Frederik Journals

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“It's all about how you gain control over your mind. It's all an inside job.”

Hello everyone.

I’m very excited to share my conversation with William Green (@williamgreen72), the author of RICHER, WISER, HAPPIER: How the World's Greatest Investors Win in Markets and Life. It’s one of my favorite investment books this year because it is about so much more than just investing. William called it a “stealth spiritual book” and I have big sticker on my copy: “This is not a book about investing.”

This conversation was a about William’s own journey and setbacks, his search for worldly wisdom in everything from Zen Buddhism to Stoicism to the Kabbalah, and the many lessons he learned from great investors. It was the perfect conversation to bookend the year and provided me with a ton of ideas to reflect on over the holidays. I hope you will find it as valuable as I did.

Also, William is working on his own podcast (he mentioned it towards the end of our conversation) for which I’m very excited. Keep an eye out for that, I’m sure he’ll have some amazing guests and deep conversations.

You can find the transcript here. It took a lot of time to clean up the automated transcript and I hope that going forward I’ll be able to pay someone to do that work. However, this also means that the transcript is only going to be available for premium subscribers. You can still find the highlights and timestamps below.

Today's post is sponsored by Tegus. Tegus is an on-demand digital research platform on which investors share their expert calls. Their library currently has some 23,000+ calls covering many public and private companies and it's growing every day. It's a beautiful business model (I wish I was an investor!) and I could see it scaling up to cover any company and industry you can imagine. I think of it as being able to tap into a library of conversations between industry insiders. For example, I recently read Michael Bloomberg's biography and am working on a piece about his origin story. What better way to find more info about the company than to jump through hundreds of expert call transcripts (thanks to their elegant search function)? I'd encourage you to check it out - they offer free trials.

Disclaimer: this podcast is for entertainment purposes only and not investment advice. It does not constitute an offer to sell or the solicitation of an offer to buy any securities mentioned or discussed. Seek your own financial, tax, legal, accounting, or other advisor’s advice before making any investment decisions. Do you own work! I am are not your fiduciary or advisor.

Highlights:

* 2.00: Introduction, William’s journey to the book.

* "This is not an investment book"

* 3.00: “You can see within investing this exquisite complexity of life, all of the ways in which we're living in this murky place, where we don't know much, and we can't tell what the future holds. And yet we somehow have to try to make decisions.”

* “Great investors  … they’re tremendous pragmatists. And it struck me. I started to think of them as practical philosophers.”

* 6.00: “I was working on the last part of the book. Just as COVID was turning our lives upside down. And it gave me an intense sense of my own mortality. And I started to think, well, let me at least leave one thing in my life that's worthwhile. … So there's a sort of grandiosity to the ambition of it where I'm actually trying to create something that will help readers and also at the same time, help myself.”

* 7.00: William’s study of everything from Zen Buddhism to the Stoics to the Kabbalah. “Tell me about what you're reading and why and how it's influenced your life?”

* "I dip into the Zohar almost every day"

* “I put in that sentence in the book and nobody has ever asked me about it.”

* 10.00: “It's really a coded story about how do you get out of the dungeon when you're stuck, when you feel like you're going nowhere in your life, when you're lost, how do you get out of the dungeon? … And so it becomes a story about consciousness and how could he be free? While he was stuck in jail.

* 11.00: “What they would say is this isn't about a fight that you have every generation with the Amalekites, this tribe that the Israelites fought with 4,000 years ago or whatever it was. It's about this war of consciousness with your own doubt. And so if you read the old Testament, literally, you just think it's kind of this meaningless story about fighting the Amalekites. But if you read it in this sense of it's all really about a path of consciousness.”

* 12.00: “When I study things like Tibetan Buddhism, which I also find exquisitely beautiful or stoicism, which I found very helpful, I see this tremendous overlap. It's really all about consciousness. It's about how do you gain control of your inner landscape? How do you gain control of your mind? And, and so I think in the epilogue, I quote this great line from the poet Milton, who was blind, who was saying that the mind can make a hell of heaven or heaven of hell.”

* 14.00: Sir John Templeton. “I failed to understand that what he was saying is no, no, you have to, you have to win this inner game in order to have a happy and successful life.”

* 17.00: Tsoknyi Rinpoche, handshake practice.

* 20.00: Jason Karp. “That disconnect between his effort and his performance was torture.”

* 22.00: “The inner game of writing or investing is dealing with these fears, your anxiety, your desire to be respected, to have honor all of this stuff. It's your ability to deal with setbacks, your sense that however hard you work, sometimes it just doesn't work out.”

* 24.00: Sometimes life has to burn down?

* “We can get subtly misaligned and feel that we're going in the wrong direction, but you keep going. Sometimes you need it all to fall apart in a fairly dramatic way, whether it's a marriage or a job health, a career or reputation, you kinda need it to collapse.”

* William’s own setback and dealing with being laid off during the financial crisis.

* 27.00: “One of the things that I liked about studying Kabbalah actually is that they, as I understood it, they would say if you don't believe that there's water, if you just think it's all random and that stuff just happens and it's unfair and is chaotic, you've actually created that reality because if consciousness is everything you see, the world is just chaos and disorder. But if you think there's order and there's something for you to learn and that everything is there for you to grow, then you create that reality. And it reminds me a bit, there's a beautiful [00:28:00] line from Einstein where he said, you can either live as if everything is a miracle or as if nothing is a miracle.”

* “If you look at the things you've gone through, whether it's breakdowns of relationships or breakdowns of career, or existential angst, which I've had tons of over the years and you think, ‘God it all lead to these extraordinary things,’ that's a totally different attitude and different framing than if you say, ‘God things never work out for me.’”

* 29.00: “There's an extraordinary story where the temple, which was supposed to be the holiest place in the world in Jerusalem, burned down and rabbi Akiva, as he's watching, he starts dancing. And so that's an extraordinary thing.

If you think of that triumph over sadness, uncertainty, fear about what's gonna happen.”

* 31.00: How did he pick the subjects and ideas of the book?

* "One idiosyncrasy of this book is that I’ve focused almost exclusively on investors whom I like and admire." (“I’m particularly drawn to those with wisdom, insights, and virtues that extend beyond an exceptional talent for making money.”)

* 37.00: Bill Miller

* 40.00: “And so I saw Bill dealing with this very painful staff in a really honest and honorable way. And he would say well he didn't realize how catastrophically wrong I could be because he said when you've been right, right, right. For all of those years, you said, even though theoretically, you know, that you need to be humble, you actually start to believe that you know what you're talking about.”

* 43.00: “I write at some point in that epilogue, I say there is as great honor in the simple virtue of perseverance. And I don't say that lightly. I think that really deeply, I mean, there's something, one of the things about writing is that when, when you really simplify and distill things, you're always worried that people will see how banal your mind is and how trivial you are.

* But, actually truth is pretty simple, I think. And so for me, when I'm condensing it down to that, I mean, I said there are two great lessons for me from Miller's Miller's downfall and recovery, because his recovery has been equally spectacular. One of them is about the simple virtue of perseverance and [00:44:00] one of them is everyone suffers.”

* 46.00: “Life as a series of adversities that give you an opportunity either to behave well or badly” (Munger)

* 48.00: How do I regain sort of control or semblance of control of, of the inner game or if my mind? Is reading enough?

* 51.00: vice admiral Stockdale,

* 53.00: “I used to be immensely impressed with the beauty of Miller's mind. When I was first writing about him in my twenties, there was something really wonderful about the fact that he was just so darn smart, just brilliant mind and brilliant moneymaker and gambler who outwitted everyone else.

And gradually as I got older, I realized that actually what I admired most was his extraordinary resilience. And the fact that when faced with this incredible setback, he handled it just incredibly well. And, and there was a moment that I, I don't think I write about in the book where I was in his garden of his home in, in Maryland. … And he was living in a way that was deeply aligned with who he is. And he would show up for work every day and in jeans and a black t-shirt. … And I said to him, it's really amazing, it's kind of like Miller Unbound.

You don't take orders from anyone. You're in control of your time, your [00:55:00] schedule, everything. And he's like, yeah, that's the best. And I, could just see that there was this kind of personal victory of this guy who is now 70, 71 who'd come through this storm and realigned himself afterwards in a way that was deeply true to who he is in all of his glorious idiosyncrasy.”

* 58.00: “And, and so I'm not super impressed just with the ability to make money and not live a more thoughtful life. I think I was more impressed with that when I was younger. I liked that aspect of the [00:58:00] game of just being able to outwit the crowd. There's something about that, that I found very, very appealing.”

* 59.00: What is it like to write about people who are very successful financially? Is there a downside (envy)?

* “Why their lives resonated with me, whether it was a Bill Miller or a Nick Sleep, or a Monish Pabrai or Charlie Munger, in some ways they were all outsiders who had diverged from the crowd. And they were thinking in a very, in a very free way, they were questioning conventional opinion and they had constructed their lives in a way that was very true to who they are. So that resonated deeply with me because I could see that I was also an outsider who at least in my own mind who didn't naturally want to go with the crowd.”

* Ed Thorp, Monish Pabrai, Irving Kahn

* 1.03.00: The value of freedom and independence.

* “I remember at one point working on a project with someone I really disliked who was kind of a bully and threatened me at one point and Monish said to me, you know, if you had had a bit more money, you just would have walked away and said, you know, f**k you. And, and I realized that was true.”

* “It's been clarifying to me too, to know that being aligned with who you are in a deep sense is, is a very important thing. That that's the goal. It's the independence. It's not, it's not the number of zeroes in your [01:06:00] account. It's actually living in a way that's true to who you are.”

* 1.11.00: Self awareness and lessons for non-professional investors. “Stumbling” into the right strategy.

* From the book: Nick Sleep: "as luck would have it, he had stumbled into a field that perfectly suited his idiosyncratic mind."

* "It also helps if, like Marks and Price, you stumble into an opportunity that happens to suit your talents and temperament."

* Eveillard: "He had the good fortune to stumble upon Graham’s value-oriented principles, which gave him an analytical edge."

* 1.17.00: “Mohnish is optimized, as he once put it to me for the game of investing. He is very rational. He plays the odds. He loves playing, playing blackjack and poker and things like that for money. I mean, he figured out a card counting technique, basically. But he said it's incredibly slow and boring. But that he has the patience for, I can't play games. I find games incredibly tedious, even something like Scrabble, [01:17:00] which I should love as a word person. I'm too impatient for it. And so I have to accept the fact that I'm just not optimized to play the game of sitting in a room reading annual reports and occasionally finding a mispriced gamble, like a Munger does. That just doesn't suit my temperament. And so I have to outsource stock picking to other investors who are better suited for it. And so I think just that self-awareness of saying, am I playing a game, the plays to my strengths, my talents, and my interests.”

* 1.20.00: Writing a substack vs. a book.

* “And I would work 70, 80 hours a week, very consistently. It was a young man's game. It was very intense. And I think I was good at my job, but I don't think [01:22:00] probably ultimately it really suited my talents and, and it may be. Getting laid off, I'm being forced to, to figure out what should I be doing?

Actually set me on a path of writing books. That's much better suited to who I am. And I love writing books. I always adored books. I love the feel of books. And I love podcasts. I love the fact that you can, you can sit and just have a thoughtful conversation. And so those are very idiosyncratic reactions and choices.”

* “I write about it very briefly with a guy Mike Zapata who was in seal team six, which is the unit that, that famously killed Osama bin Laden. And he ended up setting up a hedge fund and he said to me yeah, there are three things that are important to me. He said God, family and fund in that, in that order.

And he said, even this conversation that you and I are having it's a little bit outside that. And he said, that's okay. But he said, I just need to know that I need to keep coming back to God, family and fund. I, that was really helpful. And there was something, something kind of wonderfully tactless and lacking in terms of [01:25:00] EQ that he told me that.”

* 1.29.00: Ed Thorp, Irving Kahn

* 1.31.00: “And you look at Ed Thorp and he said, when I asked him about what he regretted in his life, he said I don't regret any of the principled decisions that I made. That's a really interesting comment. So then you think, ah, looking back in his 80s, he's really happy about the principled decisions he made, even when they worked against him, even when he made less money.”

If you enjoy my work, please consider sharing it with friends who might be interested. It would mean a lot to me and help me make this my life’s mission. 🙏

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.frederikjournals.com/subscribe

I’m very excited to share my conversation with William Green (@williamgreen72), the author of RICHER, WISER, HAPPIER: How the World's Greatest Investors Win in Markets and Life. It’s one of my favorite investment books this year because it is so much more. William called it a “stealth spiritual book” and I put a sticker on my copy: “This is not a book about investing.”

This conversation was a about William’s own journey, his search for worldly wisdom in everything from Zen Buddhism to Stoicism to the Kabbalah, and the many lessons he learned from great investors. You can find the full highlights and a full transcript on my substack. 

Highlights:

2.00: Introduction, William’s journey to the book.

7.00: William’s study of everything from Zen Buddhism to the Stoics to the Kabbalah. “Tell me about what you're reading and why and how it's influenced your life?”

"I dip into the Zohar almost every day"

24.00: Sometimes life has to burn down?

“We can get subtly misaligned and feel that we're going in the wrong direction, but you keep going. Sometimes you need it all to fall apart in a fairly dramatic way, whether it's a marriage or a job health, a career or reputation, you kinda need it to collapse.”

William’s own setback and dealing with being laid off during the financial crisis.

31.00: How did he pick the subjects and ideas of the book?

"One idiosyncrasy of this book is that I’ve focused almost exclusively on investors whom I like and admire."

43.00: “I write at some point in that epilogue, I say there is as great honor in the simple virtue of perseverance. And I don't say that lightly. I think that really deeply, I mean, there's something, one of the things about writing is that when, when you really simplify and distill things, you're always worried that people will see how banal your mind is and how trivial you are.

But, actually truth is pretty simple, I think. And so for me, when I'm condensing it down to that, I mean, I said there are two great lessons for me from Miller's Miller's downfall and recovery, because his recovery has been equally spectacular. One of them is about the simple virtue of perseverance and [00:44:00] one of them is everyone suffers.”

48.00: How do I regain sort of control or semblance of control of, of the inner game or if my mind? Is reading enough?

58.00: “And, and so I'm not super impressed just with the ability to make money and not live a more thoughtful life. I think I was more impressed with that when I was younger. I liked that aspect of the [00:58:00] game of just being able to outwit the crowd. There's something about that, that I found very, very appealing.”

59.00: What is it like to write about people who are very successful financially? Is there a downside (envy)?

“Why their lives resonated with me, whether it was a Bill Miller or a Nick Sleep, or a Monish Pabrai or Charlie Munger, in some ways they were all outsiders who had diverged from the crowd. And they were thinking in a very, in a very free way, they were questioning conventional opinion and they had constructed their lives in a way that was very true to who they are. So that resonated deeply with me because I could see that I was also an outsider who at least in my own mind who didn't naturally want to go with the crowd.”

1.11.00: Self awareness and lessons for non-professional investors. “Stumbling” into the right strategy.

1.20.00: Writing a substack vs. a book.

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.frederikjournals.com/subscribe

“Life is a big craps game. I've got to tell you, it's all been fun.”

This is a companion piece to my writeups of Kerkorian's story (part I, part II). Kirk Kerkorian was a self-made billionaire, aviator, entrepreneur, casino developer, and investor. It's one of my favorite rags-to-riches stories.

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.frederikjournals.com/subscribe

I'm reading my latest piece, Gratitude, Desire, and a Money Paradox.

“Desire is a contract that you make with yourself to be unhappy until you get what you want.” –Naval

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.frederikjournals.com/subscribe

Hello everyone.

I’m very excited to share my conversation with Sebastian Mallaby, the Paul A. Volcker senior fellow for international economics at the Council on Foreign Relations and author of several books including More Money Than Good, The Man Who Knew: The Life & Times of Alan Greenspan, as well as an upcoming book about the history of venture capital (The Power Law). I’m a big fan of More Money Than Good and tweeted about the gems in its footnotes. This conversation was an absolute treat and I hope you will enjoy it as much as I did.

You can access it here: Spotify, Apple, Google, RSS, anchor.

I’m still learning about editing the audio files and dealing with all the logistics. Happy about any feedback🙏

Disclaimer: this podcast is for entertainment purposes only. It does not constitute an offer to sell or the solicitation of an offer to buy any securities mentioned or discussed. Seek your financial, tax, legal, accounting, or other advisor’s advice before making any investment decisions. Do you own work. I am are not your fiduciary or advisor.

Conversation highlights:

* 2:00: Sebastian’s journey to the book and topic (hedge funds, also Alan Greenspan)

* 5:15: How to gain access and build trust.

* “The key was to do an unreasonable amount of preparation work.”

* “You win people's respect by doing a ton of homework. It shows that you're serious and you're not wasting people's time by asking the obvious questions.”

* 7:44: How to decide what questions to ask?

* “What you really want to know from them is specifically what their thought process was around a particular important or interesting trade. How did they make the call? How did they develop conviction? How did they hold onto the position during the inevitable hiccups and adversity? So it's that reconstruction of the case study.”

* “I often show up with very detailed notes where I've reconstructed a timeline. And I'm able to say that, ‘I know from your investor letter that in this month you made a profit on dollar/yen. I know that dollar/yen had a big move on the 15th and 16th of that month. … I really tried to kind of prompt them as much as possible.”

* 11:00: Where to look for information? “The answer is you've got to look everywhere.”

* 12:20: Finding memos in which Greenspan “described the creation of the Federal Reserve as one of the historic disasters in U.S. history.”

* 15:00: George Soros who joked "I can only remember the future."

* “When you ask him about the past, he's not much help.”

* Learning the division of labor in the Soros team and the Thai Bhat trade.

* 20:00: “The culture within an investment company matters almost as much as the analysis that the company does of the market or of the trade.”

* 21:00: The Korean bank trade.

* “On the walls of these offices they have these tombstone announcements, underwriting such and such deals. And he sees that these Korean financial institutions announcing in these framed plaques on their walls, that they've done these financings for Thai real estate companies. And of course he knows, because he was there, that all these real estate companies are bust, they’re gone, finished.”

* 23:00: “The South Korean reserves are fictitious, the government is lying. And when you see that as a currency trader, you know that if you go short the currency, they're not going to have the reserves to defend it, and you're going to win. It will be the Sterling trade all over again.”

* 27:00: Different cultures and investment styles, contrasting Soros, Druckenmiller and Robertson.

* 31:30: Culture at Tiger and the Tiger cubs.

* “That's sort of the DNA of Tiger, as far as I understand it today, that you've got people who don't mind hustling, who don't mind getting on a plane, flying to another country, meeting the manager, and building a very personal network. And that continues to generate good returns.”

* 34:00: Julian Robertson outgrowing his original strategy and the loss of “supercharged incentives.”

* “The other thing that went wrong for junior Robertson in the late nineties was that he had diversified out of stocks and into macro. He was doing currency trades and he had a dollar/yen bet. They went extremely wrong and that was the beginning of his losses. When he also got hit by the NASDAQ bubble, it was sort of a double whammy.”

* “It's not so much that people can't adapt over time. I think they actually can. It's more that when you diversify from one type of hedge fund strategy into another one, that's the risk. It's the mission creep thing.”

* “It's that supercharging of incentives that really focuses the mind and makes people perform at their best.”

* 39:30: Can investors evolve and adapt?

* “Sometimes the competitive advantage of a hedge fund manager is precisely the ability to adapt. George Soros used to say, ‘I don't play the game. I look for changes in the rules of the game.’”

* 42:00: Mindset and personality.

* “The value investing mindset almost disqualified Robertson from mastering macro.”

* “I think a big thing that people don't necessarily understand when they're outside the hedge fund world is that it's not just about being right in trading. It's about the sizing of the trade and the fact that you can be wrong more often than are right, but if you size those bets when you were right bigger, you will still make money. And that I think is sort of like the key insight about someone. Paul Tudor Jones.”

* 47:45: Understanding Paul Tudor Jones.

* “Genius does not always understand itself.” Vic Braden

* 49:00: Jones tried to replicate his system with a quant.

* 52:00: The Lehman Brothers 2008 trade.

* 55:00: “If you see that same 50:50 chance in the way that a trader like Paul Tudor Jones does, then you realize that the Hank Paulson view was crazy. And it's crazy because in a world where there's a 50% shot that it would be a flat outcome for Wall Street, but then a 50% shot that [the market] will tank, every sensible macro trader with a Paul Tudor Jones mindset will be massively short because you can't lose. It's an asymmetric bet. If you perceived their symmetry, then in a way it's no longer 50:50, it's like a hundred percent it’s going down.”

* 56:50: Jones’s process and his ‘market scripts.’

* “Sometimes causation in human actions works in a weird way.”

* “I remember him saying this to me when I went to see him. Sitting in the evening when the markets were closed and thinking through what might happen the next day, thinking about the different scenarios that could arise, thinking what he would do. If option A was to transpire, he would do trades one and two. If option B happened, he would do something else. And he kind of thinks through all these things through in advance and that quiet reflection when the markets are closed makes his faster when the markets are open. Cause he's kind of been there in his head.”

* 59:45: Reflecting on the industry and book from today’s perspective, a decade later.

* 1:03: Rise of quantitative trading.

* “Because of those high barriers to entry, you tend to get these concentrated pools of excellence in a few big quant shops and the survival rates for quants are higher. So this all changes the game. It's less of a kind of Darwinian competitive adaptive ecosystem, which is what I saw in the discretionary trading world.”

* “On the other hand, human traders are good at interpreting the arrival of new paradigms. What does it mean for markets when you have a pandemic or what does it mean for markets when you have a pandemic and then an unprecedented fiscal and monetary stimulus. And so this is like when you have unknown territory and the past patterns in markets won't necessarily repeat themselves. You need people who look into the future. You don't need machines to look into the data from the past.”

* 1:08: Sebastian's upcoming book, The Power Law.

If you enjoy my work, please consider sharing it with friends who might be interested. It would mean a lot to me and help me turn this into a sustainable effort. 🙏

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.frederikjournals.com/subscribe

I’m very excited to share my conversation with Sebastian Mallaby, the Paul A. Volcker senior fellow for international economics at the Council on Foreign Relations and author of several books including More Money Than Good, The Man Who Knew: The Life & Times of Alan Greenspan, as well as an upcoming book about the history of venture capital (The Power Law). I’m a big fan of More Money Than God and tweeted about the gems in its footnotes. This conversation was an absolute treat and I hope you will enjoy it as much as I did.

Disclaimer: this podcast is for entertainment purposes only. It does not constitute an offer to sell or the solicitation of an offer to buy any securities mentioned or discussed. Seek your financial, tax, legal, accounting, or other advisor’s advice before making any investment decisions. Do you own work. I am are not your fiduciary or advisor.

Conversation highlights:

• 2:00: Sebastian’s journey to the book and topic (hedge funds, also Alan Greenspan)


• 5:15: How to gain access and build trust.


• “The key was to do an unreasonable amount of preparation work.”


• “You win people's respect by doing a ton of homework. It shows that you're serious and you're not wasting people's time by asking the obvious questions.”


• 7:44: How to decide what questions to ask?


• “What you really want to know from them is specifically what their thought process was around a particular important or interesting trade. How did they make the call? How did they develop conviction? How did they hold onto the position during the inevitable hiccups and adversity? So it's that reconstruction of the case study.”


• 11:00: Where to look for information? “The answer is you've got to look everywhere.”


• 12:20: Finding memos in which Greenspan “described the creation of the Federal Reserve as one of the historic disasters in U.S. history.”


• 15:00: George Soros who joked "I can only remember the future."


• Learning the division of labor in the Soros team and the Thai Bhat trade.


• 20:00: “The culture within an investment company matters almost as much as the analysis that the company does of the market or of the trade.”


• 21:00: The Korean bank trade.


• 27:00: Different cultures and investment styles, contrasting Soros, Druckenmiller and Robertson.


• 31:30: Culture at Tiger and the Tiger cubs.


• 34:00: Julian Robertson outgrowing his original strategy and the loss of “supercharged incentives.”


• 39:30: Can investors evolve and adapt?


• 42:00: Mindset and personality.


• 47:45: Understanding Paul Tudor Jones.


• “Genius does not always understand itself.” Vic Braden


• 49:00: Jones tried to replicate his system with a quant.


• 52:00: The Lehman Brothers 2008 trade.


• 56:50: Jones’s process and his ‘market scripts.’


• “Sometimes causation in human actions works in a weird way.”


• 59:45: Reflecting on the industry and book from today’s perspective, a decade later.


• 1:03: Rise of quantitative trading.


• 1:08: Sebastian's upcoming book, The Power Law.

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.frederikjournals.com/subscribe

Disclaimer: The following content is provided for educational purposes only and does not contain investment advice. It is purely subjective. Always do your own due diligence.

Hello everyone.

I am so happy to share my conversation with Dominique Mielle (@DominiqueMielle), author of Damsel in Distressed. Dominique was a partner and senior portfolio manager at Canyon Partners, one of the largest distressed and credit hedge funds.

We talked about her experience during the telecom bust, the airline bankruptcies, and the financial crisis, how to deal with losses and stress, distressed as a chess game, the difference between generalist and sector specialist models, how to pitch and build an asset management business (she built Canyon’s loans securitization business after the crisis), and the hedge fund industry in general. I had a lot of fun and learned a lot during our chat and I hope you enjoy it as well.

I realize listening in the substack can be a bit cumbersome and spent a day setting up additional channels. I might also add audio versions of my longer pieces there if that’s of interest (someone told me yesterday that they listened to all of Packy McCormick’s writing on Spotify🤔).

* Spotify

* Apple/iTunes

* I also submitted it to Google but apparently it takes a few days to be processed or approved😪

* RSS feed

I’m still learning about editing the audio files and dealing with all the logistics of these conversations. Happy to hear any feedback in the comments or via email or Twitter DM🙏

We talked about:

* 3:00: The WorldCom bond trade.

* 6:30: Dealing with a losing investment.

* 9:00: Importance of expertise and networks in distressed investing. Distressed investing as a game of chess.

* “Skill in distressed is to be able to think about different scenarios and to anticipate what the adversary is going to do with his pieces.”

* 11:40: Distressed investing as an apprenticeship business.

* 14:15: Generalist vs. sector specialist model.

* 17:30: Hertz bankruptcy.

* 20:40: Airline bankruptcy investing and Equipment Trust Certificates.

* 28:00: How distressed investing changed over the past decades. “It's more competitive. It's harder to to beat the market. It requires a lot of expertise, a lot of conviction. A lot of creativity maybe more than before.”

* 32:00: Navigating the financial crisis in 2008

* 35:00: Mental resilience and losses.

* 38:00: Losses are unavoidable.

* 39:20: The business of investing: building a CLO business, raising capital.

* 40:59: Pitching, fundraising.

* 45:00: Women in hedge funds. “In 20 years, I only met one other female partner who was doing distressed. And she's a friend of mine.”

* 48:30: Implications of hedge funds as a mature industry.

* 51:25: Pitching and communicating ideas.

* 53:45: Managing a team of analysts.

Enjoyed this piece? Let me know by hitting the ❤ like button.👇 Thank you!

If you enjoy my work, please consider sharing it with friends who might be interested. It would mean a lot to me to reach (and teach) more people. 🙏

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Dominique Mielle was a partner and senior portfolio manager at Canyon Capital, a $25 billion fund, where she worked for twenty years. In this episode we discussed her career in the world of distressed investing, her book, and the hedge fund industry in general.

• 3:00: The WorldCom bond trade.


• 6:30: Dealing with a losing investment.


• 9:00: Importance of expertise and networks in distressed investing. Distressed investing as a game of chess.


• 11:40: Distressed investing as an apprenticeship business.


• 14:15: Generalist vs. sector specialist model.


• 17:30: Hertz bankruptcy.


• 20:40: Airline bankruptcy investing and Equipment Trust Certificates.


• 28:00: How distressed investing changed over the past decades.


• 32:00: Navigating the financial crisis in 2008


• 35:00: Mental resilience and losses.


• 38:00: Losses are unavoidable.


• 39:20: The business of investing: building a CLO business, raising capital.


• 40:59: Pitching, fundraising.


• 45:00: Women in hedge funds. “In 20 years, I only met one other female partner who was doing distressed. And she's a friend of mine.”


• 48:30: Implications of hedge funds as a mature industry.


• 51:25: Pitching and communicating ideas.


• 53:45: Managing a team of analysts.

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.frederikjournals.com/subscribe

Hi all,

This is my conversation with David Clarke who spent many years researching Floyd Odlum’s story. You can find an outline of his work and efforts here.

I own a pdf copy of his work and was blown away by the amount of information that David unearthed. While still incomplete, it was a pleasure to dig into the book and I look forward to the day when I can buy a printed copy. In the meantime, it is possible to contact David about purchasing the pdf at [email protected].

I asked David about how he found the story, his research process, what he uncovered that was different from the official narrative, and how Odlum rose and fell.

Unfortunately, we had a few glitches with Zoom. I did my best to clean up the audio but there are still a few fragments here and there. Nevertheless, I hope you enjoy the conversation as much as I did.

Enjoyed this piece? Let me know by hitting the ❤ like button.👇 Thank you!😉

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.frederikjournals.com/subscribe