry about things. Or you can be like, hey, this is what it is. The world's changing. We've got to face the tiger. It's going to change whether we like it or not, it's going to happen. Yeah, there's stuff from AI, but what are you going to do about it? And that's what we say to people. It's like, look, we've got to face the tiger and just remember, you get one life. Do you want to be average or do you want to be excellent? And that's how we talk to our people. You keep talking about it enough and they get in the right headspace. So when change happens or there's disruption or something goes wrong, they've got the tool that they can use, let's say face the tiger, to be able to approach it. And we try to just get that in our firm.
· Alan Waxman, Patrick O'Shaughnessy
I think I said this last time – when problems happen, we're like, "Good, let's go. Game time, let's go." And that's the way we've been since day one. And I think to some extent, the way we are as people. [00:00:00] S0: I wish I could do this with you every year. I hope we do. Thank you so much for your time. [00:00:00] S1: Thank you so much, Patrick. Appreciate it.