Ben Savage All Things Fintech Investing - [Invest Like the Best, EP.152]


Oh hello and welcome everyone. I'm Patrick Shaughnessy. And this is invest like the best. This show is an open ended exploration ration- of markets ideas methods stories and of strategies. That will help you better. Invest both your time and your money. You can learn more and stay. UP-TO-DATE AT INVESTOR FIELD GUIDES THE COM- Patrick o'shaughnessy if the CEO of a Shaughnessy asset management all opinions expressed by Patrick podcast guests are solely their own opinions and do not reflect the opinion of o'shaughnessy asset management this podcast for informational purposes only and should not be relied upon on as a basis for investment decisions clients of Ashanti Asset Management May maintain positions and the securities discussed in this podcast. I guess today's Today's Ben Savage a partner at clock tower technology ventures. Ben Is focused on financial technology or fintech investing. which is the topic of our conversation? I've been making the FINTECH INTECH rounds of late and plan on making a few these conversations. Public Ben is the first and what might be a mini series. Because of the sheer amount of information. I learned in our discussion. We cover all aspects aspects of the fintech ecosystem. I hope you enjoy of Ben. We're just having a conversation. We figured we'd just record here which is about sort of the future state date of what we think about. Maybe thinking I from the perspective of an institution as the market portfolio. So you could just recap what you just told me about how this might evolve and how that relates to maybe investment opportunities today in the financial technology stat. Sure so I think an interesting way to think about markets and think about investing always kind of push things in time to extremes and so if you imagine the world one hundred years ago two hundred her years ago what did markets look like then and by contrast one of the Click. Today what's different. It seems unlikely to me that there's something fundamental that's changed about human nature Over those two hundred years and so while capital markets might have changed. It feels less likely that that change is deeply foundational. And it's got more to do with just some curiosity of the rules essentially shifted. You can have the same thing by imagining kind of one hundred years forward or two hundred years forward and one of the telling departures. I think over over the past hundred years or so is the idea of public and private markets which I don't think would have been a sensible distinction to somebody investing hundred years ago or two hundred years ago. Goer Isaac Newton kind of thing. It's really an artifact of regulatory regime that created following the Great Depression which was such an outlier in human history. The degree of suffering that occurs occurs in the Great Depression relative to what was at that point known by economists. Regulators was so extraordinary that we said wait a second. Let's put some rules around. How markets are they're gonNA work because essentially the crash destroyed the US economy and it was this feedback loop from markets? That had not really been seen in that kind of way before. So we created a regulatory architecture in the United States that stabilized capital markets but also stabilize the economy through the creation of the fat. And once you get sort of stable economic onomic volatility from the Fed. Says we're going to dampen the economic volatility and you get a statutory regime around markets which dampens market volatility. You get the creation nation of what we think of today as public markets which are really just liquid and exchange-traded markets. And I think it's a useful reference frame to stop talking about public and private markets and talk about liquid or liquid markets on one axis and then regulated and unregulated markets on the other end. So today we have. Liquid regulated markets as public markets gets and. It's a huge industry and it's created a spectacular amount of wealth for a lot of people and it's transformed the way Americans ultimately save and invest for themselves in their families over time and it's done wonders for capital formation in the United States. There's no sort of discreet with that. But if you imagine sort of a different end of the spectrum you have venture capital which which is essentially a less liquid historically and less regulated historically market and ventures also done a pretty good job of capital formation and driving innovation in this country and I think broadly in the future the world is going to move away from liquid regulated markets to what have historically been less liquid and less regulated markets. This will happen as a function of both regulations. Sort of getting weaker than we probably hit. Peak regulation sometime around the election of president trump and technology driving more and more liquidity to unlock what were traditionally sort of less liquid markets. It sort of moves the curve so all the stuff that used to be less liquid harder to invest in become slightly more liquid at the same time regulations matter less and less and so you get the opening up up for investors whether they're institutional investors retail investors of whole segments of risk that were sort of invisible and illegible before because they were stuck in this this quadrant of this imaginary grid drying of illiquid and less regulated. And if you're a big institution or if you're an individual you're gonNA look at the World I think in twenty years there's or fifty years and say most of what's actually interesting to me in terms of generating alpha and in fact over time. I think we're most of the quote market cap op will live or most of the value will actually end up is in what today we would think of as private markets and there are some pretty profound implications of that for you as an investor. Mr and whether that means individual trying to sort of save for your family and for your retirement where a very large institutional fiduciary responsible for that task for much larger sort of quantum of people and for US venture investor in Fintech. One of the things that were particularly excited about is trying to find businesses. That are kick-starting that that are finding asset classes that historically were sort of invisible illegible and making them accessible for people to invest in which is kind of been the trend. We were talking about four for a really long time. In public markets the rise of indexing and passive investing is in some sense about taking asset classes strategies ogies ways of making money that institutions had access to and democratizing them for individual investors first and then the institutions. Kind of catch. Back up to. It would be something very similar. Yeah very much. We were talking before about G. L. D. Gold. Imagine trying to buy gold twenty five years ago as an individual investor. It was a huge pain and you had to find some store that would sell you some physical gold. They would mark it up to some price. That wasn't actually reflective of the current market at that point in time they'd probably charge you a big fee in order to do it and then you're looking around a bunch of gold where turns out to not be the most convenient thing in the world today. You can touch something on your screen and boom you own in Jail D. as an ETF and what does it actually adds liquidity to the market for gold. It also dramatically opens up the number of institutions and individuals who can actually go buy the thing and it takes what was an asset that was in a specially legible for retail investors. It was hard to deal with hard hard. Even see it hard to see the benefit of in your portfolio and now millions of people in gold in their portfolios and are happy about that. And that's why didn't really good trade for them in the past little bit it's had had real diversifying power and improved ultimately the quality of their portfolio. There's several avenues. I want to explore first of which is the kinds of businesses that are basically surfacing legibility. Maybe you could give a few examples that are more cutting edge or very new to some people get a sense for kind of what that means in. Today's context of what's an example of a business. That's making legible. An investable asset that five years ago was illegible. Yes so I think. They're pretty broad range of these things so at one end you have lending club and prosper and the variety of businesses. That we think of as sort of peer to peer lenders. They originally started that way now. They're all essentially institutional platforms personal malone's as a category very rapid growing area of our debt landscape for the investors. Who are buying securitisations of these kinds of things? You you couldn't really do that. Pre credit crisis. To the extent that the assets even existed they were held on bank balance sheets and today. There's pretty robust here's Asian market and there's billions and and billions of dollars of these loans. That are being bought by institutions. Those aren't available that much anymore to sort of an individual investor but this kind of function of taking a set of risks and securitising them and making them accessible investors has been happening for a long time. Like Michael Lewis famously writes about it happening in the mortgage market in Liar's poker and that's a great example of love. Hey in the eighties. They took this massive market. That was fundamentally not accessible to institutional capital and they made it visible through securitization. You see the same function happening today. Today that's kind of Standard Fare Wall Street transformation of risk. But at the other end you see things like we were talking before stocks is an example or rally road owed. Were you can trade sneakers and you can. Trade fractional interests and collectible cars there are start ups that allow you to trade receivables on fresh produce from farmers and circle up which I know came on your podcast which weren't investor in allows institutions and accredited individuals to buy into small cap kind of private companies in the consumer market that are taking us out of risk profiles that previously weren't really available for institutions or individuals to easily. Get to and now. By those this kinds of things in trade those kinds of things add liquidity to it over time and even in virtually all of these things essentially require you to be an accredited investor in some way shape shape or form which is an example of what I mean by a huge regulatory distortion that exists in markets. Where the SEC said at some point in prehistory okay we're trying to define this group of people as accredited investors which is essentially a wealth test? It's not even a sophistication test ms of money. It probably means you're sort of sophisticated enough enough to lose money which is kind of on its face absurd and by the way the numbers haven't been updated. I mean there's all kinds of problems with these sorts of tests and so you have a distortion in the market. And those kinds of distortions will away whether regulatory pressure or technology solutions what. You're doing that in pretty real time. And it's these kinds of categories that we think can grow and I'm not seeing any one of those specifically we'll look back fifty years ago allowed. Sneaker trading is this massive asset class but it could be certainly fifteen years ago nobody thought trading of crypto currencies was going to be a fairly big asset class. And I think if you actually pitched what the crypto currency world today looks like to virtually anyone anyone in the investment industry fifteen years ago. They would've thought you were insane and yet today. There's a surprising amount of that happening. And it's happening all over the world which which is the other piece of this that we sort of didn't talk about earlier you could sell sneakers or collectible car interests to people not just in the United States in sort of wealthy wealthier places but literally all the world and so- value changes a great deal when you create a much more connected global market with more heterogenous genus sort of risk functions and preferences and you see this in the art market which is another example of the kinds of markets that are sort of unregulated very very weird liquidity and yet there's actually a lot of market cap in art. It's much bigger than most people think. And the trends of what's been appealing in. The art market have changed radically over the past fifteen years as wealth moves in Asia and so there are whole categories of art that suddenly people are paying attention to collectible category in that were not meaningfully. Collectible fifteen twenty thirty years ago and. I think that's another good example of what happens when you sort of add liquidity to what have historically been illiquid asset classes it kind of changes the collective preference function and so it ultimately ends up changing value. Because that's all all markets are there's more buyers and sellers the end of the day. Price goes up. I love the idea that technology or examples of where technology creates new markets or new places that you couldn't have conceived conceived before. Everyone always uses the uber example. We wouldn't have anticipated this. Massive market for random people's driving time and sort of interested in is where you see the most interesting things it's happening in that creation in the investment markets today. So I think one really big category that were far from the only people thinking about real estate and looted a little while ago to the sort of invention of mortgage securitization 's in the eighties in the sheer size of that market. One of the things. That's kind of funny about just taking the United States single-family the owner-occupied houses. It is a massive market every house in the United States that is individually owned and non investor owned. And you go. What's the capital stack back of a typical house? It's two classes of securities. It's a single tier of common equity. You own your equity in the house and then in a single tier of senior secured debt. which is your mortgage? And that's it for virtually every house you have some exceptions and things like he locks and second liens and stuff stuff like that. But it's a really simple capital stack by contrast if you looked at corporations and you said what's the typical capital stack of corporate. It is radically article more complicated. There's layers and layers of debt and there's layers of different equity securitisations and they've got mez pieces and there's options and there's this incredibly ornate elaborate superstructure of ways to address and refine the risk profiles inside big corporations. And you'd go okay. Well well that makes sense. Corporations have a lot of value. They're very valuable things so if I have something that's worth one hundred billion dollars ten billion dollars even a billion dollars I can kind of carve it up and it's efficient for me to carve it up into other slices of risk but if I have a house and it's worth three hundred thousand dollars or a million dollars or even a three or four million dollar our house. Is it really going to be efficient for me to take the time to kind of carve that risk stack up and create some Mez security on Patrick's house that's a certain amount of market cap. WHO's really gonNA trade it? Well it turns out if you have technology to do this it actually suddenly becomes efficient and if you imagine rolling up an awful lot of houses into goals of risk then suddenly they become tradeable. That's exactly what happened in the mortgage market and so that pool of senior debt. Intern downstream gets hypothecated enormously enormously. But what we're starting to see now through Fintech are companies that are changing the risk profiles at this point of origination at the asset level level rather than at the bundled level. So we're investors for instance in a company called landed. which would they fundamentally do? They allow schoolteachers to buy houses to buy their first home. The basic idea says you're a schoolteacher. You're actually a tremendous borrower from an underwriters perspective. If you WANNA give a mortgage because your local community you have a very stable job with very predictable income. We kind of know what you're going to do as a teacher so good buyer for a home but a lot of times you haven't been able to save up enough for a down payment especially in like a prime. I'm kind of real estate market. So let's say you're schoolteacher in Palo Alto House. Prices are expensive. What landed does that they say? Okay we'll match your down payment simple math so you WANNA buy a million dollar house. You need twenty percent down. You put up one hundred K.. We'll put up one hundred K.. As landed and then we'll help you find the mortgage into all that but it's pretty plain vanilla mortgage and bang now. You're a homeowner in that house. The differences landed doesn't get half the appreciation on your equity even though that's what they posted when you ultimately sell the house they get something nothing less than half and there's a little more refinement around this but this conceptually is like a piece of MESDAQ sitting in that capital stack so you've gone from a very plain vanilla thing of a senior secured debt instrument and a single tier of common equity. You've kind of added this Funky Mez Strip in the middle of it at the asset level. You didn't do this on a big pool. You did this at the single house level and this becomes efficient over time and landed. Isn't the only one that does this. There's three or four companies that are doing this and there's a a whole host of other ways that home buying is actually changing at the individual asset level which only becomes possible because technology. Both breath changes the way we can actually look at individual houses and value them it changes the origination process to make it more efficient and faster than what. If you walk into a bank can can try to get a mortgage. It's like a ninety day process incredibly clunky and inefficient and most banks actually lose money on the outright origination. They have to make it all up on the loan itself because they can't actually originate at a cost that make sense and on and on and you can imagine this kind of thing happening in lots and lots of asset classes. Where by by the way if you take this kind of mess strip that landed and others creating and they would hate that on Kalaiana messed up? But it's kind of what it looks like and you roll all those up. Suddenly you have a very very different risk profile than an institution can buy if you imagine thousands and thousands of these individual asset level risk pools being created. And suddenly. What you've done is you've actually unlocked? As an asset class single family owner occupied residential real estate. which by the way? If you're a big institution today you cannot cannot buy you. Can Buy investor owned single family residential but those properties have a slightly different risk profile because their rental properties than ones were owners actually actually live in it and those markets will trade differently a market. That's heavily owned by investors will end up trading through cycles overtime differently than a market work. owners are living there and that sort of make some degree of intuitive sense so again this is something that's been around a really long time. We have a lot of intuitions about how the housing market works. I mean I mean there's millions of Americans who think they're real estate geniuses because they happen to move into markets at the beginning of an interest rate super cycle and have made a ton of money in this. So we all have these kind kind of intuitions. About how the real estate market works. Most of them are wrong. It turns out but one of the deeply wrong things is that. Oh Yeah it's just GonNa work this way where people are going to buy my house. It's going to be an individual and the rise of buyers. The rise of investors. Buying these kinds of properties is a good example of weight our intuitions about how the housing market fundamentally works Kinda wrong. And there's actually lots of other things that can happen in that market. This happening not just in housing though but broadly across all of real estate so I think that's a really good example full of where you see technology changing the way people invest. I WANNA come back to this idea of Alpha which is kind of where we started our conversation before we recorded and how large professional professional institutional and other investors think about Alpha versus Beta kind of what those concepts mean. I think part of this is identifying new Beta and making a cheap and accessible and liquid would other than housing other other major asset classes that you think jump out is obvious candidates for this sort of trend. The trend being accessing new Betas Betas correct. I think are many talk about one that I find sort of curious. Frankly don't know that I have super refined thoughts on it but I think it's going to happen over the next generation and so it's worth talking about which is income share agreements. So ice says as they're called are kind of fascinating financial instrument and their experiments in on this thing for a while now the basic idea is typically applied to students. So you could imagine that I make student loan to you in the conventional way where I lend you money and there are some terms around that and then over time you pay back or you default on it in the US anyway. We have turned the student loan industry industry into this kind of horrible thing that ends up not really working for anyone over the long run and collectively all of us are going to be on the hook for it because so much of our student. Loan Industry has been essentially guaranteed by the government and it seems almost inexorable that will not get repaid and so as a policy matter just doesn't really work one one of the ways that people are thinking about trying to fix it is through an income share agreement. Were now as sort of lend you the money but it's not really a debt asset. It looks more like an equity type of investment. Because the way you're going to repay me is through some percentage of your income over time and what that means that I might get back significantly more money than I lent you I also might get back last so I'm taking more risk in the process of giving you some money but in aggregate because on some borrowers I'm GonNa make more than I ever lent through through the income share. It works out for better from public policy perspective. And from the whole into what happens when you shift from kind of a credit instrument to an equity instrument in capital markets you are mechanically accessing a different Beta we talk about an equity risk premium. That's different from something that you see in credit even something Corporate Brett credit where you're taking a duration bet spread. Bet You're actually transforming a little bit the nature of that risk profile and so here if you imagine that student loans if if they were priced accurately which we know because of the government distortion. They're not there was some kind of underlying bet on aggregate sort of economic health. That's kind of driving having it. And then some idiosyncratic thing that's through spread kind of tied to you which is not at all how these loans priced by the way when you go to income share agreements. It's just much cleaner. The people people who do it are actually underwriting. You their underwriting where you went to school what your major is what you tell them. You're going to try to do as a career. What grades you got? You can imagine a very extended data data set of things you get kind of higher resolution risk pricing and. That's a thing that I think. Technology does very very well as it creates a much higher granularity at which we can price arrest and so an ice says at least in theory you can see this where were underwriting an individual person and we're doing it in a way that is hopefully much higher resolution than you would get even just applying for a personal loan. This exposes investors at scale to like different kinds of Beta than you've been able to get before student loans pretty large part of the capital ecosystem. You can buy student loans. Kiernan's Asians you can buy student loan debt but if you imagine that I can buy different kinds of income share agreements across different geographies vs across different age groups across different majors. Different career choices. I could get exposure to a BETA. That was the earnings of doctors in the United States. Eight and what an interesting way to express a thesis about healthcare so today if I have some view of what's going to happen as an Alpha view with US regulations around healthcare. There's the basket of stocks. I can buy their mighty baskets bonds I can do. There's probably some exotic political derivative I can buy from an investment bank from Fisk kidded. Enough maybe I just say you know what I think Dr Turnings are going to go down. How would you ever play that? You couldn't but if isis existed you could at scale and I think there will be lots and lots of those kinds of things that will will be available to you and so you get both kind of the Beta of broadly. Speaking just wages wages turns out to be a weird thing. If you wanted to just say I think wages in the United United States are GONNA go up. How do you directly express that bat will? You're basically going to do it through some kind of inflation instrument and it's not perfectly linked to it again if you're short labor-intensive businesses along tech imagine a million of these kinds of things and that's actually a really good example. Let's say you wanted to bet on wage inflation in the San Francisco. Oh Bay area long in short it in New York you could never make that bet today. But if isis existed you could at scale and I think this will happen because it's almost every player in the student loan infrastructure doesn't like the way the system set up today from the colleges to the government debt providers the only people who've actually like are the servicers and even they are starting to realize that the business is starting to sort of topple over under their own way so I really liked Daniel of spotify's conception of seeing around corners business leader that his job was to anticipate the major state changes to three years down the road and begin preparing for them now so the next question is about professional investors. Let's say it's kind of as a category big institutions but also wealth intermediaries so are as or wire houses financial advisers that are managing your money on behalf of others. How would you grade them today? In terms of preparing for a lot of the things that we've discussed thus far and beginning to do the work so that they can position Shen their pool of investment assets in this sort of we'll call it next generation of investable things. Yeah I love that phrasing and it's actually freezing. We talk talk about internally of seeing around corners one of these work hung though is sometimes adventure you can almost see around too many corners and you get sort of too far forward because change can be continuous. Some things just kind of keep happening and twenty years on the trend has been the trend. I mean e commerce. It's sort of just this steady thing that's been happening happening for twenty years. Markets didn't price it continuously markets priced at right discontinue Asli but the underlying has been very continuous. Then you see other sorts of changes where you're just never expecting it and you sort of wake up a year two years later and there's been this enormous inflection. Social Media's probably looks more like that than something like ecommerce so one of the things I would say is the investment industry isn't actually responsible. I would say for seeing around two or three corners because unless you're actually running money on kind of thirty year timescale and there's very few people that even formerly charged with running money on a thirty year timescale and then there's a subset of that they're actually succeeding at that many of running money money name like all of them right. Their businesses and their job in some sense is just not that kind of timescale. So if you're talking about a five year return target which is already that feels like a really long time for most people actually think most of these players are not doing terrible job. I think they're doing okay because a lot of these changes that we've been talking about. I think really will obtain over a very very long time. And so unless you're in the business of trying to capture Alpha associated with those changes which we are in other venture investors are. It's less relevant for you. But I think let's say you're starting a career. You're in the investment management industry. I think it's very relevant for you. Because if you're saying hey I want to be an investment professional for fifty years of my life or thirty years of my life. Suddenly this stuff does matter in. There's not a lot of people today. who sort of are really excited to start a career as a discretionary effects trader on Wall Street those those jobs are vanishing? That was a great path to making a lot of money if you started doing that in the eighties and nineties today. All those people are being fired from their jobs. If you're a discretionary bond trader. No one is hiring you. No one's hiring you out of college do that job. No one's hiring you if you're ten years twenty years thirty years into a career and so if you're a young person thinking about starting career even if you're ten years at Yorker I think these things start to become relevant but if you're an ARA and your job is managing a bunch of money for those doctors. Wages ages may decline over the next generation. I think they largely do a decent job and I think the technology industry has delivered a lot of new solutions for them to access lots of asset classes classes. I think the challenge in those jobs has actually gone up because there's been such a proliferation of information and of opportunities downstream to people that the complexity city as an investor in those jobs actually gone up a great deal at the bottom of what most people actually want. Most people don't really WANNA beat markets. They just WanNa make sure that their neighbors burs not beating them. At the end of the day I mean that's really what dries most I think of retail investments and somebody's shadow cocktail party and their neighbors GONNA talk to them about this super hot stock therein or this Angel Investment there in or maybe it was buying gold when that was a new thing to do and maybe it will be buying income share agreements remits at some point. And that'll be the cocktail party chatter. And then you'll see it become a thing and Ra's will get hit with wait. Why aren't I in an ISO- fund and half the what's a nicer find? Ah Big funny you should mention it. I have one on the shelf through this platform and so forth but I think for most people. They're getting something decent they're just overpaying for it from Arias and technology will drive all those costs down and I think that's really the challenge for most of the investment industry. Is that the sort of fee extraction is really really too high for what most people are getting which is largely a commoditised kind of service and technology will drive that down for some people. They're happy to pay the fee. Because it's functionally like therapy. I mean so. I think they're doing an okay job but there's room for improvement. What do you think will happen? Interesting trends to use specifically in the asset asset management business. So we're GONNA come back to some of the other Fintech verticals but because that's my world. I'm always curious. How investors like you think about the landscape specifically through the technology allergy length in asset management specifically? Yeah so I think on the one hand things are moving very very quickly and on the other. It's unclear whether it seems to matter. The big thing I would say is the the convergence of traditionally discretionary investment strategies with more systematic and quantitative approaches. has happened much much faster than I would've predicted five years ago. Some of that's just been a function of younger people taking on jobs and anybody who graduates from college today can code effectively. They're getting jobs on Wall Street. And that is just a cultural shift in what is expected in any of these jobs across the board relative to the people who've inhabited those jobs for a a longer period of time. I sort of think back myself. I graduated college as a philosophy and political science. Double Major. Didn't know how to code not especially quantitative. I don't think I could get a job at an investment bank today although maybe because those jobs are a lot less desirable today that they were twenty years ago but the skills are quite different so that kind of combined with the the fact that most active managers have not done extraordinarily well over the past decade. I think has driven a search for will. What are we missing and it seems like most folks go oh it must be the data it must be the quad? That's what we're missing. Let's add some quotes. Let's add some data. Maybe that'll work. Maybe it won't but that seems to be a very real trend in the front office. What are the tools I can deploy to help? Surface things that are harder for humans to see that's kind of the big difference between discretionary and quantitative tatum and systematic approaches. Is that humans I think are always always longtime but for the moment are clearly better at the big thing that's happening. In markets the big trend break take the big themes that are going on but a system can do things that humans can it can identify lots of small things at scale over and over and over again reliably and the success of quantitative systematic managers over the past decade or two has really driven a mindset change. I think in the way a people who think about investing offically are approaching kind of the next generation of businesses. And you see it in really every asset class. I mean even in venture capital there are firms that are trying to be much more technologically forward fixated and they're attracting assets. It's a good story in addition till probably working so I think that's kind of the biggest change in the front office. I I would say in the middle and back office in asset management. One of the things. That's happened partially as a result of blockchain's being a meam over the past five years ears is that there is a renewed focus on wait a second there seems like a really inefficient and high costs stack here to just execute and settle transactions. Maybe we can drive a lot of cost out of that stuff and sort of free up. Capital for better productive uses within the investment management. Business kind of get back to this kind of war for Alpha in the front office that it seems like has largely not gone very well for most folks over the past few years and so you're seeing a tremendous amount of investment there technologically. And again. This kind of continued lift out of talent the financial services industry. It's a big chunk of GDP between fifteen twenty percent GDP. Part of that is because it's a really lucrative hi paid sort of sector historically and it's hard to know exactly why I was such a high paid piece of the system but it seems like you're GonNa see just just tremendous wage pressure in the financial services but our pressure downward pressure yet tremendous downward pressure across the board. Because technology kind of commoditised monetize is a lot of these functions. And you get the elimination of a lot of jobs and then you get a small number of much smaller number of humans required to kind of keep the machine running those people end up making a lot of money and they essentially in some sense will capture the wage that all the other people sort of had to lose but it ends up being the technology technology where I think most of that value goes over time more so than a lot of people kinda pushing paper and that's fundamentally what financial services has been as a lot of paper pushing and that's just one of the the big things happening in the venture world. Is it identify any human paper based process. That's GonNa go away through software. It doesn't even have to be fancy. Ai Machine Learning wingstop. It's just pure workflow. Software will kill those kinds of jobs and kill those kinds of processes overtime. You mentioned it so I have to ask your opinion. What is your take on the current utility Ian sort of state of the cryptocurrency and blockchain world and markets? Yeah you know I mean I would say we have been wrong about the stuff jeff from inception okay. So I'm always a little hesitant to give a stronger opinion. A high conviction view what I would say is as yet to hear and so I'm going to circle back to your question which was about cryptocurrency. I don't make a meaningful distinction between. There's some people like well. It's not about cryptocurrency. It's about the blockchain. I think that's kind of a silly. Elite distinction. Trading tradeable instruments on a blockchain is a specific use case for a blockchain. I think it turns out to actually be the best use case of a blockchain is some kind of tradable store value. And I say that because we have not heard a single pitch in our history and in fairness we don't focus that hard on this stuff. We've not I heard a single pitch where I kind of heard it. And somebody said we're going to do X Y and Z and were doing on a blockchain and said well if you didn't do it on a blockchain and you just did it in a sequel server. Is it really that different. What's actually better? Because you're doing this on a blockchain and that question seems to throw blockchain people sometimes but I find it helpful if you substitute due to the word blockchain anytime you hear it for alternative database technology which is sort of a cheat. Is Her magic in it. When you stop saying the word blockchain and suddenly you say alternative database technology and IT turns turns out? I don't think there really is because what you get with blockchain's the foundational idea is this idea of a trust Louis permission less permission list is maybe a better. There isn't a central troll of thority. That's going to be responsible can tell you what you can write to that database. That's right that's right that turns out though to be a kind of funny ideal I think of it in terms of markets markets. And you sort of go. Well what do you want from markets. Do you want a centrally cleared market or not and the interesting thing is centrally cleared. Markets are there's there's more liquidity there in some sense more efficient and they're safer places to trade you pay for that. There is a cost for that but there are a lot of advantages of centrally cleared markets and notwithstanding outstanding the point I was making earlier about public markets versus private markets. There is value in central cleared markets whether it's a card swipe on a visa the mastercard network or it's a futures trade there's value in this and so when you put things on a blockchain and it's a true trust lists permission list blockchain. It's not Oh yeah it's a blockchain but there's actually five nodes in their controlled by big companies which is just a distributed database. Not what the real sort of crypto people talk talk about. It's hard for me to see that many good use cases outside of actually okay. Maybe we WANNA have some store value that can be traded in that way and Bitcoin is actually not terrible for for that and I think there's a reason that bitcoin has the market cap in Crypto. Because that seems like a reasonable thing that there exists some digital gold that's outside the sort of Fiat currency system. That's outside the banking system. That is really hard to get access to short of having a gun to your head and forcing you to tell me Your keys which which is a whole other set of problems. This thing's been around a while now. Most of the time with technologies that are actually going to be foundational ten years or whatever we are you would start to see some use is cases and there are some the banks. Are doing things on blockchain's again I think they're versions blockchain's don't look like the kinds of blockchain's that were envisioned and in the beginning of truly permission list. Trust Louis Setups. They're still very very gated. And that might work. But that's just a distributed database with a handful of key masters as opposed to the idea of a truly permission list. You mentioned earlier. This idea of Robin Hood and maybe their brilliance was to take a very okay. Well established trend. Which is secularly declining commissions on trades? And just sort of jump start at two or three steps down the road to its natural conclusion which was zero. Talk a bit about at that idea as a business model for startups and whether or not there are other trends that are sort of inexorable that you think young companies could take advantage of in the similar way. Yeah Yeah I think it is a powerful way for startup to address a market essay. Take a big existing market and find a trend. That's already happening or has been happening. I'm for a long period of time and just push it in your mind to the logical conclusion. And then just make your business model. Just go right to sort of zero commissions totally free trading. I don't know exactly. I mean if I had a long list of these I probably should go build one of those instead of doing what I'm doing but I think within financial services. There are lots of these kinds of trends that you can think about and one of the ones that's already happened is just actually very similar thing. robinhood in banking where the fees on banking services have largely. Come way way down. And so you see a whole bunch of Challenger banks that have said none of zero fee banking and we'll make money in some other way on the payment scheme you've already seen that happen in certainly betterment while front and Robo advisors like them are examples of this to of saying wait passive. indexing is going to be a thing. It's already been thing for thirty years. Let me just jump to the end and and say I'll build those portfolios for you for a very low price. I think in insurance there are probably lots of these kinds of threads that have been working their way through the system mm-hmm which is more and more refinement of risk pools. I think is a good example of it so GEICO has been this sort of incredibly successful company because they have both a much lower cost of manufacturing premia enter there just a more efficient operating entity but they also select very specific risk pool to be Geico driver picking good drivers off out of the risk pool. I think technology is allowing us to put more and more precisely underwrite and define risk pools in sort of tighter tighter and tighter bands. And so I think you will start to see that happen more. Broadly in a set of insurance risks as an example of that I think the other thing insurance is distribution distribution costs. Where and you've already seen this by the way that everyone kind of looks at insurance and says wait? Why am I going to buy young? People are very confused about this Eddie of walking into a state farm branch to buy insurance from an agent and on the commercial side. People who run small businesses are really confused when a broker shows up and kind. I don't want to take them out for a steak dinner to sell them a small business policy and so you've seen tons of startups. Get form that they will. No one's ever GonNa buy these people are just never going to buy brokers let's try to distribute it totally online and give them that kind of direct to consumer Amazon like experience and that kind of stuff of distribution. Russian is a pretty good natural end point. I think financial services though are little bit resistant to some of these trends because just think about the word financial services to the extent. You're interested in it. You're paying for some kind of service at the end of the day and while the commission's May zero through Robin Hood and Schwab and whatever else I think Schwab can look at it and say all right we can take commissions two zero. We're still going to make money on a different set of people who are going to pay US something for the advice. The advice isn't free in. That's harder to make free so there are these kinds of trends. But I think it's just full path for entrepreneurs to go down one of the trends that certainly adjacent caused by. INDEXING is the fee reduction on the asset management side. One place where that really hasn't penetrative is in the private market so VC. And it certainly has happened. To hedge funds hedge funds average fees have come down but as far as I know private equity firms even very very large ones that have scaled. That could kind of Paul Van Guard and pass some of that scale onto their customers in the form of lower management fees. Let's say but certainly not. VC The kind of two and twenty model has been incredibly sticky and it's worked in twenty ventures like two and a half and beyond asset class at the right uh-huh and so that's worked because the underlying returns have been phenomenal. So you're taking a piece of a pretty large pie. What's your view on? Kind of the future of. We opened the conversation station by talking. About how much more important non-public markets are going to be. These are still very high fee hard to access places with very non normally distributed returns. A lot of the best returns come from a couple of firms so talk about those kind of two ideas on how you think about. Yeah so I think all of that is true and I think that will make feeding oppression in private private markets a little slower so public markets obviously tremendous decompression and we are involved in the hedge fund world wells prime markets world substantial compression. That's not going away way. I do think you're starting to see a clearer. bifurcation though in liquid markets where the premium Alpha's actually are going up in price. Interestingly because there's a scarcity value to it they're durable and so there's more demand than supply so people can charge kind of whatever they want for it. You might see the same thing happened on the private side. But I think discontinuity in the distribution of returns that you articulate is actually in some ways more extreme in private markets at the moment and so it's harder to identify what that durable all source of Alpha is going to be in kind of the dirty secret about the venture industry in particular is that there's almost no institution that's reliable and there's one in sequoia but very very few less than ten for sure institutions that have durably reliably delivered extraordinary results in venture over time. It could it just be that something about the asset class could just be people check out and retired. Who knows why that is so? It's hard to identify which firms could command real premium prices but I think the flow of capital into private assets and in particular private alternative managers will prevent that fee compression. One of the things that drives fee compression as money's walking out the door let me lower prices kind of attractive. I mean it's also blind man. There's a market for that just like anything else. But I do think you hit on one of my favorite ideas which is who's WHO's trying to build an index of these kinds of markets. And if you take venture capital as an asset class it's not a big asset class like one hundred billion dollars a year in the US us until you can kind of go well What would it take to really index that asset class and there are lots of allocators that are call it? Let's say I've actually had this conversation with a pension. That's like a two hundred billion dollar pension I was like. Let's say you wanted to index not the entire venture asset class but. Let's make a simple assumption. John and say you as an alligator can figure out whether or managers in the top half or the bottom half of the quality distribution and that is the only any assumption. That's the only prior. We're GONNA make that you can figure out whether manager a is in the top half or the bottom half of the quality distribution of the venture managers which feels like man. If you can't do that get out of the job so of all you did then was say okay. I can determine what the top half the distribution is our Banham at fifty billion. Okay so what would it cost to buy one percent of every manager of all that every year. Okay it's not that much money money. It's five hundred million dollars which is a tremendous amount of money. But if you're a two hundred billion dollar plan sponsor five hundred million dollars a year over a three year. Cycle Michael is a billion five. That's a one and a half percent position for you which is not a big position in your aggregate portfolio in fact if you look at the endowment models where they run anywhere from five to twenty five percent in venture as an asset class. It's still a tiny position and you could probably the execute on the strategy. I don't think it will be a manager. That does this kind of thing. Because the way the market works it would be too hard to actually get to the underlying assets but in an alligator could actually do the indexing work and buy an index adventure. And they can say we're GONNA get out of the manager. Selection business in this asset class is. We don't need to do it what we really I care about is actually just getting the underlying Beta of innovation and capital formation in this space. Now if somebody does that and you looked at that then over time you could go Maybe that could actually be a manager that accomplished that and said Hey I have five hundred million bucks a year. I JUST WANNA buy tiny pieces of all these companies companies and you could show up at startups and do that. I think in some sense the folks who in the early days of Y combinator were saying well backline every Y C deal. Were sort of. I'm trying to do this to us like they're angels tried to do it. I mean the challenges venture as an ESA class in aggregate. It's not obvious obvious that you'd want to own the Beta. Might the entire Beta but again if you could pick the top half of it you clearly want to own it and I think that's a reasonable assumption to make that. Somebody's fiscal could pick the top path. I mean it's such an interesting topic because in many ways it's the same topic of every kind of investing UNIFIL public markets indexing works and it's driven largely by a very small subset of doc of the returns come from there's a parallel distribution in public markets just like in privates the benefit public markets is no one can stop you from buying those stocks but if benchmark and sequoia and founders funded a few others have privileged access to that right side of the power law and an index fund can't get those then prospect of index fund adventure sounds lousy to me and so there's like a privilege of access problem that I think would be really hard to overcome because why would those firms give it up. I mean it's completely fascinating idea and probably is true for all of this stuff if you were talking about in terms of making stuff legible accessible liquid but it's I think an important topic for al Qaeda's one. I think the really interesting thing is that in a typical market you would go that sort of access privilege which describing I think is true. Would disappear in the face of a capital flow because somebody would just push the price enough and say yes. I understand that you. You Awesome Entrepreneur. Acts you don't really want to sell to me because I'm not as cool as other people. But what if I just pay you a heck of a lot more choices like okay now. Well maybe I'll sell to you but what's fascinating is that actually doesn't seem to work in the venture business and we have a founder in our portfolio who took money from venture firm at which he internally Arnold believed was a forty percent discount to the market to get that firms brand on his capital. It wasn't just getting the brand. He thought they were actually over the long run. I'm going to be more valuable. But what's fascinating as before he did that. He picked up the phone and he called a bunch of entrepreneurs that that same firm had also backed and they all said Yeah. You're going to take a forty percent discount here but you'll make it up on the back end because you'll actually get a premium when you raise your next round a couple now. I sort of hear this story. It's obviously mostly impossible to know whether this is true because there aren't good counterfactual out there in the market. Because it's always going to be a single idiosyncratic story. It sounds probably not true to me but the power of some of these brands is strong enough in the minds of entrepreneurs because it's not that transparent of a market. There's not that much Angela Quincy and you don't really know whether somebody's adding value or not that. There's some durability to these franchises even in the face of steadily increasing price it remains to be seen though if that power will persist as the flows get bigger and bigger and bigger and I believe were still in that period that the the net inflows to venture are going to get bigger and bigger and bigger and I think by analogy if you imagine the private equity world in like the early two thousands. Everyone had your private equity. Sounds like wow this has been really big. It's way bigger than we ever thought. And what's going to happen in sponsors or buying deals from sponsors and they're paying these crazy prices says fast forward to twenty twenty from two thousand two thousand one thousand two and I was doing private equity back then and it's way bigger than you could have possibly imagined at at that point in time all the limits that anyone would have said about. There's no way private equity can get that big. It's bigger and I think venture will do something similar. What other interesting verticals in Fintech have you most interested or excited for example? You haven't talked about really payments or something like that more specifically a little bit about banking what other verticals super interesting to you today. Yeah so we think about the landscape. As sort of five categories payments insurance capital markets and investment tax personal finance and then kind of banking lending credit and then we would add margins to that some things like e commerce infrastructure enterprise financial services and things like that at the big level. There's something something happening in kind of all of those categories. What tends to be more interesting to us are almost more horizontal themes that work across all these things so one big horizontal Donald theme that we think about is if you magin fifty years ago what it was like to run a big company and you think about the financial functions that that were involved? They're fast forward to today. A lot of functions that used to be reserved for just really big enterprises have trickled down to small businesses and ultimately only two gig workers and freelancers which is this real big trend that we don't think is going to change. The future of work is going to continue to be a kind of atomization of jobs where you're never going to work for someplace for forty years unless it's kind of your own thing most likely and people will move jobs more and you'll see more and more consulting in freelance type. Things things. And so the example we use his payroll fifty years ago. There was a payroll department inside big companies and there was sort of some warehouse full of people in the movies as you sort of picture. All these women with big glasses shuffling paper around and you'd call the payroll department and they'd send you paper checks and like this is complicated calculation. Now it's like you could imagine that you just software does it for you and everyone can run payroll doesn't matter what size your as an individual you can run payroll and do these things but there are more subtle things like counts payable corporations still have. AP Departments then companies do and yet technology is making that easier. Even at the level of a freelancer were. quickbooks can do this kind China stuff for you. So one of the things were kind of like what are the functions that still exist. Only big corporates can do from a financial perspective. That will eventually so you make their way down to individuals finance turns out to be one of those tax turns out to be one of those. That's kind of interesting. big corporations have released vindicated tax and rich rich people have released skidded tax advice and yet turbotax which is an unbelievably good product. Intuitive remarkable company. It's still not approximating the same degree of fixation. Education right just look at effective tax rates. The evidence yeah totally and so there's all kinds of weird inefficiencies that exist because you've needed historically a degree of scale to deliver these kinds of financial functions and I think all that stuff will evolve in we're invested in a bunch companies. That do this like health. Savings accounts is a good example of something that if you're a freelancer answer a gig worker. That's been sort of difficult for you to set up those kinds of things but now technology and startups will make things like that easy so future of work and all the permutations as it roles through all these kinds of things. All these categories is an area of interest for us. I think another area that we pay some attention to before you that just on future of work one of the things. We also think a lot about in regard to this idea of big corporates and so forth I mentioned payroll. So there's been a big thing infantile over the past couple years around essentially payroll all advances and you sort of go okay. In investing we can settle A- complex derivatives trade tepes four and yet most of settled payroll he fourteen fourteen okay. It doesn't make any sense. Might trade with my employer is. I'm giving them Labor. They're giving me back money for it and yet that settles t fourteen some kind of giving them float and I'm taking some risk associated with that but yet if I call up an investment bank in trade is sort of very exotic derivative it's still like T- three and so there's been all these things that are created to to try to advance money to you as a worker whole bunch fintech startups that do this were invested in one. There's something embedded in that that picks picks up a couple of these threads and in particular picks payments of saying. How do we make faster? How do we make more real time? A lot of transactions that historically you have taken a couple of days to clear and to settle and again back to the city of sort of central clearing and payroll is a particularly interesting category of this. Because it's such an important important part of our universe it's heavily regulated. It's massively protected. We've all these rules around employment that don't exist in any other part of society because collectively selectively we've acknowledged it is hugely important to the way the world works that people are GonNa go to companies and get paid. You get your health insurance through in this country. And so we can't discriminate and there's all these things you can totally discriminate in your own house but you can't the people in your house work for you. You don't have to be friends with people from other religions and races and so forth you don't want to but you can't do that if you WanNa hire people and very good reasons for that by the way that makes sense but yet you you don't have to pay people necessarily when you're supposed to mean in theory. You could run a company if you wanted to. And you chose to pay people t sixty it would be a weird state of affairs. I'm actually SORTA surprised at some of the investment banks haven't tried to do this yet where they would just say. Yeah you make enough money you can cover your whole life partners which is going to pay you once at the end of the year because why not anyway all the stuff that happens at that moment of we're gonNA transfer your earnings back to you. You could imagine a whole bunch of financial services that happened there at kind of the point where Labor in value are actually exchanged and I think uber and Gig economy is really good. Example of how this works where it's it's a much tighter transaction of I did the ride. I earned acts. I can get paid faster. We know exactly what's happening now. We're going to route that. Money becomes much clearer for knowledge. Workers where it's like there's a much looser connection between what is the work you did. And what is the compensation you earned. It makes it sort of doesn't feel as strange range that it shows up randomly every two weeks in the bank because the hours. I work today. The things I did today is a knowledge worker much less connected to sort of the value of my labor. But I think over time in this perhaps connects to some things we were talking about earlier around legibility and markets there's going to be more legibility around who's actually adding adding value in your company. And what are people doing on a day in day out basis. That's actually moving the needle and all of these things have the potential to really change financial services. You you can imagine a state of affairs where a company says okay. We can actually figure out in real time. WHO's driving our bottom line and we'll pay you much more tangibly tangibly in real time and there's something about getting paid faster that people like me and they're literally apps where you just get paid? You pay a fee to get your money faster even though that's kind of a rational in some way and so you could imagine it changes incentives in the workplace if you got paid a little bit faster so payroll and the moment where Labor in value kind of exchange change feels like an area of focus for us so that's one category the second thing I would say that we're interested in is what I would call emergent financial services and so what I mean by. This is as you can imagine software and we've talked a lot about software so far that offers financial services almost as an ancillary thing within that context and so a lot of what you're seeing in payments companies are embedded in some enterprise for one reason or another and then later I turn on a ping function and so actually the payroll advanced company company. That were involved in mechanically does this. They sell software to a particular category like restaurants and shift work things and then they're paid SAS revenue for that and it's a beautiful the software but then behind that they can turn on some payments functionality in incremental revenue from managing payments. And there's a lot of that that's happening in Fintech right now. The last horizontal nothing mentioned is actually what I would characterize almost vertical play. which is this idea that you can create through technology more targeted affinity groups as customers some of the things? I sometimes talk about as a bank for Yoga instructors so you could imagine that at any point ten years ago twenty years ago today. Somebody at J. P. Morgan could say we're going to go build a purpose built bank for Yoga instructors and whatever it is that the particular financial services needs of Yoga. Instructors are and they've bespoke needs. I mean there are software packages that exist for Yoga instructors. We're going to go build a bank that just serves yoga. Instructors perfectly and you can imagine you spend a bunch of money you build this bank and then over time you get all the Yoga instructors in the World Bank with you will. That's probably not a good business. The amount of money it would cost you to build. That thing is not going to be recouped because the size of the Yoga instructor market while. I'm sure it's growing very quickly is still not big enough historically to have warranted what it would it cost to build the Bank of Yoga instructors but what if my conscience. It doesn't actually cost that much money to build the Bank for Yoga instructors because you can outsource the ledger. That's going to take the deposits to whole fleet of infrastructure companies. That are being started and you can outsource the marketing and the cat cost to a bunch of players that are really really efficient at targeting yoga. Instructors I and you can outsource the user interface designed to some firm. That's GONNA cost you a little bit of money but you kind of get the joke that if you can build that thing way the way cheaper today than it would have cost a decade ago which is absolutely true. Maybe suddenly the Bank for Yoga instructors actually an economically viable idea and I I think. We're this becomes conspicuous as you go. We'll don't build a bank for Yoga instructors but building for healthcare providers. That's a big CAG- or build bank for first responders. That's a big category. Sorry build a bank for military professionals which guess what that turns out the big category and lots of people have done that or build a bank for venture capitalists which it has also been done and that worked out pretty well is that Silicon Valley Bank civilian first republic. Yeah Really First Republic and so I think this kind kind of idea you'll see this happen more and more and it changes a little bit of the risk profile if your city or Barclays or chase or wells that instead of worrying about the big big horizontal players that are going to set. That are gonNA come after you. Now you have to worry about death by a thousand cuts sort of thing and this is a little bit of a classic. Innovators dilemma approach there. Some some small group. That doesn't seem like a big deal. Where okay I can lose those customers but then realized that's happening at scale and you talked about investment management in our Arias and so forth doing a good job? This is a thing you could imagine where somebody says I'm going to build an. Ria just serves police officers lot. aww police officers in this country you can imagine the marketing campaign. That would work for that. And I don't even know what the investment strategies Taylor police officers would look like. I don't know if they're long gone on. Stocks are short gun stocks. But you can imagine somebody spends time in figures this out and figure out how to market to that demographic at scale how to serve that demographic at scale and that kind of thing thing. I think we'll be a lot of the future of financial services such an interesting set of thoughts. Maybe if I could summarize a lot of the things I've learned from technology investors over the last eight hundred fifty conversations I've had is focus and this affinity group kind of crystallizes the thought for me focus of the product and focus of the market that they can be smaller seeming winning at. I actually probably leads. The better business outcomes than try to cast a wide net super interesting. Some of it's a practical thing too about. How are you going to attract capital capital to keep going? Because you're not gonNA make money fast necessarily and if you start with something small and can show. It's working you can show faster growth a lot of the time which which then in turn unlocks incremental capital to let you kind of keep going down those paths and so yeah very much things start small and then there's the snowball that just starts compounding and in some sense the whole theory of venture capital is look. We're GONNA allow some business to grow significantly faster then it's kind of Roi we would otherwise let it grow if it retained earnings and just kind of compounding at that rate by just pouring money on the thing to let it grow at not the Roi but essentially the return on margin the return on marketing margin. Very very different kind of cost profile and in some sort of venture capital Fantasy Hennessy. You don't change anything about the cost margin of business and all you're doing with incremental money is just literally pouring into top line growth and marketing funnel that then just run through some economic waterfall at the bottom of anything using improving margins to allow the business. The sort of effective are we to go up on the business over time as a practical matter. What tends what happened with these things as you give them more money and actually are? We goes down because they invest more in product. Because they're not optimizing for the bottom line and that's very much a symptom of a a surfeit of capital capital that exists in the world today. But yeah if you start with a niche and you stay focused on it you kind of figure out what the true economics of the business look like in that category and then you go. Hey this worked in this thing maybe we can do something else so we talked earlier about landed. We start off focused on schoolteachers. That makes sense there. But you can imagine the adjacent agencies that start growing from that market and the best entrepreneurs the absolute best founders have a have almost speaking out of both sides of their mouth where they can sit across the table from an investor and say. I'm laser focused on this market. This is what I'm GonNa do but by the way if you just let your mind run a little bit. Here's all the other stuff off that once I've really crushed this thing takeover and that seems to work over and over and I love it raised cab. I feel like we could go on for hours but we both of other appointments. So I'll ask my closing closing question for everybody which is for the kindest thing anyone's ever done for you kind of thing that anyone's ever done for me by my wife for marrying a common one. It's hard to put like a a specific moment on it as I'm kind of reflecting on it I feel like I'm fortunate enough to have just been exposed to so many in different successful people throughout my life for lack of a better way of putting it whether that's personally successful financially successful spiritually successful accessible. Whatever it is we've just been willing to kind of share advice on what's mattered to them and what they've learned that? There's probably a constellation of these kinds of moments where someone said. Hey this thing you're doing that's working or that's not working and so I think there's probably a handful of moments I can think about where friends have been willing to say. Let me step out of a comfort zone and tell you something that you don't maybe no one's told you or maybe you didn't want to hear maybe you didn't know about yourself or something you're doing. And that ultimately as sort of act of kindness kindness is Kinda funky work what is actually even mean to be kind and one of these. I sometimes say as you learn the real truth about people when you ask them to do something in it costs them something like it really costs them something. That's when you really know what what somebody's about are they going to cost themselves something to help someone else. So maybe that's a good definition of kindness if kindness cost someone something and you're putting something at risk whether it's a relationship or some self image whatever it is and so I think most of the moments of kindness that can reflect on have been people willing to put their self image or our relationship at risk in some way. I don't know that I can come with specific one on the spot. Though I love it I don't think anyone's ever given Meta answer like that about defining kindness. So one hundred fifty six episodes in or whatever. This is really interesting take on it loved our conversation thank you so much thanks. Really appreciate it Everyone Patrick here. Again to find more episodes of invest like the best go to investor field guide dot com forward slash podcast. If you're a book lover were you can also sign up for my book CLUB AT INVESTOR FIELD GUIDE DOT COM forward slash book club after you sign up to receive a full investor curriculum. Right away and then three or four suggestions. Serb new books every month you can also follow me on twitter at Patrick. Underscore Osieck O.. S. H. G.. If you enjoy the show please leave a quick quick review for us on itunes which will help more people discover invest like the best. Thanks so much for listening.

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