The Exchanges

Q something real. If you're ready to approach dating the same way you approach the rest of your life, With clarity and purpose, this is worth your attention. The League. Find someone in yours. Download the app and apply today. How do you think about urgency? That's one thing we didn't, that was not a word we used when we were sort of like thinking about, uh, American versus European mindsets.

A Yeah, I, I just think, uh, you know, urgency is, I, I try to build urgency into most things. You know, in my office, I have a, I have this, uh, this watch, this kind of clock, and it counts down the number, the days I've got left in, in my job. So it's not because I look forward to, to stop working because I love my job. But I have this thing on the wall, and so you come in and say, hey, Nikolai, we, we're going to work on this and, um, you know, I'll sort it by January. And I said, January? Look here. I've got 1765 days left. We need to do it now. And then you said, oh, really? You only have 1765 days left? Yeah, let's do it now. Let's do it now. So you just, you build urgency into these tasks. I love it.

AI assessment note: “urgency is, I, I try to build urgency into most things.”

Q Why did you take this job? Like, what did you see? Why did you, why did you want it?

A Oh my, it was my, it was my dream job, right? So I had, um, I had run, uh, this investing company, investment company called AKO Capital, set it up, and, um, it kind of turned 15 years, and, and I thought it was time to pass it on to the next generation and do something else, so I wanted to go back to university and do another degree. And, uh, learn some more, more things. And then I had just before that taken a degree in, done a degree in, in social psychology and, uh, organizational development. And so when this job came up, it was just like, wow, you know, it combines, uh, you know, asset management. And asset management is the most interesting thing you can do in life. Because it's about everything that moves, everything you eat, wear, drive, all that kind of thing. It's about psychology, it's about markets, it's about greed and fear, it's about, Macroeconomy, geopolitics, defense, uh, it's about everything, right? So it is, it is the most incredible game you could ever construct. Then I could combine it with organization development and really see whether we could take this organization, you know, to a place that it hadn't been before, and then do something great for the country. So all my interests came together in one job.

AI assessment note: “it was my dream job... all my interests came together in one job.”

Q Do you think you can teach intuition or pattern recognition, if you will?

A No, you can't, but you can, but you gain it with time. So I did, uh, I did a research process when I studied social psychology. I interviewed the 20 best asset managers in Europe. And I asked them, you know, about pattern recognition. You know, when do you, when do you use it? Why don't you use it? Well, first of all, you call it gut feel. Nobody believes in it. You call it pattern recognition. A lot of people believe in it. You don't believe in anybody else's gut feel. Only your own. You can't apply it when you're young, because nobody believes in it. You can't go to your boss and he's like, hey, you know what? I think you should, you know, buy a, you know, a hundred million worth of apple. It's like, okay, well, why? Ah, it's just a gut feel I have. It doesn't, it doesn't work, right? Nobody's going to listen to you. So you need to be pretty senior, and ideally you want to be the boss, because if you're the boss, uh, you can actually do it. And it gets better over time. So the best, the best people use a combination of the two. They use a combination of pattern recognition and analysis, depending on the situation. If you are, if you press for time, you, you are, you're more likely to use pattern recognition. And if it's a really complex situation where it's difficult to put numbers on the outcome, their pattern recognition is more important.

AI assessment note: “No, you can't, but you can, but you gain it with time.”

Q How do you think about rates? I mean, historically, there's been a, I think the average is six percent or something, somewhere thereabouts, and we've been lower than that for almost 20 years now.

A Yeah, we've been very low, and for a very long period of time. I think there are some structural issues which mean that they probably will be A bit higher than they have been. And I think one, one, um, factor here, which, uh, you know, people don't talk so much about just now is, is the impact on climate, you know? So climate is impacting harvest is impacting prices for a lot of, you know, raw material and, uh, and input factors in particular to the food side. So be it, uh, you know, chocolate, coffee, and so on. Then you've got various fires. Uh, you just, you just got a lot of kind of Um, impacts from climate on pricing structures. Um, you know, it also hits kind of insurance rates, reinsurance rates, um, and so on. So that's on the one hand. Now, the thing which is pulling in the other direction is, of course, efficiency gains through AI. And, uh, you'll have, uh, you know, just much more intelligence, uh, at cheaper levels, right?

AI assessment note: “structural issues which mean that they probably will be A bit higher”

Q I know, um, Druckenmiller is widely known to take a position, then do research after. Yeah. Uh, do you do that as well, or?

A Well, I did, I did that, uh, quite a lot, and I think it's, why do you want to do that? Well, um, first of all, you, if your gut feel is good, and, you know, people don't believe in gut feel if you call it gut feel. If you call it pattern recognition, more people believe in it. But if your, if your pattern recognition is good, and you see something that looks really interesting, The probability of that being a good investment is pretty high. Okay. It's like way over 50%. Um, and by taking a position, you create some urgency in the research process. And it's also easier to add to the position, you know, if it goes up, because you already have, you already have some shares, right? So it's just like mentally a bit easier to get going. So I, I was in his camp.

AI assessment note: “Well, I did, I did that, uh, quite a lot”

Q product. Upgrade your business and get the same checkout that I use. Sign up for your one dollar per month trial period at shopify.com slash knowledge project, all lowercase. Go to shopify.com slash knowledge project to upgrade your selling today. shopify.com slash knowledge project. I'm a huge proponent in sovereign wealth funds. How would you advise the United States or Canada to set one up, knowing what you know now?

A I, I, I, I'm, I think I'm too, too humble to advise anybody, uh, in that field. What has worked well for Norway is to have a sovereign wealth fund, which has broad political anchoring. So the political parties generally agree on the, on the, On the big decisions, which means that when you have a change of government, you do not change the way you run the fund. That's important. Then transparency. We are the most transparent fund in the world, and there is actually a world championship in that, and we won it three times in a row. Um, it's a world championship, which has been run by actually a Canadian company called SEM in Toronto. Uh, and then the last thing is you have a, we have a spending rule, which means that, um, The politicians spend three percent of the fund every year, maximum of three percent. So I think the, you know, the broad political anchoring, the transparency, and the spending rule, those, those are three really important factors.

AI assessment note: “the broad political anchoring, the transparency, and the spending rule, those, those are three really important factors”

Q Would you say that's the biggest problem in society?

A I think that one of the biggest problem now is, um, is the fact that we, We close up, you know, we, um, if you look at the golden, if you look at the golden ages we've had, and you look at, you know, the real powers we've had during the years, you know, Rome, Venice, uh, you know, the Song Dynasty, the Netherlands, you know, these com, these places which did really, really well, they were open economies, free trade, um, free movement of, uh, labor, thought, and so on. And, What has, what they all have in common in terms of the end of the golden ages is a close of free trades, tariffs, um, end of immigration, end of free thought, the rise of the strongman, uh, attack on, you know, freedoms of all types of, you know, sorts. And we are seeing that in many places of the world. And, uh, and that's a negative.

AI assessment note: “I think that one of the biggest problem now is, um, is the fact that”

Q Go deeper on that for a second. How important is speed and agility?

A Well, I have a big thing with speed, you know, speed is Well, I mean, speed is a mindset, and it is, you know. Um, he struck me again, going back to New York, you know, I buy this, every morning I buy this, uh, you know, egg and, uh, egg and ham roll, and just speed with which they wrap it. I mean, my. So, the speed in New York is very high. But speed generally, I think, is super important, you know. Um, it comes to this first principle, things shouldn't take longer than, than they need to take, you know. Um, You save time by being fast. So this sounds a bit, um, strange, but you know, if you answer, if I, if I send you an email and you answer within one minute, how long does that email need to be? Two, two words, right? And I'm impressed because you answer really quickly. If you answer the next day, how long does it have to be? A paragraph? And you answer a week later, it needs to be a page, right? So you, so you just save time by being quick.

AI assessment note: “speed generally, I think, is super important, you know.”

Q And when you were running your own fund before that, what was the, the worst sort of investing mistake that you made, and what happened?

A The worst mistake was during the financial crisis. We were in a subprime lender, and it turned out that there was accounting fraud, and, um, it was a big position, and that's, that's the worst, that's the worst investment I've ever made. Uh, and what I learned was that, um, you don't want to go into dubious business models. And so, Brian, you can say, you know, it's not really, um, certainly the type of company we were interested in, I would say it's not really, I mean, is it ethical to Lend money to people who are in a tough situation in life. Well, I don't know. It certainly was a really bad investment. I wouldn't invest in that type of company, no.

AI assessment note: “We were in a subprime lender, and it turned out that there was accounting fraud”

Q Do you think you can teach people to change their minds?

A Um, I think you can, to a certain extent, you can teach them. It's, um, easier as you get older, I think, because you've seen more cycles, but it's difficult to find people who are really contrarian now because it's, you need to, you need to live in a, in a space where you are, where people don't agree with you. And we, you know, in, in today's world, everybody wants to be liked and, you know, have a hundred liked You know, likes on Facebook or whatever, and so to be, to be different from other people is, is tough. So now when I have, when I give presentations at universities, I ask people, hey, anybody here who thinks differently from other people, who kind of think that they are weird, that they, that nobody understands them? Hands up. So typically, less than 10%. I said, you guys, you're great. We'd love to hire you. Can everybody else put their hands up? And then the other 90% is like, you know, sorry guys, you're just like everybody else. You're never going to make much money, but there is hope you can change, you know, and I, I kind of think people, hopefully they go out of that room and think, you know what, I want to be different, you know, it's something we should really treasure and, and love, you know, where it is good, right?

AI assessment note: “I think you can, to a certain extent, you can teach them.”

Q How do you see the difference between American and European mindsets?

A So this is super interesting, right? Um, Uh, and now I'm in New York for a month, and you know, wow, the energy here, uh, the entrepreneurship, the drive, you know, I just get so much energy just living here. Uh, level of ambitions, super high, uh, versus Europe, where there is, I mean, Europe is a fantastic place too, right? But for different reasons, um, You know, culturally, uh, incredible, uh, you know, food pretty good in many places, but less ambitions. You know, the thing with ambitions, I think it's so interesting. If you have really, really high ambitions, you achieve great things, even if you fail. If you have low ambitions, you achieve nothing, even if you succeed. And so having great ambitions is just fantastic. And you know, in, in America, five, I mean, do you think five is a high number or a low number?

AI assessment note: “level of ambitions, super high, uh, versus Europe... but less ambitions.”

Q A 140. What were those, what was the structure of those conversations like?

A Um, okay. So this is something I learned from a guy called Albert Bene. He was the head of a company in Switzerland called Geberit and another one called Lonza. And he said, Nikolai, when you, because when I got the job, I thought, you know, gee, I got the job. I mean, what do you do when you get a new job? What do you do? So I rang all the best CEOs I've ever met. I said, Hey, what do I do? I got a new job. I mean, how should I, how do you approach a new job? You have a lot of conversations with people and you do them before you start, because after you started, you have, you won't have any time. And, um, and you do it because people need to get to know you and you need to get to know them and you need more data points so that you can make your decisions. So that's very important. So I sit down with a 140 people and I just start, Hey, what's on your mind?

AI assessment note: “I sit down with a 140 people and I just start, Hey, what's on your mind?”

Q What's the most important data you look at these days?

A Uh, I don't have, like, just one or two data sources. I read, uh, just a lot of newspapers. And I think what's going on in the world now is just so incredibly fascinating, and it's so exciting to be alive, you know. And so I just wake up at five, and I just spin out of bed. I just can't wait to get out of bed, uh, to start to read the papers. And then I just start, you know, the Financial Times, Wall Street Journal, New York Times, all these things. And wow, the stuff that goes on now is just incredible. Things that you didn't think was possible, Uh, you know, a year ago, that's now happening, right? Um, so I was up in a forest, um, a few weeks ago, and, um, with seven of my best friends, and, um, and we were predicting, okay, what's going to happen in the next 12 months? So we, and we tape it, we tape record it. And then we were, we were playing our predictions from last year. And, you know, these are really clever people, and how do you think we did?

AI assessment note: “I don't have, like, just one or two data sources. I read, uh, just a lot of newspapers.”