The Wisdom Wall

“oftentimes playing the long game is the right strategy, the market's myopic, stick to your knitting, but there are occasions where long-termism is a lazy crutch.”

“In this market, it's been fun because we are viscerally exploiting or have been the specialist trap, where if you're an industry Wall Street specialist, you've looked at the same industry for 15 years, you're in an echo chamber talking about Peer analysts, management teams all day. You're underexposed to what's…”

“actually the worst possible outcome, in my view, is learning the right lesson at the wrong time. At least in the medium term, you'll end up compounding the mistake you just made and drag out a hundred performance for many years.”

“every incentive today is to Enter preservation mode, become benchmark hog, coast on the brand, and now it's really about staying true to who we are, and being different, and getting better, and serving others.”

“If you understand a company's culture, you can overlay that culture onto each of those judgment calls over a period of time. So maybe that boosts your batting average by a few percentage points, but that can compound significantly over time.”

“You can overpay for a great and improving company, but you'll recover over time. It might take a long time, but you'll recover. There's a pathway for recovery, whereas if you misvalue a bad business, there's no pathway to recovery.”

“One is to save valuation for the end of the process. I think if you have a valuation-first mindset, it steers you towards value traps, effectively, companies that are becoming less good on the margin.”

“Another one we learned about is mode trajectory is about detecting change, and if you're zoomed in too much, you're gonna be slow to see change. So I think one of the reasons why specialists are struggling with the notion of mode trajectory is you're in a vacuum. You're in an echo chamber. You're just covering a…”

“we found for every Bezos or Hastings, there's dozens of examples we've encountered of these setups where a founder can actually run a company off the rails because the idea proved to be flawed. And you can imagine these scenarios where the founder has a track record of being a visionary. As an investor, it's very…”

“I think where investors would be liable to get tripped up in these industries here is the snapback tends to be less sharp than expected because there's emerging competition from Chinese competitors.”

“For instance, if I'm looking at Danaher, am I better off from a team return on time standpoint reading another case study on Danaher business system or researching a local Chinese competitor that's up and coming? And our view is the latter is at this point in time, a higher return on time.”

“We think about that a lot because we're not big strategic planners, five-year vision type of manager, because we think it can create blinders, right? You miss opportunities right in front of you.”

“One of the conclusions was the portfolio was too correlated, but the root cause of that was the research pipeline had become too correlated.”

“I think if you just let your team tend to be a decentralized organization, they'll naturally chase what's working.”

“What was happening is collaboration was tipping into coordination. It started to feel bureaucratic. This was a very low lift way of making a light touch collaboration, which is important without meeting creep.”

“That question is very well-intentioned, but it effectively puts the burden on the receiver. So then you have to think through this person in their shoes with their context they have, with their skill set, how can they help me? Versus this notion of there are people in this organization otherwise who will really take…”

“I started to reframe that insecurity into an asset, thinking if I can understand why people have different opinions, and then maybe map out why those opinions will converge over time, why, how, and when, that would be an interesting approach, and it dovetails with how I think about investing nowadays, which is…”

“If you can lean into cognitive dissonance, it's actually makes life a lot easier. It's paradoxical in that way. It sounds hard mentally to hold two opposing ideas in your head, but if you can get to that point where you can, it can be very liberating, and a lot of the biases you have melt away.”

“Strong opinions loosely held is a common term, and I think that's what the North Star should be, or at least my view it should be, is you have to act on what you know while still doubting what you know.”

“And I started to see patterns where there are certain industries where there's some creativity involved, where it's difficult to connect cause and effect, that you just get these rules. People try to minimize career risk, and people try to sound smart. So you can think about groupthink and fixed mindset.”

“I think if you're greenlight a movie, it's kind of picking a stock. You often get described as having the magic touch. If that's how you're judged, it's natural that you're going to develop fixed mindset, especially if there's some luck and cause and effect questions at play. You're going to build an ego. You're not…”

“The one thing I've learned is you would think an unconstrained environment leads to more creativity, but it's the old playground analogy. If you put a fence around a playground, the kids start to spread out and explore. If you take away the fence, everyone starts to huddle towards the middle, and you can think of that…”

“There's a gravitational pull towards expiring knowledge. There's so much noise out there, and if you don't build guardrails around how you spend your time, you're gonna fall into this notion of just gathering more information, having a reactive mindset, benchmark hogging, just doing things in a way that You're just…”

“As we think about mode frameworks, how to think about competitive advantage, that's another field of compounding knowledge. If you can build patterns around it, that's more evergreen, that's more scalable, and you can apply it to multiple judgment calls.”

“In technology, you have network effects. In consumer goods, you have brand virality. And in healthcare, especially in pharmaceuticals, through history, you notice there are negative feedback loops, right? You have big, major counterparties, namely managed care companies and regulators, who have very different…”

“if you have a culture where people optimize for themselves and their own career path, you really just introduce a bunch of Unspoken friction into the process that just bubbles underneath the surface and gets in the wake of judgment.”

“we found historically a lot of outsourcing companies in various industries that can climb the value chain over time and evolve from low value outsource manufacturers, which is tend to be how outsourcing companies are born to high value outsourced R&D partners. They can grow their modes for incredibly long periods of…”

“I think a lot of people think about culture as touchy-feely, right? Are employees happy? And for us, that's not the question. It's more about alignment. Are employees behaving in a way that will help that company grow its moat?”

“The problem in investing is that feedback quality is poor, at least for our flavor for investing. You're long-term, you're not making that many decisions, takes a long time to get the feedback, multiple years if you're right or wrong, and then there's just a ton of noise and randomness in that time period. If you have…”

“Everyone puts in the hours, and I think people zoom in too quickly, and they try to tackle things through brute force, right? And that's what we talked about earlier with that information gathering mindset, and not asking, like, before rushing to answer a question, ask, is this the right question? As opposed to doing…”

“if you want to build a high trust team, you've got to get all the noise out of the way, the frictions, the insecurities. And I think starting with vulnerabilities, at least I've found to be the best starting point.”

“I think if you can't think of a solution to a problem, or at least a pathway to a solution, don't make your identity just constantly griping about the problem. Amplifying drama around it. I feel like a lot of young people especially get trapped in that identity.”

“If you really want to grow as a person, find someone in your life who, when you're down, will pick you up. And when you're up, we'll push you, often beyond your comfort zone. I think there's a lot of people out there who'll do one or the other. Exceptionally few people will do both”

“I think you can borrow ideas, but once you develop your own voice on the topic and lean into your journey around it, it changes everything. Your disposition changes, your body language becomes much more engaging, meetings transform from a test or a conversation, and you just have more fun doing it.”

“What I've learned to love about investing, Ted, is I view it to be a platform for self-discovery. It's effectively a mirror. It can reveal your policies, your insecurities, your temperament, what type of teammate you are, what type of communicator you are, just so much about you, if you allow it to be.”