What's the best way to get conviction in an investment idea? Find the best short seller in something that you own and and hear their arguments. If you can rebut each of their arguments, then you can feel more confident in your investment. >> And the same thing is should be true for your other views. Find the person who makes the best case for why you're wrong. The best hope we have to get to the truth is hearing from all sides and then sorting through who's got the better argument. Hi everyone, I'm Nicolola Tangan, the CEO of the Norwegian Southern Wealth Fund and today I'm in really good company. I'm in New York with Bill Akman, the founder of Persing Square. Bill is one of the best known investors in the world and he does it in a very unusual way because most funds own hundreds of companies, but you own uh very few. compounding very strong at um 16% and you've been doing it for a long time. So, uh great to have you here. >> Thanks for having me. >> What's a good company? >> Good or great? >> Great. >> Uh a great company is a business you could buy today. The markets could shut for 20 years and you know with a enormous degree of certainty that you'll own something that's enormously valuable 10 or 20 years from now. >> And what kind of industries are they in these great companies? You know, I think it's less industry specific than um the structure of the business. >> They're amazing businesses and in many different sectors. >> And so what kind of structure does it need? >> We love businesses that look like royalty collecting companies like annuities where you can be very confident that the annuity will grow at a high rate over a very long period of time and the cash that's generated from the business doesn't need to be reinvested in the business. Actually, Persian Square, I can I'll give you the pitch. >> We'll talk about that. We'll talk about that a bit later. Um, how many of those companies are there in the world, you think? >> The answer is there aren't a large number of big ones. So, in the from the perspective of Persian Square, we're allocating not the kind of capital you allocate, but you know, writing pretty big checks. Um, that's why we're concentrating because one, there's a limited number. there probably actually a couple hundred >> to 300 really great businesses >> but it's not so often that a really great business becomes available at a price that makes it a great investment and so that's why we're concentrated >> how do you come up with the ideas where do you find these things >> uh you know just you know we love investing we love learning about businesses um we read the newspaper uh so to speak um but we we've sort of built a library of companies we admire >> uh and you know business that has great economic characteristic high rates of growth managed by good management teams, they don't often become available at prices that offer the kind of returns we're looking for. >> Why don't more people do like like you do? Because I think it's just interesting, you know, Chris Horn has the same philosophy, Warren Buffett and you and you talk about how you do it and yet very few people manage it. >> So part of it is structural and the uh well many investors want to get rich quick. >> Yeah. >> And this is not sort of a get-richqu strategy. You have to have kind of a a longer term view. And then I I think most of the capital in the asset management industry is inherently short-term available for redemption on a minute-by-minut day by day or you know quarterly or annual basis. >> It's hard to think long term if your investors can are going to be judging you on a very short-term basis or the person you work for. You know, think the the Citadels, the Millenniums, firms where very short-term oriented use a high degree of financial leverage. You can't absorb a high degree of volatility in a strategy like that. Whereas you you need the Warren Buffett's had permanent capital. Chris Han has been in the business for a long period of time. He's cultivated investors that have given him kind of long-term backing. You need that in order to implement the strategy and that kind of capital is very scarce. >> Tell me a bit more where you where you get your information from. What do you what do you read? So, personally, I read uh Wall Street Journal, FT, Economist, occasionally the New York Times when I can stomach it. But, um, no, it's a good good newspaper. I But you have to uh it's it's all all media have biases. I spend a fair amount of time on X actually. It's probably my most important source of of information because you can follow people who have very much diverging views on the same topic and I think it's a very good way to get to the truth. It's become increasingly a big source of of where I get my media. >> Who do you follow? >> I follow probably a thousand people. >> Oh wow. >> Over time. It depends on the topic. I've got lots of different interests. And you know, interestingly, some of my the firm's best investments my personal best ideas have just come from particular passions. You know, health being an important passion led me to an insight about, you know, co I started seeing CO emerge in January. concerned about a pandemic >> and my interest was not driven by an investment perspective but it led to an interesting >> investment opportunity. You now a a family tragedy is you know causing me to spend a lot of time learning about what's going on AI and bringing computer interfaces and you know it may lead to some interesting investment opportunities. So it's it's uh >> you know you know once we find something that's interesting due diligence is driven by you know fairly conventional looking at public filings and then talking to you know using expert networks to talk to people. >> We'll come back to your your your tragedy. Um >> how much time do you spend on X? >> Uh my wife might say too much. >> What what is that? I >> I don't I don't calculate it. >> But what do you think? What do you think? an hour a day or more or >> I would say it's usually in the morning and the evening and not during the the business day but it depends on what else is going on in my life but I can spend uh it's a it's actually an interesting thing is people who are on X versus people who rely on conventional media you generally feel like you're a week to two weeks ahead like news comes out and you you learned it a week ago >> so it's it's very much a real-time source of information >> you made a lot of money in restaurants. >> Mhm. >> Why have they been good investments? >> Simple, predictable, free cash flow generative businesses. Uh we've kind of focused on for the most part kind of the franchise business model. Again, royalty collecting companies. Um but it's I I think a you know over time you build a domain expertise in in an area. It's >> just that my my daughter runs a cocktail bar and it's not a it's not an easy business, huh? >> It's not. It's not. But again, it's it's less the sector than the structure. M you know McDonald's is an amazing business but it's really people think of it as a historically thought of it as a as a restaurant business and in its core it is but it's also a real estate business and it's a franchising operation. >> How much do you uh do you depend on your um your pattern recognition or your your gut feel the fact that you've seen these things play out before? >> I don't know. I think it's very valuable to have experienced uh lots of market events over time. Um you know we've kind of I think it's but importantly for us actually you see that little tablet over there. We we took our kind of core investment principles and we created what amounts to a checklist. We have a framework and so I think that's I would say that framework helps us see the world in a way which every once in a while surfaces an interesting investment opportunity. So we'll uh now look at this uh thing here uh and we'll zoom in on it afterwards but uh just what are the what are the most important things there >> one it's a business we can predict with a very high degree of confidence >> right the value of a financial asset it's the present value the cash will generate over its life if you can't build a model of the next you know reasonable period of time of a business 10 15 20 years you I don't think you can come up with a value for it you know a lot of money is managed based on people believing a stock will go up or down based on a new piece of information coming out, but it's inherently a short-term, you know, is the company going to meet, exceed, or miss earnings. A huge amount of money is moved on that basis or an expectation of an event or news event that will cause a stock to move in a certain way. >> We kind of ignore that, right? What we're doing is we're building a financial model of a company over a long period of time. So, the business has to be inherently there many businesses that we have no idea what they're worth. we just don't even look at them or we once we conclude they're not >> we can't predict their certainty. So I think predictability uh is important and obviously to have predictable cash flows and revenues over time the business has to have the proverbial mode around it you know so business quality durability I would say you know critically important um we want companies that are not exposed to you know we call extrinsic factors we can't control so we we don't really invest in commodity sensitive businesses interest rate sensitive businesses regulatory sensitive businesses >> so it's it's about it's we we keep it simple >> well at least your principles are set in stone Right. >> Exactly. That was intended to be. I told uh the guy that team to make it stone. We came back with a heavy plastic. >> How do you use the analysts? >> So, you know, >> you you you're like just under 50 people. >> I would say our firm is structured differently from Chris Han. >> Yeah. We're 48 people. We're nine investment professionals. And it's not me and a team of analysts. It's actually an investment team. Um you know, I uh Ryan Israel became our CIO, you know, four years ago. But a typical structure of a hedge fund is you have a portfolio manager. I guess that's normally my position who's responsible for allocating capital among a team of analysts who are working on kind of different areas. Uh and the best ideas win and people are compensated based on individual P&Ls. We're not structured that way. One portfolio of 12 14 uh investments um no one is compensated based on individual uh P&Ls. Everyone's compensated ultimately based on how the overall portfolio does. So everyone has their interest is not getting capital allocated to them. Uh their interest is making sure the our firm's capital is allocated in the and our investors capital is allocated in the way that makes the most sense. Uh so >> so how does it work? So you sit around this table here. >> Uh this is uh not we have an investment team room which is smaller than this about half the size. >> Okay. So there you are. You you meet every week or how >> the team has a formal meeting every week but we have lunch together almost every day the full team. Uh so very high degree of interaction in the team. Typically uh someone identifies an interesting idea. It could be me, it could be Ryan, could be a member of the team. Hey, you know, XYZ stock, a company we followed for years is now available at 40% discount because they missed earnings. Let's update the file. So we pull out the file. The team that has uh done the most work on the name. We'll dig in again, update their work. Typically a twoerson team. Ryan or I Ryan and or I will will will will effectively oversee uh that team by doing some amount of work. So I'll read the annual reports the you know the the proxy the the uh conference call transcripts maybe some news articles the team doing the deeper dive will speak to you know many industry experts will do a a kind of deep dive and then >> will the whole team work on one idea at the time? >> Two people will work on one idea uh and go deep. two people will do have done some work that's you know Ryan and Ry and then the rest of the team will have done no work on the name and then that whole group will form a view as to whether and the team who leads the uh work will build a PowerPoint presentation and present to the team you know why they think an investment is is interesting and then we'll make a collective decision >> but actually important dynamic is >> um you know the typical hedge fund is structured in such a way your only incentive is to get capital allocated to you >> which sort of causes you to kind lean in to wanting an idea to be in the portfolio. In our case, we'll have two people who have done the work uh in a very profound way. Uh two people who have done some of the work and a group that has has has nothing invested in terms of >> time consensus. >> Uh we we if there is an objection or someone raises a concern, we do more due diligence to address the objection. Ultimately I have the final say but I I can't think of an investment in the last decade that we didn't have uh really a collective view on. >> So let's take an example like you own Brookfield. >> Yes. >> How does that work? How long time does it take from when you start to look at it until you make the investment? >> So we got to know I got to know Bruce Flatt and the senior Brookfield team working on a transaction. >> So FYI Brookfield is the uh private equity Canadian group. >> Yes. So uh that I met Bruce Flatt in connection with uh the bankruptcy of general growth where they were uh we ended up partnering with them and doing a restructuring with that company. Got to know the team really well. Had enormous respect for uh you know came to have enormous respect for Bruce and Cyrus and other members of that team that today still uh run that company. But we never invested in Brookfield. Um then we you know the company over time restructured and became a bit more of an asset light royalty collecting business and then we began a due diligence process a number of years ago. Um and uh it was probably Brookfield's actually quite a complicated company. That's one of the >> reasons why it's uh attractively valued. They've been simplifying the business over time. But it was probably a several month due diligence process that led to that investment. >> Is it more difficult to beat the market now than it was when you started? I don't think so. I I would say we don't try to beat the market every month or even every quarter or every year. Um but I think managing a concentrated pool of capital and having the ability to have a longerterm view I think gives you a big competitive advantage in terms of beating the market over the long term. But it's a the market's been an amazing competitor if you will the index. >> Yeah. Uh now what is AI doing to the market? I think it's making market participants increasingly shorter and shorter term. You know, you can a 10K gets published and AI can read it instantly. Uh there's a huge amount of capital invested in looking for a short-term short-term edge >> and AI I think enables that. >> The type of investments you have which are AI related would be I mean you got AWS anything else? U so you know Meta is a big investor in uh well I would say every business today is either AI related or should be or is going to be disrupted by by AI. So I think that's the assessment that you have to do. >> You know we own uh we purchased Amazon after Trump announced liberation tariffs. We acquired Meta after they disappointed people by committing a large amount of money to uh capex. And the same with with Microsoft. You know, it's sort of an interesting environment when you have a company come out publicly and say, "We have enormous demand for our service. Therefore, we have to invest uh well in excess of what we expected in capex just to try to meet the demand from our product." And then stock price goes down. >> Um and that's what led to an investment in Microsoft. But it's probably those names represent about a third of our portfolio today. >> What is AI going to do to the world? uh it's going to give almost everyone uh access to very lowcost uh very high intelligence. Um so it's if you think about you know if intelligence is a a competitive advantage in the world and you would think that it is and that intelligence becomes a commodity uh it's sort of a it's a very interesting u um it's interesting to think about what the implications are. I sort of make the argument that what's left when everyone has access to lowcost super intelligence is sort of creativity, right? The what what LLMs can do if they can read everything they can before and and be incredibly knowledgeable about that. But I not clear to me that AI can be creative yet, right? Einstein's uh light bulb moments E= MC² or theory of relativity. I don't think that anything that came before Einstein uh that that AI would have read would have come out with that formula if you will. And so I think the space that's left for human beings is is but I do think it could lead to uh abundance um as uh I think there's going to be explosion of entrepreneurship uh and um I think there can be explosion in overall GDP or global growth. Now you are known as an activist investor. You know, buy stakes and force them to to change. But you don't do that all the time. >> I used I used to be known. >> Sure. So tell me what what were you an activist investor then and why are you not so active now? >> Oh, we're I think we're very active now. The difference is we don't have to break down the door to get into the room, >> right? >> Uh you know when we >> Is that because you are older and nicer or >> I think a couple things have happened. One, activism in the early days was not something taken very seriously and you had to literally break down the door. As activism became more successful as a strategy, as we built our own reputational equity, as I got to know every CEO in America, people realized, you know what, these guys are actually thinking about the long-term interests of the owners of the company, investors in the business, the employees. You know what, let they they behave themselves on boards of directors. They can add significant value. why don't we just work with them uh and be open to their uh ideas as opposed to having to run proxy contest and I think so our last activist investment we launched in 2016 a decade ago it's actually about the 10th anniversary of that of that investment and today we buy a stake in the business and we generally get a thank you note from the CEO for for for taking a stake which is a very different message that we got you know years ago we might not even gotten a return phone call and that enables us to be you know a helpful uh investor. The other thing I think that's happened in terms of market dynamics, it used to be that a really high quality business that somehow disappointed the stock might drop three or 4%. Today the stock could drop 30 or 40% on a miss. And I think that's driven by the increasing kind of indexation which is reducing float and the increasing amount of leveraged capital short-term capital invested in markets that is creating a lot more volatility. And what that has done is it's made the occasional amazing high growth durable company uh available at a discounted price for a period of time based on a short-term >> disappointment. So we you our portfolio today is filled with businesses where we have enormous respect for the people running them. They don't need much in the way of an activist. We're happy to be a you know a quiet owner that occasionally has an idea. Do you think it's something that happened with you as well >> in one age or becoming part of the establishment or just somehow becoming a nice person or wealthy or I don't know. I >> I I'm I've always been a nice person. Uh you know, the media may have portrayed me as as as otherwise. Um but you know, look, I'm I'm the generation of people that are running many uh sort of businesses. I know this every CEO in America either directly or one person removed. Um and so you know it's it's pretty easy to get a read on what we're like as owners as shareholders and and again we haven't made an activist investment in 10 years. So >> how do you assess yield or activist investors? uh you know it depends I first of all I think it's very very healthy for markets right the the risk of increasing indexation and passive ownership is it can it can lead to you know without shareholders holding management to account um you know if you look at the history of activism you know the you know JP Morgan Carnegie right these were not activists but they were major shareholders of US Steel and and and railroads back then and they cared about how the businesses were run as Carnegie you when he passed away became he was a philanthropist gave away sort of all of his assets the rise of uh you know fidelity investments vanguard uh indexation there was this uh dissemination of controlled companies you know Europe is still comprised of many controlled businesses there are fewer and fewer other than you know sort of technology startups of the last whatever period >> and it led to a period of meaningful underperformance in the 70s and the early 80s and it was actually Mike Milin that enabled not quite activists but a group of entrepreneurs like Carl Icon and Nelson Peltz the ability to actually uh you know put companies in play. Um, and you had Marty Lipton invent the poison pill that stopped green mail activity and other green mail sort of became illegal. And then these ability to uh take companies private without the board having the ability to negotiate was u sort of disintermediated by the poison pill and and then we had a period of meaningful underperformance um until I would say activism became more of a thing over the last 20 25 years. >> You had a bit of a runin with K I >> did. I did. Yes. >> Tell me I love it. >> So I I did a transaction with Carl Icon. Uh this was in 1998 and it was a very small deal. Uh and I sold him an interest in a company called Hallward Realy Partners at a big premium to where it was trading but at a big discount to what it was worth. And he as part of the transaction he gave me what he called schmuck insurance which said that if he sold the stake or transferred it anytime in the next 3 years at at a premium I would get 50% of his uh profit uh over a I think a 10% return. And he made a bid for the company but he didn't win. Someone else bought the company and he sold within two years and he owed us like $4.5 million and he refused to pay. So I had to sue him. >> So you got a bit angry? >> I didn't get angry. I just, you know, this Carl was known for this. So that's why I had a very simple agreement. It was an eight-page document. I put in a little mathematical formula and I I described sale or otherwise transfer. I give a very complete definition, but he you know he likes uh he likes the battle. He likes the battle. >> Herbal life. >> Yeah. >> Yes. That led to herbal life. So basically what happened was uh we won the case. Now the way Carl operates, we sued him. We won and then he wait you can appeal within 180 days. He would wait to day 179 and then appeal and then we went on appeal and then he would appeal again. He he appealed to the Supreme Court and again it was a relevant uh case but he delayed us for like I don't know six seven years. Meanwhile we were earning 9% interest because that was under the terms of the agreement and eventually we won and he called me says Bill congratulations and I said some fairly strong words back uh to Mr. icon and he didn't like that I did that and he sat in the weeds and then um we did short a company called Urbal Life and then Carl without doing any due diligence in the business basically figured he would squeeze us and he very effectively did. >> Yeah. >> So, >> and you lost a billion. >> We did. >> How do you how do you assess the um kind of the decline in shareholder rights that's happening just now? Um you're referring to companies going SpaceX going public for example >> those kind of things with fewer rights to the shareholders uh voting rights ability to uh you know appoint boards these kind of things. >> I think the you know if you look back I'm a big believer in founder controlled companies in terms of their ability to make smart long-term decisions. I mean, the problem of a market that's become increasingly short-term. The company is not a controlled business. Um, you know, CEOs feel pressured to do things to make the numbers, if you will, in the short term that can be diminish the long-term value of the business. And what uh, you know, you've got if if Warren Buffett or Sam Walton or I would argue Elon Musk, you know, in control of the company, you know, I view that generally as a very good thing. Um, but I don't know about the next generation. what you don't want to happen uh is you know the next you know Elon Musk's I don't know whether his son or daughter you wouldn't want that person handed the control that the the parent has so I'm a I like one share one vote I uh we generally don't like to invest in controlled companies um but if the controlling shareholder is you know a a phenomenal CEO then I can be comfortable investing in a controlled business >> but uh our strong preference is to avoid controlled companies is because you know I do think the there's a certain uh the discipline that comes from a shareholder having the ability to you know to weigh in on occasion. >> What makes a good CEO? >> I would say uh passion, intelligence, energy, um you know an overall uh and you know good leadership qualities. People want to follow that person and uh to the end. And how do you assess how important part of the equation is it when you invest? >> It's less important to us generally. I would say the business quality, growth, durability are the most important factors. If it's the wrong CEO, we can play a role in in recruiting a better one. So, it's less important to us. Of course, we prefer a great business with a phenomenal CEO. Um, but that doesn't happen that often at an attractive price. Usually it's a great business that gets to an attractive price because management has made a series of mistakes. >> Um you you mentioned the importance of having uh long-term capital and now you have uh permanent capital. Just tell me about tell me about that. >> You if you look back you know I'm a sort of Warren Buffett disciple. He started a hedge fund. He was an activist investor. He doesn't talk about it. uh now actually today just announced that he's stepping down as the chair becoming chair of Meritus of Berkshire. Um he was running a hund00 million hedge fund in 1969 and he had a right to receive 25% of the profits over a 6% return. He gave up that promote and he uh gave back the capital to his investors and took control of a pretty shitty business. um you know >> clay style mill >> a textile mill or a series of textiles mills at a time when the the Chinese were becoming more and more competitive and he and he took a $100,000 salary and no incentive fee. Um and why did he do it? Because he realized, you know, doing the math on compounding over time that his ability to create value would be impaired by a capital base that could disappear overnight or even disappear in the relative short term. So he he traded uh permanent capital for much less favorable economics and obviously it's worked out well for him. Uh in a world where the vast majority of other investors have capital that can leave tomorrow. It's a huge competitive advantage to not have to you know we were able to go into COVID and the world's melting down and we could be very aggressively deploying capital uh because we weren't worried about redemptions at the end of the month. Um and you know among the things that create the best opportunities in markets is the fact that the vast majority of asset managers have have capital that can can get pulled. >> You know the human nature I think going back to you know the the early days of of man right the when when the you're in the savannah and all of a sudden animals are running in that direction it means something very frightening is behind them. So the human nature is, you know what, I want to I want to go where they're going because otherwise they're going to get eaten by the lions, right? I think that's still inherent to human psychology, which is why when markets implode, people are selling, you know, quoteunquote at the bottom because it's just that that fear and uh you know, one of the important uh disciplines is a kind of a dispassionate, you know, uh view of volatility. Um but you can't be dispassionate if your clients are just going to pull your money. Um and and you know if you can set yourself up in such a way that you're I mean you've you know Norway's done a pretty good job with this but absent being a sovereign wealth fund there's there's very little capital in the asset management industry that's permanent >> and that gives that's a huge competitive advantage time arbitrage as some people refer to it the ability to be a long-term investor in a short-term world really exists for us because of our capital base. But you have a permanent capital base, but you're also now setting up an investment vehicle which is in a way well you're trying to replicate virtue. Is that the way we should look at it with an insurance company and so on? >> So uh we had our version of a textile business. It happens to be a much better business than textiles. Um >> Howard Hughes >> Howard Hughes but it's a business that is I would say the market assigns a high cost of capital to the business and it's hard for us to exceed that cost of capital in a real estate operation. It's a very good business uh that over decades will generate a huge amount of cash. Basically, it's a business of sort of building these uh and developing these these small cities. What we're doing is we're transforming that business. Uh what did Buffett do? He took control of Berkshire over time. He exited textiles, took the cash from textiles, he bought an insurance company and he did something different from other insurance operators. that is typical insurance company invests nearly the entire uh collection of assets uh in fixed in pretty high-grade fixed income securities and they focus on making a profit on the liabilities i.e writing uh insurance. What Buffett did is he you know over time focused more more on running a profitable insurance business but he took a 100% of the float generated by writing >> uh policies and reinvested uh put that capital in short-term treasuries and took the the surplus of the insurer invested in common stocks and that led enabled him to run a 20 plus% roe insurer that's built most of the value of Bergkshire over time. So, what do you think Howard Hughes will look like in 10 years time? >> Uh, so in the next several years and hopefully on a more accelerated basis, um, we're going to take as much capital as we can out of the real estate operation, turn it into an asset light real estate company, reinvest the capital in the insurance operation, and then compound the capital insurance operation at a high rate over time. So, I would say in a decade from now, it will be 80 plus% insurance company and maybe 20% real estate. And then well uh we recruited we believe the best insurance team in the industry. Uh a guy named Mark Brenesen ran a company called Arch Capital Group and then his protege David Gansburg uh Lucy Fetto uh from uh she was the former vice chairman and general counsel of AIG. We have a team that you would normally put into a 50 hundred billion dollar insurance operation running a you know not quite $2 billion capital uh insurance company. And uh we think we can do really interesting things >> with that team. We think we could run a you know very profitable specialty insurance company. And then Persian Square is going to manage the assets much the same way Buffett has done. We've taken 100 you know the moment we closed on the insure in June. We sold all their fixed income kind of intermediate and longerterm fixed income assets invested the money in short-term treasuries and then we took a portion of the the uh equity the insurer invested in a common stock portfolio. again some of the best businesses in the world. There are very few examples. You know, one interesting question is why hasn't someone replicated what Buffett has done before? >> Well, I guess Apollo, >> no, very different. Very different. So, we're doing something very different from Apollo or even Brookfield or KKR uh and others. Aries for example, um Apollo bought a life insurance company that issues kind of fixed annuities and use has used it sort of as a financing vehicle, right? Issuing fixed cost, lowcost liabilities. uh and then investing the money in you know opportunistically in private credit using a decent amount of leverage and create you know taking that spread with some leverage and generating an attractive return on capital. We've bought a specialty insure and reinsur that actually takes insurance risks property casualty and um type risks and uh we're you know we're not it's not a levered spread business. It's a business of you know uh taking on various uh profitable you know hopefully profitable risks uh and then using the permanent capital of the insurer to compound over time >> but much much lower leverage than a than one of these credit strategies. >> Uh now you mentioned X uh earlier you are very public and visible. Why is that a good thing? >> Um it one is just sort of inherent to who I am. Uh my you can go back to my high school yearbook. It said uh it said a closed mouth a friend of mine wrote this little epithet. It said you know Bill Aman a closed mouth gathers no foot. Right. So I was always also I think I got most verbal something like this as my uh how people thought of me back then. So >> did you get very did you get very little attention from your parents when you were little? >> No. I got plenty of attention. It was more that they would say I never listened than than than that whether to listen to me. But uh it was always important my my principal driver in life has been I wanted to get to a place of independence so I could do what I wanted to do so I could say what I wanted to say and so always free speech was kind of important to me. Um I I went on X actually Pinker you know the uh intellectual uh Harvard professor I met him at a dinner party and he's like Bill you X. Um and I'm like why? He says well actually there are incredible conversations happening on X and this is where I could learn most of my information. I follow a group of interesting people and so I went on X more as a to learn. Uh I did my first tweet at some point. Uh and then I noticed I had 25,000 followers and I had maybe done one. >> How many have you got now? >> One tweet uh just shy of three million. And then I started getting, you know, I was always passionate about issues or politics or events, but I started sort of sharing them and uh and it's actually very valuable. You uh you have people who agree with you, you have people who don't and you can learn from both. And I I use X in kind of an interesting way in that on I try in every issue to get find the most articulate, thoughtful person on one side of the issue and then the same on the other side of the issue. And I think it's very difficult to read, you know, every owner of a media property views the the right of ownership to kind of shape, you know, uh the the zeitgeist in some kind of way. Uh so every every media I don't know that there's any media property where their intent is let's just come out with the absolute truth. Usually, you know, the owner has a political >> bias or agenda. Um, which is why it's actually quite powerful to have an open playing field where you can select, you know, who you want to listen to. Now, most people, I think psychologically, like to hear from people who agree agree with them. I like to hear from people who agree with me. I also like to hear from people who disagree. So, I've actually found it uh from an investment perspective, it's been one of my best sources of ideas, understanding what's going on in the world. >> Um, and then from a just being a a citizen of the world, understanding important issues and and hearing different perspectives. So, so I like it and then I'm now part of the conversation which is which >> philosophically so I agree with you. I also think there is something like the objective truth. Do you think philosophically the society is going in that direction or what what do you think >> go I don't know that society is going to the objective truth? I think that the social media unfortunately is I mean why is the world so divided? I think the answer I mean we probably have to blame Facebook and other social media because you know the the the dopamine is released uh and the and the advertising profits are released based on the amount of time someone spends on the app and uh what people figured out is that you know uh getting triggering people is a way to keep them engaged. And uh the nature of social media today tends to push people to believe even stronger in whatever views they came to the the app with. Uh you know, I've I've encouraged Elon on Twitter a couple times. Maybe I need to push him a little more privately. I do think there should be a button on every every time you read a tweet, you should be able to push a button to find the best argument. You know, who's the most followed person who's had the most articulate or maybe the most liked alternative argument for the same subject. So that I think it's very helpful to people to hear people make the case for the other side. Unfortunately, people tend to go to, you know, uh they'll go to Fox or they go to CNN or they go to whatever they're um >> what's the but what's the key to keeping an open mind. >> You have to believe that it's important. I'm never convinced. I I I always want to hear the other side, you know. >> But do you do you do you if you take it in properly? >> I do my best to. Yes. Um, and investing, by the way, what's the best way to get conviction in an investment idea? Find the best short seller in something that you own and and hear your their arguments. If you can rebut each of their arguments, then you can feel more confident in your investment. >> And the same thing is should be true for your other views. Find the person who makes the best case for why you're wrong. And then uh either they convince you and you're wrong or you can carefully rebut each of their various arguments. sort of enables you to get to I think it enable the best hope we have to get to the truth is hearing from all sides >> and then sorting through who's got the better argument. >> Why were you so upset about the situation at Harvard? >> Um so one you know uh you go you spend a meaningful part of your life at a university at a kind of pretty important time. So you know I went to Harvard College. I also went to Harvard Business School. Now that's six meaningful uh years of my life. Some of the best every year of my life is a great year but you know it's a critical time. So, you have a certain affection and a loyalty uh to to uh to a university. Uh and um you know, I would I show up on the Harvard campus a couple times a year. I meet students. Uh teach a couple classes, things like this. I've been >> So, you're giving them some money, too. >> Giving them some money, too. And then October 7th happened, which uh and then on the morning of October 8th, while there were terrorists still on Israeli soil killing people, 34 Harvard student organizations came out and said that Israel was solely responsible for the acts of Hamas of the last 24 hours. And 34 student organizations, you know, signed this this sort of letter. And I'm like, well, this doesn't I was sort of very puzzled by this. Then I went up to the campus to try to understand uh you know, sort of what's going on. And the kind of more I I dug on the topic, I started learning about this oppressor oppressed narrative very naively. I I I had not even heard of uh people and which they started talking about, you know, how DEI is sort of part of the web of this conversation. Uh and then you know professors behind closed doors would tell me Bill you this is not a place where you can speak freely. You know I would say among the top professors at Harvard would say this to me. So I'm like what kind of education can you have if the professors are afraid to speak their points of view? The students are afraid to speak their points of view and there certain accepted points of view. And then we're meritoc you know Harvard is starting to admit students um without you know kind of giving up on uh meritocracy and excellence um which is also not a good strategy for a best-in-class university. So I would say why do they get upset because something very important to me uh I watched it uh diminish in a meaningful way and yeah >> uh you mentioned that your family went through a tragedy earlier in the year. Is that something you want to talk about? Sure. So, uh, my daughter, uh, my 26-year-old daughter had a brain hemorrhage. Um, she had a a weakness of something called a arterial venus malfform. Um, something we could only have been aware of had she had an MRI, which she never had because she never had really any symptoms. And it happened uh, you know, early in the morning when she was alone in her apartment. And we didn't discover her until late at night when she wasn't responding to repeated attempts for us to reach her. And uh you know large brain hemorrhage, a lot of pressure on the brain for almost 19 hours. Um you know most people die uh and even the ones you save, you know, they they they die later in a nursing home because um and sort of made it my one of my important life goals to to to bring her back. >> Um so that that has been uh a big overhang in the last seven months. >> Yeah. But it's >> you're funding some new initiatives in this space. >> You know, the first focus has been her, but the more I learned about brain rehab, recovery, strokes, rehabilitation, the more I realized how little we've done in this area because many neurosurgeons and neurologists are sort of nihilists. They don't really believe that they can do much for patients and there's so much that can be done. And you know, my daughter who um you know, lost pretty much, you know, basic function, ability to walk, ability to speak, ability to see, uh is, you know, regaining function. She's cognitively, as far as I can tell, fine. Uh she's relearning how to speak. Um and she's learning again how to walk. And I'm confident we're going to get her back. um you know biggest challenge right now is that the optic nerve damage from the pressure on the brain that has caused her to lose you know probably 98% of her of her vision. Uh but even there I'm optimistic. You know spent a lot of time in the last few months meeting with all these sort of brain computer interface companies. Obviously Neurolink being the most famous but there's some other very promising um lower uh uh intervention uh technologies. Um and this will be a period you know AI is going to enable us we're going to be able to get more signal from the brain and we're going to be able to interpret that signal >> much more uh effectively than we had before. and you know the and the blind will see again and uh people have not been able to walk uh you know so to speak parapolgics I believe will walk again and that's going to be it's a matter of not months but years but not too many years um so so tragedy um you know I I have optimism that she's going to recover and I have I'm excited about the the potential and you know one of the fortunate things about my day job is is uh it's enabled me uh to one learn about lots of things. Two, I've got certain skills that apply real estate and otherwise. And we've been able to assemble a 3.4 acre site in New York with a 400,000 foot biotech building. And then I put out a tweet, the power of uh Twitter. Yeah. >> And and recruiting incredible people to run this institute. There are a lot of people who've been a I mean it's there's almost no one who's doesn't have a parent or a sibling or someone who's had either an accident, a stroke, uh you know, uh they've gone to war and you got taken a bullet um or you know Alzheimer's or cognitive decline. I mean this is something you know the brain uh is sort of everything uh and we've not spent enough time, energy, resources and there are lots of constraints in the way the funding environment works for science. So, we're going to put a lot of resources into answering these questions. >> And actually, New York City is a is a good place to do it. >> Yeah, for sure. Well, thanks for sharing. I uh I'm a father of uh three kids in the same age, so >> but I don't think I can imagine what you've been through here. >> Yeah, it's been it's a big deal. >> Yeah. Bill, um what's your biggest personal failure in life? >> Biggest personal failure. You know, I'm sort of a person who I'm very happy where I am. Uh, so I kind of view failures that I've had over time as, you know, if you think about the events that caused me to sit across from you today, you know, had I gone left at one point instead of right, it probably wouldn't be wouldn't be here. >> Do you have a systematic way of being grateful? >> Not systematic. I'm just inherently that way. >> Yeah. Well, I I would say I'm in >> I have I have a ritual I go through every morning which is really >> Okay. Interesting. So, you make a list of like >> Yeah. Yeah. I just go through the things I'm really grateful for and it takes like one minute and it's just it totally reframes my my day. >> Yeah. But I I feel that way every day obvious Obviously. Um but uh I'm an optimist. Uh interestingly and you interview a lot of people. Have any of the people you've interviewed who are successful are they that are they pessimist? I don't think there's one. >> No. >> Okay. So I think optimism is really important. >> Very. >> And I'm also you know grateful appreciative. I I don't do it systematically, but it's it's part of my Yes. I I I love every day. Absolutely. >> What's the one thing about you that people don't know? >> I'm I'm like the most transparent guy in America. I don't know what the what is the one thing that about me. Um I'm actually a really good volleyball player. >> I thought you were a tennis player. Yes, tennis people. I'm good tennis player. Um I don't know what what's the one thing. I don't know what it is. That's a good question. >> Um when you look at the books you've read, what which book has taught you the most? >> I don't know if there's one book that's taught me the most, but there's one book that had a very significant impact on me. Um Theory of Justice by John RS, which is a a book that sets up a framework for how to think about the world and obligations and things like this. Basically, the the premise of the book is everyone should do a thought experiment. Kind of go back to before you're born. Uh, and you're about to be be born. Uh, is your mother a drug addict in the Bronx? Uh, are you born in subsaharan Africa? Are you uh going to show up in Iran? um or are you going to grow up on the upper east side of New York and dad's an investment banker in that you don't know where you're going to land? Uh how would you organize the what's the fairest way to organize the world before knowing what your personal outcome is? And I think it's a very interesting way to think about >> how the world should be organized. You know, people tend to frame things based on, you know, their their personal perspective. >> How should the world be organized? Uh I would say uh so far capitalism is the best system that we've we've come up with. Um you know I think how should the world be organized? >> It's a pretty big question. >> Yeah. Uh look I I like our system. you know, I like, you know, the basic uh constitutional rights, bill of rights type uh things that we've been offered and I think it's really important that we we protect them. Um, you know, I think it's very important that the most powerful country in the world is a benign actor. Uh, that uh yes, it has to yes, we're I think America first is is >> it a benign actor now? >> I I think the president of the United States is actually trying to do good. uh you know I think a lot of people have objected to you know objected to any wars that are you know where it doesn't impact US soil but you know in a world where people can get access to nuclear weapons you know Iran was getting closer and closer to a place where we couldn't do anything about their nuclear nuclear capability uh North Korea we allowed North Korea to get to a place where we couldn't do anything about their nuclear capability because we allowed them to build a you know a their proximity to South Korea enabled them to you you which effectively scared us from trying to intervene in their nuclear program. U you know Iran has sort of made it very clear that they they're not operating with any of the same kind of life, liberty, pursuit of happiness principles that we operate under the way they treat their people, their women, their etc. You wouldn't want someone like that to get >> in effect absolute power. You know AI creates the same challenge. Um I don't know that we can slow down on AI because imagine if you know one of our enemies gets to super intelligence. So I think it's really important uh you know the I I think ultimately the US is a is a benign actor um uh globally um an imperfect but uh you know I think our our goals and principles are are good. I think it's important we maintain our preeminent military AI and uh nuclear capability to deter you know people who want to kill us or are you know I think western ideals are better than um you know some of the um you know the uh radical Islam I think is a real a real threat to to uh to the west. So, in this complex world, what is your advice to young people? >> My advice is it really matters who you hang out with when you're younger? Uh, you tend to become or be inspired or otherwise by the people you hang out with. I happen to when I was in high school, I hung out with kids who were kind of competitive about lots of things, including school. And as a result, you know, partly explains why I was a good student because I wanted to I was inherently sort of competitive and I wanted to get I don't know good grades that you know that was helpful to me in getting into a good a good college. Um but yeah, you learn the most from the people that you're you're closest to. So I think that's a really important thing. I think you know it's interesting you know how how has AI become so powerful? The answer is they've basically read a lot of books and read a lot of content. That's what that's what training a model is. I think the human brain is kind of similar, right? You and the way you train a human brain is by consuming as much information as you can. So reading uh and pursuing what's interested you pursuing what interests you so that you you train the model, you know, I think you I think how do you get to super intelligence? I don't know any very intelligent person that hasn't read a ton. Uh so I think that's a good place to go and focus on what you're passionate about. I mean if it's cars, fine. if it's you know military if it's history you know so I think that's really really important and then uh get interested and understand nutrition health exercise sleep um don't consume a lot of alcohol in fact if you can just skip it it's great sugar is poison um uh weightlifting is a really good thing to do um it's good for confidence it's good for appearance it's good for health so I would say yeah your your circle. Oh, you know, operate in such a fashion that um you know when Warren Buffett came to speak at Harvard Business School, he said something that I thought was really really good advice. He said basically, if you want to be successful, there are a certain number of qualities that you need to have. Think of the people that you go to school with that you admire the most. other than you know Yoyo Ma or you know some Olympic athlete who's had to just focus on you know you know Michael Jordan you know basketball in order to achieve the greatness success depends on having certain human qualities you know showing up on time um you know responding to people who reach out to you doing the right thing when no one's watching um all of these human character traits are things you can have tomorrow. It's just a decision you make. I want to be a good person. It's whereas being Michael Jordan is going to be you know first of all maybe you know end of one but it requires enormous amounts of work to achieve its character doesn't require really any work. It just requires sort of a decision and I thought that was really really good advice. So uh you want to be a person that other people admire. You want to be a person of character. You want to be a person that is noticed by your boss. these qualities are ones that uh are totally achievable. So, I think those would be a few things I would give. Oh, and then when you're um one of the most important decisions you make is who you're going to spend the rest of your life with, like your partner, your wife, your your husband, be very thoughtful about that decision. >> Yeah. >> And don't rush into it, but don't take too long to make it either. >> Great way to end be. Thanks. >> Thank you. Really hoped you like the episode. If you did, please like it, subscribe, and put on the notification. 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