Top Podcasts of the Week

Below is our “Top Podcast” episode with our curator, Colby Donovan!

Today we have an amazing list of episodes! We have episodes with legendary investors Howard Marks and Sam Zell, an episode on how to build a culture based on trust rather than control with the former Chief Talent Officer of Netflix.

  • ***Must Listen*** The Tim Ferriss Show: #407: Sam Zell — Strategies for High Stakes Investing, Dealmaking, and Grave Dancing. I had not heard of Zell prior to this episode but his story and impact on the investing world, such as helping popularize REITs, is incredible. Zell is the Chairman of Equity Group Investments, and he was recognized by Forbes as one of the 100 Greatest Living Business Minds. The episode starts at 4:50 and is hosted by Peter Attia, who also hosts his own fantastic podcast. The biggest takeaway of the episode is how Zell emphasizes how he mitigated risk throughout his entire career. He also talks about how he built his business, how he structured deals and partnerships throughout his career, how he helped build the REIT industry (1:08:00), and how he’s been able to be a contrarian and survive multiple cycles throughout his career. [January 23, 2020–2 hours, 3 minutesiTunes Podcast | Spotify | Overcast | Breaker | Website Link

30 years ago, 80% of pensions and endowments did not have real estate as an asset class.

  • ***Must Listen*** The Acquirers Podcast: Supermugatu: Tyro’s Dan McMurtie on long/short equity, Bangladeshi VC and millennial dating. McMurtrie both runs a long/short hedge fund and a Bangladeshi venture fund. The episode can be broken up into three parts: 1) Public investing through his hedge fund: His fund focuses on consumer, healthcare, industrial and technology. He discusses turn-around opportunities in large names, with the recent volatility in Papa John’s as an example. He also talks about how he incorporates shorting, which he only does on a competition based thesis and not because of valuations or if the company is a fraud, and explains how shorting works with regards to his portfolio construction; 2) At 47:30, they begin to discuss what led an American investor to start a Bangladeshi VC Fund. He explains he was intrigued about emerging markets and the impact technology is having (some countries have gone from 40% illiteracy rates to 40% smart phone penetration), and these massive shifts have helped create massive growth, which he wanted to be able to help companies by investing; and 3) At 67:05, they discuss the white paper he recently wrote about how changing dynamics in the dating market is impacting the rest of the economyThe paper says online dating has really increased the size of the dating pool so it’s more commoditized, which is causing to people go on more dates, try living with more partners, and get married later. [January 20, 2020–1 hour, 31 minutesiTunes Podcast | Spotify | Overcast | Breaker | Website Link
  • The Twenty Minute VC: Oaktree Capital’s Howard Marks on The Most Important Skillset An Investor Can Have. This was a great episode and Daniel Ek, CEO of Spotify, raved about it as well. Marks is a legendary investor and and co-founder of Oaktree Capital Management, an investment firm with more than $120 billion in assets. He is also the author of Mastering the Market Cycle and The Most Important Thing: Uncommon Sense for the Thoughtful Investor. Marks provides a framework of how to think about investing over time, emphasizing that instead of trying to time a market top or bottom, think of it in terms of where are we in the cycle. Marks thinks we are in the market cycle, which means the probability is negatively skewed, the expected return from here is modest, and now is the time to be cautious. [January 20, 2020–32 minutesiTunes Podcast | Spotify | Overcast | Breaker | Website Link
  • LA Venture: Erik Rannala — Mucker. Great episode on a VC firm that is two parts: the first 11 minutes is about their investment in Honey, the browser extension that automatically finds and applies coupon codes at checkout and was sold to PayPal for $4B, and the second half is about the VC firm and their investment process. The first segment does a great job of going over Honey’s life cycle — the firm had a difficult time raising money and gaining ground, but was one of the first company’s to innovate around the consumer side of e-commerce and was a great example of a firm being both contrary and right in their investment. The second half dives into their investment process, which is a loosely defined process that places a lot of emphasis on founders. They believe every situation is different and therefore it’s impossible to have a one-size-fits-all decision making process. They believe their ability to help a company go to market is their biggest strength, particularly with price and distribution. [January 22, 2020–25 minutesiTunes Podcast | Spotify | Overcast | Breaker | Website Link
  • The Sherman Show: S8 E2 David Rosenberg, Chief Economist — Rosenberg Research. Great episode all about economics and the current state of the economy with David Rosenberg, who is the founder, chief economist and strategist of Rosenberg Research and Associates, an economic consulting firm. He starts the episode with his process of conducting research, which combines economics, the stock market, and technical and fundamental analysis. Then he discusses what he sees today: what the data says about the U.S., thoughts on currencies and if there’s a threat to the dollar, the impact of both low rates around the world and the Fed’s balance sheet. He also discusses the massive amount of debt in the U.S., what he thinks the next recession will look like, and the potential for negative rates in the U.S., which he views as a tax on savers and the wealthy. He gives his major takeaway at the end: he expects 2020 to be a challenging year for economic growth so it’s time to have less risk in your portfolio and find ways for income (he likes utilities now even though they’re already trading at elevated multiples). [January 23, 2020–1 hour, 7 minutesiTunes Podcast | Spotify | Overcast | Breaker | Website Link

For the first time ever, there is only a 7% correlation between the movements in the stock markets this cycle and the movements in the economy. Normally it is between a 30%-70% correlation depending on the starting point and the multiple.

  • Stansberry Investor Hour: What’s the Most Valuable Asset in the World Right Now? I suggest listening to 24:50–1:05:30 when Meb Faber, CIO of Cambria Investment Management, joins the episode. This is one of my favorite episodes with Meb — he talks about why he is a believer in trend-following and value tilts, why home country bias hurts investors and why having a globally diversified portfolio is important (especially for U.S. investors with the market at all time highs), and why investors need to have a long time-horizon when judging performance. [January 23, 2020–1 hour, 18 minutesiTunes Podcast Spotify | Overcast | Breaker | Website Link

They confuse process with outcome. You could make a really bad bet at the roulette table in Vegas, you could make a bad bet in the markets and get rewarded for it and think it was a brilliant move, and vice versa, you could make a very sensible bet and and it not work out.

  • The Meb Faber Show: #199 — Peter Livingston — All My Best Investments Were The Ones I Couldn’t Get Anyone Else To Do. Livingston is an angel investor and is the founder and General Partner of Unpopular Ventures, and has made over 150 angel investments to date. He’s open about some of his bigger misses, including Instagram and Door Dash. During the episode, he discusses the differences between venture capital and angel investing, the relationship between companies and investors from syndicates, and emphasizes the success of the syndicate angel investment, which he thinks will become the next Benchmark or Sequoia of venture. [January 29, 2020–1 hour, 10 minutesiTunes Podcast | Spotify | Overcast | Breaker | Website Link
The Rest
  • TED Talks Daily: 8 lessons on building a company people enjoy working for. The episode is a quick and great one on how to create a culture of trust rather than control. It is with Patty McCord, the iconic former chief talent officer at Netflix. Her lessons are:
  1. Your employees are adults; if you start with the assumption that everyone comes to work to do an amazing job, you’d be surprised what you get.
  2. The job of management isn’t to control people, it’s to build great teams.
  3. People want to do work that means something and after they do it they should be free to move on.
  4. Everyone in your company should understand the business.
  5. Everyone in your company should be able to handle the truth.
  6. Your company needs to live out its values.
  7. All start-up ideas are stupid.
  8. Every company needs to be excited for change.[January 20, 2020–5 minutesiTunes Podcast | Spotify | Overcast | Breaker | Website Link
  • Planet Money: #967: Escheat Show. This is another fun episode from Planet Money about an obscure government program that takes forgotten money or payments owed to individuals. While aimed to help protect citizens from corporations, it has its flaws, as shown by the example of someone who had his Amazon shares removed from his brokerage account. The big takeaway is to check this website to see if you are owed any money (the hosts of the podcast were owed $40 and $800). [January 24, 2020–21 minutesiTunes Podcast | Spotify | Overcast | Breaker | Website Link

Below are books that podcasts guests suggested on episodes I listened to last week. The descriptions are summaries of what the guest said, not my own opinion.

Howard Marks (Co-Founder, OakTree Capital Management):

  1. Fooled By Randomness: The Hidden Role of Chance in Life and in the Markets by Nassim Taleb — I think that his ideas about the randomness of the investors environment, and as a consequence, short-term performance says rather little about merit. I think these are important ideas.

Barbara Tversky (Professor of Psychology, Stanford University):

  1. Factfulness: Ten Reasons We’re Wrong About the World — and Why Things Are Better Than You Think by Hans Rosling.

Peter Livingston (Angel Investor and General Partner, Unpopular Ventures):

  1. Angel Investing: The Gust Guide to Making Money and Having Fun Investing in Startups by David Rose — Recommends it for people who are interested in learning about angel investing and it really helped him when he started out.

Good investing,
Meb Faber