Weekly Wrap (#11)
Tobi Lutke, Dr. Martine Rothblatt, Michael Milken, Charlie Munger, Nick Train
I’m back from an exhausting week of long train rides and even longer difficult conversations. There’s nothing like caring for a sick relative to remind you of what is truly important in life: health and family.
I was reminded of a scene in Netflix’s The Crown: an ageing Winston Churchill is presented with his portrait by artist Graham Sutherland. The painting depicts Churchill as he is, and old man, not as he wants to be seen, the legendary leader and statesman. Churchill can’t tolerate the truth depicted, has the painting removed and burned.
Sir Winston Churchill: It is not a reasonably truthful image of me!
Graham Sutherland: It is, sir!
Sir Winston Churchill: It is not! It is cruel!
Graham Sutherland: Age is cruel!
Age can indeed be cruel. I hope you and your loved ones are all doing well.
On the positive side, it was another good week for podcasts, a few of which I’ll share below. Personally, I’m looking forward to getting some reading and writing done over the coming week. It’s going to be an exciting year.
Interview with Tobi Lutke on how he thinks about time and priorities, culture at Shopify, applying gaming concepts to business life, and so much more.
Fascinating conversation with Dr. Martine Rothblatt who founded SiriusXM, then found a treatment for her critically ill daughter which led her to build biotech company United Therapeutics.
Podcast with Michael Milken talking about everything from his youth, credit, media entrepreneurs, healthcare, and challenges to the American Dream.
Conversation with Charlie Munger that you all probably know about already.
Nick Train’s three investing rules of thumb
Tobi Lutke (Shopify)
It is really my core value. I believe that the job we all have in life is to acquire knowledge and wisdom and then share it. I just don’t know what else there is. This is the bedrock of my belief system.
I started a company because I love learning. I went into programming because I found it fascinating. During meetings, I just love to hear the things that teams have discovered. When you're discussing an idea or a decision, I want to know what has been considered. To be honest, I find myself more interested in the inputs of an idea than the actual decision. I say this because when I have my own ideas, the first thing I tend to do is just try to falsify them, to figure out why what I'm thinking about is probably incorrect.
I love Antifragile, and I make everyone read it. It finally put a name to an important concept that we practiced. Before this, I would just log in and shut down various servers to teach the team what’s now called chaos engineering.
Avoiding meeting creep by killing all recurring meetings:
The person requesting to cancel would rather stick it out than have a very tough conversation saying, “Hey, this thing that you started is no longer valuable.” It’s just really difficult.
Lessons from strategy games:
The question really boils down to: How am I going to spend my attention? Am I going to invest into scouting? Am I going to try to outperform in this particular instance and fight by rearranging my units, or am I going to focus on bringing reinforcements in?
The major reason why video games are valuable is because of this concept of transfer learning. For instance, people who are good at chess understand when it's time to perform tactics, and when it's time to focus on positional development. Not just in chess, but also in life.
So often you're like, “Hey, I actually have no information right now to make a tactical move in the space. So here's how we use our resources to develop our position because, as a position improves, tactics will become available.” The understanding that there's always a way to get in a better position is crucial.
In chess, this means having more pieces influencing the center. Shopify spent a lot of time developing the center. We moved all our pieces that way, and maybe this is why we’re doing well.
Dr. Martine Rothblatt (United Therapeutics)
This is one hell of a life story. Multiple times she found life purpose that hit her "like a lightning bolt to your soul": first in satellites, then in seeking a cure for her daughter which led her into biotech. Now in electric helicopters and growing transplantable organs.
"I am absolutely convinced that in this decade, the 2020s, we will be delivering manufactured organs by electric helicopter."
Pretty wide-ranging conversation starting with his youth and family, his passion for research (both in credit and healthcare), and current projects, including his work in medical research. It seems he’s working on a book about the generation of media and technology entrepreneurs he financed, people like John Malone, Ted Turner, and Rupert Murdoch. Something to look forward to.
[61.3]: "John Malone had a PhD, but I helped get John in the late '70s a PhD in financial structure. More than almost any individual in the last 40 years John has used financial structure to maximize value."
How to make the best of your long commute: learn and share.
 "No one spoke to me for 4 hours a day. I could read, I could study. When I came in in the morning, I put a post-it on every single person's chair: did you look at that, did you think about this."
As Charlie would say, I don’t have much to add here.
Good investing requires a weird combination of patience and aggression and not many people have. It also requires a big amount of self awareness. You have to know the edge of your own competency, and a lot of brilliant people are no good at knowing the edge of their own competency, they think they're way smarter than they are.
I didn’t know he experimented with venture. He invested in a company called “William Miller Instruments” which got killed by magnetic tape.
"What helps everyone is to get in something that's going up and it just carries you along without much talent or work. You've got a big tailwind."
Nick Train (Lindsell Train)
Annual report for the Finsbury Growth and Income Trust managed by Lindsell Train.
His three investment rules of thumb:
(1) If a company’s products taste good, buy the shares. We are always alert to opportunities to add beloved or trusted consumer brands to the portfolio.
(2) The world will never be bored of being informed or entertained. Owners or creators of must-have business information, like London Stock Exchange (“LSE”) or RELX, have been reliable profit-makers and stock market winners for decades.
(3) The pros are always too cautious about the stock market.
The best way to ensure you have a chance of enjoying such returns is to deliberately only invest in what you believe to be exceptional companies and then to sell or top-slice as rarely as possible. This is the effect we are trying to capture.