The Exchanges

Q So what would you say to somebody that was young, Stuck in their job. Doesn't think that they could make it. What would you tell that person?

A One of the things to keep in mind is there are a 168 hours in a week. Your employer wants 40 hours. There's still another 128 hours left. And so even when you take out time for eating and sleeping and showering and everything else, you have at least another 40, 50 hours that you could do something else. And so I think it's very important to live close to where you work so you don't spend a lot of time commuting, and you effectively have enough time for a second venture or second job, and because someone else is already paying your rent and groceries and everything, you don't need the second venture to feed you, and we are now in a knowledge economy. So a lot of things that people will want to do does not need capital. It just needs what's between your ears. It just needs you to be creative, to think about what could be, should be, can be, etc. So, you come up with an idea. You have the time. 40, 50 hours. You keep your job. You do not quit your job. You try your idea. Let's say it doesn't work. No problem. You go back to square one. Think of another idea.

AI assessment note: “You keep your job. You do not quit your job. You try your idea.”

Q But was that only after that replaced your salary?

A Yes. After nine months of banging at doors and doing things, I had three clients, and those three clients were giving me enough cash flow that it exceeded my salary. And that's when I quit. So effectively, it was risk-free because I never went to a situation where I was without cash flow, without a paycheck or any of that. And then very quickly after that, It doubled the salary. I was making two or three times what I was making and it just kept going and I, the business was growing so fast that I kept reinvesting and, and all of that. Uh, so that company, I emptied out my . I was 25. I had about 30,000 in my. I took that to zero because I said, if it, if it fails, I can go back and start over. Not a problem. And I took every credit card I could get. So I had 70,000 in unused credit card credit limits available. And as the company started growing, I used every single one of those. In fact, they were all maxed. Because the company was growing so fast that by the time I got paid from clients, you know, I had to cover that. And then about two years after I started, I met a banker who converted all of that into a line of credit, paid off all my credit cards, and I said, hallelujah.

AI assessment note: “Yes. After nine months... those three clients were giving me enough cash flow”

Q What is your mental model that you like the best for deciding the next bet you're gonna take? If you only get 10, you must have very clear models for determining when you want to add on a risk.

A Yeah. So what we are looking for is total no brainers. So let's say I own a home in Austin. Okay. And let's say I bought the home for two million dollars. Okay. And I go to my realtor after one month of buying the home and say, Hey, uh, what's my home worth? They said, Oh Vonish, it's still worth two million. Okay. And let's say I go back After another month. And the guy would say, yeah, still worth two million. And then maybe after a few months he'd say, oh, you know, it's 2,050,000. Ok, so if you just kept writing down what that house is worth and what a buyer would pay for it, you're going to see very little change over time. If I look at all the stocks in the New York Stock Exchange and I throw a dart at any one of them, let's say IBM or Amazon or whatever, and I just look at the 52 week range on their prices, it will be 100 to 200. Or 80 to one 50. It's a wide range. Your house is not going to go from one and a half million to two and a half million or one to two million. It doesn't do that. So auction driven markets accentuate price movements much more than you would if you were not auction driven. And because they accentuate price movements, sometimes you get extreme mispricing in both directions. You get extreme overvaluation and you get some extreme undervaluation. So what I'm looking for is anomalies. I'm looking for weird things that make no sense. And because we hav…

AI assessment note: “So what I'm looking for is anomalies. I'm looking for weird things”

Q our exact private equity playbook to scale revenue and profits. This is not for people who do not have a business. This is only for people who are already building their business. But if you If you are that, then you should apply to join Growth Boardroom here. You can go to contrarianthinking.co slash growth dash boardroom. You also, uh, kind of famously said you don't lie. Is that true?

A Well, we try not to lie. That if, if I did not lie at all, um, I would be at a Jesus level. Okay. I'm not at Jesus level yet. Okay. Or a Buddha level or a Gandhi level. Uh, so, uh, the whole, Lies versus truth is a very powerful mental model. There's a book I read a long time back called Power Versus Force, uh, written by a kind of new age guy in Arizona, Dr. David Hawkins, but he had a theory that he said that if I lie to you, And in your conscious state, you don't know I'm lying to you. In your subconscious state, you do. And he said that there's a pipe that goes between the subconscious and the conscious. But for most humans, that pipe is mostly clogged. Okay. So the signal cannot get through. But he says the pipe is not fully clogged. So what happens is that You, uh, in his terms, he said, you either go weak or strong in the presence of a person telling the truth versus telling lies. So if someone lying to you, you may not know directly that they're lying to you, but you will feel, I don't know if they want to spend time with this person, you know, like the used car salesman. You don't know what part of what he's telling you is a lie, but you know, there's a lot of lies in there, right? So You don't want to be there. Like, that's why people want to shop at home. They don't want to go to the car dealership because it's not a pleasant experience. Uh, they'd rather just go onl…

AI assessment note: “Well, we try not to lie. That if, if I did not lie at all”

Q I like vending machines to learn how to do business. It's cheap. There's not a lot of risk. You have an entire business and company with very little capex. It's sort of a great, but it's a terrible business at scale. Actually, really tough business. How do you think about business models in general? Do you have a mental model to determine if one business model is better than another?

A Yeah. I mean, I think that, uh, a lot of that comes, um, comes naturally. I'll give you an example that, uh, I think you might, you might find interesting is, um, in, uh, when, when, when Buffett was a teenager, he was in Washington, D.C. His father was a congressman, and he hated being in D.C. He worried back in Omaha, but he was, he was in D.C. And there was a guy in his high school Don Danley. And one day Warren went to Don's house and he saw Don tinkering with a pinball machine. Okay. And he said, what are you doing? He said, oh, you know, I, I got this pinball machine that doesn't work, um, for like five bucks because people are just giving it away. And I think for another five or seven dollars in parts, I can get it working. Okay. And, uh, so Warren says to him, um, Are there a lot of pinball machines that you can get that are not working? He said, oh, there's a, people just have them sitting all over. So what Warren did was, he's like, 16 or something, 15. Um, he tells Dan Lee to fix pinball machines nonstop, like they get 20, 30 of them, right? And puts them to work fixing those. And then he and Dan Lee go to the barber shops in D.C. And they tell the barber that we work for Mr. Wilson because they're two kids, right? There's no Mr. Wilson. Mr. Wilson is a fictitious character. They say we are, we work for Mr. Wilson and Mr. Wilson has authorized us to make you an offer…

AI assessment note: “I think that, uh, a lot of that comes, um, comes naturally.”

Q You got a deal. You are a value investor. It might be your best investment yet. You should have traded that. So what do you learn? Like when you're going into a meeting with Warren Buffett, with this mentality you have of like cloning the best ideas, learning from the best, what did you learn?

A So the lunch was a lot of fun, and actually I, I had no, I didn't have many expectations for the lunch. So, um, let me go back a few years before the lunch, because then you can understand kind of why, why the lunch happened. When I read about the way Buffett did investing, It made all the sense in the world. And he's an open book. He just said, this is how you should invest, right? Then I looked at the way the rest of the world did invest in the mutual funds and fund managers, and they're not following what Buffett is saying. So a mutual fund will have a hundred, a 150 stocks and Buffett says, Six, 10 at the most, right? So I said, the laws of investing are like the laws of physics, and I think this Buffett guy wrote the laws of investing, and whether you believe in gravity or not, it's going to affect you, ok? So I said, we have this entire industry of investment management, which is operating without the laws of physics. And then you have this guy who's doing it this way and nobody else is doing it this way. This is Chipotle with no competitors, right? I looked at all that. I said, you know, I think that if someone followed Buffett's approach to investing, they would do better than the 98%. And I also feel that an idea is like an asshole. Everyone has one. So an idea without execution means nothing. It was 94. I had just sold a portion of my business, uh, and after taxes, ev…

AI assessment note: “let me go back a few years before the lunch, because then you can understand”