The Exchanges

Q How is the Josh I'm sitting across from right now different post kids than the Josh I would have been interviewing pre kids?

A Probably a little bit more patient. I would say on the spectrum, I am very impatient. Um, you know, people here joke that I have this little lip curl and you could sort of read my impatience or if I'm in a meeting, I unfortunately have a terrible poker tell, which is this deep sigh, which is basically signaling my partnership will laugh because they know, okay, Josh is done with this meeting, you know? Um, but, but I would say patience, because I think I'm a reasonably intelligent and influential person in being able to persuade somebody of something, but geez, when you have an eight and a half year old and a six year old and a two and a half year old, and you're trying to get them to do something, you can use every tactic that Robert Cialdini has come up with, and every tactic from Munger, and every behavioral psychology thing you've learned from Kahneman, and you still get tantrums and crying and, uh, dogmatic, you know, intransigent kids, and so, um, Uh, a little bit, a little bit more patience.

AI assessment note: “Probably a little bit more patient. I would say on the spectrum, I am very impatient.”

Q human achievement. In this conversation, we explore this paradox, diving deep into how technological evolution can amplify rather than diminish what makes us human. From geopolitical power shifts to the future of human creativity, Josh reveals the exact frameworks he uses for seeing what others miss and betting on this seemingly impossible future. It's time to listen and learn. Start with what you're obsessed with today. What's on your mind?

A Uh, well, uh, first and foremost, kids and family. Trying to be a good dad, good husband. Technologically obsessed with so many different things. We were just in a partnership meeting, and probably the most interesting thing at the moment is thinking about the speed of certain technologies, like the actual physical technologies, and where the bottlenecks are. So in biology, you've got all kinds of reactions, nature Figure it out. Evolution figured out. Enzymes and catalysts and things that can speed up reactions, but you can't move faster than the speed of biology. Now you think about AI, totally different field, but the same sort of underlying philosophical principle. If you've tried ChatGPT operator, It can only move at the speed of the web, and at that it's sort of with latency a little bit slow. So we're thinking about what are the technologies that can accelerate these things that have these natural almost physics limits, and even if those limits are biological or digital. So that is something that at the moment I'm obsessed with in part because I have ignorance about it, and when I have ignorance about it, my competitive spirit says, how do I get smart about this? How do I get some differentiated insight? How do I know what everybody else thinks and then find the sort of white space answer? So that's one big thing. Obsessed with geopolitics. It is the great game. Uh, ever…

AI assessment note: “most interesting thing at the moment is thinking about the speed of certain technologies”

Q Short sellers are necessary to a well-functioning market, right? I think so. We need to hear both sides of the story and make our own judgments and decisions. What point do you think that computers are going to really make most of the investing decisions?

A Well, you could argue today they are, not because they're doing reasoning and analysis and fundamental work, but because the structure of the market is so dominated by passive indexation, and that is effectively an algorithm, and that algorithm says, one dollar in, buy, one dollar out, sell, and in both cases, indiscriminately, and so you just have a flood of money that goes into the market, and these indices buy everything, and it becomes this massive market Cap weighted accelerant and then people say sell and then the money just comes out. So the past, I don't know, 10 plus years where this has really become the case with Fidelity and BlackRock and State Street and others that the ETFs, which were well intentioned, you know, you go and listen to Buffett back in the day. It's like, just put it in the market, right? You're, it's hard for active managers to outcompete. Um, definitely the case for the past 10 or 15 years. Um, but I, I do think that we will see a return to Active managers that are able to discriminate true fundamentals, in part because I think that the cost of capital is just gonna rise and all the funny money of the past 10 years is, is gonna wash out.

AI assessment note: “Well, you could argue today they are, not because they're doing reasoning”

Q Let's go back to that for a second, because you operate in one of the most competitive markets in the world. Everybody wants to get an edge in understanding. Like, everybody's out there trying to do that. Like, what are you doing that's different?

A Part of it is understanding first, what is everybody else looking at? And then you try to find the white space, what are people not looking at? Now, I would argue public markets have a lot harder because you have a universe of companies, those, that universe of companies is known, and then people are basically diagnosing whether something is undervalued, overvalued, if they're, have higher expectations than what the fundamentals support, and, and, um, and that's relatively, you know, an efficient market. In venture capital, it's a really inefficient market because there is no known universe. You and I could be talking in a private room, and we could decide that we're going to start up a company tomorrow, and nobody else knows that information. And in fact, if you accept the premise that the best way to predict the future is to invent it, the people who are inventing it are asymmetrically distributed. So there's a scientist or a group of scientists in a lab, or there's an entrepreneur who teams with a scientist, and my job is to find those people. And persuade them that I'm the best partner, as they persuade me that their science and vision is real, before everybody else does. And so we always say, even in venture capital, which you could argue is the most lemming-like field that there is, right? You see, one company gets done, and then there's a hundred followers. We're trying …

AI assessment note: “find the white space, what are people not looking at?”

Q I like that a lot. Let's talk military and technology, and you guys are big investors in Antrol. Where's that going in the future?

A Well, there's going to be a lot more brilliant minds, I think, that feel comfortable, um, motivated not only by a sense of purpose, patriotism, but also principle and capital making that they see, the things that they doubted early on, like, why is this time different, another defense company of which there weren't very many, but seeing Andrews' ascendancy and valuation and success and program wins, I think has inspired a lot of people, like, wait, there's something going on here. We went from 50 primes down to five. You're seeing the rise of these neoprimes. I deeply believe that Anderil in the next few years will be a 30 to fifty billion dollar publicly traded business doing single-digit mid-billions of revenue with software-like margins that are not like these cost-plus margins, so that is gonna usher in a big wave in their buying companies that are acquiring smaller businesses, but you'll continue to see that sort of evolution in a world that people realize is not kumbaya Peace and safety. There are bad actors that when we take a step back or on our back foot or a little bit permissive, that they arm up. It happened with Iran, and I think the prior administrations from Obama and Biden were well-intentioned in trying to bring them into the Western world, but, you know, it was a sort of ruse, uh, you know, from Iran's standpoint. Same thing with Gaza and Israel and, and And R…

AI assessment note: “I deeply believe that Anderil in the next few years will be a 30 to fifty billion dollar”

Q So aside from meta, what counterintuitive sort of public companies would you say have like really interesting data sources?

A Ah, that's a good question. I haven't really spent a lot of time on that to figure out who's got crazy amounts of proprietary data. Pharma would be a good one because obviously they're, you know, tracking both their successful but their unsuccessful clinical trials. There's a lot of information in the unsuccessful data, like the things that fail that you can learn from. You could argue that Tesla, of course, who I'm very publicly critical of, like if they truly are collecting a ton of Road user data from, you know, every Tesla that's being driven, that would be valuable. Anything where there's a collection, a set of sensors, a repository of information that is owned by them. Anything that we've signed off on that, you know, your data is free for us to use, like, like Meta.

AI assessment note: “Pharma would be a good one... You could argue that Tesla, of course”

Q Do you schedule time to think and reflect?

A You know, not enough. Um, there were times where I would have two or three hours and often it was reactive. I would tell my assistant BB who runs, you know, I would say we allocate time and we allocate cash and BB really helps allocate time. But there were weeks where I would say, okay, I need, you know, these two or three hours from the day blocked off. Almost Charlie Munger sense, right? He used to sell himself the best hour of his day for himself. And sometimes you just can't do it. Sometimes I have a board meeting for three hours and then I'm recruiting people and it's just, it's chaos. Um, I find that late nights for me are really good. My kids, you know, sleep by, let's say eight, nine o'clock. Uh, my wife and I are up for another, you know, two hours talking, catching up, watching TV, binge watching something, uh, you know, plotting and planning family stuff and travel and, uh, you know, business stuff that we help each other on. And then I probably have another hour, hour and a half from 11 30 or 12 to like one in the morning. And that's like my personal time to like just read and crank and listen to audio books and, you know, all of which I do on like three X speed and, uh, But, um.

AI assessment note: “You know, not enough. Um, there were times where I would have two or three hours”

Q So what would your top, like, three or four priorities be then, if you were to outline them?

A My kids and my wife call it family, number one. I mean, you know, you think about like the people that lost everything physically and materialistically in the fires recently in LA. Like family is like, you know, and I don't care over time as they grow up and where they are and they're, you know, but that to me is like the most important thing. Number two is purpose and meaning. I think this is a universal thing, but I feel lucky that I enjoy what I do. It's an intellectual puzzle. There's times of like great fierce competition. We're losing to, you know, I don't like to lose. We're losing out to another firm that's got an entrepreneur. I like the intellectual gratification of being right when other people are wrong. I'm very intellectually competitive that way, and discovering something that people haven't discovered. I always talk about Linus Pauling, the double Nobel laureate, who won it for both chemistry and peace, and, uh, he has this quote about science, which I just absolutely love, and this is like, I hope until I'm That I, I continue to have this, because it's an addictive feeling, which is that I know something that nobody else knows, and they won't know until I tell them. And I love that discovering a legal secret and knowing that this is going to be announced that the scientific breakthrough is coming and nobody else knows about it yet. So that to me is like meaning…

AI assessment note: “My kids and my wife call it family, number one.”

Q I like how you bring it back to the family. Are there other things that you say your family does?

A We never give up. I mean, I, I literally, my, my two and a half year old, he gets frustrated. I said, does our family give up? You know, do the wolves give up? Never. You know, and the kids are like, no, you know, it's like, it's like watching Rudy, you know, we, we, we watch a lot of family movies and we try to come up with the principles of this and we watch a lot, you know, you watch Miracle and, uh, League of Their Own and Rudy. I mean, there's so many great sports movies. I'm not a big sports guy watching, but, So many great, you know, Horatio Alger coming of age or personal responsibility, you know, rise of the undertrod and I just like the, the hero's journey. Um, they love those.

AI assessment note: “We never give up. I mean, I, I literally, my, my two”

Q Successful people, successful leaders, like are there commonalities?

A You know, post facto, it's easy to find these patterns, but a priori sometimes I think it's like what I call randomness and optionality, which defines so much of what we do and so much of my own personal life. Um, patterns. Somebody that is a great storyteller is really good. For a startup business because they can recruit really well. They are telling a story where you meet with that person. And one of my partners used to call it somewhat inappropriately the Pampers effect. You're like wetting yourself. You're like, oh my God, I need to, I need to join this person. I need to invest with them. And, and you, it's one of those things like the Justice Stewart Potter definition of pornography. You know it when you see it.

AI assessment note: “Somebody that is a great storyteller is really good. For a startup business”

Q into GPT and be like, where are we wrong? What studies have been fabricated or proven not true that we're investing research in, right? Like, cause studies get built on studies and studies. And so If something from the eighties came out and it's like completely false, we've probably spent twenty billion dollars down this rabbit hole, and what's the next most likely thing to work? Is anybody doing that?

A I have to imagine they are, because deep research came out, you know, today or in the past 24 hours from OpenAI, which is sort of their model with a better engine, so to speak, than Google's deep research, which itself was impressive, both because of its ability to search many sources and then the ability to, uh, you know, sort of, I think it was either there or through Notepic LM to conjure the podcast, which at first was a Static presentation of near human quality voice, but now you can interrupt it like a radio call, which is super cool. But you can say, go through the past 15 years of PNAS papers, uh, or science and nature papers around this particular topic, and find correlations between papers that do not cite each other. Or tell me any spurious correlations. And the beauty of all of that on sort of the information or informatic side is eventually you will have a materials and methods output of that. That you can feed into something like Benchling or some of the automated lab players to actually say, like, run the experiment. So I'm absolutely convinced. Like, high certitude. I don't know exactly which company will do it. We've invested in some. They haven't worked. We'll invest in more. Hopefully they will. But this directional arrow of progress of the idea, by analogy, of machines doing science, twenty-four-seven automated, is going to happen. I'll give you one or two a…

AI assessment note: “I have to imagine they are, because deep research came out”

Q It sounds like you could almost get caught up in just spending your day reading all the other information coming in. How do you prevent that from happening?

A I get information anxiety. It never stops. Um, you know, it's, it's, it's like way beyond the red queen theory. Like I, you know, you have to run like three times as fast just to even keep up. And, um, and a lot of things will get lost, you know, in the, in the mix. Now, obviously if something is like super important, um, somebody internally will resend it, you know, um, at various times, um, You know, our VP of finance might be asking people to fill out something related to reserves, how much money we're reserving for a given company. And sometimes, you know, that's the most important thing for her. And somebody else might be saying, um, the most important thing is I need, um, your, your, uh, candidate recommendations for this media list. And somebody else might be saying, you know, um, we're going to host an event around the future of technology and automation and manufacturing. And I need, and so at any given point, somebody has a priority that to them is the most important thing. And part of the job that Peter and I, who run the firm, have is dialing up and reinforcing those priorities, saying, hey, you know, we need answers to this, this, or that from the people. But reading is a huge part of it. I mean, again, it's this exploration versus exploitation. You're ingesting enormous amounts of information. Public information, our sort of secret proprietary information from all…

AI assessment note: “obviously if something is like super important, um, somebody internally will resend it”

Q look like if, like, I mean, we, we have this, this very square design usually with, like, this is what an office looks like. This is what a cubicle looks like. If this were, if we had a biologically designed office building, what would that, and what, what, what variables would the computer be maximizing for? Would it be interactions between people, quiet? Like, you, you have to pick something.

A Totally, and there's trade-offs, right? So, so this is interesting because if you look at The Gates Foundation building. It's sort of two boomerangs that traverse and look like an X. And you say, okay, well, the people at the far ends of the X are, you know, very distant from each other. If you look at the new Apple headquarters, it's a giant circle. It's sort of infinite loop. It's symbolic. But I think, geez, if I had to get from one place to the other, like, you know, you have to sort of go back inside the radius and then, you know, traverse in a different angle. And so it's going to be very interesting thinking about that. I, I do remember-

AI assessment note: “if you look at The Gates Foundation building. It's sort of two boomerangs”

Q It's really interesting. Why haven't we seen more isolated attacks that are cheap and using technology? And what I mean by that is, you know, a nefarious actor can probably for two or three grand effectively plot an assassination.

A I guess the question would be to what end? And so you still have to realize that many people, even if they're like evil geniuses, have An objective in mind, and do they just want to sow chaos and create distrust in a system and have people scrambling, or is there an opportune time to strike? Think about the Israel operation with the Bieber plan. This was 10 years in the making. Now, they could have done it at any point in time five years ago, but they waited until a precise moment, and so being able to do the thing and deciding when you do the thing are two different decisions, but I think that we've been warned for a very long time about Hacking and infiltration into our physical infrastructure, for sure, somebody could shut down air traffic control, and what we saw just recently between the Black Hawk helicopter and this, uh, regional plane from, was it Kansas City? You know, crash in, uh, Washington DC, you could see the FT, the FAA shut down, you know, and have a glitch. You can have infiltration into our banking system, and, you know, just like the Sony hack, right? The big thing with the Sony hack was not that The systems were disabled. It's that information was revealed. You want to create civil war in this country, just, just reveal everybody's emails for the past year. The things that we've said about each other, you know, I mean, that like reveal truth in a sense, rig…

AI assessment note: “being able to do the thing and deciding when you do the thing are two different decisions”

Q Where do you think intelligence is the limiting factor of progress?

A Human intelligence? I think that the great thing about us is that we are, I don't know, 60 or 70% predictable, in that so many of the foibles and virtues and vices of man and woman Are Shakespearean. You know, there are hundreds of, I mean, tens of thousands of years old from modern evolution, but with that, we are still irrational. Uh, you know, Danny Kahneman was a friend. Danny passed last year, just an amazing guy, but he could document all the heuristics and all the biases, which you study and write about, and he's like, I'm still a victim of them. Even knowing them doesn't really insulate me from falling, you know, to them. It's just like an optical illusion. You can know it's an optical illusion, but You still see it, and you still fall for it. So, I think the limits to human intelligence are rooted in our biology, and we have all of these, ah, embodied intelligence that have sort of been externalized in calculators and in computers that help us to overcome that, and I certainly feel today that a significant portion of my day that might be spent with a colleague riffing on something, Uh, and sometimes that's, like, great for a muse or tapping into information or intelligence or some tidbit or a piece of gossip or an experience that they had, and that's why, like, the diversity of cognitive diversity is really important. I'm complimenting that with all-day chats with perp…

AI assessment note: “limits to human intelligence are rooted in our biology, and we have all of these”