Founders

What I learned from reading Made in Japan: Akio Morita and Sony by Akio Morita.  

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[0:01] Forty years ago, a small group gathered in a burned-out department store building in war-devastated downtown Tokyo. Their purpose was to found a new company, their optimistic goal was to develop the technologies that would help rebuild Japan's economy.

[5:00] I was born the first son and fifteenth-generation heir to one of Japan's finest and oldest sake-brewing families. The Morita family has been making sale for three hundred years. Unfortunately, the taste of a couple of generations of Morita family heads was so refined and their collecting skills so acute that the business suffered while they pursued their artistic interests, letting the business take care of itself, or, rather, putting it in other hands. They relied on hired managers to run the Morita company, but to these managers the business was no more than a livelihood, and if the business did not do well, that was to be regretted, but it was not crucial to their personal survival. In the end, all the managers stood to lose was a job. They did not carry the responsibility of the generations, of maintaining the continuity and prosperity of the enterprise and the financial well-being of the Morita family. 

[8:18] Tenacity, perseverance, and optimism are traits that have been handed down to me through the family genes.

[9:25] I was taught that scolding subordinates and looking for people to blame for problems—seeking scapegoats—is useless. These concepts have stayed with me and helped me develop the philosophy of management that served me very well.

[10:28] I had to teach myself because the subjects I was really interested in were not taught in my school in those days.

[14:09] The emperor, who until now had never before spoken directly to his people, told us the immediate future would be grim. He said that we could “pave the way for a grand peace for all generations to come," but we had to do it "by enduring the unendurable and suffering what is insufferable."

[23:58] When some of my relatives came to see me, they were so shocked by the shabby conditions that they thought I had become an anarchist. They could not understand how, if I was not a radical, I could choose to work in a place like that.

[24:28] Ibuka and I had often spoken of the concept of our new company as an innovator, a clever company that would make new high technology products in ingenious ways.

[29:36] We were engineers and we had a big dream of success. We thought that in making a unique product, we would surely make a fortune. I then realized that having unique technology and being able to make unique products are not enough to keep a business going. You have to sell the products, and to do that you have to show the potential buyer the real value of what you are selling. 

[32:20] There was an acute shortage of stenographers because so many people had been pushed out of school and into war work. Until that shortage could be corrected, the courts of Japan were trying to cope with a small, overworked corps of court stenographers. We were able to demonstrate our machine for the Japan Supreme Court, and we sold twenty machines almost instantly! Those people had no difficulty realizing how they could put our device to practical use; they saw the value in the tape recorder immediately.

[38:03] Marketing is really a form of communication. We had to educate our customers to the uses of our products.

[39:15] We would often have the market to ourselves for a year or more before the other companies would be convinced that the product would be a success. And we made a lot of money, having the market all to ourselves.

[40:20] The public does not know what is possible, but we do. So instead of doing a lot of market research, we refine our thinking on a product and its use and try to create a market for it by educating and communicating with the public.

[42:33] Everybody gave me a hard time. It seemed as though nobody liked the idea [the Walkman]. “It sounds like a good idea, but will people buy it if it doesn't have recording capability? I don't think so." I said, “Millions of people have bought car stereo without recording capability and I think millions will buy this machine.”

[46:38] "We definitely want some of these. We will take one hundred thousand units." One hundred thousand units! I was stunned. It was an incredible order, worth several times the total capital of our company. When he told me that there was one condition: we would have to put the Bulova name on the radios. That stopped me. We wanted to make a name for our company on the strength of our own products. We would not produce radios under another name. When I would not budge, he got short with me. "Our company name is a famous brand name that has taken over fifty years to establish," he said. "Nobody has ever heard of your brand name. Why not take advantage of ours?" I understood what he was saying, but I had my own view. “Fifty years ago," I said, “your brand name must have been just as unknown as our name is today. I am here with a new product, and I am now taking the first step for the next fifty years of my company. Fifty years from now I promise you that our name will be just as famous as your company name is, today."

[49:04] When I attended middle school, discipline was very strict, and this included our physical as well as our mental training. Our classrooms were very cold in winter; we didn't even have a heater; and we were not allowed to wear extra clothes. In the navy,I had hard training. In boot camp every morning we had to run a long way before breakfast. In those days I did not think of myself as a physically strong person, and yet under such strict training I found I was not so weak after all, and the knowledge of my own ability gave me confidence in myself that I did not have before. It is the same with mental discipline; unless you are forced to use your mind, you become mentally lazy and you will never fulfill your potential.

[52:06] Norio Ohga, who had been a vocal arts student at the Tokyo University of Arts when he saw our first audio tape recorder back in 1950. He was a great champion of the tape recorder, but he was severe with us because he didn't think our early machine was good enough.He was right, of course; our first machine was rather primitive. We invited him to be a paid critic even while he was still in school. His ideas were very challenging. He said then, "A ballet dancer needs a mirror to perfect her style, her technique."

[54:21] Nobody can live twice, and the next twenty or thirty years is the brightest period of your life. You only get it once. When you leave the company thirty years from now or when your life is finished, I do not want you to regret that you spent all those years here. That would be a tragedy. I cannot stress the point too much that this is your responsibility to yourself. So I say to you, the most important thing in the next few months is for you to decide whether you will be happy or unhappy here.

[59:40] My argument again and again was that by saving money instead of investing it in the business you might gain profit on a short-term basis, but in actual fact, you would be cashing in the assets that had been built up in the past.

[1:00:00] One must prepare the groundwork among the customers before you can expect success in the marketplace. It is a time-honored Japanese gardening technique to prepare a tree for transplanting by slowly and carefully binding the roots over a period of time, bit by bit, to prepare the tree for the shock of the change it is about to experience. This process, called Nemawashi, takes time and patience, but it rewards you, if it is done properly, with a healthy transplanted tree. Advertising and promotion for a brand-new, innovative product is just as important.

[1:01:19] If Japanese clients come into the office of a new and struggling company and see plush carpet and private offices and too much comfort, they become suspicious that this company is not serious, that it is devoting too much thought and company resources to management's comfort, and perhaps not enough to the product or to potential customers. Too often I have found in dealing with foreign companies that such superfluous things as the physical structure and office decor take up a lot more time and attention and money than they are worth.

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Founders Notes gives you the ability to tap into the collective knowledge of history's greatest entrepreneurs on demand. Use it to supplement the decisions you make in your work.  Get access to Founders Notes here. 

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“I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested so my poor wallet suffers. ” — Gareth

Be like Gareth. Buy a book: All the books featured on Founders Podcast

What I learned from reading The Tao of Warren Buffett by David Clark and Mary Buffett. 

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[0:01]The more I heard Warren speak, the more I learned. Not only about investing, but about business and life. 

[4:02] The great personal fortunes in this country weren’t built on a portfolio of fifty companies. They were built by someone who identified one wonderful business. 

[5:45] It is impossible to unsign a contract, so do all your thinking before you sign. 

[8:35] I don’t try to jump over seven-foot bars; I look around for one-foot bars that I can step over. 

[14:27] The chains of habit are too light to be felt until they are too heavy to be broken. 

[19:00] My idea of a group decision is to look in the mirror. 

[22:14] When management with a reputation for brilliance tackles a business with a reputation for poor fundamental economics, it is the reputation of the business that remains intact. 

[23:07] Managing your career is like investing—the degree of difficulty does not count. So you can save yourself money and pain by getting on the right train. 

[24:55] There is a huge difference between the business that grows and requires lots of capital to do so and the business that grows and doesn’t require capital. 

[27:00] I look for businesses in which I think I can predict what they’re going to look like in ten or fifteen year; time. Take Wrigley’s chewing gum. I don’t think the Internet is going to change how people chew gum 

[28:50] You want to learn from experience, but you want to learn from other’s people’s experience when you can. 

[29:20] The really good business manager doesn’t wake up in the morning and say, ‘This is the day that I am going to cut costs,’ any more than he wakes up and decides to practice breathing. 

[30:07] A public-opinion poll is no substitute for thought / A story from a young Steve Jobs 

[31:55] The business schools reward difficult, complex behavior more than simple behavior, but simple behavior is more effective. 

[32:42] If you let yourself be undisciplined on the small things, you will probably be undisciplined on the large things as well. 

[35:15] George Lucas unapologetically invested in what he believed in the most: Himself. 

[41:15] No matter how great the talent or effort, some things just take time: You can’t produce a baby in one month by getting nine women pregnant. 

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Founders Notes gives you the ability to tap into the collective knowledge of history's greatest entrepreneurs on demand. Use it to supplement the decisions you make in your work.  Get access to Founders Notes here. 

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“I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested so my poor wallet suffers. ” — Gareth

Be like Gareth. Buy a book: All the books featured on Founders Podcast

What I learned from reading The Snowball: Warren Buffett and the Business of Life by Alice Schroeder.

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[0:01] What he was teaching were the lessons that had emerged from the unfolding of his own life 

[4:35] The dichotomy of Warren Buffett 

[9:20] Warren Buffett wants to be remembered as a teacher 

[11:52] Buffett’s idea of Inner scorecard vs Outer scorecard 

[13:49] Warren Buffett’s early family life 

[18:03] Learning to avoid the habit of thinking in only one direction (18:03), 

[24:30] Warren’s WHY 

[29:58] A young troublemaker and how Warren’s dad convinced him to change his behavior 

[32:20] Warren did what you are doing right now: Since a young age Warren had studied the lives of men like Jay Cooke, Daniel Drew, Jim Fisk, Cornelius Vanderbilt, Jay Gould, John D. Rockefeller, and Andrew Carnegie.

[33:48] Turning a rejection into one of the best things to ever happen to him

[38:30] Mimicry instead of independent thought: Warren didn’t understand why they couldn’t see what was right before their eyes. 

[42:20] One of the most inspiring things about reading biographies is you are constantly reminded that we all have the ability to improve. A young Warren Buffett was so afraid of public speaking he would vomit. 

[48:06] Warren learning from and working with his idol: Ben Graham

[52:20] Warren’s advice for everyone: Sell yourself an hour a day 

[57:28] Intensity is the price of excellence and examples of people Warren wanted to do business with 

[1:01:08] Warren Buffett is an obsessive/Munger would later call Buffett an implacable acquirer, like John D. Rockefeller in the early days of assembling his empire, who let nobody and nothing get in his way. (1:01:08), 

[1:13:10] Warren Buffett on his biggest mistake 

[1:16:11] What Buffett valued in the lives of others/His idea about claim checks 

[1:19:25] His “Twenty Punches” approach to investing 

[1:22:38] Warren’s answer to the question, “What has been your greatest success and greatest failure?” 

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Founders Notes gives you the ability to tap into the collective knowledge of history's greatest entrepreneurs on demand. Use it to supplement the decisions you make in your work.  Get access to Founders Notes here. 

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“I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested so my poor wallet suffers. ” — Gareth

Be like Gareth. Buy a book: All the books featured on Founders Podcast

What I learned from reading Carroll Shelby: The Authorized Biography by Rinsey Mills. 

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[3:27] I love everything about this person. I like the way he thought. I like the way he lived his life.

[3:38] It is almost unbelievable all the different events that could happen in one human lifetime.

[3:52] He lived to 89 years old and he used every single year that he was alive.

[5:22] He could talk his way out of anything.

[6:40] He knew what he wanted. He didn't want anybody else telling him what to do.

[7:41] He had a love for anything that would go fast.

[10:48] He didn’t know what to do with his life.

[15:54] Follow your natural drift. —Charlie Munger

[17:00] I can't work for anybody.

[18:42]  He has fun his entire life. As soon as they stop being fun he runs away.

[22:20] A Man for All Markets: From Las Vegas to Wall Street, How I Beat the Dealer and the Market by Ed Thorp. (Founders #93 and #222) 

[24:17]  Money only solves money problems.

[26:32] Scratching around doing insignificant races with inferior machinery wasn't an option in which he could see any future.

[27:26] Whatever setbacks he encountered he was invariably able to bounce back through a combination of self-belief and an aptitude for making other people believe in him.

[27:45] Enthusiasm and passion are universal attractive traits.

[28:05] Go Like Hell: Ford, Ferrari, and Their Battle for Speed and Glory at Le Mans by A.J. Baime. (Founders #97) and Enzo Ferrari: Power, Politics, and the Making of an Automobile Empire by Luca Dal Monte. (Founders #98) 

[30:29] The Purple Cow by Seth Godin

[32:22] Distant Force: A Memoir of the Teledyne Corporation and the Man Who Created It by Dr. George Roberts. (Founders #110)

[32:38] Having extreme focus in the information age is a superpower.

[36:13] Racing was a means to an end. He wanted to build his own car. That was his main goal.

[42:34] He still didn't know quite how he was going to do it but if he was finally going to produce his own sports car.

[53:48] All big things start small.

[58:31] 12 months after Shelby was deeply depressed his life is completely different and the Shelby Cobra starts to take shape.

[1:00:06] A summary of the early days of Shelby Automotive: Everything had to be done tomorrow and by the cheapest method possible.

[1:01:12] It wasn't uncommon for them to work until two or three in the morning and be back down there at 7:30 the next morning.

[1:02:22] There's just something special about a group of highly talented, smart people working together for a common goal.

[1:03:48] Shelby hates company politics. That is why he wanted to run a smaller company.

[1:17:30] My name is Carroll Shelby and performance is my business. 

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Founders Notes gives you the ability to tap into the collective knowledge of history's greatest entrepreneurs on demand. Use it to supplement the decisions you make in your work.  Get access to Founders Notes here. 

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“I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested so my poor wallet suffers. ” — Gareth

Be like Gareth. Buy a book: All the books featured on Founders Podcast

What I learned from reading Enzo Ferrari: Power, Politics, and the Making of an Automobile Empire by Luca Dal Monte.

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[0:01] Ferrari was animated by an extraordinary passion that led him to build a product with no equal

[3:52] Lee Iacocca on why Enzo Ferrari will go as the greatest car manufacturer in history: "Ferrari spent every dollar chasing perfection." 

[8:50] Business lessons from his father  

[11:47] Enzo Ferrari was not interested in school. He wanted to start working immediately. 

[16:36] The deaths of his father and brother 

[18:20] No job. No money. No connections. A young man desperate to succeed in life. 

[23:06] He learned something that he would never forget for the rest of his life: Not even the best driver had any chance of victory if he was not at the wheel of the best car. 

[24:20] Starting his first business which ends in bankruptcy.

[28:31] Enzo learned from those who already accomplished what he was trying to do. 

[31:10] He does the best possible job at whatever task he is given. Even if he doesn't want to do it. Enzo focuses on being useful. 

[33:35] A young Enzo Ferrari is plagued with doubts and close to a nervous breakdown. 

[38:28] The large leave gaps for the small: The start of Scuderia Ferrari. 

[49:38] Enzo Ferrari at 33 years old. 

[51:30] For Enzo Ferrari it was always day 1.

[52:33] Alfa Romeo pulls the plug/the end of Scuderia Ferrari, the birth of Ferrari.

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Founders Notes gives you the ability to tap into the collective knowledge of history's greatest entrepreneurs on demand. Use it to supplement the decisions you make in your work.  Get access to Founders Notes here. 

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“I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested so my poor wallet suffers. ” — Gareth

Be like Gareth. Buy a book: All the books featured on Founders Podcast

What I learned from reading Go Like Hell: Ford, Ferrari, and Their Battle for Speed and Glory at Le Mans by A. J. Baime.

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[0:01] Racing was the most magnificent marketing tool the industry had ever known.

[2:42] Founders vs Managers 

[3:43] Founders Podcasts on Henry Ford: #9, #26, and #80. 

[4:29] The passion Enzo Ferrari had for his products 

[5:50] The same broad features keep recurring over and over again/ In their detailed appearance these broad features are never twice the same. 

[8:09] Steve Jobs on passion. 

[12:00] Steve Jobs on building the Macintosh/ Artisans have soul in the game. 

[13:05] Enzo Ferrari’s schedule at 58 years old / His early life 

[17:08] Ferrari’s 3 principles for winning 

[20:20] How Enzo Ferrari started his company / Racing as marketing / Ferrari’s personality and his philosophy on building a business

[24:49] Enzo Ferrari’s extreme level of dedication 

[25:48] How Enzo Ferrari described his product 

[26:54] How and why the Ford/Ferrari negotiations begin

[35:37] How Enzo Ferrari described the process of building a product

[38:07] The advantage founder led companies have / I made a mistake here. I said Les Miles when I meant Ken Miles. Les Miles is a football coach. Ken Miles is a race car driver. 

[40:58] Creative Selection: Inside Apple's Design Process During the Golden Age of Steve Jobs by Ken Kocienda 

[42:06] Enzo Ferrari on why he doesn’t have a social life. 

[42:57] You don’t understand. When I go in there, if I don’t really and truly believe I am the best in the world, I had better not go in at all.

[49:05] Enzo Ferrari played chess while everyone else was playing checkers.

[52:20] It would be a waste of life to do nothing with one’s ability. 

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Founders Notes gives you the ability to tap into the collective knowledge of history's greatest entrepreneurs on demand. Use it to supplement the decisions you make in your work.  Get access to Founders Notes here. 

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“I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested so my poor wallet suffers. ” — Gareth

Be like Gareth. Buy a book: All the books featured on Founders Podcast

What I learned from reading James J. Hill: Empire Builder of the Northwest by Michael P. Malone.

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James J. Hill demonstrates the impact one willful individual can have on the course of history [1:00]

If you want to know whether you are destined to be a success or a failure in life, you can easily find out. The test is simple and it is infallible: Are you able to save money? If not, drop out. You will lose. You may think not, but you will lose as sure as you live. The seed of success is not in you. –James J. Hill [3:30]

Early life and education [7:58]

What James Hill learned from history: The power of one dynamic individual [9:09]

Hill strikes out for adventure [10:48]

Hill makes it a priority to seek out mentors to learn from [14:44]

Starting his first business [18:22]

Hill’s strategies on building businesses & insights into his business philosophy [21:50]

Hill’s edge: An obsession with knowing every detail of his business [29:22]

Burn the boats/ going all in/ when you have an edge, bet heavily [34:31]

Stay close to where the money is being spent [36:51]

Hill had an edge because he took the time to educate himself more than others would [38:49]

The power of maintaining your focus [40:00]

The best defense against invading railroads was a better built system that could operate at lower rates [45:05]

Great idea to think of your business as a living organism [55:40]

A well run business is built slowly [56:32]

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Founders Notes gives you the ability to tap into the collective knowledge of history's greatest entrepreneurs on demand. Use it to supplement the decisions you make in your work.  Get access to Founders Notes here. 

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“I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested so my poor wallet suffers. ” — Gareth

Be like Gareth. Buy a book: All the books featured on Founders Podcast

What I learned from reading A Mind at Play: How Claude Shannon Invented the Information Age by Jimmy Soni and Rob Goodman 

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[0:25] Claude Shannon trained a powerful intellect on topics of deep interest, and continued to do so beyond the point of short term practicality

[5:50] Insulated from opinion of all kinds

[9:09] A simple way to describe the impact of information theory

[10:39] Resourceful at a young age

[11:50] An ordinary childhood

[12:41] Follow your natural drift

[14:40] Too many facts; too few principles

[16:10] His indecisive nature inadvertently helps him

[17:00] An important turning point in Shannon’s life

[18:30] Vannevar Bush: The first person to see Claude Shannon for who he was 

[21:00] The results of Claude Shannon’s thesis

[23:20] How Claude Shannon worked in his 20s

[25:30] The main takeaway from the book: The world isn’t there to be used, but to be played with, manipulated by hand and mind

[30:00] Succeeding with no prior knowledge in the specific field

[31:20] Working on what naturally interests you is time well spent

[32:45] Working at Bell Labs / The Idea Factory: Bell Labs and the Great Age of American Innovation

[36:49] Fire Control / What he worked on during the war

[38:15] Claude Shannon’s work on cryptography

[40:05] Take many different ideas from unrelated fields

[43:35] Leaving Bell Labs for MIT

[48:52] Claude Shannon on investing

[1:01:15] Shannon’s design for his own funeral

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Founders Notes gives you the ability to tap into the collective knowledge of history's greatest entrepreneurs on demand. Use it to supplement the decisions you make in your work.  Get access to Founders Notes here. 

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“I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested so my poor wallet suffers. ” — Gareth

Be like Gareth. Buy a book: All the books featured on Founders Podcast

What I learned from reading The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success by William Thorndike.

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[0:30] The failure of business schools to study men like Henry Singleton is a crime— Warren Buffett

[2:40]Buffett and Singleton: Separated at birth?

[8:35]The Singular Henry Singleton

[14:40] Supremely indifferent to criticism

[19:50] Teledyne breaks up huge business into a bunch of small profit centers

[29:30] Risk is controlled. Divisions will remain relatively small.

[32:00} Building a cash generating machine 

[36:30] Bet heavily when you have an edge.

[44:00] Singleton has found a way to run a multibillion dollar company in an entrepreneurial, innovative way.

[50:16] Singleton had a different focus: Capital allocation.

[50:37] Getting Rich vs Staying Rich 

[55:18] What the people profiled in this book have in common

[59:00] Early career and the founding of Teledyne

[1:00:38] How Henry Singleton thought about acquisitions

1:02:00] Actions express priority

[1:07:12] Ruthlessly cut fat

[1:11:20] Stay within your cirlce of competence and bet heavy

[1:16:30] Singleton on Time Management

[1:19:19] If everyone is doing them, there must be something wrong with them. — Henry Singleton

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Founders Notes gives you the ability to tap into the collective knowledge of history's greatest entrepreneurs on demand. Use it to supplement the decisions you make in your work.  Get access to Founders Notes here. 

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“I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested so my poor wallet suffers. ” — Gareth

Be like Gareth. Buy a book: All the books featured on Founders Podcast

What I learned from reading A Man for All Markets: From Las Vegas to Wall Street, How I Beat the Dealer and the Market by Edward Thorp. 

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[0:01] Ed Thorp’s memoir reads like a thriller—mixing wearable computers that would have made James Bond proud, shady characters, great scientists, and poisoning attempts. The book reveals a thorough, rigorous, methodical person in search of life, knowledge, financial security, and, not least of all, fun. Thorp is also known to be a generous man, intellectually speaking, eager to share his discoveries with random strangers.  

[1:23] Ed Thorp is the first modern mathematician who successfully used quantitative methods for risk taking—and most certainly the first mathematician who met financial success doing it.  

[3:19] Ed was initially an academic, but he favored learning by doing, with his skin in the game. When you reincarnate as practitioner, you want the mountain to give birth to the simplest possible strategy, and one that has the smallest number of side effects, the minimum possible hidden complications. 

[4:33] As Warren Buffet said: “In order to succeed you must first survive.” You need to avoid ruin. At all costs. 

[6:48]  It is vastly less stressful to be independent—and one is never independent when involved in a large structure with powerful clients. It is hard enough to deal with the intricacies of probabilities, you need to avoid the vagaries of exposure to human moods. True success is exiting some rat race to modulate one’s activities for peace of mind. 

[7:51] Read the forward by Nassim Taleb 

[9:14] Ed’s 4 rules for learning 

First, rather than subscribing to widely accepted views—such as you can’t beat the casinos—I checked for myself. 

Second, since I tested theories by inventing new experiments, I formed the habit of taking the result of pure thought—such as a formula for valuing warrants—and using it profitably. 

Third, when I set a worthwhile goal for myself, I made a realistic plan and persisted until I succeeded. 

Fourth, I strove to be consistently rational, not just in a specialized area of science, but in dealing with all aspects of the world. I also learned the value of withholding judgement until I could make a decision based on evidence.  

[11:15] I admired the heroes who, through extraordinary abilities and resourcefulness, achieved great things. I may have been inspired to mirror this in the future by using my mind to overcome obstacles. 

[14:29] They told us that my aunt Nona and her husband had been beheaded in front of their children. 

[16:45] At its core, this is a book about how to live well. 

[17:55] Ed develops simple systems for everything in his life. 

[20:37] If anyone knew whether physical prediction at roulette was possible, it should be Richard Feynman. I asked him, “Is there any way to beat the game of roulette?” When he said there wasn’t, I was relieved and encouraged. This suggested that no one had yet worked out what I believed was possible. With this incentive, I began a series of experiments. 

[21:15] “Try to figure out what your skill set is and apply that to the markets.” Thorp likes to stay within his circle of competence. This is a hallmark of people who are rational. In that sense, Thorp reminds me of Warren Buffett. A Dozen Things I learned from Ed Thorp  

[21:50] I also believed then, as I do now after more than fifty years as a money manager, that the surest way to get rich is to play only those gambling games or make those investments where I have an edge.  

[23:50] He wrote a book that sold over a million copies: Beat the Dealer: A Winning Strategy for the Game of Twenty-One  

[26:48] In the abstract, life is a mixture of chance and choice. Chance can be thought of as the cards you are dealt in life. Choice is how you play them. 

[27:52] Ed’s philosophy on life: My thoughts then were much like I expected his to have been: that acknowledgment, applause, and honor are welcome and add zest to life but they are not ends to be pursued. I felt then, as I do now, that what matters is what you do and how you do it, the quality of the time you spend, and the people you share it with.  

[30:01] Even though the Goliath I was challenging had always won, I knew something no one else did: He was nearsighted, clumsy, slow, and stupid, and we were going to fight on my terms, not his.

[33:09] A good defense keeps other people from taking your money. 

[36:39] History doesn’t repeat, human nature does: The frauds, swindles, and hoaxes, a flood reported almost daily in the financial press, have continued unabated during the more than fifty years of my investment career. But then, hoaxes, scams, manias, and large-scale financial irrationalities have been with us from the beginnings of the markets in the seventeenth century. 

[40:24] You are unlikely to have an edge on anything you hear in the news.  

[46:24] As we chatted about compound interest, Warren gave one of his favorite examples of its remarkable power, how if the Manhattan Indians could have invested $24, the value then of the trinkets Peter Minuit paid them for Manhattan in 1626, at a net return of 8 percent, they could buy the land back now along with all the improvements. Warren said he was asked how he found so many millionaires for his partnership. Laughing, he said to me, “I told them I grew my own.”   

[52:07] How Ed selected employees: For this to work, I needed people who could follow up without being led by the hand, as management time was in short supply. Since much of what we were doing was being invented as we went along, and our investment approach was new, I had to teach a unique set of skills. I chose young smart people just out of university because they were not set in their ways from previous jobs. Better to teach a young athlete who comes fresh to his sport than to retrain one who has learned bad form. 

[57:13] Life is really about spending time well.  

[1:01:45] When Princeton Newport Partners closed, Vivian and I had money enough for the rest of our lives. Though the ending of PNP was traumatic for us all, and the future wealth destroyed was in the billions, it freed us to do more of what we enjoyed most: spend time with each other and the family and friends we loved, travel, and pursue our interests. Taking to heart the lyrics of the song “Enjoy Yourself (It’s Later than You Think),” Vivian and I would make the most of the one thing we could never have enough of—time together. Success on Wall Street was getting the most money. Success for us was having the best life. 

[1:04:30] I learned at an early age to teach myself. This paid off later on because there weren’t any courses in how to beat blackjack, build a computer for roulette, or launch a market-neutral hedge fund. 

[1:07:19] As Benjamin Franklin famously said, “Time is the stuff life is made of,” and how you spend it makes all the difference. 

[1:07:37] Whatever you do, enjoy your life and the people who share it with you, and leave something good of yourself for the generations to follow. 

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