Ray Dalio: This is the Holy Grail of Investing

Speaker 0:00 You wanna be successful? Here's the mantra for investing.

Shaan Puri 0:03 I got my pen.

Speaker 0:03 The most fundamental question is how do I have the upside without having the downside? That approach was the basis of Bridgewater going from having to borrow $4,000 from my dad to the largest hedge fund, the most successful hedge fund in the world. I created personality tests. I gave it to Elon Musk, I gave it to Bill Gates, I gave it to Reed Hastings. Maybe I should probably not tell stories, but, um-

Shaan Puri 0:27 No, no, no, that's what we do here.

Sam Parr 0:29 You don't have to make it to the top to be happy.

Speaker 0:30 Well, what's the top? There's no correlation between the level of happiness in your life and the amount of money that you make, so you have to have a purpose. What do you wanna do with the money that is so important? You better answer that question. [upbeat music]

Sam Parr 0:49 You were, in some regard, a little bit of a late bloomer in terms of, like, traditional metrics of success.

Speaker 0:54 Oh, yeah.

Sam Parr 0:55 I think you were 34, 35. You had, like, two kids, I think. You had just laid off the five employees that you had had, and you're like, "Look, Dad, I've lost it all." Can you, like, close your eyes and, like, remember that conversation?

Speaker 1:09 So I started Bridgewater in 1975, and in 1981 and '82, interest rates were not the, uh, emerging countries had a lot of debt, and I calculated that those countries were not gonna be able to pay their debts and, and they were gonna have a big debt crisis. And that was a very controversial point of view. And then Mexico defaulted in August of 1982. So I was asked to testify to Congress about what this is all about and, and how, what might happen to the economy. I thought it, the economy was gonna be a disaster. I couldn't have been more wrong, okay? So I lost money for me, I lost money for my clients, and I had to lay off everybody. I was so broke, I had to borrow $4,000 from my dad. So then my choice was, am I going to, you know, put on a suit and tie, go in, commute, and work for somebody in that capacity? And I knew that I wasn't very good at working for people. Now, that was painful. That changed everything in my life. That created the bottom at Bridgewater, and then it just kept going up because of what I learned. I learned two things. First of all, I l- I learned humility to balance my audacity, okay? [laughs] I didn't have much humility. I'd say, "I'm right, I'm gonna be right," and all that. And then I learned how to d- diversify my bets and substantially reduce my risk without reducing my returns. Because I didn't wanna have, reduce the upside. I, I knew that I [laughs] had to reduce the downside. And so, um, I really learned and taught myself really my mantra. Okay, here's the mantra for investing. You wanna be successful? Th- this will, um, this is the, uh, holy grail of investing. Find 15 good uncorrelated return streams.

Sam Parr 3:07 Wh- how did you come up with 15?

Speaker 3:09 Well, I just looked at the math of it, okay? So in other words, what are the marginal benefits of diversification given the different levels of correlation? And I, I have that on a chart that keeps reminding me, okay, if you can get up to 15, you can get down to about, reduce about 80% of your risk without reducing your return. That means that you increase your return to risk ratio by something like a factor of five, okay? In other words, wow. So that means you can get the upside without having the downside, okay? And then humility, you know? I wanted people to kick the shit out of whatever I thought, you know, to try to do that and then have that. And that change in that approach was the basis of Bridgewater going from, you know, be me- having to borrow $4,000 from my dad to the largest hedge fund, the most successful hedge fund in the world.

Shaan Puri 4:13 If we wanted to be better investors, what do you think the most common mistake smart guys can make when it comes to investing?

Speaker 4:20 They don't have a game plan. They-

Shaan Puri 4:22 So what's a good game plan look like? How do you know if you have a good game plan?

Speaker 4:25 Well, the way that I did it was, um, um, every time I would make a decision, th- this is the building of all principles I did, but particularly in the markets, every time I would be, make a decision, I would go back and study if I made that decision under these circumstances, how would it have worked in the past? And I would know the track record of that decision, and it, that would give me also greater understanding of how things work. And so then I would have a decision rule, and then I would program it into the market, uh, into the computer, and when this thing come along, then I'd started to realize, okay, now I've got criteria. So rather than just the one that I would see, I would say in the computer, "Dump in all of them, and where do they exist anywhere in the world? And what, what will... So give me, give me one good decision rule that wherever it happens in the wor- world that I have a track record of knowing how those work, and wherever it is in the world, you bring me that." And then make a collection of those kinds of things and make them uncorrelated so it provides your dis- your, uh, diversification. And so now you're executing a game plan. So, like, I have rules that it should be timeless and universal. Uh, 'cause if it didn't work in a long period in time, I would need to understand why it didn't work then and would work now. So that's how I would build, you know, that's how I, I did build, uh, game plans and execute the game plans.

Sam Parr 5:57 Did Bridgewater have any revenue coming in?

Speaker 5:59 Um, nothing.

Sam Parr 6:00 And so you're waking up in the morning and you're like, "I gotta figure this out."

Speaker 6:03 It was like, um, I'm on the edge of A jungle. I could go stay out of the jungle, and I can go to safety and have a safe life, employed, regular job, great, okay. Or I could go into the jungle and try to work across, get through the jungle that all the things that can kill me, and I made a choice of what I wanted in life. I mean, like, I have to have this great upside. I can't not do that. And also part of it was if I'm going in the jungle, I wanna go with people, um, who wanna go in the jungle with me, who see things differently than I do. So it's like going through this jungle with these, uh, animals or something that can kill you, but if you're in it together, then you are... You can sort of see the animals that'll kill you. And then I loved being in the jungle so much, I didn't wanna get out of the jungle even after I've achieved-

Sam Parr 7:07 You didn't wanna go to the zoo

Speaker 7:08 ... quite success.

Sam Parr 7:08 You'd rather be in the jungle than the zoo.

Speaker 7:10 Yeah, almost. Yeah.

Sam Parr 7:11 To, to play off that analogy, I think that, like, I think a lot of successful people, and I think you've even said this, where you're like, "As long as I could, like, do what I want during the day and what I love, then I'll be happy." But I have to imagine that when you're, like, 33 or 34 or something like that and you have young kids, and you are, like, you got a little bit of a tiger in you, you're like, "I wanna provide. I wanna win. I wanna be the best."

Speaker 7:30 No, it wasn't like that at all. For me, it was, like, two levels, just very simple. Uh, can I pay for the basics? Like, I don't need a big house. I don't need a big anything. My kids can go to a good public school. They have great public schools.

Sam Parr 7:44 But did you have, like, a number where you're like, "Man, if I can make 100 grand a year-"

Speaker 7:46 I, I counted... What I started to do was I started to count how many months, and then, and, and then years of living that way could I afford if it shut down.

Sam Parr 8:00 But you said two levels. That was level one.

Speaker 8:02 It's freedom money. Basically [beep] you money.

Sam Parr 8:06 What was that number for you?

Speaker 8:07 Um, I don't remember what the number was, but it, you know, it wasn't, it wasn't mu- it was an easy-to-achieve number.

Sam Parr 8:13 Like a million dollars?

Speaker 8:14 About... Oh, no.

Sam Parr 8:16 Less.

Speaker 8:17 Oh, much less at that time.

Sam Parr 8:19 Was there ever a grand vision? Where... Or was it always like, "Well, what's the next level? Let's see if we can do that"?

Speaker 8:23 No, no. No, no, no. It was I could imagine great

Speaker 8:28 things. I'll tell you a personality test. Um, when I decided that I wanted to pass, uh, leadership of Bridgewater along to others, that I wanna be investor, let them run the business, and I wanna, uh, do that 'cause I'm hooked on the markets. I created personality tests. I started with Myers-Briggs, and then I went to d- various kinds of personality tests. And I then gave the personality tests to people like Elon Musk. I gave it to Bi- Bill Gates. I gave it to Reed Hastings. I gave it to Muhammad Yunus. I gave it to other people to see the elements of what they are, are like. I put it online for free. I created it-

Sam Parr 9:11 We took it, we took it, like, last night

Speaker 9:12 Okay, you took it. Okay. Well, there's a type of, there's a type of person that represents, um, a very small percentage of the population, and Elon Musk is it, and Bill Gates and, and, um, Reed, n- number of these people, uh, this, that I would call a shaper. And they are people who love to go from visualization to actualization and to be on that mission, and so on. And that's my personality type. I have a certain t- personality type. And they have to do certain things. And I'm, uh, remember, um, Elon, um, and he's that personality type. Okay, making money is not a big deal for him. I should probably not tell stories, but, um-

Sam Parr 9:53 No, no, no. That's what we do here. We tell stories. We can al- take it out later

Speaker 9:57 But the, the excitement, you know, the compulsive thrill of climbing that and, and aspiring to that was my personality type. And he doesn't need to... He doesn't need a house. He doesn't need security. He doesn't need anything. I mean, he didn't even need my level of needing.

Sam Parr 10:18 It sounded like you had a story of him where that's an example of-

Speaker 10:21 Well, yeah. [upbeat music]

Sam Parr 10:24 Hey, everyone, pausing really quick because I know that you are probably scrambling to write down all the stuff that Ray's talking about. Well, the good news is that we did it for you. So we made a guide. The link is in the description on YouTube, and this guide breaks down the five frameworks behind one of the greatest investing track records of all time, so you can actually use them and also spend time listening versus taking all the notes that you're probably taking right now. So you can get it for free right now. You can click the link below in the description, or you can scan the QR code right here. All right, back to the episode. [upbeat music]

Speaker 10:54 When he first started Tesla, he had made something like, um, $180 million from PayPal, and he decided that he was gonna take half of that money and he was gonna go to the Mo- um, to Mars. And he had no experience in terms of going to Mars. And so he had this vision. And, um, you know, and I said to him, um, "I suggest that you put aside a little bit of money, take a piece of that, and just so that way y- you know, things don't work out, you've got that." "No, I don't. No need to do that." And he had that, um, strong compulsive need. But there is... I think everybody has a certain nature. Okay, whether you're born, in your environment, you have a nature, and it- that's why I created these personality tests. For any of your listeners, Principles You is what it is. It's, it's free. It's online. Take it. You'll understand more about your nature, and there's a feature in there where you can ha- have somebody else that you have a relationship with take it, and then they'll tell you about the relationship.

Sam Parr 11:58 So we took it last night-

Speaker 11:59 Okay

Sam Parr 11:59 ... uh, based on, on your, after we talked the other day.

Shaan Puri 12:02 So Sam tells me, he's like, "I'm a shaper." And you had told me you're a shaper, Elon. And so I was like, I was like, "Wow, okay, I hope I get shaper." [laughs]

Speaker 12:10 [laughs]

Shaan Puri 12:10 I think I wanna be in that club. So I'm taking it, I'm answering as honestly as I can.

Speaker 12:14 Is degenerate an option?

Shaan Puri 12:15 [laughs]

Speaker 12:16 Did you get degenerate?

Shaan Puri 12:17 Happy but sort of foolish.

Speaker 12:19 Yeah. [laughs] Yeah.

Shaan Puri 12:20 With a new, new type.

Speaker 12:21 You have moron, is that one? [laughs]

Shaan Puri 12:22 So, so, so I got explorer, and I was like, that was not what I expected at all. Um-

Speaker 12:28 Did it characterize you?

Shaan Puri 12:29 Yeah, I mean, it called, it, it very much called like, I'm driven very much by curiosity, seeking info- seeking new, new knowledge, new experiences, learning, getting-- being very, like, objective and truthful about what I'm experiencing and almost taking pleasure even when you have a bad result because it means you got to learn. And so there was... And which is so true for me. I get the most fun doing that, so I guess it really was true. And I think why I may not have been a shaper, a lot of the questions would ask about part of the visualization to acquisition, and I, I think I do a, a lot of that. But I'm not very detail-oriented. I don't care about the details. I overlook details. I'm, I'm not a perfectionist. I don't care. Like, I'm, I'm mu- much less than Sam. Sam really wants everything to be great.

Speaker 13:11 Okay. And one of the elements of a shaper is, um... And by, um, by the way, that's where you're seeing your nature and you know what your satisfaction is-

Shaan Puri 13:20 Right

Speaker 13:20 ... and what you're likely to be most successful. It is that.

Shaan Puri 13:23 Yes.

Speaker 13:24 What the issue of a, um, a, a, a shaper is, um, they g- wanna go from visualization to actualization, and then they go from, like, this very big picture down to i- what are those details. So I remember E-Elon gave me the key to his car and, and it, you know, had a little button, and he showed the screen, and he got into the details a lot. And we're talking about how he wants to put a r- uh, a watering can with a plant on a rocket to send it to Mars to say, "First life on Mars," to inspire things and so on. So you-

Shaan Puri 14:02 So the 10,000-foot level-

Speaker 14:04 Like-

Shaan Puri 14:04 ... and the 10-centimeter level.

Speaker 14:05 Right. That, that liking and then taking that and going.

Shaan Puri 14:09 Right.

Speaker 14:09 Okay? Um, so yeah, the-- we all have our pers- And so the success in life, the joy really, is knowing your nature and finding the right path for your nature. 'Cause you can't fight against your nature,

Speaker 14:22 right? So look, Ray, we've only known each other for 30 minutes, but I'm gonna, I'm gonna show you something that might, might gross you out. But when I was young and drunk, I gave myself a tattoo.

Shaan Puri 14:31 [laughs]

Speaker 14:31 And the tattoo that I gave myself is on my feet, and it says, "Act now."

Shaan Puri 14:37 Oh, good. [laughs]

Speaker 14:38 [laughs]

Shaan Puri 14:40 So tell me, you, you were at the tattoo parlor?

Speaker 14:43 Have you ever heard of the phrase stick and poke?

Shaan Puri 14:44 No.

Speaker 14:45 Okay, so basically, if you're in jail, this is kinda like where it comes out of, but like a lotta, like, punk rock people do it. You get a sewing needle, and you, uh, dip it in ink, and then you just make lots of little dots on your skin, and that's a tattoo. And so when I was like-- I was actually maybe-- I pr- sometimes I say 19. In reality, I was probably 22. I just don't wanna be that mature when I say I did it. Uh, I was, like, angry that I wasn't moving fast enough in life, and I was like, "I'm so, I'm so," you know, angsty. And at the time, I was, uh, I partied a lot, and so I was drunk. And I was like, "I'm gonna tattoo act now on my feet, so when I wake up, that's the first thing that I see, is I gotta take action."

Shaan Puri 15:21 And has that worked for you?

Speaker 15:22 Yeah. I t- I tend to need to tone it down, uh, where I'm like I, y- I need to think and plan 'cause I, you know, I've had a little bit of success in my career, and I think occasionally you need to, like, be a little more strategic. But yeah, I'm usually like a bull in a china shop.

Shaan Puri 15:33 And the thing about it is that you have to find the people who are different from you, who complement you. Well, like, on my, on the leadership test, you don't just say the personality that you are. It's also where you're very weak. So it was like, on mine, it was, like, connecting, supporting, kind of the, a lot of the, like, social side. So my business partner, Ben, who's the guy who emailed 77 times to you and your team to get you to be on this podcast, he's for, I think for four years, has been emailing trying to make this happen because he's an amazing connector. He's an amazing supporter. He wanted this moment to happen even though he's not at the table. And to him, that's a win. To him, connecting is the win. And so he's my, he's been my business partner. We've had this unbelievable success as a partnership even though we couldn't be more, more different, you know, if we tried.

Speaker 16:18 So this, let's s- pause and, and reflect on that very important point, uh, uh, for success, that people who think differently from you, who you ordinarily can get annoyed at, are your paths to success, that if you can understand that. It was very interesting when I did this in Bridgewater. I did the personality test and, uh, and then they start saying, "Oh, you're a ESTP, and I'm a..." whatever it is. And then they started to understand, and they understood how they would work together rather than get annoyed by the other person. Yeah, that, that was big deal, you know? And so success comes from that. Success comes from failure, right? And learning from it, okay? And success comes from working together, I would say meaningful work and meaningful relationships. If you're on a mission to do something great, okay, go to Mars or whatever it is that you're gonna go do together, and you have meaningful relationships, and you have radical transparency, and you know your nature, and you know how to work with others, that's the formula for success, right? Yeah. Uh, another example is Dr. Da- Dalio is when-

Shaan Puri 17:32 [laughs]

Speaker 17:32 ... when Shaan came in, the notes were already printed off. There you go. [laughs]

Shaan Puri 17:36 I- I'm late. I don't have it printed. But you know, so we have a very different dynamic. But for six years we've built one of the biggest business podcasts in the world despite being completely different in our nature.

Speaker 17:46 And so I hope your audience hears this, right?

Shaan Puri 17:50 Yeah.

Speaker 17:50 It's pause and reflect. Like, 'cause okay, what are we here for? We're here for pretty much the same reason, just a little bit different settings. I'm 76. I wanna pass along whatever I have to help people in that way, right? That's my goal, okay? Your goal also is to-- uh, you're obviously not only your goal, but your effectiveness in being able to help people, otherwise I wouldn't be listening. Okay, so I just wanted to pause on that formula, okay? That f- once you get that formula Pain plus reflection equals progress, and how do you work together and all that? Wow. And follow your nature

Shaan Puri 18:25 Can you, can you guide us on the reflection part? Because I think everybody understands the word, but I bet we don't really talk a lot about how each individual person does it. And so are you-- is writing your reflection? Do you talk to-- do you have two or three people you call who tend to give you high signal, like feedback or advice? Like what is your process to actually do the reflection? Pain part comes involuntarily. That, that hits you

Speaker 18:46 When the pain comes, um, eventually the pain will go away, but you can skip the-- people can skip the reflection, and they can be hung up in their pain. So you first have to make this transition. Now, meditation has helped me a lot. I d- I've done meditation, transcendental meditation since nineteen sixty-nine.

Shaan Puri 19:06 Explain what that even is. I've, I've only heard you and Jerry Seinfeld swear by transcendental meditation. What is it?

Speaker 19:12 Oh, I, I-- Transcendental meditation is a very simple exercise of, um, you sit there calmly, and you repeat a sound that is a word that is called a mantra that doesn't have any meaning. And so, um, let me-- An example might be om. Okay, so you're sitting there, and you repeat om in your head. And when you re-do that, you can't have thoughts because when your thoughts are in om, your thoughts are in om, and the other thoughts can't come in. And then eventually, when you get this habit down, then the om goes away, and you go into pretty much a subconscious state. You know, very relaxing, very, uh, calm. And so it's a real calming exercise. And it brings you into your subconscious mind. Okay, your subconscious mind is really controlling you a lot, almost, right? There's a conscious mind, a logical conscious mind that you hope is logical and you're aware of. And then subconscious means below your awareness. There are all the things in your mind that influence you, your emotions, your subliminal stuff. And it goes into that subliminal stuff, and it calms you down. And it's also where creativity comes from. It's like if you take a hot shower and these ideas come to you, but you try to muscle ideas, you can't make the mu- you can't make them come. But that hot shower, that relaxation and so on, I found that very helpful. You know, I know I've, I've developed a, a, an instinct. Habit is a very, uh, important tool, like if you know how to develop the right habit. So the habit means that you have an instinctual positive reaction to something. So I have a, uh, a reaction which is, okay, that is, that, that's a lesson in reality. In other words, pain. Okay, so it's now like a puzzle for me. Okay, the puzzle is how does reality work? It'll tell me something about how reality works, and I have to deal with reality to make it successful. And so what is my principle for dealing with my, that reality to deal with it in the best possible way? Okay, that's my now instinct. So now when you've got that instinct, it's a whole different thing, right? Because you, you start to say, okay, there's pain, and you have your curiosity. Okay, now you take your curiosity, and you say, "What does that tell me about how reality works and how I should deal with reality?" Okay? And if you solve that puzzle, then you will get a gem, and that gem is a principle that you can carry with you to be better, right? And so if you start to recognize it as that, and then I do write.

Shaan Puri 22:09 So what's that-- what does that mean? Do you journal every morning, every night?

Speaker 22:11 No, no, no, no, no. I-- it's just when thoughts come to me or circumstances come to me and, or I'm also making decisions. I'm, I'm reflecting. And then what has happened to me is I found that, um, all those reflections are cause-effect relationships because principles are if this happens, what do you do, and that kind of thing. And then I put those in computer code. Okay, that's how I built Bridgewater. I built, okay, if this happens, you do that, okay, and you put it in computer code. And I made then this all computerized sy- decision-making systems for markets and almost, uh, everything. And because I've done this, you know, for thirty-five years or something on almost everything, I've got thousands of these principles that I've written down, and they are, you know, the ways of achieving success in whatever kind of decision. If, you know, if the Fed does this or if somebody you love dies or whatever it is, okay, how do you reflect on them? What does that mean? I would recommend-- I, I put out a journal that people can do so that they can journal their own principles and they have the reflections and so on. If they, if they start to think that way, pain plus reflection equals that, and you reflect well. Then

Speaker 23:30 what happens in the meditation is it connects your subliminal self to your conscious.

Shaan Puri 23:36 I'm, I'm on board with all that. I think that if I put myself in your shoes between the ages of like thirty-five to fifty-two, you went from like nothing to like the largest hedge fund in the world, which we-- I wanna hear all that. But when you're like thirty-four, thirty-five, thirty-six in the first three years of starting your business anew, y- I would have to think like most all small business owners, you're like, "I just gotta pay the bills."

Speaker 23:56 I could always find the way to pay the bills. The question is what was it? And I think, by the way, along those lines, that's where your priorities get tested. You know, you think about what do you really want and how do you weigh one thing against another thing. Okay. I mean, like, I want, I want survival and opportunity, and I wanna play the game, and I want... Okay. And I don't really care I, I don't care much about convention. I don't care about much about how I look y- to the outside world. I don't care about, uh, things that can inhibit maybe that choice. I think people also, uh, get stuck. Um, they get stuck 'cause they don't realize there are multiple possibilities. And so some people say to me, uh, you know, "But you don't understand. I'm in this job. I don't like the job. I think my boss is a jerk, and this isn't where I wanna go." Okay, and, and but they feel, "I have to be there." Okay. And the reality is, if you're clever and you figure it out and whatever and you try, there are many ways to have a really happy life. And, and by the way, n- a lot of money is not an important thing. Sometimes we get hung up on this like it's gotta be this conventional life which is, um, you know, okay, I've gotta do the, the... Okay, is that really what it is? Even experiment with it.

Sam Parr 25:22 Listen to this quote, Shaan, that, uh, he had. He said, "I cannot say that having an intense life filled with accomplishments is better than having a relaxed life with savoring, though I can say that being strong is better than being weak and that struggling gives one strength." Thought that was pretty cool.

Speaker 25:36 That's true.

Sam Parr 25:37 [laughs] Yeah, I guess like you don't have to make it to the top to be happy, and I think that's been like our biggest-

Speaker 25:43 Well, what's the top? You work your ass off to get a lot of money? Okay, just think about that. Is that it? What's the money for? Money doesn't have any intrinsic value, right? So you have to have a purpose. Why are you getting the money? What do you wanna do with the money that is so important? You better answer that question.

Sam Parr 26:04 Right.

Speaker 26:04 What is that gonna get you? Okay. Does that get you better friends? Okay. Does that get you better marriage, a better relationship with your kids?

Sam Parr 26:12 What is your definition of success?

Speaker 26:14 Success is you knowing your nature and then finding the best path through that nature so that you look back on that and you say, "Ah, that was the life I wanted to have."

Sam Parr 26:26 Do you think that you could answer that for yourself?

Shaan Puri 26:28 Uh, I tried to do it. I'll read what I wrote. So when I was 27 years old, I wrote... I tried to write this out 'cause I was like, I think I had actually read your principles PDF around the same time, and it made me start asking these questions 'cause one of your core principles like figure out what you want and then understand the rules of nature. Study cause and effect to understand what patterns of behavior and actions might lead to the thing you want. So here's what I wrote. You can, you can judge it. I said, "What I want out of life." I said, "I wanna have the ability to shape my own life. I wanna be my own biggest fan. I wanna make adversity part of the recipe. I wanna treat other people well, and I wanna reread this every year, every morning, so I never forget what each day is for. I wanna rewrite the list every year so I see myself evolving. I wanna focus on what matters. Number one, my loved ones, 'cause they love me even if I don't do anything on this list. Number two, my health, because without it I can't do anything on the list. Number three, my work, because it makes life fun. Number four, being somebody who lights up the room because it feels good to make others feel good. And number five, learning, because it's the master key that unlocks all doors." And I, I keep going a little bit. And then I say some of the things that I'm, I'm weak at. I said, "I wanna be somebody who doesn't just want things, who makes them happen. I need my execution to catch up with my ideas. I wanna be the most optimistic person you know, um, and I wanna win, not, but not just win, I wanna win on my terms, uh, because that's the most satisfac- uh, satisfying way to do it."

Speaker 27:41 Congratulations. That's fantastic.

Shaan Puri 27:43 And this is-

Speaker 27:44 Right? And then-

Shaan Puri 27:44 ... ten years ago

Speaker 27:45 ... and then you re- you reflect and you modify. Okay. And then, so now you know what you want.

Sam Parr 27:51 Do you change your goals every year or anything?

Speaker 27:53 No, I'm fine. It's like my nature. My nature really doesn't change. My phase of life changes, okay? So I'm at a different phase of life. Like right now I'm really feel compelled to, uh, uh, pass along everything that I have that, uh, is of value to other people, right? And so 'cause I'm late and I'm approaching my end. So, uh, that whole is, uh, my joy. We have different joys. We have different circumstances. In the middle part of our lives, there's work-life balance and your kids and your whatever. And so these le- arcs of life, there's an arc of life almost like a script. I mean, you know exactly, you know, at this age I graduate, and e- at each phase you know what it's like. And so you have that arc, but your nature doesn't change,

Speaker 28:41 I don't think.

Sam Parr 28:42 You, uh, I was listening to a podcast about you, and there was this funny story. I think this was when you were selling research. You said, uh, that you hired a guy, I forget his name, but I think he was a door-to-door Bible salesman.

Speaker 28:54 Yeah.

Sam Parr 28:54 And you're-

Speaker 28:55 Rob Freeze.

Sam Parr 28:55 Did he know anything about research or finances?

Speaker 28:58 Um, not much, but he was curious, and he was... Y- you know, like I say, there are three things. Um, there's skills, abilities, and values. And most people look at skills, and they look at the resume to determine what skills they have. In my opinion, it's the opposite order is what's the most important. First, values. What are the person's values like? Then what are their abilities? Because if you have abilities, you can change what your skills are. We're, we're in a world now that maybe programmers are no longer is going to be the most important people, and maybe, you know, all of a sudden you were growing up with, "Okay, man, you need to program because you're doing this," and then all of a sudden, man, that's a lousy job [laughs] because, you know, something comes along, right? So how do you adapt? What are you going after? And then the least imp- so the least important is the skills. And so in thinking about that, what's our relationship gonna be like? When do, b- how do we pursue a dream? Is he bright? Is he-- Uh, what is his abilities? What can we do? What-- How do you discover? I mean, most of, like your curiosity, most of everything is in the discovery, okay? It's not in the, you know, remember these rules and, and so on. The future is in the discovery. So, so that's what I'm, uh, you know, I'm looking for, right? I mean, that, that's what even talent identification is because talent is more important than money, okay? The, the money people are trying to find those people.

Shaan Puri 30:31 Right.

Speaker 30:31 Okay? So if you look at, okay, what did Elon Musk have? He didn't have money. And how did people make money? They invested in Elon Musk.

Shaan Puri 30:38 Right. [laughs]

Speaker 30:38 They found him, and they invested in Elon Musk.

Shaan Puri 30:41 Human capital versus financial capital, right?

Speaker 30:43 That's right.

Shaan Puri 30:43 Let's talk about you when you were younger. Uh, what would people have seen in the talent identification at that phase?

Speaker 30:48 I think it would've been tough. I was, um, you know, a C student. I didn't like, uh, high school education. I liked markets. I had a passion for markets. I got into, um, C.W. Post College, which is LIU, on probation, but I had a passion.

Shaan Puri 31:05 So t- tell the story, if you can, of how you got that passion, how you started. You said, "I love markets." I mean, most teenagers don't know they love markets.

Speaker 31:12 I used to do odd jobs as a kid, mow lawns, shovel driveways, and then caddy. And so I, uh, I would caddy. I, uh, would, uh, walk around. I g- got $6 a bag. And when I would get up to $50, then I would talk to people about, the, the people I'm caddying with, about the markets, 'cause everybody talked about the markets then. This was a time where if you got a haircut, your barber's talking about-

Shaan Puri 31:38 [laughs]

Speaker 31:38 ... what stocks to buy. So then, naturally, I, I took my caddying money and I put it in the markets. Um, and the, uh, first stock I bought was the only company I heard of that was selling for less than $5 a share. And I stupidly believed that if I bought more shares, I could make more money if it went up, okay? And so I, uh, I did. The company was about to go bankrupt. Another company acquired it. It tripled in price, and I said, "I like this game."

Shaan Puri 32:14 [laughs]

Speaker 32:14 You know? And I thought that this game must be probably an easy game because, like in the newspapers, the Wall Street Journal and the News, they had all these thousands of names of stocks, you know, on all of those things, and I just figure I have to pick one or two that go up. I mean, this big selection, I should be able to do that. And then I started in the game, and then I realized the game is not easy. I still know the game isn't easy, but then I got hooked on the game.

Shaan Puri 32:41 Did you have any peers at the time, or were you an oddity?

Speaker 32:43 No, I, there were no peer- k- kids who were doing that.

Shaan Puri 32:46 So books or where, where were you getting smarter? How did you start to-

Speaker 32:49 Um, I remember Fortune had the Fortune 500, and they had in the, when they had the Fortune 500, they would have, uh, little tear sheets, and you could say which annual report you would w- want. You would check it off and mail it in, and I checked off all of them. And then, uh, you know, [laughs] mailmer would lug these things to the house, and then I, and it became my little library, and I would talk, and then I'd fiddle around and, you know, that's how I did it.

Shaan Puri 33:16 Whenever I was reading Snowball, uh, Warren Buffett, and now I'm hearing you talk about it, I think, like, the lucky thing that, I don't know, luck, I don't know what it is, that you found something that you liked at such a young age.

Speaker 33:26 Th- for a lot of people I know that are like that, Bill Gates was like that, a lot of people l- like that. They'd found something. And then, uh, also, learning is different. Learning prior to puberty is different, or at around 12 or 13. The- it's like learn a language, learn something, learn a sport, and so on. When you learn it prior to that, it almost goes into your, you know, into you. Um, so yeah, that was part of it.

Shaan Puri 33:53 Were you a hustler? 'Cause, uh, you know, now we see you as this, this guy who's very wise, he's sharing all his knowledge, and, uh, when I studied Buffett, it was kind of the same. Buffett is this charming, wise, patient, uh, sort of guy. But if you read about him as a kid, he was at the horse tracks. He was studying betting. He was finding slips on the ground and cashing them in that others had overlooked. He was setting up pinball machines in barbershops and fishing golf balls out of the pond and reselling them.

Speaker 34:20 Oh, I did that.

Shaan Puri 34:20 He was a hustler. Were you a hustler as, as, of as well?

Speaker 34:23 Uh, no, uh, in the golf course that I had, I was at, uh, they would hit, uh, they would hit them into the, uh, pond, and I could walk around in the pond and-

Shaan Puri 34:32 Feel them? [laughs]

Speaker 34:32 ... feel them. Yeah, and then I would pick up the golf balls and sell them. Yeah. That's funny, I didn't know he did that.

Shaan Puri 34:38 S- Sam called you a late bloomer, and I find that term interesting. Uh, you don't know this about Sam, but he was, really wanted to be successful. He studied a bunch of successful people. He had a spreadsheet he shared with me. We met when he was, we were 24 years old maybe. He shared this thing of when did our heroes make it? And he showed that, like, he had a timeline for Bezos, for Jack Dorsey, for all of the kind of tech entrepreneurs that we were admiring. When did they start? How many years did it take for them to actually win? And he had mapped it all out-

Speaker 35:04 I broke it down into, uh-

Shaan Puri 35:05 ... interestingly

Speaker 35:06 ... their apprenticeship, so, like, to learn, and then starting their first hit.

Shaan Puri 35:11 And he reverse engineered it, almost hit it exactly. He's like, "By 30, I'm gonna have this many millions in the bank because,

Shaan Puri 35:16 and I know I'm-

Speaker 35:16 [laughs]

Shaan Puri 35:16 ... today I'm here, but I will be here," and that's, like, almost the median-

Speaker 35:19 But, uh, but, uh-

Shaan Puri 35:20 Uh-

Speaker 35:20 Okay, two things. First of all, uh, I think you should publish that, okay? Um, and I suspect it has a big range around it, okay? Like, I was thinking, uh, Ray Kroc, McDonald's. He was, like, 55-

Shaan Puri 35:34 50 something when he started McDonald's

Speaker 35:36 ... or something. Uh, okay. So it's a big range, but they s- certainly are driven.

Shaan Puri 35:40 Yeah, I basically, when I was younger, I met someone who's actually my partner now, and he was, uh, successful at a very young age, and he was probably 15 years older than me, and I was like, I didn't grow up with a lot of money, and I was like, "I, I wanna be free. I wanna fee- you know, I wanna, I wanna, I don't know. I wanna feel free." And I was like, "What's the number I need?" And he said, "$20 million." So I said, uh, "All right, that's the number. I have to make $20 million by the age of 30." And it was definitely m- I was money-oriented, and it worked. I, I got, I g- basically at 31. But it was so, I felt it was so easy to, like, have a goal and then, like, reverse engineer and back into it, 'cause then all I had to think was, like, step one, all right, step two, step three.

Speaker 36:19 Great, and, and that was smart because 20 million, right, will do it, okay, and do it, and you also thought, um- Being free

Shaan Puri 36:30 Yeah

Speaker 36:31 And then you can go for it. That was what I was trying to tell Elon, and he said, "No, I don't need it." Okay.

Shaan Puri 36:37 [laughs] Don't need the safety net. 'Cause if I'm s- if I'm listening to this, I'm hearing you say, like, "I just need a nice bed to sleep in. I want my freedom. I like to-- I want my kids to be going to a good public school," all of that. At the same time, you've made, like, twenty billion dollars, right? So this, so somebody listening can say, "Well, at some point, did he, did he just way overshoot his, [laughs] his, his needs?"

Speaker 36:54 I wasn't-

Shaan Puri 36:54 Or what happened?

Speaker 36:55 -shooting for that.

Shaan Puri 36:55 Yeah, it's, it's a byproduct of-

Speaker 36:56 I pl- I pl- I play the game that I love that pays well if you do play it well.

Shaan Puri 37:00 Right.

Sam Parr 37:01 I'm very passionate with personal finances, and particularly amongst the average Joe of, like, don't buy shit you don't need, which people don't tend to follow, um, or spend less than you make, which people don't tend to follow. Do you still do anything in your life that is a pretty frugal thing, uh-

Speaker 37:17 Oh, yeah. I, I, I instinctively can't waste. I'm reluctant to fly a private plane. Uh, I'm-- I don't like expensive watches. Um-

Sam Parr 37:29 I heard someone make a joke that most of your suits are from Banana Republic or something like that.

Speaker 37:34 It's something like that.

Sam Parr 37:35 [laughs]

Shaan Puri 37:36 Where, where do you spend well, right? So, like, spending is also a skill.

Speaker 37:39 I spend money on the things that I enjoy. I love boats. Uh, I have a house on the water. I don't have yacht, but I have a ocean exploration ship that I'm, I'm very excited about that I give to scientists, and I'll tag along. I cannot do a normal yacht, okay? But when I'm-- But when they're doing this ocean exploration... Jacques Cousteau had an effect on me. When I was, uh, growing up, uh, I watched, um, him dive and do exploration, and then my, my son, I have a son who, um, uh, well I took my sons diving, and they learned how to dive, and he then went to work at National Geographic as a filmmaker and so on. And then we have this common passion of ocean exploration. So to create a ship that's a laboratory that they do research and so on and so forth, that's a great joy. But I couldn't be... I'm-- Listen, I'm not against anybody doing any of these things. I just wanna be clear.

Sam Parr 38:37 Sure.

Speaker 38:37 It's not... Like, I think whatever brings you joy, it's okay. It's kind of like that, right? And we're uncomfortable. My members of my family, my wife would not be comfortable with much jewelry, y- you know, or anything that would be fancy jewelry or so-something. That's just hap- I mean, how we grew up. And, you know, I mean, uh, so, and the kids are the same thing, my kids who have grown up. And I would say whatever you enjoy, it's like if you enjoy the, you know, the threads and the beauty or the, uh, the watch and you really are enjoying it, that's fantastic.

Sam Parr 39:13 I know you're into the ocean. Do you believe in aliens? And have you, uh, do you have access and any cool, uh, insight into, uh, things like that?

Speaker 39:20 I have no knowledge of aliens-

Sam Parr 39:21 Oh, come on!

Speaker 39:22 And I have no, uh-

Shaan Puri 39:22 Not a believer. What do you believe?

Speaker 39:24 What do I believe? I have no beliefs that are just beliefs. So people, I've heard different people, uh, saying things and, and here's what I believe, uh, which is there's the enormity, you know, of our galaxy. There are something like a hundred billion solar systems, okay? And in the universe, there are something like a, a, a hundred billion galaxies. And so there are a lot of combinations out there. So, um, I would have to believe that the probabilities of, um, there being life in other forms and so on are great, okay, out there. However, I've also heard scientists say that there is, that that's much smaller than one would think about those things. But I haven't gotten into the subject. All I'm giving you is, you know, like, what I heard about those things.

Shaan Puri 40:24 [laughs]

Speaker 40:25 And, you know, like, it's not a subject that I've spent much time with.

Shaan Puri 40:28 Right. Yeah, I think you had a phrase like, uh, probability-weighted beliefs or something like that, right?

Speaker 40:33 Yeah.

Shaan Puri 40:33 It's like not all beliefs are, are [chuckles] obviously equal. Some you have high conviction in and some you have much lower based on your an, an analysis or an assessment.

Speaker 40:41 It's just my way, you know? And also markets teach you this way, right? What is the expected value? How to go have humility. Okay. If you have an opinion, what's the opinion worth?

Sam Parr 40:51 Hey, how much time-- Like, we've spent almost all of this time talking about, like, frameworks for thinking and, and, um, very little of it was about business or

Sam Parr 41:00 finances. How much time of your day do you spend thinking about some of this high-level stuff versus, like, actually picking or deciding, making a decision on a trade?

Speaker 41:10 They're connected to me, okay? I'm a global macro investor, okay? Which is, by the way, I think it's the best kind of investing because it brings you into, uh, okay, global, that's cool. You deal with the whole world. Macro, that means big stuff, important stuff, okay? And then how do you place your bets? And, and so it's connected to all of this stuff. You know, it's connected to, um, the, the politics and the geopolitics and all of that, and it's connected to history. I did a study, um, of last five hundred years of how things are working only because I learned in my life that if I haven't seen something before in my-- that didn't happen to me in my lifetime, I should see whether it happened before my lifetime and so on. And then when I did that, because there are these big cycles, uh, um, like there's, um, there are orders, right? We'll, we'll call. There's a monetary order. There is a political order, okay? Political and social order. There is a geopolitical order. In other words, systems of how they work, they all break down, okay? There's, uh, throughout history, you read history, but they happen like, you know, in these big sort of cycles, and they break down kind of for the same reasons all the time. They break down for the same reasons. So as a global macro investor, in a sense, I'm connected to that. So the book that I ended up writing, you know, which is A Changing World Order, I plot things, and so you see them on graphs, and you could see these things happening. Simple measures of financial health and how does that all work and what are the consequences when you see that. So yeah, I'm into that 'cause so it's connected. When you said, do I see the big stuff? Okay. Yeah, the big stuff matters a lot, right? But you see it in these... You, you realize that, um, a lot of people are looking at the news. The news lasts a minute, okay? Can you put the news in the context of what's happening? Watch what's happening. I mean, just let, let's take a look at those things. You wanna take a minute on that?

Shaan Puri 43:16 Yeah, yeah.

Speaker 43:16 Okay. Okay. So one of the things that I learned about is that there are five big forces that interact o- over a period of time to determine that. And that is the debt money economic force, okay? And there is a big debt cycle, okay? So it's... And it's a very simple thing. Um, if, uh, if you acquire more debt than you-- than you're earning over that, y- your debt service payments will squeeze out your spending. Uh, okay, s- uh, they grow, and that is like in your circulatory system, that's like plaque being built up in your circulatory system. And when that happens, and it becomes painful, you have a debt restructuring. And also one man's debts are another man's assets. So if you're producing a lot of debt, uh, let's say government's running a large budget deficit, that means it has to sell bonds. And then who are the buyers of the bonds? And how does that work? So it has a mechanical part of it. That's one of the forces. The other forces is wealth and values differences. So there's the political force, which has the wealth gaps, values gaps. As they become greater, that's a greater threat to democracy, that's a greater threat to... In other words, when you get to do you have irreconcilable differences, so you're not gonna compromise, and you're not going to even follow the system, that's a risk. Okay, that's a risk now. Okay, we have the first risk, we have the second risk.

Shaan Puri 44:50 Right.

Speaker 44:51 Okay.

Shaan Puri 44:51 Check, check.

Speaker 44:52 Okay. Third risk is, um, uh, the geopolitical risk. So there's orders, right? The way the order works is who's in control? What are the rules of the game for the world? And, um, so the way it works is you have a war, the winner of the war sets the rules, and that we call that's the order. Nineteen forty-five, we ended the war, America sets the rules, and so on, and we created what, uh, was a multilateral type of system, uh, you know, almost representative, the United Nations, the World Health Organization, the World Trade Organization. So all those world organizations are out the picture. We no longer have a multilateral world order. Okay, so how do you resolve differences? You fight, okay? You're going to have conflict. How, how do you get past the disagreement? There's no court you go to. You can't do it that... Okay. So now you have those three things, okay, that's ha- that's happening. Number four, um, a force always through nature, uh, is nature. Um, i- in particular, droughts, floods, and pandemics historically have killed more people than wars, and they are a big force a- as they come up. And number five, all through history, is man's inventiveness, particularly of new technologies. And that raises living standards. And so, so if you were to see life expectancy, um, always rises, uh, productivity, uh, per capita GDP by all measures, as we learn more, we have that. And so there's the interaction of those five forces. Those five forces, you can measure them, and you can measure their interactiveness, and that is what is now happening. So if you know those cause-effect relationships, I think they're connected.

Shaan Puri 46:35 I've read something that your family office, I don't know if this is right, you can correct the record. Your family office has like seventy percent or seventy-five percent in gold ETFs right now.

Speaker 46:42 No, no, no, no, no.

Shaan Puri 46:43 Is that wrong? The headline was wrong.

Speaker 46:44 Totally wrong. Totally wrong. I believe that from an investor's point of view, that they should, um, depends what their portfolio is constructed in. They should have between, uh, five and fifteen percent of a portfolio on getting that fifteen uncorrelated-

Shaan Puri 47:00 Right

Speaker 47:00 ... difference. Uh, that's-- they should have something like that, and they should have it overweighted if they're tactically doing it. Tactically means, let's say there's a certain time to own it and a certain time not to own it. Certain time to own it is, um, particularly when there's a debt crisis and the government is flooding with money. Uh, that's, that's an ideal time to own it. So there's a timing question. So I believe that one should strate- create a strategic asset allocation mix, meaning what is my best balanced portfolio if I have no opinions? What is-- It's not gonna be cash, because cash always is the worst performing over a period of time. People think it's the safest. It's the surest to do poorly over the longest period of time. So you-

Shaan Puri 47:44 High certainty, low performance. [chuckles]

Speaker 47:46 So what you want to have, the best thing to do is have a well-balanced portfolio of assets because you can lower their risk as by through the diversification, because if you have one, it goes like this, but if you have another that does the opposite with it, you can have that. So there's a strategic asset allocation mix, and then you make your tactical bets relative to that a- and so on. But here's what I would describe, the mechanics, let's say. Uh, there is such a thing as bubbles. Water is a bubble. A bubble is not whether the stock will pay off in the long run, because in bubbles, even the most successful companies go down eighty percent or something along those lines. So, uh, typically, when there's, uh, borrowing of money or whatever, and there's an increase in wealth relative to money. Okay. Wealth and money are two different things. Okay? Wealth is, um, you can make up wealth. If, if you have a fifty billion, a fifty million dollar offering on a billion dollar valuation-

Shaan Puri 48:48 Mm-hmm

Speaker 48:49 ... um, then all of a sudden, you're te- y- you're called a billionaire, and it, it was fifty million dollars, but... And, and then no-- the world has a billion dollars in wealth. But what happens is as wealth builds up- You can't spend wealth. You have to sell wealth in order to get money because you on- can only spend money. And so when wealth builds up a lot, and then there comes the need for money. Now, what creates the need for money? The need for money often is, uh, that they borrowed the money to buy the wealth, uh, to invest in the wealth, or and then maybe interest rates go up, and then all of a sudden they have to pay their debt back. And so where do they get that money from? They sell the wealth in order to get the money. And there's, so there's this dynamic that's taking place. And then it has another number of ingredients like it's all the rage to buy it, and everybody buys it. Everybody buys maybe more than they sh- should because they don't diversify or, uh, and what happens is i- it's all the rage, and so is it logical? And there are these elements that create a bubble. Okay. There are right now, um, on that scale, I have a bubble gauge. I measure, measure all these things, and I have this bubble gauge going back across countries to about 1900, and so I can see where they are. And these, by the way, typically take place, uh, quite often when there's great new technologies.

Shaan Puri 50:18 A reason to be exuberant.

Speaker 50:20 The reason to be exuberant and, and to bet, and, and people confuse, um, investing in-- They, they say, "I believe that technology is gonna be great and revolutionary," and it is, okay? But that doesn't mean the stock will be great. O- there's a lot of reasons that the stock could be too high, and competitors come i-in, and they, you know, uh, there's a Google, and there's a Yahoo.

Shaan Puri 50:43 So, so what's the bubble gauge saying right now?

Speaker 50:45 So the bubble gauge is saying it's about seventy-five percent toward where it was both in 2000 and 1929. So it's pretty high up there, okay? In Japan, in its bubble in 1990, it got higher even than, than those cases. So it's high, but people pay too much attention. Let's say if I just do the, the bubble gauge, I could tell you probably with good probability, um, that it won't be good to, um, for the next, uh, I couldn't tell you whether it's gonna be three years or ten years, but it won't be a good investment. Um, but it won't tell you timing. Timing, you need the pricking the bubble. Okay, so what causes it to prick the bubble? So if you've got a bubble and then you see, okay, here are the things that prick the bubble, then you've got a good combination of things to do your market timing because the timing is gonna be on the pricking of the bubble. The pricking the bubble typically is the creating the need for the cash, for the, for converting that wealth into cash for one reason or another. Quite often, it's the most typical thing is tightening monetary policy, okay? So what you have typically is that when stocks go up and bonds go down, then what you have is, uh, the future expected return of equities becomes low relative to interest rates. And when interest rates go up, let's say a tightening of monetary policy, you, you know, that's, that's a classic dynamic. Other things like wealth taxes could do it. So in other words, for example, if you say you're gonna have to pay wealth tax, then whoever has the wealth is gonna-

Shaan Puri 52:25 Has to convert to money [laughs]

Speaker 52:26 ... sell some of the, sell some of the wealth to get the money in order to be able to pay. So looking out for those things in terms of the timing is my machine. Take with that for whatever it's worth. I don't want people to trade on th-this and so on, but I'm just trying to answer the question that there are mechanics, okay? Everything that happens ha- uh, has causes that make it happen. And if so you understand the mechanics of the cause effect relationships, you can see all this and understand

Speaker 52:55 it that way.

Shaan Puri 52:56 Is Bridgewater the biggest hedge fund because you were the, you had the best performance? Is it the biggest because you were the best at marketing? Is it the big-- Why did it become the biggest?

Speaker 53:06 It, it became the biggest hedge fund because we the most consistently made, uh, excellent returns, uh, with, uh, minimal risk, and we were uncorrelated with the stock market or any other market. That, that was the main thing. It made, I think, eleven point eight percent a year for, uh, for something like thirty-one years when I did it. The worst, uh, down in a year was two thousand 'cause, uh, of the COVID, and we didn't know how to de-deal with the COVID well. That was down to about thirteen. The next two times was down like two percent, okay? And that was not correlated with anything. You know, the losses, you lose fifty percent-

Shaan Puri 53:51 Gotta make back a hundred [laughs]

Speaker 53:51 ... you have to have a hundred percent to make m-money. And so the compounded effect of that, and it was comfortable, so that's, that's, that's why.

Shaan Puri 53:59 Out of the thirty years, how many did you lose?

Speaker 54:01 I think it was like three. Thr-three.

Shaan Puri 54:04 Lowest was whatever you said, thirteen percent.

Speaker 54:06 I, I mean, uh, three, four, whatever, but not, not significant.

Shaan Puri 54:09 But it does help your, your, your, your media, your work, your, I mean, you're, you're charming, you're a good leader, like, and you've been doing it since you were in your thirties of like-

Speaker 54:17 But I became the lo-- Bridgewater became the largest hedge fund before a-anybody knew me, and it was the opposite reaction. Like, I was trying to be below the radar, and then two things happened. Uh, we became the largest hedge fund in the world, and at the same time, uh, we have this culture, okay? And the culture, uh, was perceived as a cult. And then I put online the principles just so we, we have a book of how we're gonna be with each other, the principles, and then that got around. Three million copies were-- It was downloaded three million times. People passed it around. Otherwise, it was gonna be a problem, uh, like hiring people and someone that wouldn't understand the culture, which is the culture is an idea meritocracy in which we, uh, radical truthfulness and radical transparency. But anyway, so, um, in answer to your question, it was not my charm had [laughs] anything to do with this. I could explain the process And people can, they can understand what was our process. And I could show how it was back-tested and it worked through all of those periods of time, and that it was logical. And then there were results. And we helped people learn meaningful work and meaningful relationships. So I would have re- we would have relationships with them, and we would teach them, and they would learn, and they became better investors.

Shaan Puri 55:40 I was walking around New York, because I, this is my first time here in like 10 years, and I went to the Rockefeller Center and there's this like kind of this giant stone and it's John D. Re- Rockefeller Jr. And he's just writing these things. "I believe in the sacredness of a promise that a man's word should be as good as his bond." And he just has each... It's, uh, there's like just 10 of these principles etched in stone sitting outside the building. You know, it's like, "I believe that love is the greatest thing in the world and that love alone can and will overcome hate."

Speaker 56:09 Right. And we are missing these now more than ever, right? The idea of what are these principles? What are the principles that bind us together? Okay, what are the principles that we follow, really? What is most important? People are not... Y- you know, everybody should write down their principles and then be judged on how they're living by those principles. And are they together?

Shaan Puri 56:38 Well, this is the best part of your book. It's you write the principles. You're not saying these are your principles for everybody. You're like, "These are my principles." If, if you take away anything, it should be that you should have... Figure out what yours are.

Speaker 56:48 That's right.

Shaan Puri 56:49 And you're, most people don't know what theirs are. Even fewer will ever write them down, and then the fewest will be those who act in alignment, who walk their talk.

Speaker 56:57 But to get there, you have to write it down. You have to look at it. You have to have the shit kicked out of it. You have to, you know, and you say, "Yes, that's right." Those that are clear, etched in stone, that bring us to a higher level of how we should be or so, we are short of those, just like we're short of heroes, okay? Role models that you say, "Ah, that was a great man," or, "And that's a way to be."

Sam Parr 57:27 Who was yours growing up, and maybe do you have a hero now?

Speaker 57:29 Like one of them was Paul Volcker, okay?

Sam Parr 57:33 Who was Paul Volcker?

Speaker 57:33 Uh, Lee Kuan Yew started Singapore and, and, and ran that. But no, there were many, many people who will sacrifice for, for the things. I believe that, uh, we, we talk about love, we, uh, karma. Uh, okay, or what I mean is you go across the world and you look at all religions, and there's, um, something common. Ev- everybody can have differences in their superstitions, their beliefs and so on, but there's a commonality which is do unto others as you would have them do unto you, or karma, what goes around comes around. And it is a reality that the whole is much better than the individual parts, because a little bit of consideration and help for others can make such a world of difference. And if you do that both ways, you have a much better world, right? And then people who do that are r- role models to me as I, as you look at that, okay? As distinct from selfishness and fight, in, in other words, and what... I mean, that is mutually destructive. And, and you see that. So I, I think it's a question for humanity now, can we rise above ourselves for dealing with, you know, what will certainly be better for everybody if we can get along? Uh, I bet... I don't mean that idealistically. This is practical, right? Because it doesn't cost me a lot to help you. It doesn't cost you a lot to help me. And, but it, but it can make a world of difference. When you have that, it's a practical thing. And, and then that, what is heroism? Contributed to that. I think that's literally what it is. And, and we're now operating a lot the opposite way, I

Speaker 59:26 think.

Shaan Puri 59:27 You know, we've been doing this podcast for, for a little while here, and we've been talking about lots of different angles, some about investing, some about life and principles and entrepreneurship. Um, I'm curious, like if somebody was listening to this and there's one thing that they were gonna remember, what would be the thing that you hope people remember or take away? What's like, what's the, what's the one big one?

Speaker 59:47 Know what you want and understand that it's a, it's a journey of having your nature and then running into your mistakes and learning from those mistakes to get what you want. And then I would say it's all about meaningful work and meaningful relationships. If you have work that you love and you've got relationships that you love, you're probably gonna have a great life.

Sam Parr 1:00:13 Well, thanks for doing this, man.

Shaan Puri 1:00:14 Yeah, we appreciate it. This was fun for us. I hope it was fun for you.

Speaker 1:00:17 It was fun, yeah. [outro music]