Invest Like the Best with Patrick O'Shaughnessy
00:59:28 · Jeremy Giffon
Part of the reason I think it's easier for people to outperform individuals is it's easy to take a flyer on a stock with a marginal fraction of your net worth that you don't feel you need to explain and you're not gonna be judged on later than it is to do with maybe a dollar amount that's more money than you have, gonna affect your track record and you're gonna have to explain it and all these other factors that are not related to like, do you think this is a good investment or not?
00:59:56 · Patrick O'Shaughnessy
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01:01:12 · Jeremy Giffon, Patrick O'Shaughnessy
[01:01:12] S2: There is this funny notion that it's sort of specific to the labs but it's a broader thing as well I suppose. We're sort of recreating the feudal system from first principles where there are the Lords, Elon, Zuckerberg, Dario, Sam, they can sort of make landed gentry by giving out allocations because these allocations are sort of these best example of generational wealth. You get this allocation in SpaceX or in Waymo or whatever, you get to charge huge fees on it and it's sort of this like wholly synthetic product which is someone gives you a sort of arbitrary number, they know you don't have the money so they know you're gonna go fill it and then you get to go out and basically say I've been given a deed, the king has given me 500 acres in this country and Elon has given me a $100,000,000 to allocate in SpaceX and you get to go out and charge fees and make a bunch of money from it. Do you have allocation? And I guess I'm interested in it because it's sort of this purely relational wholly synthetic thing that I'm not sure has ever existed before, certainly not at the scale and magnitude, you can go due to your relationship, basically get this like landed estate and then take it to a sovereign or a foundation and they will pay you for that access, like a pure paid for access. But maybe where it's different is that's just brokering, but the difference is obviously that brokering is sort of like a one time transaction but these allocations sort of, you know, they live on forever. [01:02:31] S0: What's the most egregious fee setup you've seen in one of these?
01:02:31 · Patrick O'Shaughnessy, Jeremy Giffon
[01:02:31] S0: What's the most egregious fee setup you've seen in one of these? [01:02:34] S2: No GP commit, ten percent one time upfront fee with some carry structure generally, where you're just demanding basically that you get paid life changing amounts of money with zero risk and then you also get a huge amount of upside. The other thing is I've seen a few that don't have a term limit. I know there was like famously some a lot of SpaceX ones. I think people were doing that ten years ago. I know there's certainly some that just collect the fee forever. To Capital's credit, you're very happy to be paying that 2% on the SpaceX thing that you did fifteen years ago. So it's sort of a win win. It's not to say these are all bad, it's just it's sort of funny because it's not investing, it's not strictly brokering, it's this very different thing that is like a wholly insider access game. And then of course, there's all the fraud and bad behavior that I think comes with all the bubble and stuff. [01:03:22] S0: How do you think about your own productivity, for lack of a better word? We talked before about how content is really just entertainment, not learning. We shouldn't kid ourselves about that. Therefore, it is largely unproductive, which is fine. It's entertainment. How do you think about, to the extent you care about yourself personally being a lot more productive with all this insane tool?
01:03:47 · Jeremy Giffon
[01:03:47] S2: I certainly care about productivity. For me, by far the most generative thing is conversations, which I guess are downstream of relationships. Part of the reason my book reading has gone down is I'm friends with a lot of people that read a lot of books. If I can only keep one thing, it would be conversations with people that I find interesting. But I also think like I'm uniquely tolerant of distasteful and weird people. I get asked for a minute like what's your media diet and conversations are my answer and it always feels like the answer falls flat with people. And I think it's because they're not friends with like weirdos. A lot of my friends I think are sort of people would largely find strange at best, distasteful at worst. If I can't predict what the person's gonna say after knowing them for a while, I like them a lot and that's a very high variance thing. Old books are good. I think YouTube remains underrated. There's a lot of really obscure things on YouTube that I really enjoy listening to. YouTube sort of remains the library of Alexandria of our time maybe of ever. But yeah, YouTube doesn't feel generative. I think the only thing that's generative is conversations so far in early twenty twenty six. I would say chatbots can lull you into feeling generative, but if I actually look at like the actions that I've taken, you can feel really productive after like a good two hour session on a chatbot, but I actually don't think they're that generative.
01:05:11 · Patrick O'Shaughnessy
[01:05:11] S0: If you think about great investing ideas, what is the right balance between simplicity and complexity? Both in the ones that you've done yourself but also studied.