Mental Models Investing Sleep And Much More With Samir Patel From Askeladden Capital

TITLE: Mental Models, Investing, Sleep and Much More With Samir Patel from Askeladden Capital CHANNEL: Focused Compounding DATE: 2018-09-06 ---TRANSCRIPT--- all ready we are ready to get started today how is everyone doing today hope you are doing well my name is andrew kuhn thank you very much for tuning in with us here today at the focus compounding podcast mr. Jeffrey Gannon how are you doing today I’m doing great Andrew how are you doing I am doing fantastic I’m always waiting for you to say how are you doing I am doing great so today we have a very special guest on he’s also a Dallas native if you could believe it Samir Patel from ask Aladdin Capital he is on the line Samir how are you doing today doing pretty well thanks for having me Geoff and Andrew hey man thanks for coming on I think you know there’s you don’t have a Twitter but I did see some people tweeting about I think your pitch deck one time or something along those lines so people definitely know that you’re out there and I think this will be a great sort of Avenue for you to you know sort of talk about you your investing style you know you definitely have sort of a unique background and I’ve talked about on the show before how I’m sort of fascinated with this idea of stories and how everyone has their own unique story the narratives always being written and there’s no one perfect story to life and how you know certain things could change in our lives and we end up doing completely different things and it’s it’s all an interesting story but today we’re going to be talking about your story I was doing some research on you and know wow you know that’s that’s not good yeah alright Google and they called you the Dan Marino of spelling and you were that choice I always prefer to tony romo spelling in Dallas yeah and you’re that kid from the spelling bee and I don’t want to talk about your past I think that’s a good Avenue for you to talk about your past but you know just sort of give us a little background on you and you know your childhood and sort of how that came about so tell me about the spelling bee and you know kind of go from there yeah so I mean I I competed in the National Spelling Bee five times in a row from I guess it was 2003 to 2007 and I placed third the first time I went in place the second the third time I went and yeah it was kind of interesting it started off being something that was almost completely accidental in the sense that you knows maybe six or seven and one day a friend of ours just mentioned hey there’s this spelling bee for Indian kids you know and Samir Samir kind of you know knows knows a lot of big words for being you know three feet tall or however I was so they recommended that I went and you know did this and so my mom took me and I did okay it was actually it’s called the north-south foundation and it’s a it’s I guess a nonprofit that is designed to kind of raise scholarship money for underprivileged students in India but anyway they host spelling bees here in the US and I actually came in fourth at the local level and I think I was seven at the time and only the top three got to go to the Nationals but because I was like I was like six or seven and everyone else there was like twelve or thirteen the conference organizers I guess made an exception and so I went to that it’s a long story short I ended up winning you know mostly by luck kind of that one and so so then I decided to move on to kind of scripts which is the you know actual kind of real Spelling Bee you know a lot of Indian kids use the north-south kind of as like a training ground for scripts and so then I went and competed in scripts and yeah so I did that a lot and it’s kind of its kind of one of those things where it’s been this part of my life that has been both frustrating and also amusing in the sense that like for years and years and years people would be like oh you’re that kid from the spelling bee and there was definitely a period especially kind of in high school where I was like look I feel like I’m doing a lot of other cool things in my life can I please get past this thing I did when I was you know 11 right but yeah so so it’s it’s still surprisingly something that people decide to bring up so here we are talking about it no no cuz yeah it’s it’s just so interesting and you know it’s quite fascinating it so you did you started that when you’re 6 or 7 years old and how old are you now 24 turning 25 in January nice so from there you’ve talked about and I read on your LinkedIn how you were homeschooled and how you plan to homeschool your kids and how you thought that was it was pretty impactful and and and great for you growing up what was it about homeschooling do you think that sort of gave you that advantage that gets to excel I mean maybe you could sort of talk about that yeah sure and you know me Andrew I’m gonna I’m going to talk about mental models because that’s what I thought what I always talked about but so I think I think what I really got out of homeschooling is you know you like you would talk about utility and opportunity costs right in terms of the mental models so in school you get to you know the benefits are that you’re kind of in a group with your peers and you’re sort of advancing at the same pace as them and so you have kind of a natural platform on which to form you know relationships that last at least for the duration of school and hopefully longer with your homeschool you don’t necessarily have that so that’s kind of what you’re giving up but what you’re gaining the trade-off is that you can advance at your own pace and you don’t necessarily have to follow the same curriculum that everyone else does right so kind of a net-net of that is that by the time I was 13 I had finished I mean I skipped like a grade in elementary school I mean grades don’t really mean much for homeschoolers but but I’ve basically done like algebra and geometry by the time I was 13 because in addition to the spelling bee I also did math counts in middle school and so when I was 13 I basically started taking dual credit community college courses and so in four years of you know quote-unquote high school I basically just did a lot of dual credit courses at a community college and graduated with an associate’s degree when I was 17 which is how I was able to go to you know real college and get my bachelor’s by the time I was 19 so so I think there were a couple things that came out of that right and one of them is just looking at the world kind of a little bit of a different perspective where I don’t always assume you know like when I was home-schooled right it wasn’t a standard like nine-to-five you know okay you you know you go to school at this time you get out at this time you go to school Monday through Friday and then e of the weekends off often any of the summers off you have two weeks for a Christmas break you know we didn’t really take summer breaks right but at the same time on a Tuesday afternoon if it was a nice day we might just not do anything and go to the park you know clearly that didn’t my development as far as you know getting through all the schoolwork I needed to and so I think that really carried forward in the sense of you know when I got into the workplace I was just sort of astonished by you know first of all a this very kind of linear like okay the workweek has to be 9:00 to 5:00 at an office and you know you work weekdays and you don’t work weekends you get these holidays off and you know so then then B the other thing is that I’ve never really kind of taken seriously sort of the very standard like okay you’re going to spend two years doing this then you’re gonna spend two years doing this and that’s just that just how your career progresses right and focused on progressing at my own pace so I think I think that’s what I really took away from it is this focus on utility and this focus on you know maybe not necessarily doing things the way that they’ve always been done or the way that people tend to do them but rather the way that makes the most sense and allows me to kind of derive the most value from what I’m doing wow that’s that’s yeah that’s absolutely incredible - was it your mom that taught you yeah no it was it was definitely I mean my mom so you know my parents made the decision to do this pretty early and again that was you talk about stories that was kind of one of those serendipity things where I have a late birthday you know being born in January I’m kind of cut off from going to school you know that you’re in kindergarten but I was kind of ready for it but my parents just said to keep me at home and I was getting bored and you know my mom was taking me to some gymnastics class or something at a local rec center and ran into some home schoolers who were you know had their books open these kids aren’t in school it’s the middle of day and she’s like huh I wonder what they’re doing and so that’s kind of how they got into homeschooling they’re like okay we’ll try it for a year and then you know just kind of went from there and I never ended up back in a public institution of school until you know Community College when I was 13 so what was that like being 13 years old and I guess being with people in class that are you know way older than you yeah I mean you know it’s funny I think I think probably less weird than then it seems in retrospect now yeah I guess at the time I knew literally probably got it right so I mean I’d never been in school with like people my own age right like I taken a few classes and stuff but I’d never like you know I’ve never even been in a public school environment really and so I don’t think at the time and of course being 13 like you don’t necessarily see things the same way you would as an adult so you know at the time it was just sort of like okay this is what I’m doing and you know it may not be what everyone else is doing but I’ve kind of never really done what everyone else is doing so I don’t think there was a lot of awareness until I kind of got older it was probably more when I was like 15 16 then I started to realize like it was kind of hard to make friends with some of these people because they could drive and I was still having to rely on my parents to drop me off places and you know things like that okay so then so you come out you’re 17 years old you have your associates degree and where do you go from there I went to UT UT Dallas here in here in the DFW area so I was actually planning to go to am but they cut their scholarships the year that I was planning to go and I had two criteria for college one was that didn’t want to pay for it and the second was that I wanted them to accept all of my credits because I didn’t want to spend four years getting a bachelor’s degree and so that basically limited me to in-state colleges just because like you know any out-of-state colleges wouldn’t have accepted all the all the credit but the Texas common core basically forces all the colleges to accept all that credit and then the second thing was that utd offers really good merit-based scholarships and so I was able to basically get through school without paying for it so that’s what led me up at UCD and then you actually went on to complete your MBA from there as well did you yeah cuz I mean they gave me a four-year scholarship and they were really good about saying you know okay so you’re only using two years for your bachelor’s you know feel free to use the remaining two years for you know whatever you want to you know any graduate work or you know other classes or so on so that’s basically what I did so then from there so now you’re probably like what 22 years old have your MBA yeah and I should I should actually interject I got really bored with classes and I didn’t see the point you know I think like a lot of valley investors you know maybe like yourself Andrew I’ve never found formal education to necessarily be the path to enlightenment as far as as far as things go yeah and so my second year of school I was eighteen I actually started working full-time as an editor for seeking alpha and I was on there seeking alpha pro team and then from there the next year when I finished my bachelor’s degree I got a job with the hedge funds basically for my second year of college I was working full time so yeah I was I was you know I graduated with my MBA at like 20 or whatever it was but by that time I’d already had two two and a half years of professional work experience well so how old were you when you actually started getting into investing and what was sort of your your first forte into value investing because you know it’s interesting because I’m always curious to hear about how the bug bit them like for Jeff for example his father told him about this book right it was Benjamin Graham and and that’s sort of how he sort of doand to that world for me my father was in the business so from you know I sort of ended up here as well and then the valley blessing bug bit me and then you know it sort of opened up this huge world I guess of this path that I’ve been on ever since so for you how did because both your parents I’m guessing your mom in charge yeah so engineer so there you go so they weren’t into investing so how did you sort of start this path that you’ve been on you so I I would say that there’s all these apocryphal stories right of these Valley investors who started reading ten caves when they were you know twelve years old and you know their juice box would have a little little financial filing on it now but you know so I’m I’m kind of the opposite of that where I mean I I think I was vaguely aware that stocks existed I seem to recall one time telling my mom when I was like six or seven because I’d heard something about the stock market crashing but yeah when I when I grow up and I have lots of money I’m not gonna put any money in the stock market I’m just gonna keep it in the bank you know look how that worked how ironic old Sammy but yeah so so essentially I think I got to about you know sixteen or seventeen and I’d saved up you know a few thousand bucks just from kind of odd jobs in high school and I was just complaining to a family friend she was actually like an 83 year old Jewish grandmother from Boca Raton long story but I was complaining to her that I was getting like you know a Penny’s worth of interest per year for keeping my money in the bank and she’s like oh you should try this high-yield bond fund at fidelity you know blah blah blah and get pays a 6% yield and blah blah blah and I no clue what a high-yield bond was but it just sort of the first time my eyes open to like oh hey I have I have a little bit of money and I can actually do something with it other than put it in the bank so I started I started investing in random mutual funds based on you know absolutely no knowledge at all it was totally like oh what’s done well the past five years that looks good let’s click on that you know I started I started day trading which was a you know completely wasn’t a complete disaster it and lose all my money but I certainly didn’t make any either so let’s just say that I had no clue what I was doing for you know quite a while and then I think what happened as I started writing for seeking alpha and actually probably more after I started working there as an editor you know through being able to you know my job as a seeking alpha pro editor was I’m basically spending the whole day reading write-ups by either hedge fund managers or people who are good enough to kind of you know write write-ups that are attractive to that audience because that was the focus of the platform and so I just leveraged that you know in terms of like okay learning about how these people think and and then reaching out to them forming relationships you know both for the purposes of seeking alphas contributor relations but then also for the purpose of like hey can you give me reading lists or you know can you look at this idea write up I did and tell me what you think or you know etc etc and so that’s kind of how I got into investing and you know several several people so there’s a local guy here in town named Tim Eichmann who’d worked for you know prudent bearer and a number of other funds there was a there was a fund manager from the Northeast named Chris DeMuth who I was really good friends with for quite a while and he was kind of a special situations guy event driven and so I I got a nice broad you know very broad sampling of different approaches to value investing ranging from you know Chris DeMuth event-driven approach to you know kind of a bargain-basement old style band Graham you know deep value type stuff to you know more kind of the compounders that’s really popular now and so just it was a good place to start and really just be exposed to all those sorts of ideas and then kind of from there start to figure out like okay what makes sense to me what’s a good match you know traded activity mental model what’s a good match to my own unique interests and skill sets so that’s interesting so then from there so how did you get the job at a hedge fund and what was that experience like for you and maybe you could sort of talk about that yeah let’s see what I’d say about that I I would say you know first of all I’m obviously very grateful to the PM for taking you know for giving me that opportunity because I don’t think there are a lot of people who would’ve hired a nineteen-year-old without much previous experience right and so his his mentality actually was that you know he didn’t want to hire the kind of standard pedigreed you know Harvard MBA two years ago men blah blah blah type analysts cuz he figured if he hired the same analysts as everyone else he’d get the same ideas you know and so and so I learned a lot there he was a small and micro-cap investor so certainly you know getting to go to Roth getting to go to be Riley and you know some of those sorts of events was interesting and kind of helped provide me with a lot of perspective I would say at the same time that you know there were many reasons I decided to move on I think one of them was there was a little bit of a just mismatch in terms of you know he he’d basically he’d been a very successful manager had a great track record men had ended up returning a lot of the outside capital and kind of was at a point in his life where you know I think investing in public stocks for various reasons wasn’t necessarily his day-to-day priority you know and obviously for me it was so I think I think I needed to you know move somewhere else to continue my development basically among among among other things I mean that’s sort of the abbreviated version yeah so did from there did you start escalating capital yeah and there were a lot of there were a lot of things that went I know you and I have talked about a number of them but you know from talking to mentors and I think I think as you know Andrew right my long-term goal is not to maximize my total lifetime earnings it’s to you know live to live the life that I want to live to be a good yeah and I got that from your pitch book yeah oh so that’s I mean that’s a big part of it right there’s also just sort of the lifestyle things around you know we you know about my Khurana type and you know about you know sort of my aversion to a lot of a typical nine-to-five type stuff and offices and dress shoes and so so I think I think when I’m thinking about what I want to do in the long term you know is always very clear to me from talking to mentors that the path I needed to take was you know being in charge of my own destiny and so what I came to understand from talking to a lot of people who’d been in the business for a while is kind of no matter how much background you have you know unless you like worked for David Einhorn or julian robertson or something um it’s gonna be very rare for you to kind of come out of being an analyst and then immediately kind of be funded and get a lot of capital like typically people want to see you establish your own track record and so on and so forth so from talking to them it just didn’t really seem like there was a lot of benefit at that point to continuing to work for other shops and and just just just in terms of my contemplation aliy it seemed to make a lot more sense to just kind of go it go go at it on my own and you know being being young really helped in the sense that you know look I don’t have a family I don’t have a mortgage so it’s not like I needed to make a lot of money for any specific reason the next few years versus if you delay and then you know you get a get a girlfriend that turns into a wife and that turns into three kids and a mortgage and you know it’s just harder at a certain point your life to go do something entrepreneurial because you have other people who’s you know livelihood is depending on you right sure list yourself so yeah that was kind of that was part that was that was sort of what into what went what went into sorry I’m tripping on my own tongue here the decision to start my own firm gotcha that’s awesome your structure is as a hedge fund and also you do manage separate management counts as well correct correct yes great and what is your you know cuz you sort of you had a bunch of different mentors and you sort of got to view a bunch of different styles what would you say is sort of your investment philosophy and investment style for your fund yeah I mean I think I think we’re kind of settled out is I’m somewhere between you know having probably more valuation sensibilities than a lot of people who focus on compounders but at the same time not really being in that deep value arena because I kind of prize business quality so so what I like to say is shorthand and this is obviously just shorthand right but I like to say that I’m equally happy paying ten times free cash flow for a business that’s worth fifteen times or I’m equally happy paying fifteen times for business that’s worth twenty right so I kind of find that the middle is my sweet spot kind of like those solid high-quality firms that grow but they’re not Grothe enough to attract the really high valuations right where it starts to you know you have to underwrite kind of a lot of growth going out a long time to justify you know the the multiple you know at the same time I’ve kind of found that I’m not really good at underwriting the cigar butt type situations and so I kind of tend to focus on that middle spot you know but somewhere between deep value in between you know paying a really big multiple for compounders sure that’s cool and then how many stocks you typically have in your portfolio and is it like a long only portfolio can you sort of correct yeah no it’s long only I don’t short I don’t use options I don’t I don’t really just plain vanila you know kind of bottom up stock picking concentration 8 to 15 names is the target you know I’ve been a little more concentrated since inception than I necessarily intend to be you know for forever but it’s just sort of like a you know the current market environment we’re in it’s just hard to find really good ideas you either kind of have to be willing to buy a little more of the stuff that you really like or you have to you know decide to hold just a lot of cash and I already have you know 10 11 percent cash my portfolio the target range right now is about 10 to 15 and I kind of view it as an opportunity cost thing right where if I can underwrite something you know at a 15 20 percent IRR over a three-year period it’s a little hard to justify holding just tons and tons and tons of cash unless you have some reason to believe there’s gonna be you know big market correction overnight which I don’t feel like I have any particular insight into right so that’s kind of where I come out on on that and you know my large positions I think it’s fairly well known publicly but I do tend to take I’m perfectly willing to take you know well north of 20 percent positions and stuff if I think it’s really really compelling sure and then D is your typical timeframe probably more than I’m guessing more longer-term than like more than like two to three years or well that’s funny so so I would I mean the way that I always underwrite companies you know with very few exceptions is the initiate a position when I think I can earn a 20% return over a three-year horizon you know and 20 percent annualized obviously so what I mean by that is that you know I think that the company’s worth something today and then obviously I think that’s going to compound at 10 percent a year you know for three years and so if you kind of add that discount to fair value in that compounding and look out three years which is what I think it you know it should take at most for the market to kind of recognize what’s going on or for me to be proven wrong you know that’s that’s how I under right things and I think what’s ended up happening is you know just due to the environment we’re in I think good news tends to get priced in very quickly so if you look at my if you look at my returns right I I don’t think my you know I’ve had really good performance and I think that’s not so much because the companies I’ve invested in have just sort of blown past my expectations I think it’s just that the market has rated them much more quickly than I ever would have anticipated you know so you can have something that I buy and it goes up kind of 50% and you’re sitting there six months later and you’re like well okay you know I don’t necessarily want to be turning over the portfolio this quickly but on the other hand right as evaluation sensitive investor even once you kind of think about the tax consequences in whatever it’s a little hard to want to own something that’s trading you know 30 40 50 percent higher than where you just bought it you know when I don’t feel like the fundamental situation has improved you know to that to that extent right so yeah I would say that in theory my target would be you know underwriting to a kind of two three four year horizon you know in practice just the market environment we’ve been in um you know it’s stuff has been you know kind of rewriting for the most part much much more quickly than that but I obviously don’t think that would continue forever sure and then are you do I mean you said that you work for a guy that invests in micro caps is that use typically are you agnostic to where you look to invest in like company size or were you typically yeah so that’s that’s always that’s always a fun discussion right I mean on the one hand you kind of have the the purists who are like you know I mean like there used to be a guy I know who’s like you know I’d look at large caps you’d be like why are you ever looking at large cap then on the other hand you’ve kind of got the people who defend the all cap approach saying that you know look the volatility and these big stocks you know look at look at how much Google and Amazon move around in a year and it’s hard to say that there’s not opportunities there as well right or you know I’d say a few things I think one is that you know people are you know I forget I forget exactly how the Buffett her quote goes here we are first first obligatory Valley investor reference to Buffett and Munger but but you know you can’t do all things at all times right and so I think you kind of have to have some amount of focus even as a generalist otherwise it’s just difficult to decide like okay what do I work on next so I think small and micro cat became my focus for a couple reasons one is that you know I do think empirically they’re they’re do tend to be you know better opportunities in that space just because obviously larger funds scale out of it you know even successful small cat managers tend to take on a lot more a lot more capital and you know especially the liquidity and some of these micro-cap Slyke I was just kind of running a little analysis of what’s in my portfolio and what’s on my watch list and you know it’s not it’s not like the only thing I invest in but in some of these sub you know 100 sub 200 million dollar companies even if you’re running 50 or a hundred million dollars you know can start to be difficult to build you know reasonably sized positions in those companies so I do think there is a phenomenon of there being opportunities there for that reason you know the other thing too and I don’t want to you know I don’t want to pitch it I don’t want to pitch it in terms of like I think that evere who doesn’t invest in small caps is stupid like I think there’s plenty of reasons to invest in other things I just think that this is something that I happen to have kind of developed a little bit of expertise in in terms of it’s easier to analyze some of these single segment companies some of these market niches works a little harder to find information but at the same time I also think just kind of from a business perspective that I don’t know what value I add to clients being the you know trillion and whomped guide to analyze Google or to analyze Facebook or to analyze Amazon right so it’s not even so much that I have a view that those stocks are unattractive or attractive or whatever it’s just that I kinda it’s like okay well if you’re gonna pay you know if you’re gonna pay for more than an index fees right I I think that my value proposition is kind of unearthing opportunities that you wouldn’t be able to find on your own that or that you know other managers probably aren’t going to be looking at for you you know and certainly I just have a really hard time kind of looking at Amazon or Google and Facebook and yes even if it’s cheap I don’t know I don’t know if that justifies me buying it and then putting my fee structure on top of it if that makes sense right because I think clients you know I think you’d have to live under a rock to not to not know that Google and Amazon exist and there are much cheaper ways to get exposure to those sorts of names sure so certainly I think that there’s a lot of in you know I don’t want to I don’t want to downplay I mean I do think there’s a lot of empirical reasons to focus on small and micro caps and that’s one of the reasons I’m closing my fund 50 million in AUM is because I want to be able to continue to exploit that you know what I view is that opportunity set you know but on the other hand certainly there are plenty of very talented investors who look at other spaces and I’ve just chosen not to for you know a variety of reasons sure no that’s that’s great so then what’s your research process typically like which is always something that I’m always interested in like for example like when you first get interested in a stock like this is the first thing you do is go over to 10k do you go to the SEC gov website can you take us through that process to you let’s dream let’s drop some let’s drop some heresy here yeah I hate 10ks I’m gonna come out and say it and you know immediately can get blackballed by like you know 70% of Valley investors out there I really really really hate reading 10ks and here’s why I feel like most 10ks are written by lawyers for lawyers to satisfy kind of this checklist of disclosure requirements right very rarely do I read a 10k and come away thinking oh wow I now have a phenomenal understanding of what’s important to this business I come away feeling yeah there’s a checkbox and this guy now told me that global warming made wipe out the global population and now there’s gonna be no customers with the company so their stock price may decline sure it’s like okay not not helpful right and obviously obviously they’re sections of the 10k that are very important for due diligence and whatnot but my process typically starts by if I can find the company giving an investor day or a presentation and like a sell side or industry conference where there’s kind of explaining you know with more qualitative color what it is they do that helps me understand whether or not it’s even the sort of company that you know is within my wheelhouse or circle of competence right and so that from then from there from that starting point I would proceed then to use the filings for due diligence but I find that the conference calls typically provide a lot more color in terms of just trying to learn about like hey what does this company do what’s their strategy you know what is management view is important what’s been happening recently so that’s that’s typically my starting point no I mean I think I completely agree with that Jeff and I we recently did a podcast and like a checklist sort of to go over things to think about that’s outside of the 10k to learn more about like the business and and you know because there’s obviously a lot that I mean I kind of agree a lot of what kay is I feel like sometimes is copy-and-paste quite honestly and so sometimes you know I think you can learn a lot about a business from you know sort of we talked about thinking like a journalist and kind of going outside of like the filings to learn about the company itself right and you know what and I don’t want it to sound like I don’t read the 10 KS right I mean I read all the footnotes and all that I do all but I do all the necessary stuff but the same time it’s like if you look at em DNA that’s provided you know on the financials it typically contains a lot less explanation than the conference calls right because the conference calls a I guess just because it’s less regulated or whatever you know and it’s they cover their butts with the safe harbor you know they just give you more color and then analysts of course ask things so a lot of times you’ll get you know things that the company doesn’t necessarily want to like disclose with rigor on a regular basis but just sort of directionally like okay how much of your contracts are related to like this sort of customer or this sort of industry or whatever right and you can’t find that in the 10k but you can find that in the investor deck or in the you know conference calls or places like that you know so I just I typically find those gonna be a lot more helpful for starting which you know again I know it’s non-traditional but no I know I think that’s great so do you use screens typically or how do you come across ideas that you’re interested in you know sort of decide to I’ve ever really used formal screens I mean I’m sure something I could use I just typically have had enough kind of lead flow without them so I mean I think you know first of all like everyone else I read you know I do spend some time reading kind of investment write-up sites like Valley investors Club or seeking alpha or you know whatever you want to call it and and I’m not necessarily looking for pitches right we’ll get into my process and a little bit in terms of the watchlist but I very rarely care about let go is this a cheap stock or is this actionable today I’m just more looking for hey is this an interesting business we’re like you know if you’re bullish on the stock and you’re reasonably competent in what you do when you write it up and you can’t give me a few reasons to actually be interested in the business model then it’s probably not a good use of my time to work on right so do you find that kind of a helpful filter in terms of like okay if someone really likes a company you know if I don’t even get interested in just the fundamental business and it’s probably not worth my time to actually do any primary work you know of course then there’s also what I call n +1 opportunities which are like I already know a sector for example you know so for example I really love these small cap kind of technical product industrials that just sell these really niche products that are low dollar in context of customer budgets but they’re really high-value are really big importance I’ll give you an example so a stock that I’ve never owned but I followed for a long time is cadent tickers ke AI and you know one of the things they sell or one of their big product lines that they’ve historically sold is these little blades that go into these big paper manufacturing plants and these blades get replaced like I think multiple times a day or you know every few days or something like that and and and they’re a big market share leader there and obviously you know these blades are not cheap they’re they’re priced at a premium to competitors but they’re also high-performing and very few people are going to take the risk of okay let’s save you know relative pennies on this blade and then our giant factory shuts down for four days because it you know the new one screwed up and now we’re losing you know thousands or millions of dollars a day and in downtime right so I like finding little companies like that that just make these niche products that have kind of you know very strong margins and you know our super capital-intensive and they have a good good reputation in their industry you know and so you kind of tend to encounter other companies just by kind of looking at those kind of companies right it’s like okay well you know who’s upstream of them who’s downstream you them who their competitors and things like that and then of course there’s also you know I have friends who kind of know what kind of stuff I like and we’ll say hey you know I’ve been looking at this recently this seems like it might be up your alley so you know variety sorts us but there’s never let me put it this way my problem is usually too little time to work on interesting ideas rather than too few ideas to work on that are interesting sure know and that’s sort of how I mean Jeff a lot of people bring ideas to you as well right I mean just people you’ve spoken with over the years and they’ll say this may be a business that you’re interested in because that’s how I got is most interesting ideas was people just bring an idea so yeah because I think it’s the people know you know so they bring is that you like hey Samir apples trading at a great value no that’s interesting so you said so you you like to follow the business and I think we’re sort of under that same mindset how it’s better to like the business first instead of go into it maybe because you think it’s cheap because sometimes you can confuse statistically cheap stock with a margin of safety so like for that situation why have you never owned it is it because you just never it never got to the point of being cheap or kada yeah yeah I mean you can just look at the stock price and you can just look at the ebdb Dom multiple or you know whatever whatever whatever you want to price it on and then the thing just took off like I mean it was kind of you know when I started working on it it was you know maybe close to a reasonable valuation not quite what I wanted to pay and then instead of instead of getting more reasonable it got less reasonable and less and less reasonable and you know now it’s so unreasonable or I even looked at in a while actually I can I can’t really speak to it but certainly at one point it had gotten to just like a very very expensive valuation so I kind of stopped working on it for a while and you know figure I’ll come back to it at some future point when it’s you know not so expensive no but I think that’s great I mean for investors to do and for everyone to listen I think that’s always my sort of advice is to build up a watch list of businesses that you would love to own if the market gave you a chance and then that’s how you’re able to actually like be patient and you know not giving to the irrational swings of mr. market you can almost use them to your advantage yeah and I was just I mean I think you put it well when he talked about confusing a statistically cheap stock with a margin of safety I think the only modest thing I would add to that you phrased it really well is that you have to consider the behavioral angle right and you know that I’m big on the you know cognitive biases and stuff and so I think that when you psychologically define success as you know finding a cheap stock to put in the portfolio it’s easy to get frustrated if you aren’t doing that right so you know after after working on a you know a dozen stocks and none of them make it into the portfolio there’s a very strong temptation on that 13th to you know find a way to make it cheap and you know when you want something it’s called desire bias right it really shapes you know shapes your objectivity and kind of prevents you from seeing things clearly you know versus when I view it is my job like hey today I want to you know find a new company and put it on my watch list or you know hey this week I want to go back and review these three companies that have been on my watch list and see what’s going on with them you know that kind of makes it easier to be objective and to really kind of wait for the market to give me a fat pitch you know whatever whatever term you want to use you know and of course as long as you put some structure around that to make sure that you’re not wasting your time working on stocks you’re ever going to own you know I think that’s a more at least for me it’s a more effective approach to to making sure that only the the best situations end up in my portfolio as opposed to kind of the you know 52-week low lists sure no I think I think that’s fantastic so you were sort of alluded to it a little bit earlier about your watchlist process what’s that about yeah so so basically I find you know a couple things one is that I just think that you you learn a lot more about a business when you follow it longitudinally than when you try to do all the work at once so you know no matter how much time I spend on it right like sometimes I’ll spend two weeks working on one stock almost inevitably in six to twelve months there are kind of initial things that I just either completely missed or that I misinterpreted or that I couldn’t have known with the information that was available at the time but kind of with things that came out after that you know kind of became clear right you know and this isn’t just me of course this is from talking to people who’ve been in the business for a very long time so I just tend to find generally that I do better when I have followed a company or you know even better like a sector kind of an industry for kind of an extended period of time and so the watchlist is really designed to allow me to do that right so when I’m looking for a new stock to work on I’m not necessarily super sensitive to valuation because the goal isn’t to get it in the portfolio today right and obviously like if something’s trading at 20 times EBIT die it’s unlikely that I’m gonna waste any time working on it just because it’s like okay well you know there’s no way I’m gonna buy it at even 15 times even aw right so so even if the stock were to climb materially kind of you know over the next few quarters the next year or whatever it’s still unlikely that I’d have that have a chance to work on it but if you have something that’s kind of trading within a reasonable range so like let’s say you know just ballpark for whatever reason I think it’s worth and I’m just using Hiba talk cuz it’s easy that’s not necessarily what I use for valuation but let’s just say that there’s a stock that I think is worth you know 11 times EBIT Don and I don’t want to buy it at 8 or 9 times and it’s trading at 12 times right it’s like okay well if they have a few bad quarters and or if that sector just falls out of favor and or you know any number of other things right you and I both seen stocks kind of go down 20 30 % on you know a bad quarter maybe too bad quarters you know so with that sort of thing it’s like okay well if I work on this it’s not a complete waste of my time because statistically if I work on enough of these situations again back to mental models the base rate is that I’m eventually gonna get one that’s cheap right and I don’t necessarily know ex ante you know if I work on 10 stocks which of them I’m gonna be able to buy in the next three years but usually you know if you work on enough stocks like that one or two of them are gonna get to a point that’s really interesting for whatever reason so that’s kind of my approaches you’re simply to say okay what are really interesting businesses that are worth falling for the long term that I would like to own you know but the price just isn’t currently there or maybe the price is there right I mean of course I do sometimes find stuff that’s trading for cheap valuations and it would be stupid to just say oh I’m not going to work on this because I don’t ever you know buy stuff today I find it right I mean there there certainly plenty of occasions when I found stuff and very quickly put it in portfolio but typically I started using kind of a what I call a scale in process where it’s not super formal it’s not like there’s really a big hard rule but like typically if I’ve just looked at something I don’t want to make it more than a two or three percent position right and that kind of goes up by two or three percent per quarter that I followed it so there are a number of cases where I found something for the first time made it maybe a two or three percent position you know kind of after one quarter has gone by I add a little bit after another quarter has gone by add a little bit you know versus if I followed something for a long enough period of time that kind of enables me to really go in you know if I think I see the opportunity that I want that I can go in and in a bigger size and kind of establish more of a fuller position versus scaling it over time so yeah that’s kind of that’s kind of the watchlist generally and of course I’ve got I guess the other portion is that I put in a fair value estimate that’s not like you know it’s not set in stone but just sort of like okay you know today I think the stocks worth 10 bucks right and so I’d like to buy it at a 20 percent discount so rough numbers we’ll call it eight right so I put I put the stock in a ten and then that lets say the current price is 11 so my spreadsheet will tell me okay well today you know this is 10 percent over your fair value estimate but it does two things one is it fetches the updated data right so it automatically fetches as the stock price changes you know where the stock is but second is it takes my favorite value number and it compounds it by 10 percent a year right because conceivably if I’m underwriting things correctly at a 10% equity cost of capital then if I buy a stock if I think a stocks worth 10 today it should be worth again rounding it should be worth 13 in three years right because it should generate a dollar value kind of every you know from a combination of cash flowing growth every year and so obviously if the stock is at ten today well maybe the stock doesn’t move at all but in two years the fair values moved up to 12 right so if you can buy a twelve dollar you know intrinsic value for ten dollars that’s actually something that I’d be interested in so the spreadsheet kind of adjusts for that too so it kind of gives me at anytime you know a good good way of looking at hey here’s where things are trading relative to you know what you thought they were worth and so it just helpful because anything that’s kind of either you know obviously below but then even near reasonably near fair values kind of worth looking at too right because sometimes things can go better than you think or there could be a big acquisition that’s transformative but the market just kind of hasn’t picked up on like you know the value creation yet and so the stock price may be higher but the business value may have even increased faster than the stock price so it’s just very helpful in terms of prioritizing and allowing me to see like okay what is there out there in the world that I already know about that I should be working on you know and then kind of if there’s nothing there that’s when I move to like okay well let’s go find something new to put on the watchlist since there’s nothing kind of that I already know about that’s worth working on yeah especially like keeping track of everything and all these businesses you’ve done work on that sounds like that’s pretty efficient and it also really helps with the opportunity cost of capital thing right I mean Munger talks about how everything is opportunity cost and you really just have to measure everything against your next best idea and so I think just having that all in one place makes it very easy you know for me to look and say like okay so this is kind of cheaper so like right now I’m looking at a company that I really like the business model but it has there are some questions around it and it has a little over three times debt to EBIT da which is you know more than more than I like to see right I’m very focused on conservative balance sheets and so you know in this case it’s not like the leverage is so high that I think the company’s at risk it’s not like I wouldn’t take a position but it’d have to be a smaller position and I’d kind of want to be more judicious about the price I paid for it and so it’s like okay well if this is trading it like you know a sixteen seventeen percent discount for fair value it’s like okay well that’s not something I’m gonna stretch for when I have kind of all these other things that are above it on the watchlist right that are cheaper with you know either better characteristics or lower risk or you know what have you so it just makes it very very easy to you know not not it’s not a conceptual exercise anymore of like okay well I could invest in this but what else could I use that capital for I mean it’s very clear like okay well here literally the 17 other things that you know my spreadsheet says I could use the capital for better and of course that doesn’t the spreadsheet isn’t you know set in stone but it at least gives me an idea of like okay well these are the other things that would be considered kind of in competition with that sure no that’s great so I sort of want to shift gears here and talk about your website which did you recently launch your mental model website yeah so it was it was July like it was around July 4 yeah and that’s actually how I came across you was somebody told me about you and because he knew that you’re in the Dow area and that obviously Jeff and I were in the Dallas area and I went to your website and I probably spend a good couple hours and that’s how I actually read the book why we sleep with from yeah that’s right and you changed my life you changed my life and I get better quality sleep so you know maybe I’m talking about getting have you been getting more and better quality sleep oh I haven’t because I’ve been making it a priority yeah and what order that what are the changes you’ve seen in your life I mean well I mean definitely I just feel more productive and I could just I could feel a huge difference between getting eight to nine hours of sleep instead of getting you know five to six hours like I was getting before and I know you’re big on workouts does it improve your you know athletic performance certainly yeah no definitely yeah I mean I don’t understand how certain people like we’re say our president for example that says he only needs four hours he gets four hours of sleep at night I don’t I can’t do that I wish I could and felt fine but I just can’t yeah I mean Walker talks about that and so um you know you can bring people into a sleep lab and they’re actually a couple interesting things here right one of which is that people who are sleep deprived or like people who are drunk and tipsy at the bar and want their keys back in that they’re impaired and everyone else can see that they’re impaired but they don’t know how impaired they are like it’s just very hard when you’re sleep deprived to know how much that’s affecting your decisions and so again sleep researchers you know if you’ve had less than seven hours of sleep typically sleep researchers can bring you into a sleep lab and measure the impairment versus if they get it you know get you get a baseline eight nine hours of sleep and then they measure your performance on you know various kinds of tasks both mental and physical but what’s also interesting is you know everyone knows that guy who’s like oh yeah I get by on six seven hours of sleep and I’m fine well what actually what’s interesting is there’s two things one is your baseline just resets right so you’re just so used to feeling tired and crappy and whatever that you just kind of you know you don’t realize how much better you feel if you did have sleep but the second thing is they’re actually genetically there is a very small percentage of the population that for whatever reason has a gene that allows them to function properly with much less sleep than normal people it’s seen as a five six hours or something like that but you know the scientists estimate that the likelihood of you having that gene is roughly equivalent to the likelihood of you being struck by lightning right so it’s kind of like a it’s it’s a rounding I mean I mean I may be getting that wrong but it sort of a rounding error where it’s like yeah we all know tons of people who say they’re fine on 67 but again statistically the pace rate is that that can happen but it’s just exceedingly exceedingly sleep yeah what do they call it the I know a guy syndrome or something like that something like that how many hours a night do you get you know it depends I mean I would say on average probably about nine I don’t know it really it really depends I tend to sleep more the night sight you know after I’ve worked out yeah sometimes I mean ten is not unusual you know it it depends on a lot of factors it seems to vary but certainly I think you know if it’s less than eight and a half I I am NOT super happy in the sense of like I know you know and certainly south of eight I start like actually feeling it so yeah it’s a priority for sure that’s hilarious what about you Jeff same same yeah so let’s get all of us are not sleep deprived and we all feel great that’s interesting so from your on your website then which obviously you use as a model which everybody could check out as well but your website is just an incredible treasure chest for people who are interested in mental models and there’s just such a such a plethora of information for people to learn from so for anyone that’s definitely interested definitely check out your website but what made you I guess you know sort of create the website and go through I mean were you doing it really for yourself to learn more or you know sort of talk about that process yeah absolutely so I would say that again it’s a mental model that sort of started this right and the mental model would be memory and and the joke that I like to tell people and it’s actually true what started this website is that I was reading a book called the seven sins of memory and I was reading it for the third time and Andrew do you want to tell me why I was reading it for the third time I’m guessing because you didn’t remember it anymore yeah you had to bring a long-term memory right is that what they say yeah so I mean it’s funny cuz I’m reading a book about you know why our wire memories work and don’t work in certain ways and I’m reading it for the third time because I’ve forgotten everything it said right and so I kind of realized like okay I spend you know half my life reading it feels like but I’m certainly like I hated the fact that I would read a book and I’d spend a lot of time reading it and thinking about it and then you know I’d read another dozen books and I’d read you know another dozen 10ks and then by the time I was done with that I’d be like well wait I I can remember basically the back cover copyright the summary of this book but I can’t remember any of this Pacific’s and so I figured out kind of maybe three four years ago that I really needed to start taking notes on what I was reading because otherwise I just was going to forget right and so so I started doing that and then along the way I realized that if you you know a lot of the value is not necessarily in a concept as a standalone but when he starts you know Munger talks about kind of the Lollapalooza effects that happen when you start to get these mental models interacting and so really it’s interesting when you start thinking about how the models interact right like okay memory and sleep there’s an interaction there in terms of like you know our memory works in a certain way but if you’re sleep-deprived it works you know worse right you know and it’s not it’s not for the better and and then how memory interacts with like you know corporate decision making in terms of like okay memory combines with cognitive biases you get like hindsight bias where because our memories don’t work right it’s very easy to focus on an outcome and kind of have that aha you know told-you-so syndrome where something goes wrong and we’re like oh man that was a bad decision I never should have done that because you don’t remember at the time that it actually was a really good decision in the circumstances were completely different right and so that’s just one example and see start getting kind of all these interactions and so you know unfortunately as much as people talk about mental models and you know building a latticework of mental models and whatever there’s just not really anything out there that I think people can go to if they really want to learn they want understand how these concepts interacted they want to do that in a structured way and so I started building it completely for my own purposes just because I’ve always been a writer and you know I find that when I write things down I am better able to remember them I then obviously can go back and refer to them and then it was a pretty natural jump from there to like well if I put in just a little incremental effort to sort of format this and write it a reader friendly manner you know provides a lot of value to a lot of people and of course for me right it provides a platform to meet and interact with interesting people so like you know I wouldn’t have met you right if it hadn’t been for the website cuz you know Joe Joe read the website and Joe was like oh Andrew would love this and he’s in Dallas and I’ll send it to Andrew and so yeah that’s it and he sends it to you and you read it and we meet up and our friends right so you know it’s a really useful networking tool I think in the sense of introducing me to people who are thinking about the world the same way I am which is something I think we all you know really want and derive value from no I think that’s I think that’s absolutely incredible and everyone definitely needs to check that out we will put that link obviously in the show notes so what do you and you also do book reviews on there as well correct yeah and so that’s the idea is to be vertically integrated right because because when I think about how I learn it’s primarily through reading reading books and of course I read some long-form articles too right so like New Yorker type stuff you know but but mostly it’s books and one of the things I find is that you know again just like with companies right there are so many books out there and you can go on Amazon and you could you could I could fill up my entire house with books as I said you read hard copies already have a Kindle no yes I read I read hard copies and I know a Kindle would totally be I mean you’re gonna laugh I went on a backpacking trip and despite the weight like I was carrying like three books you know which which like the ultralight people would just like they roll their eyes but yeah I mean I for me part of it is that I just spend like my entire life staring at a screen anyway so I just kind of like literally the you know physical kind of break of like not looking at a screen and looking at looking at a book and then there’s also the fact that I’m a value investor and you can get used books on Amazon for usually like you know a couple bucks plus you know another few bucks and shipping versus like Kindle books are usually like 10 12 15 bucks you know and saving five dollars a book doesn’t sound like much but when you I mean I my my Amazon bill is embarrassing like I don’t spend money on pretty much anything else besides food and coffee but the amount of money I spend on books is really truly staggering so it does it does add up yeah Jeff has said that you you’ve said that before right that every year you look at to see what you most mo expenditures were on Amazon it’s always books yeah I don’t even look I just don’t it’s my friend Clayton who Jeff I know you I know you know Clayton but you know Clayton used to talk about like I think when he was a kid he didn’t allowance but something like his mom like would basically give him as much money as he wanted for books it I caught it I kind of view it the same way like I don’t I’m frugal and I don’t spend much money but like when it comes to a book you know less is like a really really expensive book like you know I’m not gonna buy Klarman margin and safety button but you know pretty much anything south of that like yeah it’s a book and it’s you know not not five hundred dollars I’ll buy it but it’s almost like I mean I obviously I’ve been reading on a Kindle too more recently but I do like hard copies because it’s almost like it’s a trophy in a way I feel like like there’s just some sort of satisfaction that comes from once you read it and you know you put it on the bookshelf or whatever just seeing that you and being able to reference in the future and stuff like that yeah I mean I’m not I’m not dogmatic like I do buy Kindle books sometimes and you know I know plenty of people who get value from it and I certainly would not argue with the efficiency right like being able to control half is huge like one of the biggest annoyances with the physical books really any physical printed material is not having control F because like it’s so annoying when I like especially when I was building the site and like I would know that there was some reference somewhere that I wanted but like I couldn’t find it in my notes and I couldn’t just go search for it in the book yeah but I mean the book reviews on the site are really for the purpose of helping people understand like ok if there’s a specific model or a specific topic or a specific category you’re interested in right like you know investing books aren’t really covered on the site but it’s like ok there’s a there’s a million books in any category which are the ones that kind of derive the most value per page for the user because unfortunately right there are a lot of books that have a lot of useful information but it’s buried in so much you know irrelevant detail that you kind of never get to it or you can’t find it and or there’s books that are just really poorly written so for example like it always astonishes me that Kahneman’s Thinking Fast and Slow is ever recommended by anyone right because obviously you know Kahneman’s research is top-notch and he deserves you know all the praise he gets as a researcher but but his book is just like incredibly dry and dull and repetitive and it’s not practical or applied at all right versus tailors misbehaving which covers you know pretty much the same ground but it’s hilarious it’s witty it’s really practical it you know talks about how you can use in your everyday life you know so it’s like okay if you’re gonna spend a certain amount of time learning about behavioral economics like why not do that a fun way that you’re actually gonna remember because again memory mental model things that you enjoy you tend to remember a little bit better than things that are really dull and boring which is why I’ve forgotten you know everything I ever learned in college yeah sure that’s great I guess what what is your favorite book by the way um you know it means upend I think I think the three that I named on the site why we sleep is obviously one I call it the most important book of the century which I really don’t think is hyperbole misbehaving is probably my favorite book just in terms of like it’s really funny like I’m not kidding like he could be a sailor could be a stand-up comedian you know and it’s super educational the design of everyday things is also I think a really important one and I don’t know if we’re going to get into it here but it’s a podcast with you know John John Malkovich of the manual of ideas a while back where we talked a little bit but just this idea of structural problem-solving we’re like you know Norman kind of talks about you know a lot of people when they are faced with a problem they assume is the users fault right it’s like these engineers designed this washing machine that has seven trillion buttons you know and then they’re frustrated that the users can’t figure out you know which of the buttons to press in which order in which combination right it’s like one of those video games from childhood where it’s like oh you want to do this sword combo it’s like hey and then Y and then X and then you know the right bumper or something and you have to hold the stick in a certain direction you know and obviously obviously right like you can you can try and force people to learn all this all this stuff if you’re designing a product but you can also just sort of accept that people part of the way they are and design a product for real people instead of these fictitious you know what Taylor calls econ which are you know people with unlimited willpower and unlimited memory and unlimited you know knowledge and none of us know these people and so the design of everyday things is really about consumer products in terms of like how do you design a good or how do you design a you know stop sign that works well or whatever but the idea behind it right again going back to mental models this idea is totally applicable in other fields and so Thaler you know if you if you read his books and you look at his Nobel Prize you know he mentions in several times that he actually you know gone Norman’s the design of everyday things was a guiding principle for him and so failure you know along with some colleagues designed this program called save more tomorrow which long story short helped people save like six times the amount for retirement or just something it’s incredible I mean then you add compounding in right and they did that by basically understanding the mental models and kind of using structural problem-solving to say like okay well how do we take these and turn these into pluses instead of just banging on people’s doors and saying hey save more save more save more how do we create a system that encourages them to save more right without them you know having to exert any willpower and so you know I think I think those are probably my three favorite books that’s you know it’s hard to choose there’s so many honorable mentions I love Lawrence Gonzalez’s books about cognition and intuition so he has two ones surviving survival the others deep survival he’s a great writer you know super informative too but yeah there’s just there’s so many good books out there I just I haven’t even scratched the surface sure and how did you get into like mental models and everything I mean I’m assuming a majority or of the interest came from like Charlie Munger and obviously Warren Buffett and being a value investor and stuff like that yeah I mean I think I think I think it sort of predates that in the sense that I probably was already thinking along those lines and then you know I encountered the bunker monger and Buffett terminology and it just gave me a way to organize what I’d already been thinking about but certainly it was just sort of you know I had this idea for a long time of like okay well if you can just sort of figure out how the world works right and figure out these organizing principles then you can apply them repeatedly and so like one of the interesting things that had always bothered me is kind of a you know teenager and a young adult was like why people seem to not apply the same lessons from business to life right and I think I think that’s something that Munger talks about really well is that like well the principles apply everywhere right and if there’s a difference between principles and practices like obviously you don’t necessarily talk to your eight year old kid the same way you talk to your employees or the same way you talk to your boss your clients but the idea of empathic listening right that’s that’s a principle that sort of transcends all those individual situations and you apply it differently being in the whole Dale Carnegie stuff that works no matter whether you’re talking about like you know trying to make a new friend or you know trying to get your family to do something or you know trying to advance yourself in the workplace right so yeah but that’s that’s definitely where it came from sure no that’s interesting so I think we’re gonna kind of bring this to an end here and I was you know obviously when I was doing some due diligence for this podcast I was going over your pitch book and just a few different things and in your pitch book you said please ask me about my mistakes and what I’ve learned from them so I’m kind of curious to hear about you know some of your mistakes and what you’ve learned from them and you know sort of what your takeaways were for them yeah sure I guess I’d I’ll categorize this in two ways and I guess the first is investment mistakes which are probably less interesting but you know so prior to launch it you know since launching ask a lot and I’ve been very fortunate and that obviously the markets been very conducive and also I’ve just you know the investments I’ve made have worked out you know whether that skill or lock is is an open question but you know before launching I certainly had a lot of failures in my personal portfolio that were very obviously me making mistakes like investing in companies that were you know heavily leveraged or had bad management or had you know cyclical you know very cyclical end markets and I kind of didn’t size the position you know it’s not it’s not necessarily bad to invest in companies with some cyclicality but it is bad to sort of you know assume that the cyclic ality is going to go your way right so I think those are all you know fairly obvious lessons and you know in a different context I’d be happy to chat more about that in terms of the investment side of it you know I think personally the biggest mistake I’ve made and the one that continues to be a challenge I think not just for me but for a lot of people is separating the world that you want to exist from the world that actually exists and so it’s that desire bias thing that I was talking about which is you know one of the models but so for example I kind of want you know I really I really prize you know kind of strong relationships and civility and kind of kindness and things like that and I want the world to be a place where you know you get ahead by sort of being nice and doing the right thing and if you do that then everything will work out right you know and I think what I’ve come to find is that that that is true much of the time and certainly I think it’s adaptive to behave in that manner but just because you do all the right things doesn’t guarantee that you’re gonna get a right outcome right and there are bad actors out there who will take advantage of you and who you know no matter how much you try to kind of help them and do the whole Dale Carnegie thing you know they’re just aren’t gonna respond right and so i mean i think i think the formal game theory angle on it is that like you know in a game like prisoner’s dilemma or whatever right like the I think tit-for-tat is sort of the evolutionarily adaptive strategy but you know you can also just cheat all the time right and if someone cheats all the time there’s no way to beat them by playing nice you kind of just have to like you know respond so it’s kinda it’s kind of interesting but I think I think the biggest lesson I’ve learned you know and that’s just one example right but the takeaway is that you know whether it’s as an investor or whether it’s as a person it’s just really important to sit down and think about like okay am I seeing the world this way because it’s the way the world really is or am i seeing the world this way because that’s the way I want the world to be and so I’m selectively cherry-picking the data points that support that worldview and you know kind of conveniently ignoring the ones that contradict that worldview you know so so for example right an example of that would be you know I believe in work-life balance right you know but of course there are cases where I think that you know working longer working harder or whatever like is important and you have to kind of be careful not to not to start with your thesis and then you know go through the confirmation bias thing and just kind of selectively confirm it so yeah those are those are some of the that I think would be top of mind well Samir thank you so much I mean that was incredible and you know obviously Jeff knives we can’t thank you enough for coming down the show you know it’s interesting because that was actually more interested in everything else about you then actually talking about like your investment process and and you’re funded everything like them and you just you know with your models and everything it’s just it’s so interesting and obviously can’t thank you enough for coming on how can people get in contact with you if they want to reach out yeah so you know email is good my first name si mi are at aske la dden capital comm you know obviously I think you’re gonna post a link to the website and so the websites there and you know they can they can read all that and there’s a lot of information there yeah and I don’t actually you know you mentioned I don’t have a twitter I actually do have one now but it’s only to like do an automated like it I don’t ever use it it just automatically like posts new things that I post on the website because it drives engagement and whatever weird about this Twitter at some point in the future but I’m still trying to bring back the long email and so there’s a little bit of a it’s a little different between that in 140 character is it’s 280 now yeah Twitter just Twitter just a hard boy you be tweeting yeah going on like nine term greenfield value right it’s like it’s not it’s not something that’s gonna be worth something in like ten years it’s a bunch of like 24/7 type I don’t know I know there’s a lot of people who derive a lot of value from it so I try to be careful not to not to pan it too much but certainly I’ve not you know it’s not something I’m interested in engaging and personally that’s so funny it’s hilarious cool man I really want to thank you so much for coming on and you know we definitely want to have you come on in the future and you know if you do decide to turn over to the dark side we’ll help you out link people to your Twitter so they could follow you you may actually like it well you could you could given by Twitter it’ll give them an automatic feed of whatever they whatever I pose its attack task Aladdin TX for Texas so and that’s all it is it’s pretty simple but yeah it’s very bare it’s not not fancy perfect perfect Samira thank you so much for coming on yeah thanks appreciate it perfect well we hope everybody enjoyed this podcast this was one of our first times of having individual on to talk about you know them and their investing process and you know other things related to that this is something that we probably are going to be doing in the future there’s a lot of fun for both Jeff and myself if you do want to get access to our investing idea website feel free to go to focus compounding calm and if you do sign up use the podcast promo code which is podcast and what that I’ll do is take $10 off of the monthly price indefinitely as long as you do stay a member also Jeff sends out a weekly memo on investing principle every Sunday if you do want to get access to that and have it in your inbox feel free to enter in your email on our home page and then now will allow that memo to be reached to you other than that thank you very much everybody have a great week and we’ll see in the next podcast