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1:41

Alright, folks. Welcome to investing

1:43

for beginners podcast. Today, we have a very

1:45

special guest with us joining us all the way from

1:47

California very early in the morning. We

1:49

have Jake Taylor is the CEO of

1:51

Fardom Street Investments. He is also

1:53

one of the cohosts of one of my favorite podcast

1:56

value after hours with Tobias Carlisle

1:58

and Bill Brewster. And, Jake, also

1:59

wrote one of my favorite books, The Rebelallocator.

2:02

Jake, thank

2:03

you very much for joining us today. We really appreciate

2:05

it. And I guess, could you kind of give a

2:07

brief synopsis? Like, how did you get into investing?

2:10

What started you down this path? Sure. Pleasure

2:12

being here. Thanks, gents, for having me on. my

2:14

background was I got an undergrad degree in

2:16

economics, and I graduated

2:18

in two thousand three. If you remember back then,

2:20

there actually were not that many jobs available

2:22

for people with no experience. which was

2:24

mean. And so I

2:26

happened to very fortunately get

2:28

this an operator and training program

2:31

at the California ISO and I they

2:33

taught me basically in a year an electrical

2:35

engineering degree and how to run the power

2:37

grid. So

2:38

I went through that program, got a job

2:40

running the power grid, and actually did that for

2:42

twelve years. But while I was

2:45

in working for the power grid, I

2:47

Not sure exactly what I wanna

2:49

do when I grow up even at that point, even though that was

2:51

a pretty good career. I went back to get my

2:53

MBA in a working professional program at

2:55

UC Davis. and so, like, nights and weekends.

2:58

And the first year that I was there at

3:00

Davis, I happened to win this lottery to go

3:02

back to Oman and have lunch with Warren Buffett. and

3:04

one of those, you know, like, where the classes come and

3:07

visit him. And, of course, it was amazing as you would expect.

3:09

I mean, he's so good. And when I

3:11

started digging in more about Buffet.

3:13

I learned that, wait, he's just trying

3:15

to find a deal on things. He just wants to

3:17

pay less than what something is worth. I felt

3:19

like I'd been doing that my whole life, you know, buying

3:21

something on Craigslist and then sell it on eBay

3:23

in an arbitrage and, you know, always

3:25

looking to find a deal never paying retail.

3:27

And when you take that concept and apply it

3:30

to the purchase and ownership of

3:32

publicly traded companies, you know, little slices

3:34

of a business They call it value investing,

3:36

and it made perfect sense to me. And so

3:38

I realized that that was what my calling

3:40

was. And so I started working towards

3:43

you know, starting Farnham Street investments. Actually,

3:45

with my boss at the time at the energy place,

3:47

my mentor, he was also really into Buffet,

3:49

and so we started a fun together And

3:51

but I did both for more than

3:54

five years both the and

3:56

working as a kind of a as a power system operator.

3:58

So And eventually, I was able to make

4:01

the transition to full time, like, my passion.

4:03

And and since then, I've just been trying to tinker

4:05

around with projects that I think are interesting and

4:07

kinda like keep me moving forward and making progress

4:09

and that included writing a book

4:11

and, you know, writing quarterly letters

4:13

and doing podcasts and and

4:16

lots of other projects. Yeah. That's

4:18

awesome. So you have definitely gone

4:20

a path that I would think that most people

4:22

probably have not followed. So, you know,

4:24

how did you feel about going from energy

4:27

to investing? Was that a hard

4:29

transition once you kinda stepped away from

4:31

that? You know, it is a little difficult in

4:33

that you don't know what you don't know if

4:35

you're just an outsider. You know, if if I'd

4:37

come up, you know, and I'd worked at Goldman Sachs

4:39

or something and then, like, I would had a much

4:41

better lay of the land probably, but then I

4:43

also on flip side would have probably

4:45

learned a lot of things that were maybe

4:47

led me into some blind alleys as well

4:49

and made you think like everyone else thinks.

4:52

So to actually I think it's in in the

4:54

end of the day, it's actually an advantage to be have

4:56

that outsider kind of mindset as long as you

4:58

kind of avoid some of those real obvious big

5:00

mistakes that are kind of easy to make if you are outsider.

5:02

So, I guess, let's talk about those. What

5:04

are some of the big obvious mistakes that

5:06

people could make? Well, I mean, if you're

5:08

trying to be in a professional, I'm almost thinking

5:10

more in the compliance realm, like,

5:12

you come in, you're just like, you don't know

5:14

that you're not allowed to say that or you're

5:16

not allowed to, you know, like,

5:18

things that you would've learned kind of on day one

5:21

at goldman or or even actually a

5:23

big part is getting clients is

5:25

hard if you didn't come from that sort of pedigree.

5:27

Mhmm. You know, if you're coming in from

5:29

an cider. And if you didn't grow up in a,

5:31

you know, kind of a silver spoon environment,

5:33

which I did not, it could be hard to stand up

5:35

a business that is, you know, that is

5:37

functional and has enough assets to

5:39

really, like, make a living from it. So yeah.

5:41

I mean, there's definitely you know, like I said, there's pluses and

5:43

minuses. Yeah. For sure. So

5:45

how long have you been running Farnham Street

5:47

now? Our first

5:49

fun launched in two thousand eight.

5:51

Okay. Nice time. a little while. Yeah.

5:53

Yeah. January January of two thousand

5:55

eight. I'm not even, you know, October. So,

5:58

yeah, we took the first, you know, that

6:00

year on the chain, like, pretty

6:02

much performed with the market down thirty

6:04

seven percent out of the gates. But

6:06

Yeah. I mean, if what the mindset was that we're gonna

6:08

be doing this for a long time. You know, it's it's

6:10

unfortunate, but you just

6:12

keep one foot in front of the other. And we had

6:14

some good years right after that as you would probably

6:16

expect, you know, and value had a pretty good

6:18

run there and especially, you know, two thousand

6:21

nine, ten, eleven ish. So It

6:23

was okay, but it definitely definitely

6:26

not an auspicious start. Yeah.

6:29

For sure. So I guess, kind of thinking

6:31

about that, you've kind of you've gone

6:33

through some different kinds of ups and lows

6:35

and cycles, if you will, of the market. So

6:37

has that affected kind of how you think

6:39

about your investment strategy or

6:41

the way that you look for companies and track

6:43

those kinds of things? Yeah. I would say

6:45

that, like, I think everyone every

6:47

investor is imprinted based

6:50

on whatever market environment they sort

6:52

of cut their teeth on. And so

6:54

if you happen to be, you know, come

6:56

of age in a a very bullish

6:58

time period, you're probably a

7:00

little bit more tuned

7:02

and turned up towards, you know,

7:04

right tail outcomes and, you know,

7:06

big investment results that you're looking for.

7:08

If you came up, you know, in the Great Depression,

7:11

you probably are wired for the downside

7:13

and thinking about and I don't know if it's

7:15

DNA related or if it's

7:17

actually sort of like survivorship bias that,

7:19

like, if you made it through that period, then, you

7:21

know, like, the the period kind of, like, winnowing

7:23

down, you know, who survives, and then,

7:25

therefore, that's the population that's left after

7:27

that time period. whatever the mechanism

7:29

is, I think that whatever you kind of

7:31

cut your teeth in, you tend to carry

7:33

that with you through your entire investment journey.

7:35

And so I am very much kind of a downside

7:38

protection minded guy.

7:40

And I think about, you know, what's the worst case

7:42

scenario? And I try to

7:44

optimize for that. And you

7:46

know, that mindset can serve you well at different

7:48

time periods, but it can hamstring you as well.

7:50

Like, you know, twenty fifteen to

7:52

twenty twenty, I would say, was

7:54

a very difficult time for someone who was thinking

7:57

about the downside because the downsides

7:59

did not really materialize that much. And a

8:01

lot of the upsides that came about

8:03

that would might have been a little bit

8:05

longer shots than you would have expected, but they

8:07

came true. And you're gonna look like an idiot if

8:09

you were worried about the downside and there's nothing

8:11

but, you know, upsides cashing in.

8:13

So Kelsey. So Yeah,

8:15

too. Is that mean banks are kind of

8:17

out of the equation here? Because

8:20

there was a lot of ugliness

8:23

with the banking sector during that two

8:25

thousand eight, two thousand nine period. I

8:27

actually owned a fair number of the banks in

8:29

two thousand eleven, twelve,

8:31

that thirteen through that time period. And

8:33

it was everything is always in

8:36

relation to price. So there's

8:38

ugly, but if the price is that much,

8:40

you know, more attractive, like it's that

8:42

beat up, then I can maybe get comfortable

8:44

with it. there's no assessment of risk where price

8:46

is not a huge component of that. So the

8:48

banks, I thought, got unduly cheap

8:50

then. We actually did okay in those. pretty

8:52

well. But there were at the time, if you remember

8:54

it was, like, the asset side of this

8:56

is such a question mark. And the liabilities are

8:58

very real always. Right? Where

9:00

are the holes in the balance sheet where this thing

9:02

could explode. And if you can get comfortable

9:05

with that, then, you know, how much are you paying for it?

9:07

And at the time, you know, it it was well

9:09

south of fifty cents on the dollar for a lot of

9:11

them. And we figured out that the assets were

9:13

even if there were some impairments, it wasn't

9:15

going to be half of the bank's balance

9:17

sheet was garbage. And, actually, if

9:19

if anything, the underwriting got really strong around

9:21

that time period because there had been so many problems

9:24

before, especially on, like, residential real

9:26

estate. So ironically, it was actually a

9:28

great time for them to because they had

9:30

actually tightened up so much from and

9:32

like Basel rules, we're also, you know,

9:34

pushing them into a lot more conservative

9:36

positioning. So Anyway, like, it was it

9:38

actually wasn't that hard of a trigger to pull at that time

9:40

based on the price. So I know this you keep

9:42

going back to price. How does

9:44

your holding period strategy

9:46

factor into price?

9:48

Do you ascribe more to the idea

9:50

of buy until it's fairly

9:52

priced and then get out? Or are

9:54

you kind of on the other

9:56

more, like, buffet side of letting them

9:58

run. Yeah. So, I mean, I think the right way to

10:00

think about it is that over shorter

10:02

periods of time, changes

10:04

in multiple or the

10:06

sentiment of that company are going to

10:08

drive results a lot more. And over

10:10

long periods of time, the difference in

10:12

multiple fades and the return

10:14

on the business, the return on equity or

10:16

assets or however you want to measure with invested

10:18

capital is what will dominate how

10:20

things out for you as an investor. So

10:22

when I first started out, I was a lot

10:24

more short term focused in

10:26

that I was looking for a multiple rerate

10:28

of things that were super cheap, whether

10:30

it was you know, really low price to

10:32

book or even net nets if I could find them.

10:34

But what kind of happened is that that those

10:37

super cheap things really dried

10:39

up around that time period. And so you

10:41

just couldn't fill up an entire portfolio of

10:43

them. So now what do you do? So you have to start

10:45

worrying a little bit more about business quality.

10:47

You're trying not to reach too much and

10:49

overpay for things. But when you can't

10:51

find these, like, no brainer, you know,

10:53

things trading for less than cash on the balance sheet,

10:55

you have to find some new tools to get

10:57

to work. And so was part of my own,

10:59

you know, a forcing mechanism to

11:01

become a better investor. Like, I needed that.

11:04

Otherwise, I would have just probably hit out in net

11:06

nets. And so Now I tend to

11:08

be more of a value buyer and a

11:10

little bit of a growth holder if it

11:12

converts into that. And I try to look

11:14

through a little bit deeper into

11:16

you know, a few years from my ownership, what

11:18

might the business look like, and

11:20

how cheap is it relative today to

11:22

what it could look like in a few years? and

11:24

trying to be real conservative with my assumptions,

11:26

but, you know, I wouldn't wanna sell just

11:28

because it ran up, you

11:30

know, a little bit more than I was comfortable

11:32

with before when there was still plenty of

11:34

kind of IRR baked into where it was where

11:36

the puck was going. Basically,

11:38

IRR for beginners

11:40

who not familiar with the term internal

11:42

rate of return, basically the upside

11:44

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11:46

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13:39

And

13:42

really, like, my assessment

13:44

of what the company is worth and how

13:46

close are we to that assessment? Ideally,

13:48

actually, like, I would love to find

13:50

situations where the multiple

13:52

doesn't change at all. I buy

13:54

it at a ten times earnings and

13:56

I hold it for a decade and I earn

13:58

a a fifteen percent return on

14:00

equity that the company is generating

14:02

internally, and I'll just ride that

14:04

same multiple all the way through. But

14:06

mister Market can kind of force your hand sometimes

14:08

by, you know, if the price was to go

14:10

up and I went from a ten times

14:13

multiple to, let's say, a twenty, Well, now all of a

14:15

sudden, like, my prospective return that I

14:17

could expect starts to come down,

14:19

and therefore, I'm starting to look for places to

14:21

trade up potentially. But again, it

14:23

always is this balance of factors

14:25

of what do I know this

14:27

company very well versus the new thing that

14:29

I'm buying, maybe I don't know it as well,

14:31

and that's can be a very dangerous place. And then what is

14:33

the kind of risk reward and how

14:35

certain am I as the business results that I'm

14:37

hanging my hat on? And in a world now

14:39

where there's a lot more disruption

14:41

from technology. Like, it starts to get it's

14:43

kinda difficult to really and I

14:45

think you really saw this with COVID

14:47

where twenty twenty was an

14:49

insane year for, you know, like, the

14:51

economy just stopping. Who would've thought

14:53

airlines with literally zero revenue?

14:55

Like who was underwriting that in their

14:57

analysis. And then back to twenty twenty

14:59

one where you had just things like

15:01

rocketing and, like, all over the place work

15:03

from home completely changing how we

15:05

do everything, and just a huge round

15:07

trip in a lot of these companies that have

15:09

kinda come back down to their trend lines where

15:11

they were from twenty nine team.

15:13

Like, normalizing any business

15:15

today is incredibly difficult based on the

15:17

last few years of numbers. Like, it's a really

15:19

hard task right now. Like, probably harder than at any

15:21

point. I I think I've seen in my career.

15:23

That's a great insight. And I guess one

15:25

of the things that, I guess, I'm curious

15:27

about when you're talking about some of

15:29

the price issues and some of the things that

15:31

how do you think about projecting some of those

15:33

things forward? Is that something that you

15:35

study the past and kind of

15:37

project that forward? Or is it based on your

15:39

experience by reading through all

15:41

these companies and kind of understanding the

15:43

businesses and where you think they're

15:45

gonna go how certain you feel, you know,

15:47

when you make a bet on a company that this

15:49

is gonna come to pass? Usually not

15:51

very certain. But, I mean,

15:53

ideally, you The

15:55

right way to do this is to think in base rates.

15:57

And so a base rate is if we

15:59

looked at an entire population of

16:02

businesses like this, And the closer that we

16:04

can get describing this

16:06

particular business that we're trying to project, if

16:08

we can find a lot of companies that

16:10

look like that business the more

16:12

that we can kinda hang our hat on the base

16:14

rate. If we're just using very general

16:16

terms, you know, it starts to

16:18

decrease the chances that the base rate that we're

16:20

using actually applies to this

16:22

individual business. So the base

16:24

rate can be for a lot of things, whether

16:26

it's you know, how much are the revenues of this company

16:28

gonna grow over the next few years? And so

16:30

if we looked at, you know, companies that are

16:32

like this, and the base rate

16:34

said that companies this size in

16:36

this industry with this particular

16:38

niche that they're operating in

16:41

have historically grown

16:43

at ten percent, let's say.

16:45

That would be my base operating assumption.

16:47

And now I have to have some kind of special

16:49

insight into how the world works.

16:51

to wanna deviate off of what that base

16:53

rate is telling me. And so that's

16:55

the ideal way to do it. Now

16:58

the execution of that is like

17:00

where the art is. in this. That's

17:02

scientifically the right way to think about it, but to

17:04

actually do it well requires, you

17:06

know, the more experience that you have,

17:08

I think, really helps a lot in And is where

17:10

Buffet, you know, is still so good as a ninety,

17:12

you know, what is he now? He's ninety

17:14

two. He has been reading newspapers,

17:16

looking at companies, looking at

17:18

the financials for, you know, more than fifty

17:21

years. And he's been building these base rates in

17:23

his head this entire time. And so he's got a

17:25

very good idea about a lot

17:27

of companies even once he doesn't

17:29

own, what they are likely to do over the next

17:31

five to ten years. And so when

17:33

something dislocates, the price, you know, gets

17:35

away from what he thinks is a pretty obvious

17:37

where this is going. He's ready to act like

17:39

that. That's how he's able to make, you know,

17:41

decisions in less than a day because he has

17:43

a very good idea of what the base rates

17:45

he can kind of effect. And as long as he stays within

17:47

his circle of competence, which basically means,

17:49

like, either I know the base rate or

17:51

I know something special about the world

17:54

that allows me to know why the base rate is not right in this

17:56

particular situation. Then I know that,

17:58

like, that's how I could get comfortable with being

17:59

able to make that kind of decision so

18:02

quickly. That's awesome. So you're just confirming to me that Buffet

18:04

has, you know, a computer in his head, and he's like

18:06

a Michael Jordan as far as his intellect

18:08

goes. You know? So for those of

18:10

us, mere mortals, how do we learn

18:12

about base rates? Like, where is a good resource to learn more

18:15

about those? Yeah.

18:16

Michael Moberson, who is one of

18:19

the best authors and writers and

18:21

researchers in our field has a

18:23

couple different papers on base rates that are

18:25

very handy to have. So

18:27

if you just Google Mobesan.

18:29

I think it's MAUB0USSIN

18:32

He will they'll be these white

18:34

papers on base rate that that they actually give

18:36

you some of the base rates for some industries that's

18:38

kind of helpful. Do you have any favorites

18:40

that you've

18:41

leaned on in the past that you would be

18:44

willing to share? whether it's revenue

18:46

or any other category? Well,

18:48

we could

18:48

talk about mistakes that I've made in

18:51

using base rates if that's -- Sure. -- that's probably

18:53

more instructive I did a

18:55

little post mortem on

18:57

Google in earlier this year.

18:59

And what I was trying to do was figure

19:01

out, like, I'd been to Google headquarters. I

19:03

have a lot of friends that work at Google.

19:05

I recognize that Google was a special

19:07

business a decade ago.

19:09

Why did I not own it?

19:11

over at any point during that, you know,

19:13

twelve years. Why would I pass on it? And what was

19:15

I doing? And how do I not make that same mistake

19:17

again? And so what it came down

19:19

to was actually you know, Google

19:21

was a very big company in twenty fifteen. And

19:24

typically, historically, the

19:26

base rate would tell you that large

19:28

companies don't grow as fast

19:30

because they've already saturated their

19:32

markets. They're already giant. Maybe they've

19:34

already got a lot of the low hanging fruit in

19:36

what they're able to do for a customer. Well,

19:38

That is true. However, I was using a base

19:40

rate for kind of more industrial minded

19:43

companies, which is what we had at the time. Like, I

19:45

didn't have There was

19:47

research that came out after, actually, from

19:49

Mobesan about how certain

19:51

companies in the digital space

19:53

are able really defy the base

19:55

rates of existing historical big

19:57

companies and keep growing at these incredible

19:59

rates even though they're large.

20:01

And so, you know, I had been using the

20:03

wrong base rate. And when I would use that to

20:05

kinda project revenue out and then assume

20:08

some kind of a profit margin and

20:10

give some kind of a, you know, multiple for

20:12

that profit, I kept coming up with,

20:14

like, it seems like Google's fully priced

20:16

this whole time. And yet it just keeps going up

20:18

and up and up. And every time I would run

20:20

kind of an assessment, I'd be like, it seems like it's

20:22

already fully priced, like, the gross already baked

20:24

into this. I don't see how I can win

20:26

from here. But then, you know, if you use

20:28

the newer base rate that's more

20:30

applicable for this particular type of

20:32

animal then

20:34

if I had been using that, I would have seen, like, oh, wait.

20:36

There's actually a lot of cheap growth still here

20:38

if it follows that base rate. And that

20:40

that would be how I would win, and maybe

20:42

even margins are proving some of these

20:44

businesses as they get bigger. And now you

20:46

also have, in fairness, a lot of multiple

20:49

expansion on that, which I would have probably not. That's

20:51

not what I typically tend to underwrite.

20:53

Like, I don't wanna really win most of the

20:55

time because everyone gets crazy

20:57

excited about my businesses. Like, I wanna win because

20:59

the business is doing well and

21:01

serving per as well. Now sometimes, they do get excited

21:03

about it, and that's usually when I get tempted to sell

21:05

a good business, which is actually a very

21:07

frustrating position to be in. But so

21:09

that was where base rates led me astray at

21:11

one point. And, you know, that's hopefully I

21:13

learned from that and that I, you know, just

21:16

keep working on finding the base the next good base rate and

21:18

the one that's most applicable to what it is that

21:20

I'm studying. Why do you think Buffet and Munger

21:22

missed on Google? because I know

21:25

they've admitted that they missed on it. Do you think

21:27

it was kind of the same idea? I really

21:29

have no idea because they actually

21:31

they're more guilty than I am, I would say,

21:33

because they I mean, the meetings, they've talked about how

21:35

they recognized well, one, they knew

21:37

that newspapers, a one town

21:41

one newspaper situation

21:43

is one of the best businesses of all

21:45

time of the twentieth century. They

21:47

absolutely printed money I mean, they made

21:49

all the money that they ever wanted to make,

21:52

basically. And because they had both sides

21:54

captured, they had, you know, the more readership

21:56

that they had, the more valuable was

21:58

to advertisers and the more

21:59

advertisers they

22:00

had, the more pricing that they could

22:02

charge for it. So they were in

22:04

a fantastic situation. And Google is

22:07

basically, like, the one town of the

22:09

world Internet newspaper with

22:11

classifieds and search. I mean,

22:13

it's it's just an incredible business.

22:15

and even to compound their error, even

22:17

more for Buffet Munger, they had been

22:19

paying a ton of money as GEICO

22:22

owners to Google and

22:24

seeing how well it was doing for

22:26

them. So, like, they had an inside,

22:28

you know, like, front row seat to see how

22:30

Google was working for ads and driving

22:32

eyeballs for GEICO, and they

22:34

recognized it, and yet somehow they

22:36

still never pulled the trigger on it. So makes

22:38

me feel a little bit better that I was so stupid

22:40

to not buy it, but I don't know what their

22:43

excuses. I

22:45

say that jokingly because your best ever have

22:47

done it, but Right. Of course. Of course. It

22:49

does help one sleep better at night knowing that

22:51

even the greatest can make, you know, can miss

22:53

and make mistakes. from time to time

22:55

that this game is not easy and still get

22:58

incredible results. That's the other nice thing about this

23:00

is that you do not have to bat you

23:02

know, nine hundred or a thousand in

23:04

this game to still do just fine.

23:06

Why do you think there's this perception that you have

23:08

to be perfect to do well in

23:10

the markets? I don't know. Like, a lot of it

23:12

I mean, the other thing I think that's that goes

23:14

missing a lot in that conversation is that

23:16

it's really more about slugging percentage

23:18

than batting average. So you great individual

23:21

pick. But if you don't put hardly any money

23:23

behind it, I mean, it's almost as if you

23:25

didn't even swing the bat. Whereas, you can

23:27

also, you know, have a

23:29

marginal idea that does not that great,

23:32

but maybe not that bad. But if you put a lot of

23:34

money behind it, the opportunity cost

23:36

of that idea can absolutely eat you alive of

23:38

the things that you didn't invest in because

23:40

you were you had your money tied up

23:42

in this, you know, dog for lack of a

23:45

better term for a long time. So -- Yeah. -- the position sizing is actually

23:47

a completely different

23:49

conversation than the stock picking, and

23:52

it's probably just as important. Or maybe we

23:54

could chat about that a little bit. What's

23:56

the best way to get started

23:58

in the market? Download

23:59

Andrew's e book for free at

24:02

stock market PDF dot

24:04

com. Yeah.

24:06

Do you have opinions on

24:08

maybe somebody like you who does it

24:11

professionally versus somebody who's

24:13

kind of a DIY average investor.

24:15

Do you think there's Do have

24:17

thoughts on either side of that spectrum,

24:19

I guess? Yeah. I mean, I would say I I

24:21

mean, it's the same for everybody. I would say,

24:23

like, Daniel Donovan would tell you that overconfidence

24:26

is the number one killer of behavioral

24:29

biases. And so how do you combat

24:31

overconfidence? Cut your position

24:33

sizes down from what you

24:35

think your gut is telling you and spread your bets around

24:37

a little bit more. I know that that's not a

24:39

very Mongolian kind of approach like

24:41

Mongol would tell you put your, you

24:43

know, the most money in your best idea. And

24:46

if it's better than all your other ideas, like, why

24:48

water it down with your tenth best idea?

24:51

Well, I think the world's a little bit

24:53

more random than that for most of us

24:55

unless you are truly waiting

24:57

for if you're following Mulder's

25:00

approach, which I don't know if you guys know this, but like in running

25:02

Daily Journal's portfolio, he

25:04

sat in treasury bills from,

25:06

like, two thousand five to

25:08

two thousand nine.

25:10

and did nothing. And,

25:12

you know, of course, there's no shot clock for

25:14

him because he's, you know, he's bunker and

25:16

he's running this company and he's a totally in

25:18

charge of it. But if you were a professional

25:20

money manager who's supposed to be picking stocks and you

25:22

had all your clients in treasuries four

25:25

years, you're gonna get fired. I mean, there's

25:27

just no two ways about that. But

25:29

then in two thousand nine comes along and he

25:31

just loads up on a couple different things like

25:33

Bank of America. And so he, like,

25:35

just bet big when he had

25:37

very overwhelmingly obvious smart

25:39

things to do. And then he went back to,

25:41

you know, doing whatever designing

25:43

dorm rooms and catamarans and

25:45

whatever else he's doing, reading

25:47

books. But so that's one style. I just like, you have to

25:49

be I think it's important to

25:51

recognize, like, matching your own

25:53

personality with the style that you're trying to implement. And

25:55

so if you are that kind of person that

25:57

can can be doing other things ignore markets for years

25:59

on end, then you probably can do that. But

26:01

for most people, I think you probably wanna

26:04

stay more fully invested most of the time and balance

26:06

your position sizing out a little bit more because

26:08

it's the world is a little more untamed

26:10

than it seems and there'd

26:12

there'd be dragons more often than you realize. So it's

26:15

better to spread your bets a little bit more and,

26:17

you know, some diversification I

26:19

think is called for. I love those

26:21

examples. You know, when you talk about

26:23

bunker in two thousand five, he had

26:25

been an investor for, like, four or

26:27

five decades. I don't know, probably longer

26:29

than that. So he kinda knows what he's doing

26:31

versus somebody who's maybe trying

26:33

to approach the market for the

26:35

first couple of years thinking they can

26:38

after a couple years of experience, time

26:40

in the market, it's a bit of a

26:42

goes back to that overconfidence idea. I

26:44

think you have to recognize also that

26:47

chances are because of just the way the

26:49

information flows, when you hear

26:51

about and you get excited about

26:53

investing as a new investor, chances

26:55

are you are being sucked into something near

26:57

the top. That's just how otherwise, you

26:59

wouldn't have been hearing about it. Right? If it's down if

27:01

it everyone hates it, you're not hearing

27:03

about it in any kind of news flow. And this actually applies

27:05

to me as a value investor. Like, I got

27:08

into value investing in two

27:10

thousand let's say, six, seven time

27:12

period. Well, guess what value the best thing had

27:14

been doing for the last like six years?

27:17

Absolutely crushing everyone. Right?

27:19

So I was a momentum value

27:21

investor in a way. Like, I got sucked

27:23

into the top of a value sort of run.

27:25

And naturally, because you hear about it and

27:27

like, oh, this just makes a lot of sense. Like, of

27:29

course, this is the right way to do it. And it's

27:31

working. Like, of course, like, I'm a genius. Like, I

27:33

should be doing this. It's easy. This is

27:35

very easy. Right? And I think that applies to all

27:37

investment styles. You get sucked

27:39

in near the top most likely. Like

27:41

statistically, chances are if you hear

27:43

about it and you're new to the

27:45

game, you're getting in near the top. And you

27:47

just have to recognize that and go

27:49

slowly and try to find yourself and

27:51

find your sweet spot where your

27:53

personality matches with the investment

27:55

and recognize that chances are actually

27:57

it's not going to be whatever's happening right

27:59

now is how you're going actually

28:01

do well and just be ready for that. That's a

28:03

very good point. That's a great insight. Think

28:05

about the poor people that have started investing

28:07

in twenty twenty. you know, for the last two years, the

28:09

rollercoast that they've been on, I can't even

28:11

imagine. Yeah. And I mean, it it would be very

28:13

sad if this experience

28:16

disabuse them from ever wanting to be

28:18

owners of businesses via the stock

28:20

market. I mean, that is a huge loss for

28:22

them as a vehicle if they decide

28:24

that, you know, the game is rigged,

28:26

or stocks are for suckers, or

28:28

it's only a gambling instrument. That

28:30

could be true. And and Mungar even talks

28:32

about this, he'll say that sometimes

28:35

stocks are priced like businesses

28:37

and based on cash flow, and sometimes

28:39

they're priced like REM Brands, and it's more

28:41

about just what are someone willing to pay

28:43

for it. So recognizing, you know, are you in an

28:45

investment kind of market? Are you in

28:47

a rembrandt market? And, you know, we've

28:49

been in a rembrandt market for a

28:51

couple years there, you know,

28:53

call the end of twenty twenty. Well,

28:55

let's start at two thousand nine, really,

28:57

to say, you know, the pandemic. And

28:59

then, again, like, even more as,

29:01

you know, kind of ecstatic rembrandt

29:04

market for twenty twenty one.

29:06

It kind of feels like maybe we're at

29:08

the end of that now and we're a little going

29:10

back more towards profits over

29:13

promises, but we'll see. No one really knows the

29:15

answers to those heads. You

29:17

know, where's the market going questions?

29:19

No. None of us do.

29:22

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29:49

that's ANGI or download the

29:51

app today. Yeah. It's

29:52

I mean, like you said, it's been a

29:54

very interesting environment since o

29:57

nine. obviously, nobody has

29:59

a crystal ball,

29:59

but how much hope do you have

30:02

for some sort of

30:03

reversion to the mean of, like, how the

30:05

market used to be. There's a lot of ideas going out

30:08

there. Values just taking a new

30:10

form. And I think there's

30:12

some other ideas that maybe it will revert and

30:14

we're starting to see that now.

30:16

do you have any thoughts on either

30:18

of those things, obviously knowing nobody

30:20

knows? You know, I think you have to there's

30:22

lots of different ways to skin the cat. And you so

30:24

you have to like

30:26

I said, do what is matches your personality.

30:29

And I think that there's definitely, like,

30:31

business value, the creation of

30:33

business value. is

30:35

morphs over time as it should. Right? Like,

30:37

you know, a hundred and fifty years

30:40

ago, half of us were farmers and

30:42

that you know, we were subsistence, you

30:44

know, hand to mouth, basically. And

30:46

now, you know, we've specialized enough and

30:48

gotten enough output from, you know, every industry

30:50

to where we can find our little

30:52

niche where we can provide even more value.

30:55

And, you know, that is going to change

30:57

over time. And it should. Otherwise, we're not

30:59

making progress as a species. So

31:02

naturally, the owner of these businesses also

31:04

has to think about how things are changing

31:06

and recognize where things are

31:08

going. with all of that said, I do think that, you know, reversion

31:10

of the mean is still an incredibly powerful

31:12

force in the universe. And I would say

31:14

that it's not I don't think it's

31:16

dead. I think buying cheap

31:19

things. However, you define cheap, you

31:21

know, is will work over time.

31:23

Think that markets mean revert as well, and I

31:25

think we will spend some time below

31:27

the mean at some point, you know, that will

31:29

be when real investors are kinda

31:31

tested. Yeah. And it'll Ben

31:33

Graham has the saying that, like, bear markets

31:35

are when stocks return to their

31:37

rightful owners. And so, you know,

31:39

I think they'll be that time period again and

31:41

a cleansing, and and that's what you need to

31:43

generate good returns. Like, you

31:45

need you'd actually need pain and you need a reset

31:47

of a washout of the exuberance.

31:49

You actually did it to be on the other side

31:51

of it with negativity and, you

31:54

know, people The death of equities was

31:56

a famous article that was written in

31:58

nineteen eighty one. I think it was in

31:59

Forbes, and it was it pretty

32:02

much marked the bottom of seventeen

32:04

year bull market run. So those are the

32:06

kind of things that you have to have at the bottom

32:08

to have a truly epic kind of bull

32:10

run. And the bull run doesn't

32:13

come from I don't think

32:15

from a period like today where

32:17

you have a very high multiple of

32:19

earnings being paid for most businesses,

32:21

you have profit margins through

32:23

the roof compared to, like, nineteen eighty one, profit margins were down

32:25

at, like, two percent and now they're at, like,

32:27

fourteen. Basically, every, like, metric

32:29

that you would look at to

32:31

say, okay, can we, like, go

32:33

in the other direction from here? Like, we're

32:35

kinda pegged out at the upper end already of

32:37

where most of these data sets have lived

32:40

for in some cases, thousands of

32:42

years if you look at, like, interest rates. So

32:44

anyway, long story short, there's still

32:46

always interesting things to work on and learn about

32:48

and there are pockets that will always be

32:50

available and, like, smart things to do. So don't

32:52

I'm not saying, like, don't get out there and work. I'm just

32:55

saying, you know, little more conservative

32:57

and expect that, you know, it might be some

32:59

tough times from here actually, and that you

33:01

actually should be looking forward to that because that's

33:03

when the real investors will

33:05

reassert themselves, and that's when, like, the real you'll start actually

33:07

making, like, the real money that you deserve to make

33:09

and not sort of, like, to the moon as an

33:11

investment thesis. You know, I just

33:14

I don't that was never really sustainable. Yeah. Totally.

33:17

So you are obviously somebody that's spent a

33:19

lot of time studying this, and you spend a

33:21

lot of time looking at the

33:23

companies that you end up buying.

33:25

And so I'm wondering what

33:27

kind of what kind of vehicle do you use

33:29

to kind of keep track of your your

33:31

investment thesis. Like, how do you

33:33

track, you know, hey, I'm gonna buy company

33:35

a. In five years from now, how do you look

33:37

back and see why did I buy this? And

33:39

is that still in play now? Yeah.

33:41

So I had this very problem for a

33:43

long time. And I also knew that

33:45

there were all kinds of little data points

33:47

like what I would call like dark data that were

33:49

going without being captured, that I

33:51

knew were important on the input

33:53

side of the process, that were

33:55

driving results. And

33:57

it kinda drove me nuts that, like, I wasn't capturing

33:59

these things. So for instance, just even, like,

34:01

a very basic example. You know, like, say,

34:03

I'm going through and looking a bunch of

34:05

different businesses. And maybe I spend five or ten minutes on one and just kinda look

34:07

through the financials real quick. And I just

34:10

decide, not for

34:12

me. Okay. Well, passing on that idea is an obvious thing.

34:14

We all do it. But why did

34:16

I pass on it? And as

34:18

a base of all of the times that

34:20

I said, and

34:22

not that into it for this reason. Maybe it was too much

34:24

leverage or it's too expensive or the

34:26

business, like, returns on equity aren't

34:29

good enough for me whatever the reason

34:31

code was that I kinda used internally, how does it go

34:33

on to perform from there? So what really,

34:35

what is the cost of my filtration

34:37

system on the

34:40

front end? and I wasn't keeping track of that. And so how would I know if my

34:42

filtering is getting better or not

34:44

unless I'm measuring these things?

34:46

Mhmm. So little and like a

34:48

million other little things like that that I felt like

34:50

were going unmeasured that I wanted to know about

34:52

myself for my own process and to

34:54

get better. And, really, at the end of the day, it's about closing feedback loops

34:56

because that's what's required to start

34:58

learning and actually build intuition

35:00

about things. You have to have feedback

35:02

loops closed. So

35:04

it was driving me nuts so much and I was like looking around for

35:06

some solutions and I couldn't really find anything

35:08

that was in what I was looking for. And

35:11

so I basically decided to start building something

35:13

myself. And I've teamed up with a couple

35:15

of just amazing cofounders

35:18

that are a joy to work with,

35:20

and we've hired employees. And so I've we've been building this software now for

35:22

almost a couple of years. And

35:24

hopefully, maybe within the next

35:27

maybe by the end of the year, we'll launch, you know, actual

35:29

public launch. And the name of it is is

35:31

called journalidic. And the idea behind that

35:34

is that it's journaling on the front end. So that's kind of your

35:36

interface with, you know, getting your thoughts

35:38

out into this. And

35:40

then analytics on the back end

35:42

to help you understand yourself better,

35:44

understand your decision making, which is

35:46

where the key thing really drives is how do

35:48

we improve your

35:50

decision making? And so closing those feedback loops through analytics and reports

35:52

on the back end that hopefully

35:54

help you understand yourself better that make

35:56

you improve at a

35:58

faster rate. to

35:59

kind of, like,

35:59

illustrate, hey, by the way, here's where you

36:01

missed these base rates, like, three

36:03

times, and it wasn't just a one time

36:05

thing kind of I

36:08

mean, the idea is really like, you know, if you do this diligently, one,

36:10

you learn about yourself,

36:12

but two, like, don't make the same at stake

36:14

twice. if you're doing a good job

36:16

of sort of postmorteming, you know, like, when things

36:18

went wrong, you know, that's how Munger would say, like,

36:20

rub your nose in in your mistakes. And so

36:23

a lot this makes it a lot easier to recognize, like,

36:25

oh, okay. Here's where I'm making the same sort

36:27

of mistake over and over again. And I actually have

36:29

a behavioral bias here that's

36:32

hitting me. I need to be aware of that and get nudged a little

36:34

bit away from that so that I don't keep doing it

36:36

over and over again. Yeah. I like how it's

36:38

kinda focused on the opportunity

36:40

cost side. which kind of fits

36:42

in with what you were talking about with

36:44

Google. I think it could be

36:46

one of those hidden blind

36:48

spots that you

36:49

don't even realize you're doing it because it's just part of

36:51

your everyday filter and that,

36:53

you

36:53

know, there's so many different ways you could

36:56

screw up why not take some time to figure out if your

36:58

systems, like, out of date or need

37:00

some adjustment? I'm glad you brought up

37:02

blind

37:02

spots because that's a

37:05

hundred percent the right way to think about it. In fact, somebody who I know has done

37:07

a lot of studying about human behavior

37:09

and, you know, why do we do what we

37:11

do, says that, like,

37:14

that actually all mistakes come from blind spots because

37:16

otherwise if it wasn't a blind spot that you

37:18

would know and you wouldn't do it. Right?

37:21

And so, like, he's he basically says, like, you could almost, you know, all

37:23

these if you go through, like, Port Charlie's Almanac where he

37:25

goes through, like, I think the twenty five

37:28

behavioral biases that affect

37:30

human psychology, human psychology this

37:32

person would say, like, you don't need twenty five of those. You just need the

37:34

one in its blind spots. And so revealing

37:36

those blind spots is a big part of

37:38

what we're after with the software is

37:41

just help you see where are you making the

37:43

mistakes. Yeah. That's awesome. I wish I would have had

37:45

that thirty years ago. Same here.

37:47

That's that's exactly why

37:49

I was like, shoot. We gotta get building this, I guess, because

37:51

I'm not gonna get better at the rate that I want to

37:54

unless unless I start closing these

37:56

feedback loops. But even, like, we have

37:58

some other kinda cool stuff that's lined up

38:00

there. So

38:02

imagine that you're just sort of journaling about a

38:04

particular idea and you're just dumping your

38:06

thoughts in there. we're actually

38:08

building an API, like,

38:10

where it will do a natural language

38:12

processing of your word choices

38:14

and assign a sentiment score to that

38:16

journal entry and then overlay

38:18

that on the price of what you're,

38:20

you know, as you're journaling about that

38:22

idea, we can see how your sentiment is changing

38:24

over time in show it to you so

38:26

that you can get a sense of what I think most people are going to discover is that price is driving your

38:28

sentiment in a major way, like how

38:30

you feel about the company

38:33

how you interpret that next piece of data that

38:35

comes in from a ten q, wherever,

38:37

is colored by what price has

38:39

been doing recently. which is not the right

38:41

way to be thinking about it. Like, you should be

38:44

recognizing the fundamental numbers regardless

38:46

of what price has been doing. And it's just

38:48

incredibly difficult to do. Like, we're all guilty

38:50

of it. And conversely, you know, if the price has been going down, you're

38:52

like, oh, god. I hate this company sucks. Like, in

38:54

I'm filtering every new piece of data that

38:56

comes in with that sort of

38:58

lens and what our hopefully, our feedback that we're going to give

39:01

you through your sentiment analysis will let you

39:03

step out away from that a little

39:05

bit and take those lasses off

39:07

and be able to look at the real

39:09

data, the real experience without

39:12

being jaded by whatever the

39:14

recent kind sent the recent price has been driving your sentiment. Oh, that

39:16

would be so cool to use and

39:18

see people use.

39:20

Yeah. Yeah. any money. I

39:22

think about when you're in it, like, right

39:24

now, we're in twenty twenty two. So a

39:26

lot of the way we think about the market today

39:28

and whatever opportunities are in the

39:30

market can be influenced by what we hear from CNBC, how we talk to our colleagues

39:32

about the market, all of these things. You know, I

39:34

haven't been doing this forever, but it's funny

39:36

to me to hear the the moaning of

39:38

people talking

39:40

about twenty twenty and how, you know, oh, it should have been so obvious

39:42

that I should have bought this stock or that stock

39:44

is like, no. You don't remember the

39:46

conversations that everybody was having. much

39:50

to do not even with the stock

39:52

market, but where the world was going. And

39:54

we already two years later have

39:57

forgotten so much of that. I mean, our

39:59

memories are

39:59

so fallible. It's unbelievable.

40:02

And that's another big part of wanting to just

40:04

write things down is that when you can go back see

40:06

what you're actually thinking. It's it'll blow your mind. I mean, you

40:08

will literally not recognize what was

40:10

written there, but you know it was you.

40:13

It's crazy. And that I

40:15

think the being able to see that

40:17

about yourself and see how much it changes

40:19

you, I think is just such an advantage

40:21

if you start doing it especially if you're younger

40:23

and a a beginner, it's almost table stakes at this point. Like, if you

40:25

wanna get better, you really have to keep capturing

40:27

these things. And the problem

40:29

is is that If you just rely

40:31

on your own memory, you know, memory works in that it is

40:34

almost like it's not this perfect

40:36

recording of

40:38

what happened. it's a a replay of what you kinda

40:40

think happened. And the more that it sort of

40:42

replays, it tapes over it. And as

40:44

it does that,

40:46

it'll drop data points

40:48

that might threaten your ego actually.

40:50

And so it will wanna just get rid of those

40:52

things that kinda make you question, you know,

40:54

your own self worth. And it's

40:56

just trying to protect you. Like, it's not, you

40:58

know, it's nothing malicious, but it

41:00

means that your connection to what actually

41:02

was happening and what you were thinking at

41:04

the time is a very tenuous connection when you go trying to just

41:06

remember. And so writing it

41:08

down is just such an advantage and

41:09

it's such an obvious good

41:12

idea that I just really couldn't recommend it enough if you're a beginning

41:14

investor. Yeah. I'll also

41:16

put emphasis on that because I'll

41:18

read some of the newsletters

41:20

I wrote four, five years ago, I

41:22

was recommending companies to people and it makes

41:24

my stomach kinda turn

41:26

a little bit to think. And what's

41:28

funny about it is how much

41:30

sometimes you can either

41:32

be wrong or just have a blind spot on something and

41:34

still make money on it, which to me is kind of

41:36

encouraging that you can have a

41:38

lot of thoughts that are really wrong, but

41:40

still do pretty well if you stick to some

41:42

key principles with

41:44

your messaging. Well

41:44

and I think that is you just hit on one of the biggest

41:46

problems that is the investment

41:48

world is that the feedback loops

41:51

are incredibly long and they're very

41:53

noisy, which means it's a very difficult

41:55

learning environment. It's what researchers would call

41:58

a wicked learning environment as

42:00

opposed to mind learning environment. A kind learning environment is

42:02

where feedback is unambiguous.

42:04

It's instantaneous. It's every single

42:07

time it happens. But in the

42:10

investment world, it can take years sometimes to

42:12

figure out if you were right or wrong, and you can a

42:14

hundred percent be right or wrong for the

42:16

wrong reasons. You could be right for the

42:18

wrong So another thing that I recommend that a new

42:20

investor does is to

42:22

actually make

42:24

probabilistic predictions

42:26

about certain company fundamentals. So you could say,

42:28

I believe that Apple's revenue will

42:30

grow at a ten percent clip,

42:32

and I'm seventy percent percent

42:35

sure about that. And I think

42:37

the profit

42:38

margins will be this,

42:40

let's say, twenty percent or greater,

42:42

and I'm eighty percent sure about that.

42:45

And what you're wanting to do is accumulate a bunch

42:47

of data of your

42:50

predictions. And the reason to do

42:52

it probably strictly is that then when you can

42:54

see, okay, when I said seventy percent,

42:56

that should happen seven out of ten

42:58

times as a base case. And

43:01

if it's not, then I'm not calibrated correctly.

43:03

Right? And so that will reveal

43:05

where you're overconfident

43:08

or underconfident. But to have let's say I'm making, like, five

43:10

fundamental predictions every single

43:12

year about a company, whether it's, you know, the the

43:15

revenue growth rate the profit margins, the multiple, the dividend,

43:17

share count, whatever all these things that are sort of

43:20

the natural drivers of returns, you

43:22

can start

43:24

to accumulate five data points for every one price

43:26

data point that you would get over a year. And

43:28

what you'll start to see then is, like, the

43:30

price could go up and you could be way

43:32

off on

43:34

your projection and that's a very dangerous place to be because you

43:36

are actually you're showing a lack

43:38

of skill in your predictions, but

43:40

your price like your return is showing that

43:42

you're doing

43:44

well. and that's when you're gonna get your head cut off on the next time because wildly

43:46

overconfident about how good you are at

43:48

this. Or conversely, you could be

43:50

doing great on your predictions and the market

43:54

is not ring with you at all. Mhmm. And that could just tell you,

43:56

like, okay, I just need to kinda stay the course. I'm

43:58

doing the right thing. I'm gonna end up where I

43:59

need to. Eventually, the market has to agree

44:02

with what's happening spinning

44:04

fundamentally. It's just a time period that's a little bit

44:06

unlucky. So untangling luck

44:08

versus skill, you can do it over twenty

44:10

years of an investment career based

44:12

only on price. but a lot of people wanna

44:14

know that answer sooner. And the way

44:16

to find the answer sooner is to make, you

44:18

know, five predictions to every one

44:20

price data point and start

44:22

accumulating a bigger sample size

44:24

faster so that you can start to get a sense

44:26

of do you have luck or

44:28

skill? Yeah. That's

44:28

interesting. Yeah. It's obvious that you spend

44:30

a lot of time thinking about that it kinda

44:33

shows shines through how you're thinking about how can I make myself

44:35

better, my skills better, knowing that over

44:37

the long term, just gonna make better

44:39

results in the market, It's

44:41

not about what's my portfolio gonna do next year,

44:44

but how can I make better and better

44:46

choices probabilistically?

44:48

And then My chances

44:49

just improve the more you invest. Well, the

44:51

only thing we really have control over is

44:53

our process and our mindset.

44:56

And so focusing on those things. I think it's the only

44:58

smart thing to do. Like, the results are going to

45:00

be what they're gonna be, and you don't have a whole lot

45:02

of control over them.

45:04

The market can do can make you

45:06

feel stupid for long periods of time, very long periods. We'll test

45:08

your resolve. You know, that's probably how it

45:10

should Like, if it was super easy, I

45:12

don't you know, it would get competed away. And

45:14

so the fact that it's difficult just

45:16

means that there's that many less people who

45:18

are likely to be following that same thing

45:21

that you're doing that's usually a good sign for when it's gonna

45:23

start working again is when everyone hates

45:25

it. So at least that's what I tell

45:27

myself to to keep going. But but, yeah, I

45:29

do think that, like, process

45:32

is is the

45:32

only real lever that we have to focus

45:34

on is just try to get a little bit better

45:36

every single day and, you know, go to bed a little

45:38

bit smarter than you woke up as Mulder would say. It's

45:40

a very important framework. I think there's a lot of wisdom and experience

45:43

and knowledge behind it. And I

45:45

highly recommend for people Maybe

45:48

store this download away for the next time you start losing

45:50

faith, remind yourself that maybe

45:52

how you're evaluating yourself might

45:55

have a blind spot. So, Jake,

45:57

we really, really appreciate your time. The time flew by for

45:59

me. I mean, I thought there was so much good

46:01

stuff here. You have a great book, which we didn't even get

46:03

a chance to talk about.

46:06

the rebel allocator. Just real quick, I

46:08

think people should check that out. It was one of my

46:10

favorite reads this summer. It's

46:12

basically a fiction

46:14

book about capital allocation, investing. It's a

46:16

great read for even if somebody who's not

46:18

familiar with the business world

46:20

or investing to

46:22

learn some of the key principles. A lot of it reminded me

46:24

of Buffet. So that was a really

46:26

cool read, and I highly recommend it.

46:29

you have a a software that's gonna

46:32

be coming out that we should be looking out

46:34

for. So remind us again

46:36

what that is and

46:38

then also where people can learn more about you and what you going

46:40

on if they wanna follow what you're doing.

46:42

Sure. Yeah. The software that's

46:43

coming out on decision making is

46:46

called journaling. dot

46:48

com. And so you can go there now and sign up on the waitlist. And

46:50

we've been onboarding people kind of at

46:52

our own pace because we wanna make sure

46:55

that it's a good experience. And really, like, we're

46:57

learning from, you know, each little cohort

46:59

that comes through, you know, how do we do this better

47:01

for the next one? So we're not completely open

47:03

yet, but hopefully, we'll

47:06

be open and, like I said, in the next few months, say, by the end of the year.

47:08

Yeah. I tend to put

47:10

a a lot of public stuff on

47:12

Twitter just as an easy place to

47:14

kind of if we wanna keep

47:16

up what I'm doing, not all the time. Like, I

47:18

try not to spend so much time on there, but it is a

47:20

little bit addicting, to be honest. Mhmm.

47:22

So on Twitter,

47:24

I'm at farnum, FARNAM jake

47:26

one. So that's I don't know. That's where I do a fair amount

47:28

of kind of public dumping of

47:30

sometimes what I'm thinking. Sometimes

47:32

it's just pictures of

47:34

hikes. Sometimes it's research papers that

47:36

I like. Sometimes it's just promoting my

47:38

own stuff. That's Twitter. Yeah. And then the

47:40

book is Rebel Allocator available

47:42

on Amazon and physical

47:44

ebook and got a I had

47:46

a voice actor record the audio version.

47:48

I thought he just did such a great job with it.

47:50

I was very so happy with how that turned out. And

47:52

luckily for all of you, I didn't do it, and

47:54

you didn't have to have my, like, nasally thrown

47:57

pretending key characters.

47:59

So was definitely a big win for

48:01

the audience. He did he did email

48:04

characters very well. Yeah. Yeah. He was

48:06

so good. Like, he had all he

48:08

had the range to get all the different characters in there.

48:11

And I thought he did such a good job.

48:13

Yeah. He did do a great job, but he had great

48:15

material to work with too. So it

48:17

is a great book. I listened to it on a long drive

48:19

back and it actually made me cry. So it was

48:21

very touching and it was very informative and

48:23

I I literally couldn't stop listening to

48:25

it. So you have checked it out, I highly recommend it.

48:27

For whatever level you are, it's it's

48:29

a fantastic book. It's very educational and

48:32

it's very emotional. So for me was.

48:34

So I enjoyed it, touched me.

48:36

So Jake, we really appreciate you taking

48:38

the time out to to come talk to us today. This

48:40

was awesome. There was so much great stuff. You

48:42

weighed on us, and I'm gonna be thinking a lot after we get off of

48:44

the year, so appreciate you doing that. And even though we

48:46

didn't get to share any veggies, we didn't get to talk about

48:49

some of your favorite stuff. So that

48:52

was cool. So, again, everyone check out everything that Jake's doing, the Valley

48:54

After Hours podcast. If you've not listened to

48:56

it, it's a lot of fun. The three of them have a great

48:58

time talking to

49:00

each other. and it really shines through. So it's it's one of my favorite podcasts.

49:02

So let's do it every week. So what I do further

49:04

do, I'll go ahead and sign us off. You guys go out there and

49:06

invest with a margin

49:08

of safety. refuse to sign the safety. Have a great week, and we'll talk to you all next

49:10

week. We hope you enjoyed this

49:12

content. Seven steps to

49:13

understanding the stock market shows

49:16

you press isolating how to

49:18

break down the numbers in an

49:20

engaging and readable way

49:22

with real life examples.

49:25

Get access today. at stockmarket

49:27

pdf dot com. Until next

49:30

time. Have

49:31

a prosperous day. The

49:36

information contained is for general information and educational purposes only.

49:39

It is not intended for a

49:41

substitute for legal, commercial,

49:44

and or financial advice from a licensed review

49:46

our full disclaimer at e investing

49:48

for beginners dot com.

49:52

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