1 00:00:03,240 --> 00:00:07,560 Speaker 1: This is Masters in Business with Barry Ridholds on Bloomberg Radio. 2 00:00:08,520 --> 00:00:12,360 Speaker 1: This week on our Masters in Business podcast, I actually 3 00:00:12,360 --> 00:00:15,480 Speaker 1: have a really special guest. I know I said that 4 00:00:15,520 --> 00:00:17,520 Speaker 1: every week and you guys make fun of me, but 5 00:00:17,840 --> 00:00:21,800 Speaker 1: this is a really special guest. His name is arts Hamburg. 6 00:00:22,040 --> 00:00:27,680 Speaker 1: He is a legend amongst both hedge funds and venture 7 00:00:27,720 --> 00:00:31,720 Speaker 1: capital investors. Uh. He has a phenomenal track record. When 8 00:00:31,800 --> 00:00:35,040 Speaker 1: he began his hedge fund was one of less than 9 00:00:35,080 --> 00:00:38,560 Speaker 1: a hundred funds that were in existence, and he briefly 10 00:00:39,280 --> 00:00:41,640 Speaker 1: he tells the story how he gets a call from 11 00:00:41,680 --> 00:00:44,120 Speaker 1: the Wolf Street Journal to find out that his hedge 12 00:00:44,159 --> 00:00:50,640 Speaker 1: funds is apparently George Soros had retired and um Julian 13 00:00:50,720 --> 00:00:53,720 Speaker 1: Robertson had retired, and suddenly he's running the biggest hedge 14 00:00:53,720 --> 00:00:56,200 Speaker 1: fund in the world at the time. And not not 15 00:00:56,440 --> 00:00:58,760 Speaker 1: that that was his designer is focus, but it just 16 00:00:59,000 --> 00:01:03,160 Speaker 1: kind of happened. He's a fascinating guy. His his literally 17 00:01:03,200 --> 00:01:07,280 Speaker 1: a rocket scientist, an aeronautical engineer who used to work 18 00:01:07,319 --> 00:01:10,319 Speaker 1: on on missiles and satellites and things like that before 19 00:01:10,360 --> 00:01:12,920 Speaker 1: he moved to Wall Street. He tells some of those 20 00:01:12,959 --> 00:01:17,600 Speaker 1: stories and they're quite fascinating. Our conversation about venture capital 21 00:01:17,680 --> 00:01:23,280 Speaker 1: investing in the areas he's looking into is really quite amazing. 22 00:01:23,440 --> 00:01:26,600 Speaker 1: And you know, you guys by now know, I'm not 23 00:01:26,640 --> 00:01:30,080 Speaker 1: afraid to talk. Most of the time during this conversation, 24 00:01:30,640 --> 00:01:34,840 Speaker 1: we're just sitting I'm just lobbing questions and listening UM 25 00:01:34,840 --> 00:01:37,240 Speaker 1: in rapt attentions as to what he said. It wasn't 26 00:01:37,319 --> 00:01:40,800 Speaker 1: until later in the podcast I actually come out of 27 00:01:40,840 --> 00:01:44,200 Speaker 1: my shell. But UM, the elephant in the room is 28 00:01:44,880 --> 00:01:49,480 Speaker 1: you know, it's public knowledge. Uh, there was an SEC investigation, 29 00:01:49,640 --> 00:01:54,160 Speaker 1: it was started, it finished, it reopened again. Ultimately he 30 00:01:54,320 --> 00:01:58,200 Speaker 1: ended up settling without admitting or denying. UM, paid a 31 00:01:58,480 --> 00:02:01,000 Speaker 1: twenty eight million dollar five I think it is, and 32 00:02:01,000 --> 00:02:04,320 Speaker 1: and as the SEC tends to do, had him sign 33 00:02:04,400 --> 00:02:08,480 Speaker 1: a non disclosure agreement or or something to that effect. 34 00:02:08,560 --> 00:02:12,600 Speaker 1: So we really couldn't get into that in great detail. UM, 35 00:02:12,639 --> 00:02:15,440 Speaker 1: but I did bring it up, and he did respond, 36 00:02:15,639 --> 00:02:19,799 Speaker 1: I thought, in a rather forthright way, as much as 37 00:02:19,840 --> 00:02:24,040 Speaker 1: he's allowed to say. He said, UM, really interesting guy, 38 00:02:24,560 --> 00:02:28,560 Speaker 1: fascinating background, and some of the stories he tells are 39 00:02:28,760 --> 00:02:33,240 Speaker 1: they're just amazing. So sit back and brace yourself for 40 00:02:33,480 --> 00:02:41,000 Speaker 1: our couple of hours with Art Samberg. This is Masters 41 00:02:41,000 --> 00:02:45,240 Speaker 1: in Business with Barry Ridholts on Bloomberg Radio. This week 42 00:02:45,280 --> 00:02:48,200 Speaker 1: on Masters in Business, I have a very special guest. 43 00:02:48,680 --> 00:02:52,160 Speaker 1: His name is Art Samberg, and he's been running various 44 00:02:52,160 --> 00:02:55,400 Speaker 1: hedge funds and venture capital funds for a good couple 45 00:02:55,400 --> 00:03:00,079 Speaker 1: of decades, posting fairly spectacular returns. I'm only gonna have 46 00:03:00,160 --> 00:03:03,320 Speaker 1: a short version of your CV because it will take 47 00:03:03,400 --> 00:03:06,960 Speaker 1: up the whole segment. Otherwise launched a hedge fund. Uh, 48 00:03:07,080 --> 00:03:11,799 Speaker 1: it was Samberg, Dawson, Samberg, not Dawson and the originally 49 00:03:11,840 --> 00:03:15,000 Speaker 1: back in eighties six, back when there was fifty hedge 50 00:03:15,000 --> 00:03:17,080 Speaker 1: funds something. That's the number I made up, but it's 51 00:03:17,160 --> 00:03:20,560 Speaker 1: under a hundred. It was a small number of hedge funds. 52 00:03:20,880 --> 00:03:23,480 Speaker 1: Put it returns over the life of his funds of 53 00:03:23,600 --> 00:03:28,880 Speaker 1: almost And the interesting thing about Mr Sandberg doesn't come 54 00:03:28,919 --> 00:03:35,400 Speaker 1: from the traditional business economic background. Undergraduate bachelors of science 55 00:03:35,400 --> 00:03:38,760 Speaker 1: and aeronautics and astronautics from m I T and then 56 00:03:38,800 --> 00:03:42,120 Speaker 1: a master's degree in those subjects from Stanford, So really 57 00:03:42,160 --> 00:03:45,640 Speaker 1: you're a rocket science you were rocket science no longer 58 00:03:45,680 --> 00:03:47,960 Speaker 1: I am, and then you end up getting your NBA 59 00:03:48,120 --> 00:03:50,320 Speaker 1: from Columbia. We'll talk a little bit about some of 60 00:03:50,400 --> 00:03:55,120 Speaker 1: your classmates at Columbia. There's some really interesting stories there. Uh. 61 00:03:55,360 --> 00:03:58,000 Speaker 1: You currently are the chairman of the m I T 62 00:03:58,920 --> 00:04:01,240 Speaker 1: I'm sorry sits the board of advisors of the m 63 00:04:01,280 --> 00:04:05,600 Speaker 1: I T Energy and UM Initiative, and you were chairman 64 00:04:05,640 --> 00:04:09,280 Speaker 1: of the m I T Investment Management Company. I sit 65 00:04:09,400 --> 00:04:13,360 Speaker 1: on the executive committee UM, and I'm very very involved 66 00:04:13,360 --> 00:04:15,360 Speaker 1: in the school. There's so many other things and so 67 00:04:15,400 --> 00:04:18,040 Speaker 1: many other titles you have. You're very active in philanthropy 68 00:04:18,120 --> 00:04:20,839 Speaker 1: and a variety of other things. We'll get into that 69 00:04:20,920 --> 00:04:23,400 Speaker 1: as the show goes on. Let me just start by saying, 70 00:04:23,560 --> 00:04:25,800 Speaker 1: welcome to bloom Buck. It's great to be here. Thank you, Verry. 71 00:04:26,160 --> 00:04:32,040 Speaker 1: So first I have to ask you were at Lockheed 72 00:04:32,080 --> 00:04:35,359 Speaker 1: Missile and Space Company in San Francisco, You come to 73 00:04:35,400 --> 00:04:38,320 Speaker 1: New York, you get your NBA from Colombia, and then 74 00:04:38,360 --> 00:04:42,000 Speaker 1: you end up working as a security analyst at Kidder Peabody. 75 00:04:42,440 --> 00:04:48,720 Speaker 1: How do you transition from literally rocket scientists to financial analyst. UM, 76 00:04:48,720 --> 00:04:50,720 Speaker 1: you gotta follow your passion. You've got to follow your 77 00:04:50,760 --> 00:04:54,599 Speaker 1: competitive advantage. And UM I quickly found out that I 78 00:04:54,640 --> 00:04:56,839 Speaker 1: could solve the equations, but I had no idea what 79 00:04:56,960 --> 00:05:00,320 Speaker 1: was really going on. UM. I worked in missilante aitude 80 00:05:00,360 --> 00:05:05,800 Speaker 1: control UM. So these were defined. So we were the 81 00:05:05,880 --> 00:05:09,280 Speaker 1: US launches rockets, UM. Satellites come off of those. I 82 00:05:09,360 --> 00:05:12,359 Speaker 1: looked down on Russia back then, UM, and they have 83 00:05:12,440 --> 00:05:16,400 Speaker 1: infrared sensors and they find out where, uh, the Russians 84 00:05:16,400 --> 00:05:19,960 Speaker 1: are launching rockets, and there's a lot of orbital mechanics. 85 00:05:20,520 --> 00:05:23,039 Speaker 1: And I could solid equations, but did I really have 86 00:05:23,120 --> 00:05:25,080 Speaker 1: any clue as to what was actually going on? I 87 00:05:25,160 --> 00:05:27,560 Speaker 1: quickly found out that I did not. So you go 88 00:05:27,640 --> 00:05:31,119 Speaker 1: to kid A Peabody, you're covering aerospace and and those sorts. 89 00:05:31,279 --> 00:05:34,719 Speaker 1: It's so interesting how I made the transition. I I 90 00:05:34,760 --> 00:05:37,360 Speaker 1: wasn't going to go to graduate school, but Locke would 91 00:05:37,400 --> 00:05:39,000 Speaker 1: pay for it, so I said, sure, you're gonna pay 92 00:05:39,040 --> 00:05:41,160 Speaker 1: for it, I'll do it. So I went to Stanford, UH. 93 00:05:41,200 --> 00:05:42,880 Speaker 1: And it was during the day, and on the way 94 00:05:42,880 --> 00:05:44,800 Speaker 1: back I would stop off at a brokerage office. And 95 00:05:44,839 --> 00:05:48,200 Speaker 1: it was the time when comp Compsat went public. That's 96 00:05:48,200 --> 00:05:51,600 Speaker 1: something I know something about the sties. I got out 97 00:05:51,640 --> 00:05:54,520 Speaker 1: of m I T and sixty two and I was 98 00:05:54,680 --> 00:05:57,800 Speaker 1: working as an engineer from sixty two sixty five. Someplace 99 00:05:57,839 --> 00:06:00,840 Speaker 1: in that time period, comps At law as the company 100 00:06:00,880 --> 00:06:04,719 Speaker 1: goes public. Uh, and I'm fascinating. It's like, my goodness, 101 00:06:04,800 --> 00:06:06,640 Speaker 1: all the stuff that I know, I can apply it 102 00:06:06,640 --> 00:06:10,480 Speaker 1: to I can real money. Um, as opposed to supposed 103 00:06:10,560 --> 00:06:13,159 Speaker 1: you're working my way up the engineering ladder where I 104 00:06:13,320 --> 00:06:16,520 Speaker 1: had no illusion that I would ever be great. That 105 00:06:16,640 --> 00:06:18,560 Speaker 1: was a good middle class job. But you're never going 106 00:06:18,600 --> 00:06:23,640 Speaker 1: to My dad was an electrician. UM, so you were 107 00:06:23,680 --> 00:06:26,960 Speaker 1: making more money than your dad when you're so, then 108 00:06:27,000 --> 00:06:30,880 Speaker 1: how did you go from there to Columbia? Um? Because 109 00:06:30,920 --> 00:06:34,960 Speaker 1: my wife needed to get a job teaching school in 110 00:06:35,000 --> 00:06:37,680 Speaker 1: New York any place, and the only place I knew 111 00:06:37,680 --> 00:06:39,200 Speaker 1: for sure you could get one was back in New 112 00:06:39,279 --> 00:06:44,080 Speaker 1: York because I people. So you go to Columbia and 113 00:06:44,880 --> 00:06:46,200 Speaker 1: this is a rumor, and you have to tell me 114 00:06:46,240 --> 00:06:49,240 Speaker 1: if this is true. Used to car pool to Columbia 115 00:06:49,320 --> 00:06:52,279 Speaker 1: with two guys named Mario Ga Belly and Lee Cooperman. 116 00:06:52,800 --> 00:06:55,520 Speaker 1: It's no rumor, it's the actually truth. That's a that's 117 00:06:55,520 --> 00:06:58,760 Speaker 1: a lot of intellectual firepower. Learned more in the car 118 00:06:58,800 --> 00:07:02,120 Speaker 1: pool than I did at school. Don't tell, don't tell 119 00:07:02,120 --> 00:07:04,239 Speaker 1: the school. I said that I cod share the board. 120 00:07:04,960 --> 00:07:07,840 Speaker 1: By the way, the school that you're you're dissing right now. 121 00:07:08,120 --> 00:07:12,800 Speaker 1: You made the biggest donation in their history to their 122 00:07:12,840 --> 00:07:16,679 Speaker 1: to their graduate program. It's been exceeded by a couple 123 00:07:16,720 --> 00:07:19,320 Speaker 1: of other guys now, but people, it was a large no. 124 00:07:19,440 --> 00:07:23,920 Speaker 1: I I My my success in life is UM is 125 00:07:24,040 --> 00:07:29,000 Speaker 1: taking UM a decent expertise in technology and combining with 126 00:07:29,160 --> 00:07:32,360 Speaker 1: finance and trying to apply those two things to help 127 00:07:32,400 --> 00:07:36,920 Speaker 1: companies aggregate capital um and grow and create jobs. And 128 00:07:36,960 --> 00:07:39,160 Speaker 1: so I'm one of those guys who believes in all 129 00:07:39,200 --> 00:07:41,840 Speaker 1: of that good stuff? Are there many people who don't 130 00:07:41,840 --> 00:07:44,000 Speaker 1: believe a lot of people who don't. I think people 131 00:07:44,040 --> 00:07:46,560 Speaker 1: believe it, they just get offended by some of the 132 00:07:46,600 --> 00:07:51,880 Speaker 1: gross excesses that occasionally erupt. I think they're also jealous 133 00:07:52,160 --> 00:07:57,000 Speaker 1: UM there's there's possible and possibly that. So so one 134 00:07:57,000 --> 00:07:59,400 Speaker 1: of the things we've had Lee Cooperman on, I know 135 00:07:59,520 --> 00:08:02,880 Speaker 1: you guys are friendly. One of the things that Lee 136 00:08:02,960 --> 00:08:08,080 Speaker 1: talked about was how he developed his deep value framework 137 00:08:08,160 --> 00:08:12,360 Speaker 1: from Colombia. What was your experience like? UM? My experience 138 00:08:12,440 --> 00:08:16,360 Speaker 1: was I was the antithesis of deep value. M I 139 00:08:16,440 --> 00:08:21,320 Speaker 1: remember Mario Lee and I, Uh, well, Mario and I 140 00:08:21,360 --> 00:08:24,200 Speaker 1: took a course from Roger Murray, who was the guy 141 00:08:24,440 --> 00:08:28,080 Speaker 1: reinstituted the value investing stuff at Columbia. He got he 142 00:08:28,200 --> 00:08:30,400 Speaker 1: got one grade higher than I did because it was 143 00:08:30,440 --> 00:08:32,680 Speaker 1: analysis of a company where it turned out that the 144 00:08:32,760 --> 00:08:34,880 Speaker 1: really key factor was the old man who found it 145 00:08:34,920 --> 00:08:37,680 Speaker 1: was going to die and then value would be created, 146 00:08:37,679 --> 00:08:41,600 Speaker 1: which Mario was fantastic at. I thought that was disgusting. 147 00:08:41,760 --> 00:08:43,720 Speaker 1: I mean, I really am interested in people who were 148 00:08:43,760 --> 00:08:46,680 Speaker 1: alive and doing things. You care about the technology you 149 00:08:46,720 --> 00:08:51,400 Speaker 1: have the physics. I care about solving the world's problems 150 00:08:51,400 --> 00:08:53,960 Speaker 1: and getting rich while doing it, because I think the 151 00:08:54,040 --> 00:08:57,240 Speaker 1: two actually do work together well. Many people who have 152 00:08:57,320 --> 00:09:02,240 Speaker 1: created solutions to pernicious problems have not only helped society 153 00:09:02,280 --> 00:09:04,840 Speaker 1: but created a tremendous amount of wealth. I think that's 154 00:09:04,920 --> 00:09:07,640 Speaker 1: the americanay, and I think it's phenomenal. You're listening to 155 00:09:07,720 --> 00:09:11,439 Speaker 1: Masters in Business on Bloomberg Radio. We're speaking with Art Sandberg. 156 00:09:11,600 --> 00:09:15,560 Speaker 1: He is the founder of Peaquad Capital Management and now 157 00:09:15,600 --> 00:09:21,360 Speaker 1: he's running Hawks Financial venture capital and Hawks is a 158 00:09:21,600 --> 00:09:25,120 Speaker 1: umbrella family office venture capital and stuff. But we do 159 00:09:25,200 --> 00:09:27,480 Speaker 1: have a fun though that my older son is now 160 00:09:27,520 --> 00:09:30,640 Speaker 1: the managing partner. We call it a Katia Woods uh 161 00:09:30,760 --> 00:09:33,280 Speaker 1: and it's increasingly showing up in the holding of some 162 00:09:33,400 --> 00:09:39,560 Speaker 1: very interesting companies. So that's that's fascinating. Let's talk about UM. 163 00:09:39,679 --> 00:09:42,560 Speaker 1: We mentioned earlier less than a hundred hedge funds when 164 00:09:42,559 --> 00:09:48,200 Speaker 1: you launched, and and the fund returned a rather smart 165 00:09:48,600 --> 00:09:53,079 Speaker 1: by the way, that's very similar to Lee Cooperman's returns seventent. 166 00:09:53,720 --> 00:09:56,800 Speaker 1: Lee is a great friend. Mine is better. I think 167 00:09:56,840 --> 00:09:59,559 Speaker 1: you're about half a percent well, And I will say, 168 00:09:59,679 --> 00:10:02,440 Speaker 1: because you know, I believe that numbers are numbers, and 169 00:10:02,440 --> 00:10:04,760 Speaker 1: you're full with numbers. I was, you know, I did 170 00:10:04,880 --> 00:10:06,920 Speaker 1: go to M I T. But my first year I 171 00:10:06,960 --> 00:10:11,160 Speaker 1: was down. You were down about you were to adjust 172 00:10:11,200 --> 00:10:15,320 Speaker 1: it like most people have first years when they were 173 00:10:16,559 --> 00:10:19,160 Speaker 1: and then the money pours in, and then depending on 174 00:10:19,280 --> 00:10:21,800 Speaker 1: you came in, you might not have even made money 175 00:10:21,800 --> 00:10:23,719 Speaker 1: with one of these guys with a great record. The 176 00:10:24,160 --> 00:10:28,120 Speaker 1: not true here. The dollar adjusted returns, not the time 177 00:10:28,160 --> 00:10:31,960 Speaker 1: weighted returns for a lot of big funds are awful 178 00:10:32,280 --> 00:10:36,199 Speaker 1: because they were putting up returns with twenty million dollars. 179 00:10:36,559 --> 00:10:39,439 Speaker 1: Then they're at forty five billion and they lose a third, 180 00:10:39,840 --> 00:10:42,640 Speaker 1: So net net, over time there are a dollar loser. 181 00:10:42,800 --> 00:10:46,440 Speaker 1: But percentage wise, UM on a time weighted basis, I've 182 00:10:46,480 --> 00:10:49,160 Speaker 1: never had the chance to say this before, but that 183 00:10:49,360 --> 00:10:53,079 Speaker 1: is absolutely not the case of QUI so you with 184 00:10:53,200 --> 00:10:57,120 Speaker 1: down And one of your quotes that I really like 185 00:10:57,400 --> 00:11:00,520 Speaker 1: was you learn more from your disappointments then you do 186 00:11:00,640 --> 00:11:06,839 Speaker 1: from your successes. Success feeds on success, and people are 187 00:11:06,880 --> 00:11:09,440 Speaker 1: there to tell you how wonderful you are. People don't 188 00:11:09,559 --> 00:11:14,480 Speaker 1: really unless money attracts. Money is used to and I 189 00:11:14,520 --> 00:11:17,600 Speaker 1: never understood it until a few years ago, and and 190 00:11:17,600 --> 00:11:19,199 Speaker 1: and and if you if you do that for a 191 00:11:19,240 --> 00:11:22,960 Speaker 1: long enough period of time, my belief, um, clearly my 192 00:11:23,040 --> 00:11:25,200 Speaker 1: belief is that people then want to start to tell 193 00:11:25,240 --> 00:11:26,920 Speaker 1: your down. They either want to continue to build you 194 00:11:27,000 --> 00:11:30,520 Speaker 1: up or tell you down, and there become a high 195 00:11:30,559 --> 00:11:33,679 Speaker 1: profile target. So, um, you're not going to hear a 196 00:11:33,679 --> 00:11:36,640 Speaker 1: lot of things you believe about what you're doing wrong 197 00:11:36,679 --> 00:11:40,079 Speaker 1: when you're doing right. Um, but you are doing things wrong. 198 00:11:40,360 --> 00:11:43,439 Speaker 1: And and then if you just go into a shell 199 00:11:43,600 --> 00:11:46,960 Speaker 1: and you don't realize and self analyze and you know, 200 00:11:47,120 --> 00:11:51,120 Speaker 1: really look carefully at what you did and why it failed, um, 201 00:11:51,440 --> 00:11:53,520 Speaker 1: you will not do well. So after I was down, 202 00:11:53,679 --> 00:11:56,439 Speaker 1: because that was the crash of eight seven, and it 203 00:11:56,520 --> 00:12:01,760 Speaker 1: was you had launched what Yes, so you did worse 204 00:12:01,800 --> 00:12:06,600 Speaker 1: than the crash. Uh. It was one day the market 205 00:12:06,640 --> 00:12:10,760 Speaker 1: was up almost and ended up returning for the year. 206 00:12:11,240 --> 00:12:13,719 Speaker 1: That was a big, big down draft, which it was 207 00:12:13,800 --> 00:12:17,240 Speaker 1: brutal UM. And I remember having because I I when 208 00:12:17,240 --> 00:12:20,240 Speaker 1: I started the fund it was in small companies that 209 00:12:20,320 --> 00:12:24,360 Speaker 1: were overlooked that could become big companies. Those are exactly 210 00:12:24,360 --> 00:12:28,000 Speaker 1: the kind of illiquid positions got creamed and so I 211 00:12:28,120 --> 00:12:30,760 Speaker 1: ended up having Assuming that I was going to get redemptions, 212 00:12:31,040 --> 00:12:33,560 Speaker 1: I had a call companies and say, would you buy 213 00:12:33,559 --> 00:12:36,839 Speaker 1: my stock? Um? That is, if anybody who knows anything 214 00:12:36,840 --> 00:12:38,880 Speaker 1: about anything, that is not a good way to UH 215 00:12:39,080 --> 00:12:42,280 Speaker 1: to execute a cell program. But there were no other buyers, 216 00:12:42,720 --> 00:12:46,120 Speaker 1: so I got smoked UM and I so I was 217 00:12:46,200 --> 00:12:49,120 Speaker 1: up three percent for my stub period in eighty six 218 00:12:49,360 --> 00:12:53,240 Speaker 1: and I was down six I can't remember percent in 219 00:12:53,360 --> 00:12:56,480 Speaker 1: eighty seven, but then it came roaring back. So what 220 00:12:56,520 --> 00:12:58,559 Speaker 1: was what was the subsequent couple of years? So in 221 00:12:58,600 --> 00:13:02,040 Speaker 1: other words, you put up eighteen almost eighteen percent a 222 00:13:02,160 --> 00:13:05,560 Speaker 1: year despite starting from that. So if you were to 223 00:13:05,600 --> 00:13:07,839 Speaker 1: just do the simple math, it would take it up 224 00:13:08,559 --> 00:13:13,320 Speaker 1: probably closer if you backed out that over UM the 225 00:13:13,400 --> 00:13:18,240 Speaker 1: next few years we're up twenty up seventy five it's 226 00:13:18,280 --> 00:13:21,800 Speaker 1: just you know, crazy numbers right in the late eighties 227 00:13:21,960 --> 00:13:27,800 Speaker 1: up seventies, starting in back in eighty nine, UM, and 228 00:13:27,840 --> 00:13:33,640 Speaker 1: then and then I can imagine were just insane. What 229 00:13:33,679 --> 00:13:36,040 Speaker 1: sort of numbers were you doing those? Yes, you know. 230 00:13:38,960 --> 00:13:41,200 Speaker 1: But one of the things that did Pequa was to 231 00:13:41,280 --> 00:13:44,880 Speaker 1: realize that because because I was sort of the first 232 00:13:44,880 --> 00:13:48,319 Speaker 1: guy to really specialized in technology investing as as a 233 00:13:48,360 --> 00:13:53,400 Speaker 1: hedge fund. Really yeah, without a doubt, and I sector funds, 234 00:13:53,400 --> 00:13:57,320 Speaker 1: and I had I had a great partner, Dan Benton, 235 00:13:57,360 --> 00:14:00,720 Speaker 1: who who then took over the technology she stuff, because 236 00:14:00,760 --> 00:14:03,280 Speaker 1: I thought I had brought her background in the whole 237 00:14:03,280 --> 00:14:05,360 Speaker 1: business and I can run the business and everything else. 238 00:14:05,400 --> 00:14:07,840 Speaker 1: And he had a hundred percent year. I had a 239 00:14:07,840 --> 00:14:12,080 Speaker 1: healthcare fund that was up that time period. UM, we 240 00:14:12,120 --> 00:14:15,040 Speaker 1: started an energy fund UM. So we had sector funds, 241 00:14:15,120 --> 00:14:18,600 Speaker 1: and I devised a way for me to manage increasing 242 00:14:18,600 --> 00:14:21,320 Speaker 1: amounts of money by using those talents and bringing him 243 00:14:21,320 --> 00:14:23,280 Speaker 1: into the fund while I'm still doing trying to do 244 00:14:23,360 --> 00:14:27,040 Speaker 1: research myself. In the early days of the fund, someone 245 00:14:27,160 --> 00:14:31,320 Speaker 1: had written and I don't remember where I'm quoting this from, 246 00:14:31,400 --> 00:14:34,960 Speaker 1: that it was over fifteen billion dollars and kept growing 247 00:14:35,120 --> 00:14:37,360 Speaker 1: and at the time that made it the biggest hedge 248 00:14:37,360 --> 00:14:39,880 Speaker 1: fund in the world. Is that true? You wake up 249 00:14:40,040 --> 00:14:43,360 Speaker 1: and and you wake up to unexpected news every once 250 00:14:43,360 --> 00:14:44,880 Speaker 1: in a while, and that's happened to me more than 251 00:14:44,920 --> 00:14:47,640 Speaker 1: once in my life. But the unexpected news in this 252 00:14:47,720 --> 00:14:52,000 Speaker 1: case was in the spring of two thousand. UM, we 253 00:14:52,040 --> 00:14:55,600 Speaker 1: had a PR firm, and the PR firm calls and says, Um, 254 00:14:55,680 --> 00:14:58,400 Speaker 1: the Wall Street Journal, UM is going to do a story, 255 00:14:59,360 --> 00:15:04,840 Speaker 1: uh on hedge funds now that George Soros and Julian 256 00:15:04,960 --> 00:15:08,239 Speaker 1: Robertson have decided to close down to the outside investors. 257 00:15:08,560 --> 00:15:10,600 Speaker 1: And they have determined that you were the largest hedge 258 00:15:10,600 --> 00:15:13,680 Speaker 1: funds in the world and clients at that point, sir 259 00:15:13,880 --> 00:15:17,120 Speaker 1: and and and they will do the article, UM with 260 00:15:17,240 --> 00:15:20,360 Speaker 1: or without your input. UM, and we suggest you probably 261 00:15:20,360 --> 00:15:22,480 Speaker 1: should tell you're in the part of the story. I 262 00:15:22,520 --> 00:15:24,920 Speaker 1: don't think anybody really, I mean, people on Wall Street 263 00:15:25,040 --> 00:15:28,440 Speaker 1: knew who peak what was But I I don't like publicity. 264 00:15:28,520 --> 00:15:31,040 Speaker 1: I like to just live my life, do my thing, 265 00:15:31,200 --> 00:15:35,720 Speaker 1: give back. I believe I do give back. UM. And 266 00:15:35,760 --> 00:15:38,960 Speaker 1: I'm not out for self and grand grandizement. And uh 267 00:15:39,320 --> 00:15:41,280 Speaker 1: So we were unknown and then all of a sudden, 268 00:15:41,280 --> 00:15:44,960 Speaker 1: on a Monday morning, or Tuesday. Bang, there it was, 269 00:15:45,240 --> 00:15:50,040 Speaker 1: and my life changed really in what ways? No, nothing positive. 270 00:15:51,560 --> 00:15:54,040 Speaker 1: So hence the low profile is the better way to go. 271 00:15:54,400 --> 00:15:57,120 Speaker 1: I've tried to maintain that ever since. And as you know, Barry, 272 00:15:57,200 --> 00:15:59,320 Speaker 1: that was one of my reluctance is about doing this. 273 00:15:59,480 --> 00:16:02,680 Speaker 1: I do know and and for listeners, I've been chasing 274 00:16:02,840 --> 00:16:05,600 Speaker 1: Art down for the better part of a year and 275 00:16:05,840 --> 00:16:10,760 Speaker 1: Um after our conversation with Lee Cooperman, Lee eventually convinced you, oh, 276 00:16:10,800 --> 00:16:13,000 Speaker 1: this guy isn't that bad. You should come to so 277 00:16:13,760 --> 00:16:16,640 Speaker 1: so far, so good. You're listening to Masters in Business 278 00:16:16,680 --> 00:16:20,240 Speaker 1: on Bloomberg Radio. My guest today is Art Sandberg. He 279 00:16:20,600 --> 00:16:25,040 Speaker 1: is a former rocket scientist who became an analyst, hedge 280 00:16:25,040 --> 00:16:28,760 Speaker 1: fund manager, and venture capitalist. Let's talk a little bit 281 00:16:28,800 --> 00:16:32,880 Speaker 1: about your methodology, because we've already identified you're not a 282 00:16:32,960 --> 00:16:37,080 Speaker 1: deep value investor like your friends Lee and Mario Um, 283 00:16:37,240 --> 00:16:41,520 Speaker 1: Lee Cooperman and Mario Gavelli. What is your methodology when 284 00:16:41,520 --> 00:16:44,760 Speaker 1: you're looking at either a public stock that you're thinking 285 00:16:44,800 --> 00:16:48,200 Speaker 1: about buying or a private company that you're thinking about 286 00:16:48,240 --> 00:16:52,440 Speaker 1: investing in. UM, it sort of starts from the same 287 00:16:54,480 --> 00:16:57,640 Speaker 1: It starts from the same basis, which is what kind 288 00:16:57,680 --> 00:17:01,000 Speaker 1: of change is possible. What kind of change can you 289 00:17:01,120 --> 00:17:05,040 Speaker 1: find that is being implemented by smart people? UM. It 290 00:17:05,040 --> 00:17:09,440 Speaker 1: becomes more difficult obviously as UM a trend goes on 291 00:17:09,560 --> 00:17:11,840 Speaker 1: and as you become larger in size, you can't you 292 00:17:11,880 --> 00:17:16,240 Speaker 1: really can't establish those positions. UM. But initially my my 293 00:17:16,240 --> 00:17:18,480 Speaker 1: my fund was set up to invest in market caps 294 00:17:18,680 --> 00:17:20,320 Speaker 1: if you can believe this in this day and age. 295 00:17:20,359 --> 00:17:23,399 Speaker 1: But we're talking thirty years ago now of market caps 296 00:17:23,480 --> 00:17:26,960 Speaker 1: under under two hundred million dollars, uh, YadA YadA ya. 297 00:17:26,960 --> 00:17:29,200 Speaker 1: And then of course it changed thirty years ago into 298 00:17:29,200 --> 00:17:34,280 Speaker 1: two hundred million dollars today. That's still thousands of companies, 299 00:17:34,320 --> 00:17:37,280 Speaker 1: but they trade by appointment. There's not a lot of 300 00:17:37,280 --> 00:17:39,960 Speaker 1: liquidity of it, which is the only kind of things 301 00:17:40,000 --> 00:17:42,399 Speaker 1: that owned my personal account right now. And I won't 302 00:17:42,440 --> 00:17:47,280 Speaker 1: talk about any of those. But I'm back to back 303 00:17:47,280 --> 00:17:49,200 Speaker 1: to being able to do what I first did when 304 00:17:49,240 --> 00:17:53,600 Speaker 1: I UM, when you started the business, UM, you know, UH, 305 00:17:53,840 --> 00:17:58,720 Speaker 1: creating alpha through that cycle UM becomes difficult. UM. And 306 00:17:58,720 --> 00:18:02,720 Speaker 1: and so that approach that I described, UM, you have 307 00:18:02,840 --> 00:18:06,720 Speaker 1: to evolve into a master of markets, as it were, 308 00:18:06,800 --> 00:18:08,560 Speaker 1: to be able to go short and know how to 309 00:18:08,640 --> 00:18:12,720 Speaker 1: use derivatives appropriately match. You know the cost of doing 310 00:18:12,760 --> 00:18:17,720 Speaker 1: that to um the potential upside, and that's become increasingly 311 00:18:17,760 --> 00:18:21,920 Speaker 1: difficult for practitioners these days. And the results quite honestly 312 00:18:21,920 --> 00:18:24,919 Speaker 1: have been pretty pretty mediocre. When we look at the 313 00:18:25,000 --> 00:18:28,879 Speaker 1: small cap there are guys like David Booth of Dimensional Funds. 314 00:18:28,880 --> 00:18:33,840 Speaker 1: You've created a very nice business focusing on the small 315 00:18:33,920 --> 00:18:37,840 Speaker 1: cap um advantage. The fact that you actually see out 316 00:18:37,880 --> 00:18:43,000 Speaker 1: performance from smaller caps UM versus the big well followed. 317 00:18:43,280 --> 00:18:46,159 Speaker 1: There's an inefficiency amongst small caps that leads to I 318 00:18:46,160 --> 00:18:51,479 Speaker 1: think there's growing inefficiency UM because we all know what's 319 00:18:51,520 --> 00:18:53,919 Speaker 1: happened to employment in the brokerage industry, all know how 320 00:18:53,960 --> 00:18:57,119 Speaker 1: many companies are followed that's declining all the time. The 321 00:18:57,160 --> 00:19:01,080 Speaker 1: economics aren't there with the regulation um, they're burdens on 322 00:19:01,119 --> 00:19:04,640 Speaker 1: the company's plus the financial companies to follow them UM. 323 00:19:04,720 --> 00:19:07,159 Speaker 1: So the value is definitely there. The problem is that 324 00:19:07,200 --> 00:19:09,240 Speaker 1: nobody knows when you're gonna get paid for that value. 325 00:19:09,240 --> 00:19:12,600 Speaker 1: If David has managed to harvest some of these, more 326 00:19:12,640 --> 00:19:18,399 Speaker 1: power to them. But some of the guys now Dimensional Funds, 327 00:19:18,600 --> 00:19:22,480 Speaker 1: maybe they buy a position to everything, don't they they 328 00:19:22,520 --> 00:19:25,719 Speaker 1: have a quantitative model. They end up holding these things forever. 329 00:19:26,080 --> 00:19:28,760 Speaker 1: I wouldn't say everything they run through a number of screens. 330 00:19:28,920 --> 00:19:31,760 Speaker 1: Oh no, I'm not but detegrating what they do. Basically, 331 00:19:31,960 --> 00:19:34,920 Speaker 1: it's very different than the model I'm talking about. For sure, 332 00:19:35,320 --> 00:19:39,520 Speaker 1: I'm trying to identify winners. Um and they're in my experience, 333 00:19:39,680 --> 00:19:43,480 Speaker 1: like there aren't that many winners. So you mentioned earlier 334 00:19:43,480 --> 00:19:46,439 Speaker 1: you're running your own assets as opposed to when you 335 00:19:46,480 --> 00:19:50,080 Speaker 1: were running other people's money. How does that universe difference? 336 00:19:50,119 --> 00:19:52,879 Speaker 1: What's what's it like running your own money versus what 337 00:19:52,960 --> 00:19:54,639 Speaker 1: you have to deal with when you have outside of this. 338 00:19:54,840 --> 00:19:57,679 Speaker 1: It's very simple. You don't have to report, Okay, I 339 00:19:57,720 --> 00:20:00,200 Speaker 1: do have to report to uh I have to son, 340 00:20:00,280 --> 00:20:02,359 Speaker 1: so I do it with um and I have a 341 00:20:02,440 --> 00:20:05,359 Speaker 1: daughter who runs our family foundation. She and my wife. 342 00:20:05,600 --> 00:20:08,760 Speaker 1: Um So, in our family, the males make the moneys, 343 00:20:08,800 --> 00:20:12,000 Speaker 1: and the females or social conscience and and and and 344 00:20:12,040 --> 00:20:15,280 Speaker 1: help us give it back. Um So, my boss is 345 00:20:15,400 --> 00:20:19,360 Speaker 1: really the women in the Sandburry clan. Okay. They expect 346 00:20:19,400 --> 00:20:21,919 Speaker 1: that I will always perform, I will perform well, and 347 00:20:21,960 --> 00:20:25,440 Speaker 1: we will do great, great deeds for the world. Um So, 348 00:20:25,600 --> 00:20:29,040 Speaker 1: you still like have other other investors to to answer to. 349 00:20:29,359 --> 00:20:31,840 Speaker 1: But I I can deal with that because they are 350 00:20:31,840 --> 00:20:34,360 Speaker 1: in my family. So it's a little it's a little easier. 351 00:20:34,520 --> 00:20:37,320 Speaker 1: It's so easier. So we were talking about the increased 352 00:20:37,520 --> 00:20:40,960 Speaker 1: regulatory environment and how things have changed from when you 353 00:20:41,080 --> 00:20:44,159 Speaker 1: launched thirty years ago. Could you launch a fund today? 354 00:20:44,160 --> 00:20:47,639 Speaker 1: How what let's say, hypothetically you're right out of business 355 00:20:47,680 --> 00:20:50,520 Speaker 1: school today, what would it be like launching a fund 356 00:20:50,560 --> 00:20:53,320 Speaker 1: in this environment? Well, I guess in some ways it's easy. 357 00:20:53,400 --> 00:20:58,000 Speaker 1: Well talking about today today, UM, I don't really know 358 00:20:58,040 --> 00:21:01,400 Speaker 1: because I haven't been then involved or involved at all. 359 00:21:01,520 --> 00:21:04,960 Speaker 1: But um, at the peak of my success, it was 360 00:21:05,000 --> 00:21:07,560 Speaker 1: simple for anybody to raise a fund. I mean, everybody 361 00:21:07,640 --> 00:21:09,560 Speaker 1: was looking for the next great manager and they throw 362 00:21:09,640 --> 00:21:13,639 Speaker 1: money at him with fat return you know, return profiles 363 00:21:13,680 --> 00:21:16,840 Speaker 1: for for the manager. Um. I think that welcome has 364 00:21:16,880 --> 00:21:19,800 Speaker 1: been worn out. You know, that welcome has been worn out. 365 00:21:20,160 --> 00:21:24,120 Speaker 1: So now I think, if you don't have a nest egg, um, 366 00:21:24,359 --> 00:21:26,920 Speaker 1: you're not gonna make it. So you better have made 367 00:21:26,920 --> 00:21:30,639 Speaker 1: some money um before and put it at risk in 368 00:21:30,720 --> 00:21:33,960 Speaker 1: doing what you're doing. I certainly did that back when, 369 00:21:34,119 --> 00:21:38,280 Speaker 1: because if you're down, you can't really pay your bills, 370 00:21:38,320 --> 00:21:40,399 Speaker 1: so you better you better have something to live on 371 00:21:40,720 --> 00:21:42,399 Speaker 1: and then decide whether you really want to take the 372 00:21:42,520 --> 00:21:46,480 Speaker 1: risk for your family and everything. Um going forward. Um, 373 00:21:46,640 --> 00:21:49,080 Speaker 1: I think you went through a whole generation of people 374 00:21:49,119 --> 00:21:52,359 Speaker 1: who didn't have that risk. They just we're having money 375 00:21:52,400 --> 00:21:55,040 Speaker 1: thrown at them. Uh. And now there's a sorting out 376 00:21:55,080 --> 00:21:57,360 Speaker 1: process going on. So I think it's it's much more 377 00:21:57,359 --> 00:22:00,040 Speaker 1: difficult right now to sort of fund You're listening a 378 00:22:00,160 --> 00:22:03,480 Speaker 1: Master's in Business on Bloomberg Radio. My guest this week 379 00:22:03,600 --> 00:22:07,760 Speaker 1: is Art Sandberg, probably best known for pe Quad Management, 380 00:22:07,880 --> 00:22:11,960 Speaker 1: although he has been a well regarded venture capitalist and 381 00:22:12,040 --> 00:22:16,760 Speaker 1: philanthropist over the years. Let's talk about running a business. 382 00:22:16,760 --> 00:22:20,760 Speaker 1: What it's like to run an investment management business. I 383 00:22:21,080 --> 00:22:23,479 Speaker 1: some time ago read a speech you had given and 384 00:22:23,480 --> 00:22:27,680 Speaker 1: you had talked about how challenging it is to find 385 00:22:28,280 --> 00:22:33,359 Speaker 1: and hire the best people. M what why? Why? How 386 00:22:33,400 --> 00:22:36,960 Speaker 1: significant is that and why is that such a challenge 387 00:22:37,119 --> 00:22:44,720 Speaker 1: to an investment firm. Um, it's a challenge because um, uh, 388 00:22:44,800 --> 00:22:47,040 Speaker 1: there are a lot of smart people out there. UM. 389 00:22:47,119 --> 00:22:51,080 Speaker 1: So if you meet somebody and you talk to him, UM, 390 00:22:51,400 --> 00:22:53,199 Speaker 1: you know you're not gonna think everybody's smart, but you're 391 00:22:53,200 --> 00:22:55,000 Speaker 1: gonna think a lot of people are smart. And then 392 00:22:55,480 --> 00:22:58,159 Speaker 1: trying to distill down those who appear to be smart 393 00:22:58,520 --> 00:23:00,159 Speaker 1: into those who are gonna be really a fair to 394 00:23:00,240 --> 00:23:03,320 Speaker 1: be managing money, who are going to be um easy 395 00:23:03,359 --> 00:23:06,440 Speaker 1: to live with, because you have to live with these people, UM, 396 00:23:06,440 --> 00:23:09,920 Speaker 1: who aren't the kind of guys who become megalomaniacs. And 397 00:23:10,000 --> 00:23:12,440 Speaker 1: I think that all the success is due to their 398 00:23:12,480 --> 00:23:16,240 Speaker 1: efforts and not because of the team's effort. Very very difficult, 399 00:23:16,600 --> 00:23:19,800 Speaker 1: very difficult. How how soon after you make a key 400 00:23:19,880 --> 00:23:23,000 Speaker 1: hire do you usually know if you're right or wrong? Um, well, 401 00:23:23,040 --> 00:23:25,520 Speaker 1: I won't. I won't do anything that the key higher 402 00:23:26,040 --> 00:23:29,480 Speaker 1: um tells me to do on the first recommendation. Um. 403 00:23:29,600 --> 00:23:31,840 Speaker 1: I always waiting to see how that works out. Not 404 00:23:31,960 --> 00:23:34,080 Speaker 1: because I don't believe in it, but I believe it's 405 00:23:34,080 --> 00:23:37,440 Speaker 1: a it's a it's a far better learning example to 406 00:23:37,480 --> 00:23:40,680 Speaker 1: pick that one apart about what went wright what went wrong? Um, 407 00:23:40,760 --> 00:23:45,880 Speaker 1: so objectively with no money at risk, and and and 408 00:23:45,880 --> 00:23:49,560 Speaker 1: and then and then you you progress from there. But um, 409 00:23:50,840 --> 00:23:53,159 Speaker 1: the great, the great fortune I had when I started 410 00:23:53,160 --> 00:23:56,280 Speaker 1: peak was, UM, I hit a hot streak of hiring 411 00:23:56,520 --> 00:23:58,760 Speaker 1: and UM, you know you like to think it's all 412 00:23:58,760 --> 00:24:01,640 Speaker 1: because of yourself, but you know I brought in Dan 413 00:24:01,680 --> 00:24:04,280 Speaker 1: Benton I brought in Mark Bach, I brought in Peter Dartley, 414 00:24:04,320 --> 00:24:06,679 Speaker 1: I brought in Church and Deel I brought it. The 415 00:24:06,680 --> 00:24:11,760 Speaker 1: first four hires that I made were spectacular, and then 416 00:24:11,800 --> 00:24:14,520 Speaker 1: it gets harder because they hire people and you hire 417 00:24:14,560 --> 00:24:16,359 Speaker 1: other people, and all of a sudden, there's a lot 418 00:24:16,400 --> 00:24:18,479 Speaker 1: of people, and all of a sudden you're getting bigger, 419 00:24:18,760 --> 00:24:20,800 Speaker 1: and all of a sudden you have back office issues, 420 00:24:20,880 --> 00:24:22,800 Speaker 1: and all of a sudden, every client wants to talk 421 00:24:22,840 --> 00:24:26,919 Speaker 1: to you, and it's just very, very difficult to maintain 422 00:24:26,960 --> 00:24:29,720 Speaker 1: your focus. But those are those are good problems. Those 423 00:24:29,720 --> 00:24:33,439 Speaker 1: are success. They're great problems. I'd rather have those problems 424 00:24:33,440 --> 00:24:35,600 Speaker 1: and not have them. But they are problems, right, Well, 425 00:24:35,600 --> 00:24:37,959 Speaker 1: they're better problems than why is the fund doing so poorly? 426 00:24:38,040 --> 00:24:40,520 Speaker 1: Why have five of you employees laughed? Why you know 427 00:24:40,560 --> 00:24:42,880 Speaker 1: those are bad problems? Yeah, well that's when you get 428 00:24:42,880 --> 00:24:44,840 Speaker 1: into the point where so much money is coming into 429 00:24:44,880 --> 00:24:47,560 Speaker 1: the consultant's controlled they as they should. I mean, they 430 00:24:47,600 --> 00:24:50,040 Speaker 1: have a fiduciary responsibility, but do they I'm not sure 431 00:24:50,040 --> 00:24:54,600 Speaker 1: if consultants have a fiduciary response. Um, the consultants don't. 432 00:24:54,640 --> 00:24:58,919 Speaker 1: But the boards in hospitals, the boards that educational institutions 433 00:24:59,000 --> 00:25:02,840 Speaker 1: whatever they do, and they need the cover of the consultants. 434 00:25:03,400 --> 00:25:08,399 Speaker 1: Um uh, not covered is gonna sound worse than it 435 00:25:08,960 --> 00:25:12,240 Speaker 1: that I intended. They need the plausible, uh, somebody to 436 00:25:12,240 --> 00:25:14,720 Speaker 1: point a finger at when things go wrong. They also 437 00:25:14,960 --> 00:25:17,240 Speaker 1: need somebody who's gonna do it full time. I mean 438 00:25:17,320 --> 00:25:20,320 Speaker 1: usually the people who are on these committees are very 439 00:25:20,400 --> 00:25:23,359 Speaker 1: very busy time. It's not a full time, part time. 440 00:25:23,359 --> 00:25:26,760 Speaker 1: They've got very active careers that they're very good at, 441 00:25:26,880 --> 00:25:30,680 Speaker 1: and they have to delegate to somebody. So the infrastructure 442 00:25:30,760 --> 00:25:36,280 Speaker 1: builds up. Anything that is successful creates either regulators, consultants, 443 00:25:36,320 --> 00:25:41,840 Speaker 1: an infrastructure around that activity. That. Um, there's a challenge 444 00:25:41,880 --> 00:25:45,440 Speaker 1: to people who are really say dragged on future returns 445 00:25:45,480 --> 00:25:49,440 Speaker 1: and operations. It's inevitable. There's no way around that. I 446 00:25:49,720 --> 00:25:56,040 Speaker 1: didn't know it's inevitable. I just inevitable, okay. Um. One 447 00:25:56,080 --> 00:25:58,080 Speaker 1: of the themes that we've had in the show I'm 448 00:25:58,080 --> 00:26:01,359 Speaker 1: Gonna Change Gears on You has been the role of luck, 449 00:26:01,520 --> 00:26:05,520 Speaker 1: whether it's in business or investing or even careers. Lee 450 00:26:05,640 --> 00:26:09,280 Speaker 1: talked about this, Clivastness talked about this a number of people. 451 00:26:09,880 --> 00:26:13,080 Speaker 1: Bill Gross talked about this. What is the role of 452 00:26:13,240 --> 00:26:17,320 Speaker 1: luck in in building a firm and making investments. How 453 00:26:17,359 --> 00:26:22,320 Speaker 1: does it affect people's professional careers. I'm sure it's a 454 00:26:22,359 --> 00:26:27,000 Speaker 1: major Uh, it's it's a major causal effect. But if 455 00:26:27,000 --> 00:26:30,359 Speaker 1: you think about it, um, that's the biggest mistake you 456 00:26:30,359 --> 00:26:33,080 Speaker 1: can make. I mean I never thought about, boy, am 457 00:26:33,080 --> 00:26:37,320 Speaker 1: I lucky? I mean after I had achieved the success, 458 00:26:37,359 --> 00:26:40,600 Speaker 1: perhaps I thought that that was lucky. But you know, not, not, 459 00:26:40,600 --> 00:26:42,520 Speaker 1: not while I was doing it. While you're doing it, 460 00:26:42,560 --> 00:26:45,320 Speaker 1: what are you focused on? Your focus on your core principles? 461 00:26:45,359 --> 00:26:47,200 Speaker 1: You know? What? What what is it that you bring 462 00:26:47,200 --> 00:26:51,080 Speaker 1: the table as different than other people? How do you, um, 463 00:26:51,760 --> 00:26:55,159 Speaker 1: how do you build an organization around you that it 464 00:26:55,200 --> 00:27:00,359 Speaker 1: amplifies that that competitive advantage? Um? And stay you know, 465 00:27:00,440 --> 00:27:03,760 Speaker 1: and and continue to learn and and and and and 466 00:27:03,840 --> 00:27:07,399 Speaker 1: learn from your setbacks all the things we talked about before. 467 00:27:07,520 --> 00:27:10,399 Speaker 1: But to think that I don't really believe it was 468 00:27:10,440 --> 00:27:12,240 Speaker 1: because of luck. I think it was because I was 469 00:27:12,359 --> 00:27:16,000 Speaker 1: I was, I was, I was driven. Um I did 470 00:27:16,000 --> 00:27:20,119 Speaker 1: I have setbacks? You better have setbacks. But UM, I 471 00:27:20,280 --> 00:27:23,439 Speaker 1: viewed those of setbacks and and things to overcome, not 472 00:27:23,440 --> 00:27:25,920 Speaker 1: not like someday I'm gonna get lucky. So I'm gonna 473 00:27:26,000 --> 00:27:28,359 Speaker 1: keep keep doing this, so you really have more of 474 00:27:28,440 --> 00:27:31,240 Speaker 1: an engineers approach, which is, here's the formula, we're gonna 475 00:27:31,240 --> 00:27:33,679 Speaker 1: plug and jug and ultimately you come out with the 476 00:27:33,720 --> 00:27:37,399 Speaker 1: conclusion on the other end. So we have the pope 477 00:27:37,400 --> 00:27:41,080 Speaker 1: in town. That makes it appropriate to talk a little 478 00:27:41,080 --> 00:27:44,640 Speaker 1: bit about charity and giving back. We've we've talked about that, right. 479 00:27:45,040 --> 00:27:50,800 Speaker 1: You have a number of philanthropic causes, organizations, you have 480 00:27:50,840 --> 00:27:54,280 Speaker 1: your foundation. Let's let's talk a little bit about about that. 481 00:27:54,920 --> 00:28:00,600 Speaker 1: First question is what are your philanthropic goals? Um, I 482 00:28:00,600 --> 00:28:02,480 Speaker 1: don't know what the goals are. You know, to to 483 00:28:02,560 --> 00:28:05,360 Speaker 1: create a better world yet day Yeah yah, but um, 484 00:28:05,440 --> 00:28:07,520 Speaker 1: but a lot of this is formed by by by 485 00:28:07,560 --> 00:28:10,560 Speaker 1: your life experience. So my life experiences that my grandfather 486 00:28:10,640 --> 00:28:14,560 Speaker 1: came over from Russian Poland UM one one was a tailor. 487 00:28:15,080 --> 00:28:18,639 Speaker 1: UM my dad, who was very bright guy, was the 488 00:28:18,640 --> 00:28:22,280 Speaker 1: oldest five. His father lost his job in the depression 489 00:28:22,320 --> 00:28:24,479 Speaker 1: and he ended up becoming an electrician because he had 490 00:28:24,480 --> 00:28:26,879 Speaker 1: a support the family. But we you know, it was 491 00:28:27,080 --> 00:28:29,399 Speaker 1: it was it was a strong family and my parents 492 00:28:29,400 --> 00:28:31,760 Speaker 1: that everything he could to help me get along. And 493 00:28:31,800 --> 00:28:34,000 Speaker 1: so I got into m I t um which is 494 00:28:34,080 --> 00:28:38,200 Speaker 1: the ultimate in a meritocracy. Um, you you you you, 495 00:28:38,200 --> 00:28:40,479 Speaker 1: you do the work, you do well, you don't do 496 00:28:40,520 --> 00:28:43,240 Speaker 1: the work. You know. It's I think it's a great institution. 497 00:28:43,320 --> 00:28:46,240 Speaker 1: I think I wish, I wish America reflected more more 498 00:28:46,280 --> 00:28:49,360 Speaker 1: of its core values. But I realized that, you know, 499 00:28:49,480 --> 00:28:52,200 Speaker 1: I got I got to go there and and and 500 00:28:52,320 --> 00:28:54,880 Speaker 1: all that it was. It was sort of somewhat random, 501 00:28:54,960 --> 00:28:57,520 Speaker 1: um um. And there are a lot of people born 502 00:28:57,520 --> 00:29:00,480 Speaker 1: in this world who have the same talents that I had, 503 00:29:01,080 --> 00:29:03,000 Speaker 1: who are never gonna have that chance. And I got 504 00:29:03,000 --> 00:29:06,520 Speaker 1: to write that. I can't. I can't. I can't. I 505 00:29:06,560 --> 00:29:11,280 Speaker 1: can't make the world perfect and create equality across the 506 00:29:11,320 --> 00:29:13,680 Speaker 1: board for everybody. But but if I can affect the 507 00:29:13,720 --> 00:29:17,320 Speaker 1: lives of a number of kids who don't have the 508 00:29:17,320 --> 00:29:20,040 Speaker 1: opportunity I had because of just the way that you know, 509 00:29:20,080 --> 00:29:23,640 Speaker 1: the their their family circumstances are, um, I want to. 510 00:29:23,680 --> 00:29:25,360 Speaker 1: I want to make that difference. So how do you 511 00:29:25,400 --> 00:29:29,840 Speaker 1: express that in terms of of in terms of philanthropy, 512 00:29:30,160 --> 00:29:32,480 Speaker 1: what do you do with that? We We we do 513 00:29:32,560 --> 00:29:38,600 Speaker 1: that um by supporting um lots of start up ventured 514 00:29:38,800 --> 00:29:44,240 Speaker 1: you know, philanthropies that are in the area of education, healthcare, 515 00:29:44,840 --> 00:29:48,760 Speaker 1: I could name names. Is the Summit Health leads. Um, 516 00:29:48,800 --> 00:29:51,280 Speaker 1: we were instrumental in getting the two of those started there. 517 00:29:51,360 --> 00:29:56,000 Speaker 1: They're they're highly respected, UM, and they're My daughter who 518 00:29:56,080 --> 00:29:58,000 Speaker 1: runs our foundation, will be annoyed at me if I 519 00:29:58,040 --> 00:30:01,320 Speaker 1: forget all of them. UM, I'll so you know, I'm 520 00:30:01,400 --> 00:30:05,720 Speaker 1: Jewish and UH believe um, you know, believe in the 521 00:30:05,760 --> 00:30:09,480 Speaker 1: Jewish people. And so we were original investors in UM 522 00:30:09,880 --> 00:30:15,800 Speaker 1: Birthright Israel, as was your friendly uh Lee Lee Lee 523 00:30:15,840 --> 00:30:17,960 Speaker 1: was as an investor in birth Right is Heal. We 524 00:30:18,200 --> 00:30:22,600 Speaker 1: were one of the fourteen founding families UM uh and 525 00:30:22,600 --> 00:30:25,000 Speaker 1: and and and a number of other things. So it's 526 00:30:25,200 --> 00:30:28,720 Speaker 1: um those dual things, you know, giving back to your heritage, 527 00:30:28,760 --> 00:30:32,280 Speaker 1: giving back to people who don't have the opportunities you had, 528 00:30:32,320 --> 00:30:35,360 Speaker 1: but certainly have the ability that you had. Um. How 529 00:30:35,360 --> 00:30:39,280 Speaker 1: does that manifesto itself in terms of scholarships or getting 530 00:30:39,360 --> 00:30:42,800 Speaker 1: kids who might not otherwise get to a place like 531 00:30:43,000 --> 00:30:45,040 Speaker 1: m I t to that sort of school. I am 532 00:30:45,080 --> 00:30:48,000 Speaker 1: told by the school, and I can't say this is 533 00:30:48,000 --> 00:30:51,520 Speaker 1: true that that the scholarships I've given Um, I've given 534 00:30:51,600 --> 00:30:53,520 Speaker 1: the largest amount of money in scholarships to m I 535 00:30:53,560 --> 00:30:57,000 Speaker 1: t Um. I think that's true. My wife is very 536 00:30:57,040 --> 00:31:02,120 Speaker 1: involved with west Chester Community College and UH, we're big 537 00:31:02,160 --> 00:31:07,200 Speaker 1: supporters in Westchester Community College UM, UH Columbia Business School, 538 00:31:07,240 --> 00:31:10,640 Speaker 1: which I co chair with with Henry Cravis. UM. We've 539 00:31:10,680 --> 00:31:14,400 Speaker 1: got a major campaign going right now to UH build 540 00:31:14,680 --> 00:31:17,440 Speaker 1: a new business school up in the Manhattanville campus. UM. 541 00:31:18,440 --> 00:31:26,440 Speaker 1: And I did a matching UM grant um for fellowships 542 00:31:27,080 --> 00:31:31,160 Speaker 1: at UH UM at at Columbia UM. So it's it's 543 00:31:31,240 --> 00:31:34,360 Speaker 1: it's it's not it's not per se about buildings. It's 544 00:31:34,400 --> 00:31:39,240 Speaker 1: about you know, giving to the kids, giving to the professors. 545 00:31:39,280 --> 00:31:43,280 Speaker 1: We have a program at UH Columbia Presbyterian New York 546 00:31:43,280 --> 00:31:46,720 Speaker 1: Presbyterian UM where we have a thing called the Samburg 547 00:31:46,800 --> 00:31:50,000 Speaker 1: Scholars and Pediatrics enabled them to hire a whole bunch 548 00:31:50,040 --> 00:31:53,160 Speaker 1: more research people and fill in some gaps in there. 549 00:31:53,720 --> 00:31:57,920 Speaker 1: And so the emphasis is on young people and health UM. 550 00:31:58,000 --> 00:31:59,800 Speaker 1: And it's a it's a pretty well thought out thing. 551 00:31:59,840 --> 00:32:02,600 Speaker 1: My my my wife and I UH and our three 552 00:32:02,680 --> 00:32:06,520 Speaker 1: kids are on the board. UM. We uh, you know, 553 00:32:06,560 --> 00:32:09,160 Speaker 1: we take it very very seriously. My goal, you know, 554 00:32:09,320 --> 00:32:11,760 Speaker 1: is to take care of my family. But if I 555 00:32:11,840 --> 00:32:14,840 Speaker 1: die with out a penny to my name, UM, that 556 00:32:14,920 --> 00:32:17,360 Speaker 1: would be just that would be ideal. Trying to figure 557 00:32:17,400 --> 00:32:20,360 Speaker 1: out how you manage that is uh, not the easiest 558 00:32:20,360 --> 00:32:22,560 Speaker 1: thing in the world. But so if someone wanted to 559 00:32:22,560 --> 00:32:26,040 Speaker 1: find out more about UM the charities and philanthropies you support, 560 00:32:26,120 --> 00:32:28,160 Speaker 1: is there a place they could go online to look 561 00:32:28,200 --> 00:32:32,120 Speaker 1: at that or is this all UM various meetings and 562 00:32:32,160 --> 00:32:35,120 Speaker 1: committees and what have you. UM we have a website 563 00:32:35,120 --> 00:32:38,400 Speaker 1: for the sand Rick Family Foundation, which we don't ever 564 00:32:38,400 --> 00:32:41,160 Speaker 1: talk about the first time I've ever mentioned it. That 565 00:32:41,240 --> 00:32:45,280 Speaker 1: does not include UM schools that we went to and stuff. 566 00:32:45,320 --> 00:32:48,360 Speaker 1: So everybody is responsible for their own alma mater. So 567 00:32:48,400 --> 00:32:52,200 Speaker 1: it does talk to the kind of social things we 568 00:32:52,240 --> 00:32:54,840 Speaker 1: are trying to do. We as a word of caution, 569 00:32:54,960 --> 00:32:59,280 Speaker 1: we do not accept incoming inquiries inquiries We only we 570 00:32:59,280 --> 00:33:01,120 Speaker 1: we do our reach, which can we go out and 571 00:33:01,280 --> 00:33:04,240 Speaker 1: selectively pick what we want to do. We've been speaking 572 00:33:04,280 --> 00:33:08,520 Speaker 1: with Art Samberg of Pequod Capital and the Samberg Family Foundation. 573 00:33:08,760 --> 00:33:12,200 Speaker 1: If you enjoy these conversations, be sure and check out 574 00:33:12,320 --> 00:33:14,200 Speaker 1: the rest of our chat. You can find that on 575 00:33:14,240 --> 00:33:18,640 Speaker 1: Bloomberg dot com, SoundCloud and Apple iTunes. Check out my 576 00:33:18,680 --> 00:33:22,760 Speaker 1: column on Bloomberg View. Uh. Follow me on Twitter at Ridolts. 577 00:33:22,960 --> 00:33:26,360 Speaker 1: I'm Barry Rihults. You've been listening to Masters in Business 578 00:33:26,400 --> 00:33:31,200 Speaker 1: on Bloomberg Radio. Okay, welcome back to the podcast. Half Now, 579 00:33:31,280 --> 00:33:33,320 Speaker 1: I don't have to worry about time that by the way, 580 00:33:33,360 --> 00:33:36,960 Speaker 1: that's really annoying having like I have three minutes, one minute, 581 00:33:37,040 --> 00:33:39,960 Speaker 1: thirty seconds, so he's in the back of it's it's 582 00:33:39,960 --> 00:33:43,200 Speaker 1: such a distraction. So a couple of things I didn't 583 00:33:43,200 --> 00:33:46,520 Speaker 1: get to during the broadcast portion. Let's let's take up 584 00:33:46,600 --> 00:33:50,520 Speaker 1: some some loose questions and then we'll we'll focus on 585 00:33:50,560 --> 00:33:52,960 Speaker 1: some of my favorite questions to ask during the segment. 586 00:33:53,360 --> 00:33:56,720 Speaker 1: So I see a name like pea Quat, which is 587 00:33:56,720 --> 00:33:59,600 Speaker 1: an Indian triumbe obviously, how did you come up with 588 00:33:59,600 --> 00:34:03,480 Speaker 1: a name peaquat capital for that? Well, in hindsight, I 589 00:34:03,520 --> 00:34:07,920 Speaker 1: wish I hadn't because distinctive it stands out that was 590 00:34:08,000 --> 00:34:10,840 Speaker 1: and it was a literate of Peaqua partners and it 591 00:34:10,880 --> 00:34:13,439 Speaker 1: sounded good, it felt good. Um, I had no idea 592 00:34:13,520 --> 00:34:15,760 Speaker 1: the Peakuad Indians we're going to get a gaming license. 593 00:34:15,800 --> 00:34:19,560 Speaker 1: And I remember getting letters from European investors about eight 594 00:34:19,719 --> 00:34:22,279 Speaker 1: ten years into the life of the fund saying are 595 00:34:22,320 --> 00:34:25,719 Speaker 1: you affiliated with that gambling tribe? No. I was at 596 00:34:25,719 --> 00:34:28,600 Speaker 1: three fifty four Peak what avenue in south Ford today? 597 00:34:29,000 --> 00:34:31,759 Speaker 1: Out and it sounded alliterate of it meant nothing. I 598 00:34:31,760 --> 00:34:34,600 Speaker 1: didn't want anything that suggested, you know, did you predate 599 00:34:34,640 --> 00:34:39,440 Speaker 1: the casinos? And yeah, absolutely, yeah, absolutely didn't come after you, 600 00:34:39,480 --> 00:34:42,480 Speaker 1: did they They called me and I said, well, just 601 00:34:42,560 --> 00:34:45,239 Speaker 1: check the incorporation papers. It was three four Peak what 602 00:34:45,360 --> 00:34:47,600 Speaker 1: Avenue and that was it. That was it and it works. 603 00:34:47,640 --> 00:34:50,600 Speaker 1: So now you know Hawks, which is my family office. 604 00:34:50,680 --> 00:34:53,000 Speaker 1: I live on a street by the name of Hawks. 605 00:34:53,120 --> 00:34:56,919 Speaker 1: UM Katia Woods or our family venture fund. We live 606 00:34:57,160 --> 00:35:01,520 Speaker 1: on a Katia Woods Road and uh, north Port, Michigan, UM, 607 00:35:01,600 --> 00:35:04,399 Speaker 1: which is where I spent my summer. So so you're 608 00:35:04,480 --> 00:35:06,480 Speaker 1: you're in New York three quarters of the year and 609 00:35:06,600 --> 00:35:09,080 Speaker 1: you're half the year and you're there a quarter a 610 00:35:09,200 --> 00:35:12,000 Speaker 1: quarter of the time in Michigan. Yeah. Yeah, so you're 611 00:35:12,040 --> 00:35:15,799 Speaker 1: they're just over the summer, over the summer beat. Oh 612 00:35:15,840 --> 00:35:19,320 Speaker 1: that's awesome. We we lived down the beach from Mario Batali, 613 00:35:20,160 --> 00:35:23,520 Speaker 1: who was a big champion of that area. Um, New 614 00:35:23,600 --> 00:35:29,600 Speaker 1: Yorkers don't Italian tour it ends up in Northport, Michigan, 615 00:35:29,640 --> 00:35:31,640 Speaker 1: which is on the tip of a peninsula jetting into 616 00:35:31,760 --> 00:35:34,759 Speaker 1: Lake Michigan. It's a beautiful, beautiful area. Um. If you're in. 617 00:35:35,320 --> 00:35:37,520 Speaker 1: If you're in New Yorker, you go to the Hampton's, 618 00:35:37,560 --> 00:35:40,640 Speaker 1: except if you're me, you go to Michigan. It's bizarre. 619 00:35:40,719 --> 00:35:45,279 Speaker 1: Mario Batali, the chef for the Okay So, but he's 620 00:35:45,320 --> 00:35:47,279 Speaker 1: not from the is he from that part now? But 621 00:35:47,360 --> 00:35:49,520 Speaker 1: his his wife went to University of Michigan and was 622 00:35:49,600 --> 00:35:52,719 Speaker 1: friendly with with a gal who grew up on that peninsula. 623 00:35:52,920 --> 00:35:56,600 Speaker 1: And that's and that's where you are right over. And 624 00:35:56,640 --> 00:35:59,239 Speaker 1: because I do venture capital now and I don't know 625 00:35:59,320 --> 00:36:02,000 Speaker 1: have to be I don't have to have morning meetings, 626 00:36:02,000 --> 00:36:05,280 Speaker 1: I don't have to all of the paraphernalia about running 627 00:36:05,280 --> 00:36:09,120 Speaker 1: a fund um. I can do everything, you know, electronically, 628 00:36:09,600 --> 00:36:11,680 Speaker 1: take plane trips to where I have to go. How 629 00:36:11,719 --> 00:36:16,479 Speaker 1: often are you on the West coast California? Eight times 630 00:36:16,520 --> 00:36:18,800 Speaker 1: a year? So we were just in the beginning of 631 00:36:18,800 --> 00:36:21,640 Speaker 1: this year. I was in Seattle for a week actually 632 00:36:22,080 --> 00:36:26,640 Speaker 1: um c F A events. I interviewed Howard Marks at 633 00:36:27,000 --> 00:36:29,319 Speaker 1: at UM in Seattle, and then we spent a week 634 00:36:29,360 --> 00:36:33,560 Speaker 1: in Seattle. Seattle is on fire. It's absolutely a city booming. 635 00:36:34,000 --> 00:36:36,080 Speaker 1: And we just got back a few months ago from 636 00:36:36,160 --> 00:36:38,719 Speaker 1: a week in San Francisco. It was a conference in 637 00:36:38,840 --> 00:36:41,799 Speaker 1: Napa and then a week in sanci. San Francisco is 638 00:36:41,880 --> 00:36:44,640 Speaker 1: on fire. It's San Francisco has been on fire ever 639 00:36:44,719 --> 00:36:46,799 Speaker 1: since I got out of school in sixty two. Well, 640 00:36:46,840 --> 00:36:50,480 Speaker 1: it waxes in Waynes but you know, post financial crisis, 641 00:36:50,520 --> 00:36:53,680 Speaker 1: it was a little tamped down for a year or 642 00:36:53,680 --> 00:36:58,400 Speaker 1: two and it's just been booming. Ceccality is part of 643 00:36:58,880 --> 00:37:01,239 Speaker 1: part of the human condition. So how do you But 644 00:37:01,280 --> 00:37:04,000 Speaker 1: it's also true in Denver we have we started up 645 00:37:04,200 --> 00:37:07,719 Speaker 1: a real estate development from Denver. Denver is another also 646 00:37:07,760 --> 00:37:10,080 Speaker 1: booming booming. How much of that is related to the 647 00:37:10,200 --> 00:37:12,839 Speaker 1: legal marijuana in Denver and how much of it is Well, 648 00:37:12,840 --> 00:37:15,879 Speaker 1: I'll tell you. The best investment has not been art 649 00:37:15,960 --> 00:37:19,279 Speaker 1: has not been. It has been buying up old warehouses 650 00:37:19,400 --> 00:37:22,560 Speaker 1: in Denver because that's where they that's where they store 651 00:37:23,040 --> 00:37:27,359 Speaker 1: the marijuana they grow it. They're also they need they 652 00:37:27,360 --> 00:37:30,759 Speaker 1: need they have big warehouses, but they're big new and 653 00:37:30,800 --> 00:37:33,719 Speaker 1: they need electricity, and they need they need artificial light. 654 00:37:34,080 --> 00:37:37,400 Speaker 1: But just the crumby old, hundred year old small warehouse 655 00:37:37,440 --> 00:37:42,000 Speaker 1: just to store I missed it. I missed that play. Yeah, 656 00:37:42,040 --> 00:37:45,920 Speaker 1: but I know it's true. So you're doing a lot 657 00:37:46,000 --> 00:37:49,080 Speaker 1: of venture capital wise, how do you deal with the 658 00:37:49,200 --> 00:37:54,080 Speaker 1: supposed valuation issues these days, all these billion dollar unicorns 659 00:37:54,080 --> 00:37:59,520 Speaker 1: where I hope that I get into a unicorn. So 660 00:37:59,600 --> 00:38:01,520 Speaker 1: what sort of stuff do you like to to look 661 00:38:01,560 --> 00:38:04,480 Speaker 1: at as a as a VC. Yeah, it's it's consistent 662 00:38:04,520 --> 00:38:07,520 Speaker 1: with with my background. My my older son who I 663 00:38:07,960 --> 00:38:11,839 Speaker 1: worked with, ran business strategy of people soft. He knows 664 00:38:11,880 --> 00:38:14,799 Speaker 1: software far better than I do. Um, I'm better at 665 00:38:14,840 --> 00:38:18,800 Speaker 1: the you know, the physical sciences. Um. We're involved with 666 00:38:18,840 --> 00:38:21,440 Speaker 1: the fusion company that I really can't talk much about, 667 00:38:21,480 --> 00:38:25,080 Speaker 1: but people should should should read read the newspapers and 668 00:38:25,400 --> 00:38:30,280 Speaker 1: fusion in terms of energy generation. Yes, thorium, I hope. 669 00:38:31,040 --> 00:38:33,280 Speaker 1: Why don't we have thorium reactors? You have a physics? 670 00:38:33,400 --> 00:38:35,560 Speaker 1: Because we have, we have we have a better approach 671 00:38:35,960 --> 00:38:40,640 Speaker 1: really yea, because thorium is supposedly and now my physics 672 00:38:40,880 --> 00:38:45,919 Speaker 1: is thirty years rusty, but supposedly better than uranium, better 673 00:38:45,920 --> 00:38:50,640 Speaker 1: than plutonium, no waste issues. Tonium is highly radioactive. I 674 00:38:50,920 --> 00:38:53,520 Speaker 1: can't remember how radioactive storium is. I looked at it 675 00:38:53,560 --> 00:38:56,440 Speaker 1: a while ago. Well, what we're trying to do is 676 00:38:56,880 --> 00:39:00,279 Speaker 1: fuse hydrogen and boron, and I won't bore everybody that 677 00:39:00,400 --> 00:39:04,520 Speaker 1: that results in three helium Adams energy and it's completely 678 00:39:04,920 --> 00:39:08,760 Speaker 1: not completely, but largely into tronic and you can actually 679 00:39:08,920 --> 00:39:13,480 Speaker 1: know part neutrons, high energy particles leaving correct and and 680 00:39:13,600 --> 00:39:17,239 Speaker 1: therefore UM you can build a commercial reactor unlike what's 681 00:39:17,239 --> 00:39:20,799 Speaker 1: the waste product? Like, Uh, there's very little waste really, 682 00:39:20,840 --> 00:39:22,680 Speaker 1: so you're not left with there is waste and we've 683 00:39:22,680 --> 00:39:26,200 Speaker 1: got to take care of Is it radioactive waste? No? No, no, 684 00:39:26,200 --> 00:39:30,240 Speaker 1: no no, it's non radioactive waste product out of a fusion. 685 00:39:30,400 --> 00:39:33,359 Speaker 1: It's a major, major project. And you said you're trying 686 00:39:33,400 --> 00:39:35,759 Speaker 1: to change the world. You really no, No, I am 687 00:39:35,760 --> 00:39:38,239 Speaker 1: trying to change the world. Plus, I were invested in 688 00:39:38,320 --> 00:39:43,319 Speaker 1: a and the solar company that uses UM three D 689 00:39:43,440 --> 00:39:48,200 Speaker 1: bristols and it's a major breakthrough. Uh. And we're going 690 00:39:48,239 --> 00:39:51,360 Speaker 1: through the last phases of we've seen technology on solar. 691 00:39:51,560 --> 00:39:53,640 Speaker 1: I just had this conversation with someone not too long 692 00:39:53,640 --> 00:39:57,040 Speaker 1: ago on solar. All of the gains that we've seen 693 00:39:57,600 --> 00:40:02,760 Speaker 1: have been so agonizing over thirty years. It's a substantial series, 694 00:40:03,080 --> 00:40:06,960 Speaker 1: but they've been really incremental and evolutionary. This is not 695 00:40:07,200 --> 00:40:09,879 Speaker 1: you're talking about a revolutionary talking about When I first 696 00:40:09,880 --> 00:40:13,160 Speaker 1: met these guys, they were growing three million nana um 697 00:40:13,640 --> 00:40:17,440 Speaker 1: nickel nano fibers on a substrate per square inch. Doing 698 00:40:17,480 --> 00:40:21,000 Speaker 1: a flat panel, you're doing three dimensional panel where the 699 00:40:21,000 --> 00:40:24,319 Speaker 1: photons come in and spiral down the bristles, so you're 700 00:40:24,320 --> 00:40:26,560 Speaker 1: capturing a lot more of the energy that ends three 701 00:40:26,600 --> 00:40:31,000 Speaker 1: times this magnitude break. Photons stay in the structure three 702 00:40:31,040 --> 00:40:32,920 Speaker 1: times as long as if they were to just reflect 703 00:40:32,960 --> 00:40:35,799 Speaker 1: off of a plane surface. Um. So they stay in 704 00:40:36,080 --> 00:40:39,279 Speaker 1: and the and the efficiency goes up. It's hard to do, 705 00:40:39,680 --> 00:40:42,160 Speaker 1: but we're almost there. How much more expensive of these 706 00:40:42,160 --> 00:40:47,680 Speaker 1: panels than traditional Sure, we're now making them on glass panels. 707 00:40:48,080 --> 00:40:49,600 Speaker 1: I'll give you the answer to that in the first 708 00:40:49,680 --> 00:40:52,239 Speaker 1: quarter next year. All right, but none of these are open. 709 00:40:53,320 --> 00:40:55,560 Speaker 1: This is your now, this is this is you know, 710 00:40:56,120 --> 00:40:59,239 Speaker 1: I don't believe in share. This is risk uh um. 711 00:40:59,800 --> 00:41:04,560 Speaker 1: But should just stay tuned and some really interesting things, 712 00:41:04,560 --> 00:41:08,040 Speaker 1: really interesting things coming along. And that's two of a 713 00:41:08,160 --> 00:41:11,680 Speaker 1: number of others. So we do software companies. When you 714 00:41:11,880 --> 00:41:14,799 Speaker 1: when you were running Peaquat, there was a lot of 715 00:41:14,960 --> 00:41:19,800 Speaker 1: oil energy, natural gas LEAs, things like that. So energy 716 00:41:19,880 --> 00:41:23,799 Speaker 1: has been an an interest of yours for a long time. Yeah, 717 00:41:23,800 --> 00:41:25,560 Speaker 1: I had I had a bunch of sector funds as 718 00:41:25,560 --> 00:41:28,200 Speaker 1: I mentioned, but they were in telecom, they were in technology, 719 00:41:28,239 --> 00:41:32,000 Speaker 1: they were in healthcare, small cap indessing. The one exception 720 00:41:32,280 --> 00:41:36,160 Speaker 1: was early on was an energy because I went you know, 721 00:41:36,239 --> 00:41:37,839 Speaker 1: if you if you lived in the seventies, you went 722 00:41:37,840 --> 00:41:41,200 Speaker 1: through the oil embargo. I remember as a kid trying 723 00:41:41,200 --> 00:41:43,440 Speaker 1: to get a gas can filled up to mow the lawn, 724 00:41:44,120 --> 00:41:46,880 Speaker 1: and I would get the question, you know, what, what 725 00:41:47,000 --> 00:41:51,120 Speaker 1: is your license plate even or on and have a 726 00:41:51,200 --> 00:41:54,000 Speaker 1: gas can? Well, I don't have a license, so all right, 727 00:41:56,360 --> 00:41:58,239 Speaker 1: they should have let the grass grow and give it 728 00:41:58,239 --> 00:42:00,600 Speaker 1: to me. I mean, I was the adult with little kids. 729 00:42:00,920 --> 00:42:02,919 Speaker 1: I needed it. I had a mo that's hey, listen. 730 00:42:02,920 --> 00:42:08,520 Speaker 1: I had earned a living, so delivered papers. Same here 731 00:42:09,560 --> 00:42:12,959 Speaker 1: I hated. Delivering papers was a terrible tal my. I 732 00:42:13,000 --> 00:42:15,160 Speaker 1: was so I had. I had a bunch of friends 733 00:42:15,160 --> 00:42:17,480 Speaker 1: and to two of them head routes. The one the 734 00:42:17,480 --> 00:42:19,640 Speaker 1: one key guy who I bought a route with, ended 735 00:42:19,719 --> 00:42:22,880 Speaker 1: up being a sheet metal worker. He took a fifty 736 00:42:22,920 --> 00:42:25,879 Speaker 1: paper route which we split in half, and he got 737 00:42:25,880 --> 00:42:28,920 Speaker 1: it up to a hundred a hundred customers. Mine dwindled 738 00:42:28,920 --> 00:42:31,200 Speaker 1: down to ten because I would sit on the curb 739 00:42:31,239 --> 00:42:33,840 Speaker 1: and read the newspaper first, and he just took the 740 00:42:33,880 --> 00:42:36,600 Speaker 1: papers and delivered them. So, you know, the best part 741 00:42:36,680 --> 00:42:39,480 Speaker 1: about delivering newspapers was Sunday morning, me and a few 742 00:42:39,480 --> 00:42:42,040 Speaker 1: friends who all had routes would go to the diner 743 00:42:42,080 --> 00:42:45,080 Speaker 1: and have breakfast at nine o'clock. That was the highlight. 744 00:42:45,160 --> 00:42:48,279 Speaker 1: I didn't do that that would have been successful. That 745 00:42:48,360 --> 00:42:50,880 Speaker 1: was the best part of it. Um. So it sounds 746 00:42:51,000 --> 00:42:55,040 Speaker 1: energy is really in energy is really interesting that, you know. 747 00:42:55,200 --> 00:42:57,800 Speaker 1: It is my belief that you know, in thirty years 748 00:42:58,000 --> 00:43:00,880 Speaker 1: all they're all producing countries in the world will be 749 00:43:00,920 --> 00:43:06,520 Speaker 1: bankrupt meaningless, basically back to managing that sitting on a 750 00:43:06,520 --> 00:43:10,120 Speaker 1: bunch of sand and rocks. Um. You know, I hope 751 00:43:10,160 --> 00:43:14,200 Speaker 1: to I hope to help you want to accelerates. Not 752 00:43:14,320 --> 00:43:16,719 Speaker 1: just not not because I have anything against them, It's 753 00:43:16,719 --> 00:43:19,600 Speaker 1: just that it's absurd that burning fossil fuels, the burning 754 00:43:19,600 --> 00:43:22,440 Speaker 1: fossil fuels, they're not really sharing the wealth with the 755 00:43:22,480 --> 00:43:25,160 Speaker 1: people of their country. When you look at all the 756 00:43:25,200 --> 00:43:27,680 Speaker 1: problems we've had in the Middle East, I can't help 757 00:43:27,680 --> 00:43:30,480 Speaker 1: but think if there wasn't oil there and we weren't 758 00:43:30,520 --> 00:43:33,520 Speaker 1: so dependent on it, people wouldn't really care. We wouldn't 759 00:43:33,560 --> 00:43:35,759 Speaker 1: have had it could be true. I come at it 760 00:43:35,840 --> 00:43:38,239 Speaker 1: just from a pure you know, how can myself, How 761 00:43:38,280 --> 00:43:40,959 Speaker 1: can I help solve the world's problem, which is making 762 00:43:41,080 --> 00:43:44,239 Speaker 1: energy plentiful and cheap? Goes along? There's no doubt. I mean, 763 00:43:44,400 --> 00:43:47,480 Speaker 1: you know, I don't even want to get involved in 764 00:43:47,520 --> 00:43:51,360 Speaker 1: the climate debate. Um, I am what debate of it? 765 00:43:51,440 --> 00:43:56,400 Speaker 1: You know? Is carbon human generator or whenever? And I 766 00:43:56,520 --> 00:43:58,440 Speaker 1: hear that this just came up at a dinner the 767 00:43:58,480 --> 00:44:00,560 Speaker 1: other day. I always tell people, if you don't think 768 00:44:00,600 --> 00:44:04,280 Speaker 1: you can affect your environment, park your car in your garage, 769 00:44:04,400 --> 00:44:06,759 Speaker 1: leav the engine running, shut the door, and spend an 770 00:44:06,760 --> 00:44:08,920 Speaker 1: hour or to that. I'd rather spend my time figuring 771 00:44:08,920 --> 00:44:11,640 Speaker 1: out how to solve the problem rather than debate the issue. 772 00:44:11,760 --> 00:44:14,120 Speaker 1: I don't want to either. I just say, park in 773 00:44:14,120 --> 00:44:15,799 Speaker 1: the car with the park of the garage, with the 774 00:44:15,840 --> 00:44:18,400 Speaker 1: engine running, and we'll see how little you can affect 775 00:44:18,440 --> 00:44:22,320 Speaker 1: you there there, that is an argument, um. But I 776 00:44:22,360 --> 00:44:24,600 Speaker 1: don't get involved in stuff like that. I get involved 777 00:44:24,600 --> 00:44:27,200 Speaker 1: in what is the problem, What is the solution? Can 778 00:44:27,239 --> 00:44:30,759 Speaker 1: I affect the solution in a positive way? And that's 779 00:44:30,760 --> 00:44:34,560 Speaker 1: an engineering approach? So what other from it? What other 780 00:44:34,680 --> 00:44:39,239 Speaker 1: issues lend themselves to an engineering solution that you can 781 00:44:39,280 --> 00:44:43,120 Speaker 1: do venture investing with UM. I don't know if it's 782 00:44:43,120 --> 00:44:45,560 Speaker 1: a problem or what, but UM we we we bought 783 00:44:45,680 --> 00:44:49,520 Speaker 1: up the UM we bought up all the patents from 784 00:44:49,840 --> 00:44:55,360 Speaker 1: A T and T in holographics. UM So yeah, storage, 785 00:44:55,520 --> 00:44:59,560 Speaker 1: you know, data storage is growing a year UM and 786 00:45:00,000 --> 00:45:02,239 Speaker 1: will continue to grow with those kind of absurd rates 787 00:45:02,239 --> 00:45:06,360 Speaker 1: for quite some time. UM and UM So I'm involved 788 00:45:06,400 --> 00:45:10,680 Speaker 1: in in some flash memory companies. I'm involved in UH 789 00:45:10,760 --> 00:45:14,880 Speaker 1: some new algorithms to to to try and make servers 790 00:45:14,960 --> 00:45:17,520 Speaker 1: much more efficient there and I don't want to name name. 791 00:45:17,600 --> 00:45:19,800 Speaker 1: So there's a hardware approach and a software approach and 792 00:45:21,200 --> 00:45:23,560 Speaker 1: we're involved in both. And and what you really need 793 00:45:23,680 --> 00:45:29,279 Speaker 1: is you need vast amounts of data UM on warm 794 00:45:29,320 --> 00:45:35,360 Speaker 1: what's called warm storage storage. So you know, hot storage 795 00:45:35,600 --> 00:45:39,680 Speaker 1: is our disk drives. UM and to some degree, flash 796 00:45:39,760 --> 00:45:43,640 Speaker 1: memory and cold storage are tapes, which are you know, 797 00:45:43,680 --> 00:45:48,040 Speaker 1: they just run sequentially. It's not random access. It's ancient technology, 798 00:45:48,200 --> 00:45:50,239 Speaker 1: or it's it's ancient, but it's you know, on a 799 00:45:50,280 --> 00:45:53,319 Speaker 1: cost effective basis that still makes sense. But you really 800 00:45:53,320 --> 00:45:57,200 Speaker 1: want something that was that is nearer than tape UM 801 00:45:57,280 --> 00:45:59,520 Speaker 1: which which will burn out in five to ten years, 802 00:45:59,640 --> 00:46:02,560 Speaker 1: can have the longer storage life. UM. I mean, our 803 00:46:02,600 --> 00:46:04,920 Speaker 1: government goes out and has all these drones that are 804 00:46:04,920 --> 00:46:07,720 Speaker 1: taking pictures of all kinds of stuff god knows what, UM, 805 00:46:07,800 --> 00:46:09,880 Speaker 1: and they can't even they can't analyze half of it 806 00:46:09,960 --> 00:46:13,279 Speaker 1: because they there's no way to process it all. And 807 00:46:13,360 --> 00:46:16,320 Speaker 1: also as you get into genomics and other things, we 808 00:46:16,560 --> 00:46:18,799 Speaker 1: are just spitting out data. So if you could use 809 00:46:18,800 --> 00:46:23,160 Speaker 1: holographic memories which would last for for fifty years um 810 00:46:23,800 --> 00:46:28,480 Speaker 1: uh and uh down to the right price points um 811 00:46:28,520 --> 00:46:31,040 Speaker 1: at any rate. So we're trying to develop that that 812 00:46:31,200 --> 00:46:33,719 Speaker 1: is not that is not an area where we can 813 00:46:33,760 --> 00:46:35,759 Speaker 1: go out and talk to a venture capitalists and get 814 00:46:35,800 --> 00:46:39,160 Speaker 1: them to you know, go alongside you. UM just won't 815 00:46:39,160 --> 00:46:42,240 Speaker 1: do it because it's that that area has been death 816 00:46:42,320 --> 00:46:46,200 Speaker 1: to many many start ups. For my for for for 817 00:46:46,200 --> 00:46:49,960 Speaker 1: for our family purposes, we can take that risk. UM. 818 00:46:50,000 --> 00:46:52,680 Speaker 1: It might take a little longer, we can take that risk. 819 00:46:52,760 --> 00:46:54,960 Speaker 1: So we're trying to solve that problem. We're involved in 820 00:46:55,320 --> 00:47:00,680 Speaker 1: medical devices and and some some medical uh um, some 821 00:47:00,760 --> 00:47:03,200 Speaker 1: interesting companies. You were on the board of a New 822 00:47:03,239 --> 00:47:06,960 Speaker 1: York genomics UM center before we get to that, because 823 00:47:06,960 --> 00:47:09,200 Speaker 1: that's an area I find absolutely fascinating. Would love to 824 00:47:09,239 --> 00:47:12,360 Speaker 1: talk about you're buying these patents up from a T 825 00:47:12,520 --> 00:47:15,480 Speaker 1: and T. Well, it wasn't from a T and T. 826 00:47:15,960 --> 00:47:18,319 Speaker 1: There was a there were two venture groups that that 827 00:47:18,480 --> 00:47:22,160 Speaker 1: did that. Uh. What year did these patents? Well, these 828 00:47:22,160 --> 00:47:25,480 Speaker 1: are these were done in the nineties and um they 829 00:47:25,520 --> 00:47:28,120 Speaker 1: were expired at this point or there enough because you 830 00:47:28,200 --> 00:47:31,280 Speaker 1: keep refreshing them, there's enough. We keep improving the basic 831 00:47:31,480 --> 00:47:35,919 Speaker 1: UM stuff. So we own all the patents. We we 832 00:47:35,920 --> 00:47:39,799 Speaker 1: we have two patents uh covering both the way you 833 00:47:39,840 --> 00:47:42,839 Speaker 1: store it and the media you need to produce it. 834 00:47:43,360 --> 00:47:47,960 Speaker 1: UM and uh to venture firms trying to put part 835 00:47:48,000 --> 00:47:50,919 Speaker 1: a hundred million dollars into trying to develop this UM 836 00:47:51,200 --> 00:47:54,200 Speaker 1: and they were getting and we bought. We bought the 837 00:47:54,239 --> 00:47:58,359 Speaker 1: asset at but hopefully there's a value of plate right 838 00:47:59,200 --> 00:48:01,080 Speaker 1: if you were if well, anything you buy at a 839 00:48:01,120 --> 00:48:04,640 Speaker 1: bankruptcy is usually well there's another one that we're involved 840 00:48:04,640 --> 00:48:07,759 Speaker 1: with which we did help somebody buy a bankruptcy, which 841 00:48:07,800 --> 00:48:11,600 Speaker 1: is clear, which is at the airports. What is what 842 00:48:11,719 --> 00:48:19,600 Speaker 1: is clear clear is the a biometric screening technique at 843 00:48:19,719 --> 00:48:22,359 Speaker 1: airports too. And now they're starting to be in court 844 00:48:22,360 --> 00:48:25,480 Speaker 1: with the Yankees just um uh started using at the 845 00:48:25,520 --> 00:48:28,960 Speaker 1: San Francisco at the stadium at the stadium. So when 846 00:48:28,960 --> 00:48:35,720 Speaker 1: I I assume that everybody else, although they don't assume 847 00:48:35,920 --> 00:48:38,360 Speaker 1: everybody uses t S A pre so they can whisk 848 00:48:38,400 --> 00:48:40,959 Speaker 1: through the airport and then when you come back, there's 849 00:48:40,960 --> 00:48:45,680 Speaker 1: global entry. Will you bypass all the customs and beautiful? Right? 850 00:48:45,800 --> 00:48:48,040 Speaker 1: So you you take your passport and then you take 851 00:48:48,080 --> 00:48:50,560 Speaker 1: your hands and you put that on a machine and 852 00:48:50,640 --> 00:48:54,160 Speaker 1: you're done in thirty seconds. What is clear due relative 853 00:48:54,239 --> 00:48:57,480 Speaker 1: to that sort of Clear does the same thing, um 854 00:48:57,719 --> 00:49:01,440 Speaker 1: but biometric biometrics and checks it against the giant database 855 00:49:01,520 --> 00:49:06,400 Speaker 1: to make sure you're not a Yeah. And so the 856 00:49:06,480 --> 00:49:08,880 Speaker 1: Yankees are using this, and the San Francisco Giants are 857 00:49:08,920 --> 00:49:13,919 Speaker 1: using this, and uh increasingly airports are using it. It's 858 00:49:14,320 --> 00:49:19,040 Speaker 1: it's a company that went bankrupt. Um technology but dead 859 00:49:19,040 --> 00:49:24,360 Speaker 1: business model and that that was in some ways of 860 00:49:24,440 --> 00:49:28,240 Speaker 1: value play. But but but the value of play based 861 00:49:28,239 --> 00:49:32,919 Speaker 1: around superior technology of the bad go to market implementation. UM. 862 00:49:33,080 --> 00:49:37,279 Speaker 1: So we're involved that. UM tons of things. These are 863 00:49:37,280 --> 00:49:41,840 Speaker 1: really fascinating venture stuff. What what other areas intrigue you 864 00:49:41,920 --> 00:49:47,560 Speaker 1: from a venture perspective? Um. So there's alternative energy, there's software. 865 00:49:47,600 --> 00:49:52,719 Speaker 1: There's one company in Boston, UH that we're involved with that. 866 00:49:53,080 --> 00:50:00,400 Speaker 1: Uh UM. I'm watching the wheel spin and fig watching 867 00:50:00,400 --> 00:50:02,120 Speaker 1: you try and figure out what you can and can't 868 00:50:02,160 --> 00:50:05,600 Speaker 1: say what what subject does the technology cover? Well. The 869 00:50:06,440 --> 00:50:10,920 Speaker 1: problem that companies like Hewlett Packard or Samsung or a 870 00:50:10,920 --> 00:50:14,320 Speaker 1: bunch of them have is that the real money in 871 00:50:14,320 --> 00:50:19,320 Speaker 1: in smartphones and devices these days are in the apps UM. 872 00:50:19,440 --> 00:50:22,560 Speaker 1: And there are two app platforms, one of course is 873 00:50:23,960 --> 00:50:31,000 Speaker 1: apples iOS UM uh iOS and and the other is UM. 874 00:50:31,320 --> 00:50:34,000 Speaker 1: You know, the Android system UM. So if you look 875 00:50:34,040 --> 00:50:35,799 Speaker 1: were to come out with a new product and not 876 00:50:35,920 --> 00:50:41,439 Speaker 1: support those apps UM, people won't buy it. So some 877 00:50:41,440 --> 00:50:46,280 Speaker 1: some products have been introduced that are technically wonderful products, 878 00:50:46,320 --> 00:50:49,520 Speaker 1: but they don't service the market as it is configured today. 879 00:50:49,880 --> 00:50:53,279 Speaker 1: If you if you were able to UM, if you 880 00:50:53,320 --> 00:50:58,520 Speaker 1: were able to solve that problem for manufacturers UM amplify 881 00:50:58,719 --> 00:51:04,239 Speaker 1: their software or appify. They're there prom and you can emulate. 882 00:51:04,760 --> 00:51:07,480 Speaker 1: You can emulate those things. But when you emulate, you 883 00:51:07,480 --> 00:51:12,680 Speaker 1: have another microprocess. It's slow, it's inefficient, it just isn't competitive. 884 00:51:12,880 --> 00:51:14,840 Speaker 1: If you can do it and what's called native mode 885 00:51:15,080 --> 00:51:20,040 Speaker 1: using the application control layer, UM, you can I'm looking 886 00:51:20,040 --> 00:51:22,160 Speaker 1: to see if the word applify is taken because I 887 00:51:22,200 --> 00:51:25,640 Speaker 1: want to. I think that's a word that I you know, 888 00:51:25,719 --> 00:51:28,600 Speaker 1: it's all it's all yours, Telly rate. There's a company 889 00:51:28,600 --> 00:51:32,279 Speaker 1: in Boston that has done that. Um, Samsung is UH incorporating, 890 00:51:32,400 --> 00:51:35,560 Speaker 1: It's UH and it's ties and z one phone which 891 00:51:35,560 --> 00:51:39,239 Speaker 1: is introduced into India. And the future looks pretty bright. 892 00:51:39,320 --> 00:51:42,319 Speaker 1: So there are software applications that are that are that 893 00:51:42,360 --> 00:51:47,279 Speaker 1: are interesting because they solve problems. They solve problems. Yeah, 894 00:51:47,360 --> 00:51:51,239 Speaker 1: I like solving problems. So what else? Um? Oh, I 895 00:51:51,360 --> 00:51:53,760 Speaker 1: see why I keep speaking of problems. I keep searching 896 00:51:53,800 --> 00:51:56,240 Speaker 1: for this and I keep coming up with an Amazon 897 00:51:56,600 --> 00:51:59,919 Speaker 1: Applify create the simplest Mac possible, Mac from a show. 898 00:52:00,520 --> 00:52:03,880 Speaker 1: So somebody else already has the sorry the word apifi. 899 00:52:04,480 --> 00:52:08,200 Speaker 1: And then there's appify Android apps on Google play at 900 00:52:08,280 --> 00:52:10,960 Speaker 1: appify on Twitter. So all right, I thought it was 901 00:52:11,000 --> 00:52:13,239 Speaker 1: a good ours has a different name. I want to 902 00:52:13,239 --> 00:52:16,200 Speaker 1: even mention, Okay, don't mention. So you don't want to 903 00:52:16,280 --> 00:52:18,239 Speaker 1: run an emulation because you're reading a whole another layer 904 00:52:18,280 --> 00:52:22,680 Speaker 1: of software. It slows down, more buggy, more complicated. So 905 00:52:22,760 --> 00:52:24,560 Speaker 1: but you make it need to do it. If you 906 00:52:24,560 --> 00:52:28,359 Speaker 1: can do it off of the application control layer, it's 907 00:52:28,360 --> 00:52:31,839 Speaker 1: completely legit and it's very hard to do. It's very 908 00:52:31,840 --> 00:52:34,239 Speaker 1: hard to do. So this is a software solution to 909 00:52:34,320 --> 00:52:38,040 Speaker 1: a programming problem. All right, what are the areas intrigue 910 00:52:38,040 --> 00:52:41,080 Speaker 1: you in terms of ventures? Right, young guys out of 911 00:52:41,200 --> 00:52:43,520 Speaker 1: M I T who have come up with an active 912 00:52:43,560 --> 00:52:49,759 Speaker 1: shock absorber system active shock absorber cars for bicycles or 913 00:52:49,800 --> 00:52:55,640 Speaker 1: four cars, cars and maybe truck camps. But but right 914 00:52:55,680 --> 00:52:59,600 Speaker 1: now the emphasis is on cars, um and it's it's truly. 915 00:53:00,200 --> 00:53:02,080 Speaker 1: So the trick there is to get it to a 916 00:53:02,120 --> 00:53:05,120 Speaker 1: low enough cost and put it in automobiles. There are 917 00:53:05,160 --> 00:53:07,960 Speaker 1: many there there, there, there there there. There are systems 918 00:53:08,000 --> 00:53:15,120 Speaker 1: today which use hydra fluids and the hydraulic that that's 919 00:53:15,160 --> 00:53:18,040 Speaker 1: pretty old school though. That's old school, and it's very 920 00:53:18,040 --> 00:53:20,400 Speaker 1: expensive for a wheel. If you can get it down 921 00:53:20,440 --> 00:53:23,600 Speaker 1: with a simple system, um, so that it would you know, 922 00:53:23,760 --> 00:53:27,839 Speaker 1: sell for under two thousand dollars per automobile. Um, there's 923 00:53:27,840 --> 00:53:31,440 Speaker 1: a vast market. And these guys, these guys, I think, 924 00:53:31,480 --> 00:53:34,440 Speaker 1: have the solution to that. So so I'm on the 925 00:53:34,440 --> 00:53:37,440 Speaker 1: board of that one. Yeah, that's interesting. So this, you know, 926 00:53:37,560 --> 00:53:40,239 Speaker 1: there's great stuff out there. So I am not one 927 00:53:40,239 --> 00:53:42,720 Speaker 1: of these people who believe, oh my god, the world 928 00:53:42,719 --> 00:53:45,360 Speaker 1: has a million problems. Let's stick our head in the ground. 929 00:53:45,440 --> 00:53:47,319 Speaker 1: Unless it does have a million problems, but it's got 930 00:53:47,320 --> 00:53:50,520 Speaker 1: two million solutions. That is, we go to this venture. 931 00:53:50,800 --> 00:53:54,440 Speaker 1: It's really early stage. An angel conference in San Diego. 932 00:53:54,800 --> 00:53:56,680 Speaker 1: I can't go every year on my head explodes. I 933 00:53:56,719 --> 00:54:00,520 Speaker 1: go every other year and you cannot come out of 934 00:54:00,719 --> 00:54:04,520 Speaker 1: and it's college kids and stuff. You cannot go through 935 00:54:04,560 --> 00:54:07,399 Speaker 1: an event like that. Well, they've told me. They've told 936 00:54:07,440 --> 00:54:09,680 Speaker 1: me of an M I T. That um that in 937 00:54:09,719 --> 00:54:13,560 Speaker 1: the generation or two ago, probably too, the every age 938 00:54:13,560 --> 00:54:15,560 Speaker 1: of an M I. T. Graduate who started a company 939 00:54:15,640 --> 00:54:20,080 Speaker 1: was forty two years old. And now, yeah, I find 940 00:54:20,120 --> 00:54:23,160 Speaker 1: you can't go to one of those events and leave 941 00:54:23,320 --> 00:54:26,800 Speaker 1: and not be optimistic about the future, no matter how 942 00:54:26,920 --> 00:54:30,600 Speaker 1: terrible things are. It's like we're pikers. These kids are 943 00:54:30,640 --> 00:54:33,040 Speaker 1: going to solve all these is that that is what 944 00:54:33,120 --> 00:54:36,960 Speaker 1: keeps me going. It's amazing. I was at I think 945 00:54:37,000 --> 00:54:38,800 Speaker 1: I've told this story before. I was at a wedding 946 00:54:38,800 --> 00:54:40,759 Speaker 1: in Virginia or maybe it's a bar Mitz, but it 947 00:54:40,800 --> 00:54:45,800 Speaker 1: was a family member and the was it the no, no, 948 00:54:45,880 --> 00:54:50,480 Speaker 1: it was a wedding because it was the grooms groomsmen, 949 00:54:50,880 --> 00:54:52,799 Speaker 1: a couple of kids out of I think it was 950 00:54:52,920 --> 00:54:57,319 Speaker 1: U v a UM down in Richmond, and they one 951 00:54:57,360 --> 00:55:01,839 Speaker 1: of them had an iPhone. Okay, that had built into it. 952 00:55:01,920 --> 00:55:04,680 Speaker 1: This sounds idiotic, but it was genius. Had built into 953 00:55:04,719 --> 00:55:08,480 Speaker 1: it a bottle opener, like built into the things take 954 00:55:08,520 --> 00:55:11,719 Speaker 1: your phone and and just pop a bottle. And I said, oh, 955 00:55:11,760 --> 00:55:13,920 Speaker 1: that's hilarious. You know how you guys gonna make that? 956 00:55:13,960 --> 00:55:16,600 Speaker 1: And they look at me like I have two heads, dude. 957 00:55:16,600 --> 00:55:19,640 Speaker 1: We're doing twenty thousand units a month we have manufactured 958 00:55:19,920 --> 00:55:23,040 Speaker 1: in China. These guys are twenty, they're in college. We're 959 00:55:23,040 --> 00:55:27,239 Speaker 1: selling units. What do you charge with this fourteen? What 960 00:55:27,280 --> 00:55:30,040 Speaker 1: does it cost you? I don't know? Eight seven shipping 961 00:55:30,120 --> 00:55:33,120 Speaker 1: is more so when you see kids like that in 962 00:55:33,239 --> 00:55:37,279 Speaker 1: college who was so I don't I don't understand the 963 00:55:38,280 --> 00:55:42,600 Speaker 1: consistent pessimism from people about the world is terrible, America 964 00:55:42,680 --> 00:55:45,160 Speaker 1: is terrible. You you meet some of these kids, that 965 00:55:45,320 --> 00:55:49,120 Speaker 1: changes present. The people can't really relate to this kind 966 00:55:49,120 --> 00:55:52,200 Speaker 1: of stuff, really don't like it, and therefore draw their 967 00:55:52,239 --> 00:55:56,680 Speaker 1: own conclusions. They're not based on anything factual. I mean. 968 00:55:56,760 --> 00:55:59,160 Speaker 1: The problem the problem with all of this, of course, 969 00:55:59,239 --> 00:56:01,680 Speaker 1: is the is the income divide between the people who 970 00:56:01,680 --> 00:56:03,920 Speaker 1: can do what you've just described and the people I've 971 00:56:03,960 --> 00:56:09,279 Speaker 1: been describing, UM and to help. Yeah, there there is 972 00:56:09,400 --> 00:56:12,400 Speaker 1: there is a huge there is a huge problem developing. 973 00:56:12,680 --> 00:56:16,000 Speaker 1: UM well in terms of in terms of income inequality 974 00:56:16,080 --> 00:56:21,960 Speaker 1: or in terms of opportunity inequality. Maybe well it's both. Um. 975 00:56:22,080 --> 00:56:24,080 Speaker 1: Some people will never be able to participate in this 976 00:56:24,120 --> 00:56:28,680 Speaker 1: new world UM given advantages. They just not tech savvy. 977 00:56:28,760 --> 00:56:31,800 Speaker 1: They lack the skill set for that or the interest, 978 00:56:31,960 --> 00:56:35,080 Speaker 1: or they might have the interest, but they're not gonna 979 00:56:35,080 --> 00:56:37,520 Speaker 1: be able to implement. And I, you know, I believe 980 00:56:37,560 --> 00:56:40,880 Speaker 1: that everybody should given a given a chance to so 981 00:56:41,040 --> 00:56:43,400 Speaker 1: I will spend as much money as I can to 982 00:56:43,400 --> 00:56:47,520 Speaker 1: to to try and help that. But you know, you know, 983 00:56:47,560 --> 00:56:49,160 Speaker 1: there are a lot of people in this world and 984 00:56:49,200 --> 00:56:52,520 Speaker 1: not everybody can can start these things. So you know 985 00:56:52,560 --> 00:56:56,080 Speaker 1: that there are real social policy issues about how do 986 00:56:56,080 --> 00:56:58,960 Speaker 1: you how do you fix that? I'm not a social scientist, 987 00:56:59,000 --> 00:57:03,480 Speaker 1: so I don't know, UM, but I don't know. One 988 00:57:03,480 --> 00:57:06,880 Speaker 1: of the reasons that that we have emphasized things like 989 00:57:07,000 --> 00:57:12,520 Speaker 1: fusion energy, solar things like that are because that they 990 00:57:12,560 --> 00:57:17,400 Speaker 1: saved they address the basic problem, which is that unless 991 00:57:17,440 --> 00:57:20,640 Speaker 1: you have cheap electricity or a number of other things 992 00:57:21,000 --> 00:57:22,960 Speaker 1: you don't grow world income. And if you don't grow 993 00:57:23,000 --> 00:57:26,240 Speaker 1: world income, everybody fights over the pie. And if everybody 994 00:57:26,280 --> 00:57:30,440 Speaker 1: fights over the pie, you're gonna have a terrible, a 995 00:57:30,560 --> 00:57:33,840 Speaker 1: terrible world system. UM. So I want to help people 996 00:57:34,000 --> 00:57:37,280 Speaker 1: grow the pie. I would like to help in some 997 00:57:37,400 --> 00:57:40,720 Speaker 1: of this carbon stuff if I can. UM, I'd like 998 00:57:40,760 --> 00:57:43,320 Speaker 1: to give part of the money back. I would like 999 00:57:43,360 --> 00:57:45,840 Speaker 1: to keep some of it um to uh, to give 1000 00:57:45,880 --> 00:57:48,520 Speaker 1: everybody the opportunity to participate in that. It is then 1001 00:57:48,600 --> 00:57:50,880 Speaker 1: up to government to figure out the rest of it. 1002 00:57:51,040 --> 00:57:55,120 Speaker 1: And I see absolutely no movement towards coming up with 1003 00:57:55,160 --> 00:57:58,240 Speaker 1: any logical solutions to that. Well, but that's along the 1004 00:57:58,240 --> 00:58:02,240 Speaker 1: government discussion. That's easy. That's long arc and eventually government, 1005 00:58:03,440 --> 00:58:05,439 Speaker 1: well what I mean by easy is over the next 1006 00:58:05,480 --> 00:58:11,640 Speaker 1: ten or twenty years. My guess is that government in competence, incompetency, 1007 00:58:11,800 --> 00:58:16,480 Speaker 1: especially partisan incompetency, collapses under its own weight, and eventually, 1008 00:58:17,720 --> 00:58:21,480 Speaker 1: eventually we're replaced with I don't think the Republican and 1009 00:58:21,520 --> 00:58:26,960 Speaker 1: the Democratic Party are infinite in lifespan and here forever. 1010 00:58:27,400 --> 00:58:34,560 Speaker 1: I think these parties are slowly losing, slowly losing um membership, 1011 00:58:34,600 --> 00:58:37,240 Speaker 1: and you're gonna end up with more and more people 1012 00:58:37,480 --> 00:58:40,600 Speaker 1: as independents, and that's how you end up with somebody 1013 00:58:40,680 --> 00:58:44,800 Speaker 1: like Donald Trump, who really are hard to define by 1014 00:58:44,880 --> 00:58:51,120 Speaker 1: traditional party politics. Not not a coincidence that what's going 1015 00:58:51,160 --> 00:58:54,880 Speaker 1: on today in the Republican party, the appeal is the 1016 00:58:54,920 --> 00:58:59,440 Speaker 1: guy who's the least associated with with the party, And 1017 00:58:59,480 --> 00:59:02,200 Speaker 1: the same thing is happening on the Democratic side. The 1018 00:59:02,480 --> 00:59:06,880 Speaker 1: Bernie Sanders is not a traditional Democrat, and suddenly there's 1019 00:59:06,920 --> 00:59:10,680 Speaker 1: all this So you have Trump and Sanders. The appeal 1020 00:59:10,880 --> 00:59:16,400 Speaker 1: isn't what they're specific politics are. The appeal is that 1021 00:59:16,440 --> 00:59:21,479 Speaker 1: they're not traditional partisan players. I agree, and I agree 1022 00:59:21,520 --> 00:59:23,920 Speaker 1: with your conclusion. So I hopefully hope it happens as 1023 00:59:23,960 --> 00:59:27,800 Speaker 1: you go through that process or fragment. It's very painful. Yeah, 1024 00:59:27,800 --> 00:59:30,320 Speaker 1: that that's gonna So now let me let's talk a 1025 00:59:30,320 --> 00:59:33,480 Speaker 1: little politics and and let me force you to stop 1026 00:59:33,560 --> 00:59:36,800 Speaker 1: dancing around the carbon issue. You'll never you'll never be 1027 00:59:36,840 --> 00:59:40,640 Speaker 1: able to force me to stop. So global warming real, 1028 00:59:41,400 --> 00:59:44,200 Speaker 1: I have no idea. Get out of here. Come on, 1029 00:59:44,240 --> 00:59:46,680 Speaker 1: how can you say that Because you're a physicist, you're 1030 00:59:46,720 --> 00:59:50,560 Speaker 1: investing in film strategy, you're an engineer, you have a 1031 00:59:50,600 --> 00:59:54,000 Speaker 1: ton of physics, you understand the scientific process, you know 1032 00:59:54,080 --> 01:00:00,200 Speaker 1: when of scientists say something, you don't think that Bible 1033 01:00:00,240 --> 01:00:05,280 Speaker 1: warming is a genuine climate change. I think the fact 1034 01:00:05,280 --> 01:00:07,480 Speaker 1: that there's so much carbon diox on the atmosphere is 1035 01:00:07,480 --> 01:00:09,480 Speaker 1: a really really bad thing. How did it get there? 1036 01:00:09,640 --> 01:00:11,560 Speaker 1: How did it get their sun spot? I don't know. 1037 01:00:13,160 --> 01:00:17,800 Speaker 1: I don't carbon probably okay, alright, But I don't know 1038 01:00:17,840 --> 01:00:20,040 Speaker 1: if it's solely because of that. I I I know 1039 01:00:20,160 --> 01:00:22,840 Speaker 1: nothing is solely because of anything. I have friends who 1040 01:00:22,920 --> 01:00:25,000 Speaker 1: are on either side of this one, and I read 1041 01:00:25,080 --> 01:00:27,520 Speaker 1: it all, and I sit on this m I T 1042 01:00:27,760 --> 01:00:30,800 Speaker 1: Energy Initiative Board UM. At m I T. They have 1043 01:00:30,840 --> 01:00:34,040 Speaker 1: this guy, Richard Lindson, who is a world acclaimed UM 1044 01:00:34,200 --> 01:00:37,640 Speaker 1: climate scientist who doesn't believe it. UM. There are many 1045 01:00:37,720 --> 01:00:43,560 Speaker 1: others like he's a he's a very responsible guy, UM, 1046 01:00:43,600 --> 01:00:45,880 Speaker 1: and they're responsible on the other side. I don't know. 1047 01:00:46,240 --> 01:00:48,920 Speaker 1: I mean, there are plenty of people arguing that you 1048 01:00:48,960 --> 01:00:51,880 Speaker 1: know that that matter. All I know is I think 1049 01:00:51,880 --> 01:00:55,160 Speaker 1: that I can support you guys who have a solution 1050 01:00:55,200 --> 01:00:58,440 Speaker 1: to it. I'd rather waste my brain cycles and energy 1051 01:00:58,440 --> 01:01:02,720 Speaker 1: and money on that rather than the debate. The argument 1052 01:01:02,800 --> 01:01:05,800 Speaker 1: is just wasted energy. Anyway, You're never got People aren't 1053 01:01:05,800 --> 01:01:08,200 Speaker 1: gonna convince each other. By the way, when I say 1054 01:01:08,240 --> 01:01:12,520 Speaker 1: I think, when I say I think that burning carbon 1055 01:01:12,760 --> 01:01:16,600 Speaker 1: and eating red meat for that matter, contribute to global warming, 1056 01:01:16,920 --> 01:01:19,040 Speaker 1: I'm not saying that you shouldn't burn carbon and you 1057 01:01:19,040 --> 01:01:21,760 Speaker 1: shouldn't eat red meat. I have too many cars and boats. 1058 01:01:21,800 --> 01:01:24,840 Speaker 1: I eat lots of red meat. So I'm not I'm 1059 01:01:24,880 --> 01:01:27,760 Speaker 1: not let No, I'm fine. I'm not lecturing people, Hey, 1060 01:01:27,880 --> 01:01:31,160 Speaker 1: change your life. But I think it's hypocritical for people 1061 01:01:31,240 --> 01:01:34,360 Speaker 1: who know better to say, oh, just because we have 1062 01:01:34,360 --> 01:01:37,040 Speaker 1: a cold company and we fund signed research that says 1063 01:01:37,360 --> 01:01:40,840 Speaker 1: this has no impact. I'm not. I object to the 1064 01:01:41,440 --> 01:01:45,040 Speaker 1: hypocrisy of that. I'm not telling people change your life. Hey, 1065 01:01:45,080 --> 01:01:47,440 Speaker 1: you're affecting the world. Let's accept it and move on. 1066 01:01:47,520 --> 01:01:50,200 Speaker 1: I like your solution, which is to try and come 1067 01:01:50,280 --> 01:01:53,720 Speaker 1: up with a solution rather than digress into the debate too. 1068 01:01:53,840 --> 01:01:56,720 Speaker 1: It's all too complicated, and you're never, as you said, 1069 01:01:56,720 --> 01:01:59,960 Speaker 1: you will never change people's minds about this because it's 1070 01:02:00,040 --> 01:02:05,800 Speaker 1: become a religious fight. Not know, five million people a 1071 01:02:05,880 --> 01:02:08,880 Speaker 1: year die from burning wood. I mean, so, what do 1072 01:02:08,920 --> 01:02:13,360 Speaker 1: you mean in terms of the or or what we 1073 01:02:13,440 --> 01:02:16,600 Speaker 1: see every winter where people take a carosene heat or 1074 01:02:16,640 --> 01:02:19,240 Speaker 1: in the fumes. You know, a joke about the garage, 1075 01:02:19,280 --> 01:02:23,360 Speaker 1: but learning stuff releases all sorts of noxious fun. That's terrific. 1076 01:02:23,480 --> 01:02:28,320 Speaker 1: It's terrific. And so you know, um, the people who 1077 01:02:28,320 --> 01:02:31,600 Speaker 1: believe that you should you know, like like so the 1078 01:02:31,720 --> 01:02:35,320 Speaker 1: Union of Concerned Scientists which was born about thirty years 1079 01:02:35,360 --> 01:02:40,000 Speaker 1: ago and opposial nuclear weapons, right well, an opposition to 1080 01:02:40,120 --> 01:02:43,280 Speaker 1: nuclear weapons, but also you know nuclear power plants because 1081 01:02:43,320 --> 01:02:47,800 Speaker 1: they were sort of hand in hand. Um. They just 1082 01:02:47,960 --> 01:02:51,440 Speaker 1: about two months ago reversed their position and said, you know, 1083 01:02:51,840 --> 01:02:56,200 Speaker 1: nuclear energy is the solution because there's no there's no 1084 01:02:56,280 --> 01:02:59,200 Speaker 1: carbon dioxide. So you know, if you live long enough, 1085 01:02:59,320 --> 01:03:05,440 Speaker 1: you watch all these convoluting everything comes around. Um and uh, 1086 01:03:05,480 --> 01:03:07,960 Speaker 1: you know, it depends on what the priority is and 1087 01:03:08,040 --> 01:03:14,720 Speaker 1: what the new religious zeal is. UM. So advanced nuclear 1088 01:03:14,840 --> 01:03:19,080 Speaker 1: is legitimately back on the table, thank god, and much 1089 01:03:19,640 --> 01:03:24,400 Speaker 1: lower radioactive waste product. And no, that's the traditional way 1090 01:03:24,440 --> 01:03:27,840 Speaker 1: of doing it. Um and and and so we actually 1091 01:03:28,280 --> 01:03:32,080 Speaker 1: another company we helped get started is a nuclear remediation 1092 01:03:32,120 --> 01:03:35,360 Speaker 1: It's called Curion ku r I. And what do they do. 1093 01:03:35,400 --> 01:03:41,960 Speaker 1: They they they try and vitrify the the waste product 1094 01:03:41,960 --> 01:03:47,120 Speaker 1: from nuclear fission plants. And um, that enables you to 1095 01:03:47,320 --> 01:03:49,360 Speaker 1: bury it in the store. It We're not all the 1096 01:03:49,360 --> 01:03:52,040 Speaker 1: way there yet, but in the process, we we we 1097 01:03:52,040 --> 01:03:54,959 Speaker 1: we developed a media that will enable to take caes 1098 01:03:55,000 --> 01:03:59,240 Speaker 1: the amount of water and um that radioactive very negative 1099 01:03:59,440 --> 01:04:03,479 Speaker 1: and and we came a huge problem with Fukujima. Uh 1100 01:04:03,600 --> 01:04:06,160 Speaker 1: so we as a small startup company were the only 1101 01:04:06,200 --> 01:04:08,720 Speaker 1: ones who were able to get into Fukushima and help. 1102 01:04:08,960 --> 01:04:11,320 Speaker 1: Really and so something that was going to be like 1103 01:04:11,480 --> 01:04:15,160 Speaker 1: you know, growing very slowly at first, just grew in size. 1104 01:04:15,240 --> 01:04:18,920 Speaker 1: So we've added other capabilities and uh it's fascinating. So 1105 01:04:19,120 --> 01:04:21,760 Speaker 1: curium like with a K like madame k you are 1106 01:04:21,960 --> 01:04:26,800 Speaker 1: io n C. And so this removes radioactive season um 1107 01:04:26,880 --> 01:04:30,720 Speaker 1: from water in order to clean up that's the big 1108 01:04:30,760 --> 01:04:33,720 Speaker 1: problem right now. It's not that people are dying and 1109 01:04:33,720 --> 01:04:36,040 Speaker 1: all that kind of no, but you you have potentially 1110 01:04:36,160 --> 01:04:39,840 Speaker 1: dangerous water. You can't put it into and you can't 1111 01:04:39,880 --> 01:04:42,800 Speaker 1: stop it. Water finds its own level and it's really 1112 01:04:42,840 --> 01:04:45,520 Speaker 1: a problem. But we, you know, we have been helping 1113 01:04:45,560 --> 01:04:49,600 Speaker 1: them fix that problem. And this company is removing radioactive 1114 01:04:49,640 --> 01:04:53,120 Speaker 1: season um from water in Japan today today has been 1115 01:04:53,160 --> 01:04:56,160 Speaker 1: for three years now. Really, wow, that's fast. It was 1116 01:04:56,200 --> 01:04:59,360 Speaker 1: a startup that was met him. You know, three people 1117 01:04:59,440 --> 01:05:02,400 Speaker 1: back in and now what's going on there? That's a 1118 01:05:02,440 --> 01:05:07,560 Speaker 1: good question. Um, you're an investor in this company, and 1119 01:05:08,080 --> 01:05:13,680 Speaker 1: how is it growing? Is it home run? What's the 1120 01:05:13,680 --> 01:05:16,840 Speaker 1: exit strategy for a company like that? Um, that's a 1121 01:05:16,880 --> 01:05:19,480 Speaker 1: good question. I'll tell you next time we talk. Okay, 1122 01:05:19,640 --> 01:05:21,840 Speaker 1: well we'll we'll, We'll have to we'll have to revisit 1123 01:05:21,920 --> 01:05:25,400 Speaker 1: that any other VC stuff that's interesting before we move on. 1124 01:05:25,760 --> 01:05:29,280 Speaker 1: Probably probably I probably said I've said too much, and 1125 01:05:29,280 --> 01:05:32,200 Speaker 1: I've probably caused too many eyes to glaze. All right, No, no, 1126 01:05:32,360 --> 01:05:34,600 Speaker 1: I well I can't tell you about other eyes, but 1127 01:05:34,640 --> 01:05:37,000 Speaker 1: I glazing over. But I find this sort of stuff, 1128 01:05:37,480 --> 01:05:41,120 Speaker 1: this stuff fascinating. There's a show on the Science Channel. 1129 01:05:41,400 --> 01:05:46,040 Speaker 1: So my background was applied mathematics and physics until my 1130 01:05:46,120 --> 01:05:48,920 Speaker 1: senior year in college. And I figured out that if 1131 01:05:48,960 --> 01:05:52,320 Speaker 1: I switched to polyscien philosophy, I can drink beer and 1132 01:05:52,400 --> 01:05:56,200 Speaker 1: chase girls and not have double labs for three times 1133 01:05:56,240 --> 01:05:59,040 Speaker 1: a week. And so I have enough physics and math 1134 01:05:59,120 --> 01:06:01,560 Speaker 1: to be dangerous to my my My, my best friend 1135 01:06:01,880 --> 01:06:04,280 Speaker 1: uh as an undergraduate, was a brilliant guy who ended 1136 01:06:04,320 --> 01:06:06,880 Speaker 1: up being chairman of the Biomedical Engineering department at Hopkins 1137 01:06:06,880 --> 01:06:09,800 Speaker 1: for seventeen years. What worlding now and uh? And he 1138 01:06:09,800 --> 01:06:12,800 Speaker 1: helped me get through. You truly helped me get through UH. 1139 01:06:12,840 --> 01:06:15,360 Speaker 1: And whenever I would say I was really a very 1140 01:06:15,440 --> 01:06:18,160 Speaker 1: mediocre student in M I T he'd say, oh no, 1141 01:06:18,280 --> 01:06:20,480 Speaker 1: but when you know later on, when you started taking 1142 01:06:20,520 --> 01:06:23,200 Speaker 1: religion and political science, you can help me. You really, 1143 01:06:23,280 --> 01:06:25,960 Speaker 1: you really knocked the ball out of the park. And 1144 01:06:26,000 --> 01:06:28,400 Speaker 1: I said, I don't think. I don't think that's what 1145 01:06:28,600 --> 01:06:31,920 Speaker 1: M I T is. All that comparative religious studies in 1146 01:06:32,080 --> 01:06:34,520 Speaker 1: M I not. It was a great It was a great. 1147 01:06:34,560 --> 01:06:37,520 Speaker 1: Houston Smith was a professor. He was he was world 1148 01:06:37,680 --> 01:06:41,440 Speaker 1: now and I mean I has got great but you know, 1149 01:06:41,560 --> 01:06:44,880 Speaker 1: but that was not but it was it was you know. 1150 01:06:44,920 --> 01:06:47,000 Speaker 1: But but but I learned so much from going there 1151 01:06:47,000 --> 01:06:52,000 Speaker 1: about applying yourself, overcoming obstacles. It's not an easy place, 1152 01:06:52,040 --> 01:06:55,080 Speaker 1: but no, no, it's a very competitive place, very competitive, 1153 01:06:55,120 --> 01:06:57,760 Speaker 1: which I think is a great preparation for life, to 1154 01:06:58,160 --> 01:07:01,320 Speaker 1: say the least. What I was gonna mentioned, there's a 1155 01:07:01,360 --> 01:07:05,440 Speaker 1: show on the Science Channel called How the Universe Works, 1156 01:07:05,920 --> 01:07:13,640 Speaker 1: and essentially it's really complex astrophysics with great digital graphics. 1157 01:07:13,640 --> 01:07:17,000 Speaker 1: So I don't know if that's what the inside of 1158 01:07:17,000 --> 01:07:20,439 Speaker 1: a neutron star looks like. But okay, that's close enough. 1159 01:07:20,520 --> 01:07:24,240 Speaker 1: It's a little more scientific than industrial light and magic shows. 1160 01:07:24,240 --> 01:07:28,120 Speaker 1: You on Star Wars, you know that stuff is is fascinating. So, 1161 01:07:28,600 --> 01:07:31,720 Speaker 1: speaking of of saying too much, let's talk a little 1162 01:07:31,720 --> 01:07:35,440 Speaker 1: bit about Um, the SEC, and I know this is 1163 01:07:35,520 --> 01:07:38,520 Speaker 1: a an area I want to tread lightly. Let me 1164 01:07:39,520 --> 01:07:42,760 Speaker 1: let me bring up another guest. I had Mark Cuban 1165 01:07:42,840 --> 01:07:48,439 Speaker 1: on some time ago, and well, let's let's let's talk 1166 01:07:48,480 --> 01:07:51,680 Speaker 1: about that a little bit. But Mark went off on 1167 01:07:51,720 --> 01:07:56,920 Speaker 1: an absolute jihad about the SEC and he talked about 1168 01:07:57,280 --> 01:08:01,880 Speaker 1: how they're miss misfocused, misguided on fair. He went off 1169 01:08:02,040 --> 01:08:03,960 Speaker 1: and after the conversation was like, are you sure you 1170 01:08:04,000 --> 01:08:06,120 Speaker 1: want to say this? He's like, no, we just won 1171 01:08:06,200 --> 01:08:08,880 Speaker 1: in court. We're done with them. They they you know, 1172 01:08:09,080 --> 01:08:10,800 Speaker 1: they had to put their tail between their legs and 1173 01:08:10,840 --> 01:08:15,240 Speaker 1: walk away. Um, you had a not especially pleasant experience 1174 01:08:15,240 --> 01:08:18,599 Speaker 1: with the SEC. What do you think about what Mark 1175 01:08:18,680 --> 01:08:23,400 Speaker 1: had to say? Um? I know Mark, before Mark made 1176 01:08:23,439 --> 01:08:26,280 Speaker 1: his first fortune, we worked together on a private investment 1177 01:08:26,320 --> 01:08:28,919 Speaker 1: I made. UM. He's a very smart guy. He's obviously 1178 01:08:28,920 --> 01:08:32,080 Speaker 1: where you're outspoken guy, very colorful guy. Um, he was 1179 01:08:32,120 --> 01:08:35,760 Speaker 1: managing his own personal money. He didn't have the responsibility 1180 01:08:35,800 --> 01:08:40,080 Speaker 1: of managing money for you know, for fiduciaries and have 1181 01:08:40,160 --> 01:08:43,479 Speaker 1: a lot of employees and everything. So I obviously I'm 1182 01:08:43,479 --> 01:08:46,000 Speaker 1: gonna approach this in a far different way. I did not. 1183 01:08:46,200 --> 01:08:48,799 Speaker 1: He has to be less circumspect than than you must, 1184 01:08:48,920 --> 01:08:53,240 Speaker 1: for sure. And um I I did one of those 1185 01:08:53,280 --> 01:08:57,639 Speaker 1: settlement things with the SEC neither admitting nor denying guilt. 1186 01:08:57,960 --> 01:09:02,519 Speaker 1: Um uh. And that was that was that was after 1187 01:09:02,560 --> 01:09:08,360 Speaker 1: the case was reopened. People well, like I think they 1188 01:09:08,400 --> 01:09:11,280 Speaker 1: walked in and three or O four and it didn't 1189 01:09:11,320 --> 01:09:13,960 Speaker 1: get resolved until O nine. It was resolved once where 1190 01:09:14,000 --> 01:09:18,320 Speaker 1: they they dropped it and and there was a congressional 1191 01:09:18,400 --> 01:09:21,920 Speaker 1: hearing and they actually made their notes available their their 1192 01:09:22,000 --> 01:09:24,400 Speaker 1: closing document, which is an internal thing. And I'm told 1193 01:09:24,400 --> 01:09:26,760 Speaker 1: by the lawyer's this first time ever. And then it 1194 01:09:26,840 --> 01:09:29,640 Speaker 1: got reopened and and and it sort of got reopened 1195 01:09:29,760 --> 01:09:32,040 Speaker 1: right when Nate Off happened. So you can you can 1196 01:09:32,080 --> 01:09:34,360 Speaker 1: come you can go to you can come to your 1197 01:09:34,360 --> 01:09:37,320 Speaker 1: own conclusions. Is to you know, what what what was 1198 01:09:37,360 --> 01:09:40,480 Speaker 1: going on? Um the case had to do with Microsoft, 1199 01:09:40,520 --> 01:09:45,400 Speaker 1: which is the most um widely followed company in the world. 1200 01:09:45,760 --> 01:09:50,000 Speaker 1: Um and uh. You know, there's really not much to 1201 01:09:50,000 --> 01:09:52,840 Speaker 1: say about it other than what I said at the time, 1202 01:09:52,880 --> 01:09:58,040 Speaker 1: which is, UM, this is too distracting, And that actually 1203 01:09:58,160 --> 01:10:01,760 Speaker 1: was a factual statement. It was stremely distracting. There were 1204 01:10:01,800 --> 01:10:03,599 Speaker 1: many things I thought I could do with my life. 1205 01:10:03,640 --> 01:10:06,680 Speaker 1: I was sixty eight years old. To fight from that 1206 01:10:06,720 --> 01:10:09,320 Speaker 1: point I would have taken another three to five years. 1207 01:10:09,400 --> 01:10:11,679 Speaker 1: And so if I had one who's going to give money, 1208 01:10:11,760 --> 01:10:14,519 Speaker 1: a hedge fund guy who's in his early seventies, it 1209 01:10:14,640 --> 01:10:17,639 Speaker 1: was just it was a ludicrous battle to fight, um 1210 01:10:18,080 --> 01:10:22,000 Speaker 1: and uh and and I thought, how more interesting things 1211 01:10:22,040 --> 01:10:23,760 Speaker 1: to do with my life. And it sounds like you 1212 01:10:23,800 --> 01:10:26,160 Speaker 1: certainly have been focusing on a lot. I'm very happy 1213 01:10:26,200 --> 01:10:28,720 Speaker 1: about the decision I made. It. It's nothing you like 1214 01:10:28,840 --> 01:10:31,479 Speaker 1: to go to your grave with you know UM and 1215 01:10:31,520 --> 01:10:35,559 Speaker 1: have your grandkids google UM and find out you know 1216 01:10:36,040 --> 01:10:40,280 Speaker 1: UM about But UM. I was convinced at the time 1217 01:10:40,320 --> 01:10:42,960 Speaker 1: it was the right decision, and I'm convinced still convinced. 1218 01:10:43,400 --> 01:10:47,080 Speaker 1: And it sounds like you have not, um lost a 1219 01:10:47,120 --> 01:10:50,120 Speaker 1: step in terms of what you're focusing on after that. 1220 01:10:50,320 --> 01:10:54,000 Speaker 1: Success in life is just keep moving forward, moving forward, 1221 01:10:54,040 --> 01:10:58,600 Speaker 1: moving forward, like a shark. If you stop swimming. It's well. 1222 01:10:57,800 --> 01:11:01,240 Speaker 1: I client for my fifty ninth birthday, I claimed coleman 1223 01:11:01,320 --> 01:11:04,920 Speaker 1: Jaro and really yeah, and the locals have this expression pole, 1224 01:11:05,120 --> 01:11:09,599 Speaker 1: which means slow, slow, slow, slow, one foot in front 1225 01:11:09,640 --> 01:11:15,679 Speaker 1: of the other and keep moving forward. Count So you're 1226 01:11:15,760 --> 01:11:21,040 Speaker 1: still in the upper upper reaches of that. There's still elevation, 1227 01:11:21,120 --> 01:11:25,439 Speaker 1: sickness and terrible way weather. I know Everest is twenty 1228 01:11:25,640 --> 01:11:29,880 Speaker 1: six something. That's supposed that's a technical claim, right, people, 1229 01:11:29,920 --> 01:11:33,920 Speaker 1: Supposedly the last five thousand feet of that are are 1230 01:11:33,960 --> 01:11:36,840 Speaker 1: hallucinating and what's terrible? Yeah, no, I didn't want to 1231 01:11:36,840 --> 01:11:40,280 Speaker 1: be miserable, but this, this was this was not quite miserable. 1232 01:11:40,320 --> 01:11:42,920 Speaker 1: But how long did it take to this is news 1233 01:11:42,920 --> 01:11:44,240 Speaker 1: to me. By the way, this doesn't show up in 1234 01:11:44,280 --> 01:11:47,639 Speaker 1: any of our research about you. Um, how long did 1235 01:11:47,640 --> 01:11:49,519 Speaker 1: it take to get to the top of how long 1236 01:11:50,479 --> 01:11:55,679 Speaker 1: there are? We prepped for six months? But really that's amazing. Yeah, 1237 01:11:56,000 --> 01:12:00,120 Speaker 1: it wasn't strenuous prepping, but it was trapping. But there 1238 01:12:00,320 --> 01:12:01,920 Speaker 1: are two days ago. You can go and I've forgotten 1239 01:12:01,920 --> 01:12:03,479 Speaker 1: the names of the trails. You can go straight up 1240 01:12:03,520 --> 01:12:06,519 Speaker 1: the spine of the mountain. You can loop around, you 1241 01:12:06,600 --> 01:12:10,960 Speaker 1: can Yeah, which way did you the ladder because at 1242 01:12:11,120 --> 01:12:14,200 Speaker 1: nine I wanted to acclimate as slowly as possible. How 1243 01:12:14,200 --> 01:12:15,880 Speaker 1: long did it take to get to the top three days? 1244 01:12:16,320 --> 01:12:19,880 Speaker 1: Three days and then back down? Well that's the interesting thing. 1245 01:12:19,920 --> 01:12:22,439 Speaker 1: But the last day you wake up at ten eleven 1246 01:12:22,479 --> 01:12:24,840 Speaker 1: at night. I can't remember exactly when, because you want 1247 01:12:24,880 --> 01:12:27,920 Speaker 1: to walk up the glacial rain while it's frozen so 1248 01:12:27,960 --> 01:12:30,679 Speaker 1: you don't slide back. You get to the peak at 1249 01:12:30,720 --> 01:12:34,760 Speaker 1: six thirty in the morning when the sun's just spectacular 1250 01:12:34,880 --> 01:12:37,600 Speaker 1: you then you go back down to the camp that 1251 01:12:37,680 --> 01:12:41,439 Speaker 1: you just straight down or it's you have a hard 1252 01:12:41,439 --> 01:12:43,920 Speaker 1: time lifting your legs at this point, I mean, the 1253 01:12:44,000 --> 01:12:47,719 Speaker 1: quads are just a um and uh. So you stop 1254 01:12:47,760 --> 01:12:49,800 Speaker 1: at fifteen thousand feet where you were the night before, 1255 01:12:49,840 --> 01:12:51,479 Speaker 1: you sleep for two hours, and then you go down 1256 01:12:51,479 --> 01:12:54,400 Speaker 1: to twelve or ten I can't remember, just to acclimate 1257 01:12:54,479 --> 01:12:59,360 Speaker 1: the pressure, to get it all over with um and 1258 01:12:59,360 --> 01:13:03,280 Speaker 1: and uh. It's an exhilaration to believe you can do that. 1259 01:13:04,200 --> 01:13:07,400 Speaker 1: You're looking down on the clouds. It's uh, you know. 1260 01:13:07,439 --> 01:13:09,599 Speaker 1: But being being a hedge fun guy, I of course 1261 01:13:09,640 --> 01:13:11,720 Speaker 1: had my satellite phone and at the top of the 1262 01:13:11,720 --> 01:13:14,000 Speaker 1: mountain I had a call in to get quotes you 1263 01:13:14,040 --> 01:13:16,840 Speaker 1: were trading. From the top of it. I didn't. I 1264 01:13:16,880 --> 01:13:19,800 Speaker 1: didn't trust my judgment off but but I certainly wanted 1265 01:13:19,800 --> 01:13:21,479 Speaker 1: to be in touch. Well, you had enough of your 1266 01:13:21,520 --> 01:13:23,840 Speaker 1: wits about you to know that you were not to 1267 01:13:23,880 --> 01:13:25,960 Speaker 1: be trust trust. I had a friend who once went 1268 01:13:26,000 --> 01:13:29,639 Speaker 1: to Africa for two weeks, came back and the crash 1269 01:13:29,680 --> 01:13:32,240 Speaker 1: of eighty seven had occurred, and he knew nothing about 1270 01:13:32,280 --> 01:13:35,160 Speaker 1: it during the whole really, and that that memory stayed 1271 01:13:35,200 --> 01:13:37,880 Speaker 1: with me. It's like, you cannot you cannot do what 1272 01:13:37,920 --> 01:13:41,240 Speaker 1: I do and be removed from the world for the 1273 01:13:41,560 --> 01:13:45,800 Speaker 1: missed the You know. My one of my favorite eighty 1274 01:13:45,840 --> 01:13:49,120 Speaker 1: seven stories is David Rosenberg's first day of work. He 1275 01:13:49,200 --> 01:13:51,519 Speaker 1: had been a government economist and he went to work 1276 01:13:51,560 --> 01:13:54,040 Speaker 1: for not Mary Lynch. Was the job before that? His 1277 01:13:54,080 --> 01:13:57,479 Speaker 1: first day in the job was nice. Was the black Monday? 1278 01:13:57,680 --> 01:13:59,160 Speaker 1: Is that right? Yeah? That was the first day. You 1279 01:13:59,200 --> 01:14:02,120 Speaker 1: guys talked about autism by five. So this guy is 1280 01:14:02,160 --> 01:14:05,679 Speaker 1: running a hedge fund. He goes to Africa in he 1281 01:14:05,680 --> 01:14:09,680 Speaker 1: he didn't have a hedge funt. He's running money. He 1282 01:14:09,760 --> 01:14:11,960 Speaker 1: goes in October and he comes back and what the 1283 01:14:12,040 --> 01:14:13,600 Speaker 1: hell happen? And he calls from the airport and I 1284 01:14:13,720 --> 01:14:16,479 Speaker 1: Robi and they tell him and where the markets are 1285 01:14:16,479 --> 01:14:20,200 Speaker 1: and don't don't joke with me, right, this is too serious. 1286 01:14:21,680 --> 01:14:25,320 Speaker 1: This is where things are. Yeah, the flash crash in 1287 01:14:25,400 --> 01:14:28,680 Speaker 1: two thousand ten, I took off from I think it 1288 01:14:28,720 --> 01:14:31,719 Speaker 1: was Dallas at like nine in the morning, New York time, 1289 01:14:32,400 --> 01:14:35,000 Speaker 1: and this was there was no WiFi on the flight 1290 01:14:35,040 --> 01:14:37,640 Speaker 1: because it was a short flight, and I land in 1291 01:14:38,040 --> 01:14:41,720 Speaker 1: maybe a Chicago and land in in uh Laguardi, and 1292 01:14:41,760 --> 01:14:44,639 Speaker 1: it was what the hell happened? Is? Wait, we're down 1293 01:14:44,640 --> 01:14:48,160 Speaker 1: a thousand points and now we're only down what like 1294 01:14:48,240 --> 01:14:50,320 Speaker 1: I'm like, soun's wrong with I called somebody, Son's wrong 1295 01:14:50,400 --> 01:14:52,640 Speaker 1: my phone? It's shown, No, you don't stand It was 1296 01:14:52,720 --> 01:14:57,800 Speaker 1: two thirty two three. Just just absolutely insane. All right. 1297 01:14:57,880 --> 01:15:00,400 Speaker 1: So let's um, let's get to some of my favorite questions. 1298 01:15:00,680 --> 01:15:04,679 Speaker 1: I know you, Um, you have to have other places 1299 01:15:04,720 --> 01:15:10,520 Speaker 1: to go, that's right. UM. So who are your early mentors? 1300 01:15:10,520 --> 01:15:14,639 Speaker 1: Who who really uh put the love of investing and 1301 01:15:14,640 --> 01:15:20,400 Speaker 1: and both technology venture investing and asset management into you? Um? 1302 01:15:20,760 --> 01:15:25,479 Speaker 1: Good question. UM, I mean we're talking to ancient history now. UM. 1303 01:15:27,720 --> 01:15:30,640 Speaker 1: I got out of Columbia and UH interviewed around and 1304 01:15:30,680 --> 01:15:33,600 Speaker 1: I interviewed a Kidder. So what you mentioned was the 1305 01:15:33,640 --> 01:15:35,920 Speaker 1: first job. There was a guy at Kidder at the time, 1306 01:15:35,960 --> 01:15:38,920 Speaker 1: Tom Folder, who was an M I. T. Graand UM, 1307 01:15:39,200 --> 01:15:42,519 Speaker 1: who was director of research. He had hired about six 1308 01:15:42,560 --> 01:15:45,840 Speaker 1: months earlier, guy Bob Johnson to follow computers M I T. 1309 01:15:46,120 --> 01:15:49,000 Speaker 1: Harvard Business School. Uh. And he hired me and we 1310 01:15:49,120 --> 01:15:53,040 Speaker 1: formed the first sort of group group. Um. It was 1311 01:15:53,240 --> 01:15:57,200 Speaker 1: unheard of back in sixty seven, sixty sixty nine. UM. 1312 01:15:57,280 --> 01:15:59,800 Speaker 1: And that that that was a kick. So you know, 1313 01:16:00,760 --> 01:16:05,040 Speaker 1: if I had gotten you recruited to follow the energy industry, 1314 01:16:05,120 --> 01:16:07,679 Speaker 1: I probably would have become a deep value energy buyers. 1315 01:16:08,000 --> 01:16:09,679 Speaker 1: I don't know, but I got in with these guys 1316 01:16:09,680 --> 01:16:15,040 Speaker 1: who who had a similar mindset, similar approach um. Uh. 1317 01:16:15,040 --> 01:16:17,320 Speaker 1: And so I would say that that that influenced me. 1318 01:16:17,360 --> 01:16:20,400 Speaker 1: And then I, uh, I've always worked for a smaller firm. 1319 01:16:21,200 --> 01:16:23,760 Speaker 1: You are what you are. So you know, my first 1320 01:16:23,840 --> 01:16:26,960 Speaker 1: job out of college was Lockheed, which not exactly a 1321 01:16:26,960 --> 01:16:29,280 Speaker 1: small phone, exactly a small firm. Then then then I 1322 01:16:29,320 --> 01:16:31,920 Speaker 1: go down to Wall Street, uh, and I joined Kidder, 1323 01:16:31,960 --> 01:16:34,840 Speaker 1: which was a substantial firm at that time. And Kidder 1324 01:16:34,880 --> 01:16:40,080 Speaker 1: eventually became whatever or Dean Winder. No, No, didn't didn't 1325 01:16:40,479 --> 01:16:43,120 Speaker 1: buy it. I don't remember. I think Gee bought it 1326 01:16:43,120 --> 01:16:46,400 Speaker 1: and then hold it UM. But it disappeared. It was 1327 01:16:46,400 --> 01:16:48,920 Speaker 1: a great firm, but it disappeared. UM. I went from 1328 01:16:49,040 --> 01:16:52,400 Speaker 1: kidder uh to a small a small firm by the 1329 01:16:52,479 --> 01:16:54,920 Speaker 1: name of Lombard by Tallis Pagan, Ducy and Nelson, which 1330 01:16:55,080 --> 01:16:57,720 Speaker 1: doesn't appear in any of bio stuff any longer. Was 1331 01:16:57,760 --> 01:17:00,320 Speaker 1: there for for all of one year, and the wise 1332 01:17:00,360 --> 01:17:03,040 Speaker 1: peg were was starting up a complete startup. That's a 1333 01:17:03,400 --> 01:17:07,320 Speaker 1: that's now a decent sized farm. They sold out to 1334 01:17:07,400 --> 01:17:09,920 Speaker 1: a Dutch bank, but um, I was the first. I 1335 01:17:10,000 --> 01:17:13,479 Speaker 1: was the first higher after the partners opened the doors. 1336 01:17:14,000 --> 01:17:17,519 Speaker 1: UM stay there for fifteen years, managed firm capital, had 1337 01:17:17,560 --> 01:17:20,080 Speaker 1: a pretty good record UM for five years, and went 1338 01:17:20,080 --> 01:17:23,519 Speaker 1: out and started the funds. So the investing part of 1339 01:17:23,560 --> 01:17:27,880 Speaker 1: it was, you know, a combination of my first job 1340 01:17:27,960 --> 01:17:32,080 Speaker 1: and then the venture experience at weiss Peck and managing money. 1341 01:17:32,120 --> 01:17:34,799 Speaker 1: And I learned a lot about money management and cycles 1342 01:17:34,800 --> 01:17:37,960 Speaker 1: and money management, and I learned a lot UM and 1343 01:17:38,000 --> 01:17:41,280 Speaker 1: I learned a lot by managing partners Capital and anybody 1344 01:17:41,360 --> 01:17:46,000 Speaker 1: standing out at WISPEC as all my uh. I don't 1345 01:17:46,000 --> 01:17:49,160 Speaker 1: know if you'd say mentor but but influence influence. So 1346 01:17:49,240 --> 01:17:53,599 Speaker 1: Byron Ween was and and Byron has been an investor, 1347 01:17:53,640 --> 01:17:56,759 Speaker 1: and I was an investor when I had funds. UM 1348 01:17:56,800 --> 01:17:59,639 Speaker 1: from the very beginning we had offices next to each other. 1349 01:18:00,400 --> 01:18:03,280 Speaker 1: Um eventually came to work for Peaquad as the chief 1350 01:18:03,280 --> 01:18:06,840 Speaker 1: strategist when he left Morgan Stanley's now with of course 1351 01:18:06,880 --> 01:18:10,200 Speaker 1: at Blackstone UM. So Byron was one of them. There's 1352 01:18:10,320 --> 01:18:13,559 Speaker 1: unfortunately a fellow just passed away. But then Mickey Straus, 1353 01:18:13,680 --> 01:18:16,479 Speaker 1: who who I worked with there, So it was really 1354 01:18:16,520 --> 01:18:19,880 Speaker 1: more my colleagues than it was you know, and and 1355 01:18:19,960 --> 01:18:22,880 Speaker 1: sometimes you learn as much from colleagues as you do 1356 01:18:22,920 --> 01:18:26,559 Speaker 1: from Biman was on the show. He's now in his 1357 01:18:26,640 --> 01:18:31,800 Speaker 1: early eight he still maintains a relentless travel schedule. I 1358 01:18:32,040 --> 01:18:34,360 Speaker 1: think he's crazy. He flies to China all the time. 1359 01:18:34,400 --> 01:18:38,679 Speaker 1: He's like, I know people my age and younger who 1360 01:18:38,680 --> 01:18:40,800 Speaker 1: are like, oh, I can't travel that much. He's on 1361 01:18:40,840 --> 01:18:43,439 Speaker 1: the road a week or two a month. Like he's 1362 01:18:43,600 --> 01:18:46,320 Speaker 1: twenty six right out of school. I don't think he's 1363 01:18:46,360 --> 01:18:49,519 Speaker 1: like twenty six out of school, but he's uh but yeah, no, 1364 01:18:49,680 --> 01:18:52,400 Speaker 1: he's he's an amazing He's a warrior. He's a warrior. 1365 01:18:52,439 --> 01:18:56,120 Speaker 1: He's eighty's something. He's a warrior. There's another guy who 1366 01:18:56,160 --> 01:18:59,000 Speaker 1: just loves what he does and nothing's going to stop him. 1367 01:18:59,160 --> 01:19:02,639 Speaker 1: And we're stiver close. I'm gonna ask about a book 1368 01:19:03,040 --> 01:19:05,720 Speaker 1: that I suspect you've read, and if you haven't, I'm 1369 01:19:05,720 --> 01:19:10,439 Speaker 1: going to recommend it. James Glicks The Information not the 1370 01:19:10,560 --> 01:19:14,280 Speaker 1: History of Information and Theory and and that put that 1371 01:19:14,400 --> 01:19:16,519 Speaker 1: right on the top of your list because you read 1372 01:19:16,640 --> 01:19:20,880 Speaker 1: enough interesting, eclectic stuff about both history and science. This 1373 01:19:21,479 --> 01:19:25,320 Speaker 1: he's a brilliant writer. He's done the book Chaos about 1374 01:19:25,400 --> 01:19:30,280 Speaker 1: chaos theory. That's him and this book is this should 1375 01:19:30,280 --> 01:19:33,439 Speaker 1: have won the Pulitz or if it didn't, it may have. 1376 01:19:33,720 --> 01:19:36,679 Speaker 1: Just a brilliant If you like that sort of stuff, 1377 01:19:37,000 --> 01:19:40,800 Speaker 1: suspect you do, you're gonna you're gonna find that that fascinating. 1378 01:19:40,840 --> 01:19:44,000 Speaker 1: So so let's talk a little bit about what's changed 1379 01:19:44,240 --> 01:19:47,719 Speaker 1: during in the industry over the course of your career. 1380 01:19:47,760 --> 01:19:52,040 Speaker 1: What do you think, whether it's venture capital or traditional investing, 1381 01:19:52,120 --> 01:19:55,960 Speaker 1: everything everything, what's what's the more? When you know I 1382 01:19:56,000 --> 01:20:01,160 Speaker 1: came down to Wall Street in seven and um, you 1383 01:20:01,200 --> 01:20:03,320 Speaker 1: know there was the Lost generation. Nobody came down to 1384 01:20:03,320 --> 01:20:08,639 Speaker 1: Wall Street in the thirties, forties to two people started. 1385 01:20:08,800 --> 01:20:11,799 Speaker 1: You know, so is that luck or is that I followed? 1386 01:20:11,840 --> 01:20:14,479 Speaker 1: What what what I thought my passion was. I don't know. 1387 01:20:14,600 --> 01:20:16,400 Speaker 1: I mean, I guess there's an element of luck to it. 1388 01:20:16,479 --> 01:20:19,280 Speaker 1: But so I got there at the beginning of the cycle, 1389 01:20:19,760 --> 01:20:22,639 Speaker 1: beginning of the bear market. It was also the beginning 1390 01:20:22,680 --> 01:20:25,040 Speaker 1: of market. Yeah. So there was a bear market, as 1391 01:20:25,080 --> 01:20:30,240 Speaker 1: you know, from seventies seventy one to eighty three. Um. 1392 01:20:30,360 --> 01:20:33,160 Speaker 1: And uh, the time period I like to use is 1393 01:20:33,200 --> 01:20:36,479 Speaker 1: the Dow kissed the thousand in nineteen sixty eight. It 1394 01:20:36,560 --> 01:20:42,240 Speaker 1: did not eclipse that in nineteen sixty six until eighty two. 1395 01:20:43,040 --> 01:20:45,439 Speaker 1: So it's a full sixteen years and those are my 1396 01:20:45,479 --> 01:20:48,519 Speaker 1: formative years. So now you know, you come in, the 1397 01:20:48,520 --> 01:20:52,120 Speaker 1: FED keeps interustrates at zero assets getting fled to go 1398 01:20:52,200 --> 01:20:55,519 Speaker 1: up though, doesn't it. But a lot of people come 1399 01:20:55,560 --> 01:20:58,559 Speaker 1: in and you know what one of my mentor there 1400 01:20:58,640 --> 01:21:01,760 Speaker 1: was a mentor um that I forgot to mention, but said, 1401 01:21:02,040 --> 01:21:04,120 Speaker 1: you know, I had the expression, which others have had, 1402 01:21:04,160 --> 01:21:08,640 Speaker 1: don't confuse brains with the market. Um. I really believe that. 1403 01:21:08,840 --> 01:21:12,640 Speaker 1: But you know so, um, but back then, UM, you 1404 01:21:12,720 --> 01:21:15,040 Speaker 1: didn't just come into the market, and you know, the 1405 01:21:15,080 --> 01:21:17,640 Speaker 1: averages went up because the government decided they should go 1406 01:21:17,760 --> 01:21:20,519 Speaker 1: up or whatever is going on right now. Um, back 1407 01:21:20,560 --> 01:21:23,559 Speaker 1: then you had fifteen years of nothing and you had 1408 01:21:23,560 --> 01:21:27,559 Speaker 1: to survive. And that's that's nominal in real inflation, it 1409 01:21:27,600 --> 01:21:30,800 Speaker 1: was a big loser. Inflation was high, of course, so 1410 01:21:31,040 --> 01:21:35,240 Speaker 1: you know, um that that was my baptism. Um, well, 1411 01:21:35,280 --> 01:21:37,960 Speaker 1: what was it like in the early seventies? What what sucked? 1412 01:21:38,160 --> 01:21:42,960 Speaker 1: It sucked? That's that's an understatement. Obviously, the bond side 1413 01:21:43,080 --> 01:21:48,760 Speaker 1: was paying huge, yes, huge again nominal yields. But on 1414 01:21:48,800 --> 01:21:53,080 Speaker 1: the equity side, who's buying stocks? There weren't that many. 1415 01:21:53,160 --> 01:21:55,240 Speaker 1: But you know, and that was all I did. I mean, 1416 01:21:55,560 --> 01:22:00,240 Speaker 1: you know, I've never met a bond I like, um, 1417 01:22:00,280 --> 01:22:03,439 Speaker 1: which is not true, but um, but you can put 1418 01:22:04,240 --> 01:22:06,200 Speaker 1: well if I haven't, you know, I knew the play. 1419 01:22:06,280 --> 01:22:09,880 Speaker 1: You know, when the rates were up, you know, at 1420 01:22:09,880 --> 01:22:12,080 Speaker 1: the end of that period, and you know, we've had 1421 01:22:12,080 --> 01:22:18,240 Speaker 1: the biggest bond bullmarket ever from two to You could 1422 01:22:18,280 --> 01:22:21,400 Speaker 1: have bought zero coupons and paid no interest and made 1423 01:22:21,400 --> 01:22:24,040 Speaker 1: a fortune, but um, you know, but I didn't do that, 1424 01:22:24,160 --> 01:22:27,479 Speaker 1: So I stuck with the stock thing. Um, And you 1425 01:22:27,520 --> 01:22:31,479 Speaker 1: know that that's worked out. It's worked out enormously well. 1426 01:22:31,880 --> 01:22:34,320 Speaker 1: But it also means that I was a late bloomer 1427 01:22:34,800 --> 01:22:38,040 Speaker 1: because you know, I put in seventeen years before I 1428 01:22:38,040 --> 01:22:41,599 Speaker 1: started getting really paid back for credit ship. I paid 1429 01:22:41,640 --> 01:22:43,519 Speaker 1: my dues. But I did it. When I did it, 1430 01:22:43,560 --> 01:22:45,880 Speaker 1: I did it because I loved it. And now I 1431 01:22:45,880 --> 01:22:49,000 Speaker 1: think people come in because they think you're gonna get rich. Well, 1432 01:22:49,040 --> 01:22:52,639 Speaker 1: that's always the wrong way to yeah, right, If you're 1433 01:22:52,680 --> 01:22:55,439 Speaker 1: doing it for the money, then everything that's not putting 1434 01:22:55,479 --> 01:22:57,599 Speaker 1: money in your pocket is a misery. Right. If you're 1435 01:22:57,600 --> 01:22:59,639 Speaker 1: doing it because you love it, Well, I'm not making money, 1436 01:22:59,640 --> 01:23:01,640 Speaker 1: but I'm having fun. So you know, I like, I 1437 01:23:01,640 --> 01:23:04,559 Speaker 1: like I like obviously I like engineering enough, you know, 1438 01:23:04,640 --> 01:23:07,360 Speaker 1: but I like the discipline of it, in the logic 1439 01:23:07,439 --> 01:23:10,120 Speaker 1: of it. Um. But when you added to that the 1440 01:23:10,200 --> 01:23:12,760 Speaker 1: market and the uncertainty and the ability to try and 1441 01:23:12,800 --> 01:23:19,120 Speaker 1: outcuss other people along with data, um, that became really exciting. Um. 1442 01:23:20,160 --> 01:23:22,599 Speaker 1: It wasn't. It wasn't because I you know, my dad 1443 01:23:22,640 --> 01:23:25,240 Speaker 1: wasn't eluctrician, and I wanted to become a billionaire or something, 1444 01:23:25,320 --> 01:23:29,040 Speaker 1: and there was a farthest thing from my mind. It 1445 01:23:29,080 --> 01:23:33,120 Speaker 1: was just it just happened. It happened, truly, just happened 1446 01:23:33,479 --> 01:23:35,080 Speaker 1: one of the one of those things. So maybe you 1447 01:23:35,360 --> 01:23:37,840 Speaker 1: said before, I don't really think about a lot about luck. 1448 01:23:38,560 --> 01:23:44,479 Speaker 1: How much of what happened was just serendipitous word. Yeah, No, 1449 01:23:44,800 --> 01:23:47,760 Speaker 1: that that I agree with. All right, So you're slicing 1450 01:23:47,840 --> 01:23:51,839 Speaker 1: the luck factor a little more right place, right time, 1451 01:23:52,000 --> 01:23:54,880 Speaker 1: and no doubt. Okay, So so there's an element of 1452 01:23:54,960 --> 01:23:57,599 Speaker 1: luck to that. True. No, that part is luck, I agree. 1453 01:23:57,840 --> 01:24:01,680 Speaker 1: But individual things I did or whatever, and that was 1454 01:24:01,760 --> 01:24:05,040 Speaker 1: a combination I believe I created that. That's a combination 1455 01:24:05,080 --> 01:24:10,120 Speaker 1: of smarts and hard work and an application. So. Um, 1456 01:24:10,160 --> 01:24:12,759 Speaker 1: so we know lots and lots of stuff has changed 1457 01:24:13,439 --> 01:24:16,320 Speaker 1: in the past. What are some of the next shifts 1458 01:24:16,360 --> 01:24:20,000 Speaker 1: that you see in these industries? From your vantage point 1459 01:24:20,439 --> 01:24:23,879 Speaker 1: looking at technology and looking at the rate of change 1460 01:24:24,240 --> 01:24:27,720 Speaker 1: which just seems to keep accelerating. Yeah, I think you're 1461 01:24:27,720 --> 01:24:30,599 Speaker 1: in this fascinating Um. I mean one of the reasons 1462 01:24:30,600 --> 01:24:35,120 Speaker 1: I drifted to venture capital is because um um uh 1463 01:24:36,960 --> 01:24:42,760 Speaker 1: markets of the economy is is matured. Um we have right, 1464 01:24:42,840 --> 01:24:48,080 Speaker 1: so we have huge amounts of social security UM, pension funds, 1465 01:24:48,520 --> 01:24:55,120 Speaker 1: UH savings plans, uh iras four O one foundations, trust 1466 01:24:55,320 --> 01:24:58,280 Speaker 1: and and anybody is that we're just a washing liquidity 1467 01:24:58,520 --> 01:25:02,160 Speaker 1: um and so it's got a go someplace. So um, 1468 01:25:02,240 --> 01:25:05,519 Speaker 1: it needs a big engine solution to how do you 1469 01:25:06,040 --> 01:25:11,080 Speaker 1: intelligently manage all these assets plus corporations um uh In 1470 01:25:11,120 --> 01:25:14,479 Speaker 1: the US at least, um. The one good thing about 1471 01:25:14,520 --> 01:25:17,320 Speaker 1: activism and all the other stuff is it's formed forced 1472 01:25:17,320 --> 01:25:20,120 Speaker 1: productivity that keep increasing in the United States, which has 1473 01:25:20,160 --> 01:25:22,320 Speaker 1: not been happening in the rest of the world. Even 1474 01:25:22,320 --> 01:25:24,880 Speaker 1: though the measures of productivity in the US or are 1475 01:25:25,120 --> 01:25:29,240 Speaker 1: softer than a lot of people say that problem or 1476 01:25:29,280 --> 01:25:31,960 Speaker 1: do we still have good productivity? Yet? I think we 1477 01:25:32,040 --> 01:25:35,200 Speaker 1: have good productivity. I think the economy is changing rapidly. 1478 01:25:35,240 --> 01:25:39,360 Speaker 1: And the productivity in the areas that generate growth, I 1479 01:25:39,400 --> 01:25:41,519 Speaker 1: think the productivity is good. And then and then in 1480 01:25:41,560 --> 01:25:45,920 Speaker 1: the areas that don't produce growth, capital is being returned um. 1481 01:25:45,960 --> 01:25:50,720 Speaker 1: So so the capital part is more productive. So there 1482 01:25:50,720 --> 01:25:55,720 Speaker 1: where washing liquidity um and uh. There's no worldwide, there's 1483 01:25:55,760 --> 01:25:57,639 Speaker 1: not a lot of growth in the US. The growth 1484 01:25:57,720 --> 01:26:00,400 Speaker 1: is obviously much slower than it used to be. So 1485 01:26:00,479 --> 01:26:03,439 Speaker 1: somebody has to manage all of that money. And you're 1486 01:26:03,439 --> 01:26:04,920 Speaker 1: not going to manage it by giving it to a 1487 01:26:04,920 --> 01:26:07,280 Speaker 1: guy like May back thirty years ago, who's going to 1488 01:26:07,360 --> 01:26:10,600 Speaker 1: buy market capps under two hundred millions? So you know, 1489 01:26:10,720 --> 01:26:13,280 Speaker 1: you go to you know, Ray Dally has got a 1490 01:26:13,439 --> 01:26:16,360 Speaker 1: you know, a great engine, and other people have great engines. 1491 01:26:16,880 --> 01:26:19,559 Speaker 1: So you go to these algorithmic kind of things that 1492 01:26:19,560 --> 01:26:23,400 Speaker 1: that are more formulaic than than what I ever used 1493 01:26:23,400 --> 01:26:26,639 Speaker 1: to do. UM. So you know, when you say what's 1494 01:26:26,640 --> 01:26:29,840 Speaker 1: going to go on in the future, I think that 1495 01:26:29,880 --> 01:26:33,000 Speaker 1: those trends are going to continue. I think this this, 1496 01:26:33,000 --> 01:26:37,439 Speaker 1: this UM, this innovation that we're seeing is um is 1497 01:26:37,840 --> 01:26:43,080 Speaker 1: there's no stopping it. And Ure's notion. And what does 1498 01:26:43,120 --> 01:26:48,479 Speaker 1: that mean in terms of of US growth, the change 1499 01:26:48,560 --> 01:26:53,240 Speaker 1: of technology and for the rest of the world economy. UM. 1500 01:26:53,360 --> 01:26:57,160 Speaker 1: I think it means, UM, don't bet against it. Well, 1501 01:26:57,240 --> 01:26:58,840 Speaker 1: for sure, you don't bet against it, and you should 1502 01:26:58,880 --> 01:27:01,920 Speaker 1: bet with it. And they're gonna be superior returns for 1503 01:27:02,000 --> 01:27:06,320 Speaker 1: people who fully understand it. UM. Right now, it's uh, 1504 01:27:06,400 --> 01:27:09,840 Speaker 1: the jealous or the envy factors has worked in and 1505 01:27:09,880 --> 01:27:12,160 Speaker 1: so you're seeing all these comments on the unicorns and 1506 01:27:12,160 --> 01:27:16,519 Speaker 1: all that kind of stuff. You know, tem per cent 1507 01:27:16,560 --> 01:27:19,320 Speaker 1: of the unicorns will work, but they'll be monster companies 1508 01:27:19,320 --> 01:27:22,960 Speaker 1: and and and I think that's the wrong focus. These trends. 1509 01:27:23,040 --> 01:27:27,000 Speaker 1: There is no there, there there, there's there's no changing 1510 01:27:27,000 --> 01:27:29,960 Speaker 1: these trends. Um so that the amount of accority in 1511 01:27:30,000 --> 01:27:31,960 Speaker 1: the system is going to continue increase, the amount of 1512 01:27:32,000 --> 01:27:35,240 Speaker 1: growth is gonna diminish. The growth is gonna shift from 1513 01:27:35,360 --> 01:27:38,519 Speaker 1: old ways of doing things in new ways of doing things. Uh. 1514 01:27:38,560 --> 01:27:41,360 Speaker 1: And there's huge opportunities for me um in what I 1515 01:27:41,400 --> 01:27:44,720 Speaker 1: now do. God knows if there would be any opportunities 1516 01:27:44,760 --> 01:27:47,040 Speaker 1: and what I used to do. Okay, so we're running 1517 01:27:47,040 --> 01:27:49,320 Speaker 1: out of time. Let me get to the last two questions. 1518 01:27:49,320 --> 01:27:53,040 Speaker 1: These are my my favorite questions. First, what sort of 1519 01:27:53,080 --> 01:27:55,799 Speaker 1: advice would you give to a millennial or a college 1520 01:27:55,800 --> 01:27:59,240 Speaker 1: graduate today if they were interested in going into either 1521 01:27:59,760 --> 01:28:05,559 Speaker 1: at some management or a venture capital Get a job, really, yeah, 1522 01:28:06,040 --> 01:28:10,120 Speaker 1: just just find some related job and get some get 1523 01:28:10,120 --> 01:28:13,240 Speaker 1: a job in an industry. I would not come into 1524 01:28:13,280 --> 01:28:16,840 Speaker 1: this industry fresh out. I didn't. I went and work 1525 01:28:16,880 --> 01:28:18,880 Speaker 1: in the aerospace industry for three years. So get some 1526 01:28:18,960 --> 01:28:22,519 Speaker 1: other sort of experience and then use that. And then 1527 01:28:22,680 --> 01:28:25,920 Speaker 1: last question, what do you know about the world of 1528 01:28:25,960 --> 01:28:29,000 Speaker 1: investing today that you wish you knew when you began 1529 01:28:29,120 --> 01:28:34,920 Speaker 1: forty years ago? Oh? Well, that's I knew nothing forty 1530 01:28:35,000 --> 01:28:38,400 Speaker 1: years ago. I mean I was, you know, was I was. 1531 01:28:38,439 --> 01:28:42,120 Speaker 1: I was a wet behind the years, ex college student 1532 01:28:42,479 --> 01:28:47,200 Speaker 1: aeronautical engineer, gotten a car pool with Cavelly and Cooperman, 1533 01:28:47,640 --> 01:28:50,360 Speaker 1: got fascinated by markets, which I had been a little 1534 01:28:50,400 --> 01:28:54,280 Speaker 1: bit interested in before, but I didn't know diad lely. Um, 1535 01:28:54,720 --> 01:28:58,840 Speaker 1: so everything everything you know today? Everything all right? Thank 1536 01:28:58,880 --> 01:29:00,960 Speaker 1: you so much for being so interest with your time. 1537 01:29:01,040 --> 01:29:05,559 Speaker 1: This has really been a fascinating conversation, UM, and I 1538 01:29:05,600 --> 01:29:08,360 Speaker 1: really appreciate UM you're spending so much time with I 1539 01:29:08,360 --> 01:29:11,439 Speaker 1: appreciate the opportunity to tell the story. You've been listening 1540 01:29:11,479 --> 01:29:14,799 Speaker 1: to Masters in Business. I want to thank our our 1541 01:29:14,880 --> 01:29:18,879 Speaker 1: engineer Can, my producer Charlie, and my head of research 1542 01:29:19,439 --> 01:29:23,000 Speaker 1: Mike bat Nick. If you enjoy this conversation, look up 1543 01:29:23,000 --> 01:29:25,720 Speaker 1: an Inch or down an Inch on iTunes and you 1544 01:29:25,760 --> 01:29:30,160 Speaker 1: could see the other sixty such conversations we've had. Be 1545 01:29:30,240 --> 01:29:33,559 Speaker 1: sure and check out my daily column on Bloomberg View 1546 01:29:33,640 --> 01:29:36,760 Speaker 1: dot com or The Big Picture at Dholtz dot com. 1547 01:29:36,880 --> 01:29:41,559 Speaker 1: Follow me on Twitter at rid Holts. I'm Barry Hults. 1548 01:29:41,600 --> 01:29:44,880 Speaker 1: You've been listening to Masters in Business on Bloomberg Radio