Transcription
Read Shakespeare, and he pretty much covers the human condition. It is [music] we humans that I need to study if I want to get really good at investing.
Decart did us a disservice by removing mind and body. I might be able to put together a group of people to solve mind-body problems, even [music] if they don't believe it's going to work.
The way you built your finance empire was through writing these series of books. >> Markets change minute to minute. Uh, human nature barely budges millennia by millennia. Arbitrageing human nature is the last sustainable edge. >> So, I'm going to read you the three, three of the key predictions you made in that book. >> Mistakes were made, and yes, by me. >> Yes. Yes. >> Small cap stocks. Oh, it was so wrong. [laughter] Value stocks. So wrong. Looking back, that probably shouldn't have been a physical book.
>> It's rare to find someone who combines action and contemplation. And that's my guest, Jim Oanison, a legendary Wall Street financier who has an unquenchable thirst for the humanities as a student, patron, and writer. I met Jim a couple years ago when [music] he first interviewed me on Gerard, and we became fast friends because of how rare that combination is. And then I met one of his sons, Patrick, who's also become a friend. Patrick studied philosophy and is now one of the top venture capitalists. And then I thought, huh, rare still. But then, as I was preparing for this interview, I came across a book written about Jim's grandfather, I Oanison, who was one of the most successful oilmen in the 20th century. He trained in the liberal arts. He was the then largest donor to Notre Dame, who endowed the [music] humanities building. It's rare enough to synthesize action and contemplation in one individual. How does one sustain that across now four generations? That's what we [music] will begin this interview discussing before talking about how Jim's love of the humanities shaped his very career across finance, media, and philanthropy.
My name is Jonathan B. I'm a founding member of Cosmos. We deliver educational programs, fund research, invest in AI startups, and believe that philosophy is critical to building better technology. If you want to join our ecosystem of philosopher builders, you can find roles we're hiring for, events we're hosting, and other ways to get involved on jonathanb.com/cosmos. Without further ado, my friend Jim Oan.
How does not just an individual but a family sustain a deep integration between action and contemplation, between a life of entrepreneurship as well as a deep engagement with humanities?
>> Well, I think it's the old nature versus nurture, right? Uh, I tend to just because the evidence is much stronger on the nature side. Uh, but nurture has a lot to do with it as well. Um, our entire family absolutely loves reading the great books, history, all of the various uh aspects uh that traditionally business types are not interested in. And you know, there's a practical reason for that. Uh, read Shakespeare, and he pretty much covers the human condition better than any of the textbooks.
>> Yeah. I mean, you've got it all.
>> And that was kind of where I got my first idea that it is we humans that I need to study if I want to get really good at investing. Um, one of my jokes is uh the uh markets change minute to minute. Uh, human nature barely budges millennia by millennia. Arbitrageing human nature is the last sustainable edge. And I got that like right out of Shakespeare. Honestly, "A thing is neither good nor bad, but thinking makes it so." And uh, it was just as far as the environment part went. I was incredibly lucky. I grew up in a house just filled with books, filled with music, filled with sort of all of the things that you would more anticipate to see in a college professor's house.
>> You begin one of your uh essays that you wrote with a Goethe quote. "Letters are among the most significant memorial a person can leave behind them." And then you go on to describe um your habit of writing letters to your children even when they're you know, just born. So tell us about the rituals of the Shaughnessy family that that sustained this deep collaboration between action and contemplation alive.
>> I think that the rituals were always um driven by just voracious curiosity um and just wanting to know about things. And one of the things that I thought about when I started the letters to my kids, what we did was I started writing those. Patrick is my oldest. So when he was six days old, I wrote him his first letter. But we always planned to give them the letters uh on their 21st birthday. And I have two daughters as well. Um, and the purpose behind that was not only so that they could see how I changed as their dad because I was 24 when Patrick was born. Um, and I guess I might have been in my 50s when I wrote the last letter to my youngest. Um, but I I I felt it was I I think that much of history is lost in the edit. And I'll give you an example. Uh, well, I wrote the letters by hand and I wrote the first one and let it sit and then I went back and reread it and I'm like, ah, I misspelled this. I, you know, this sounds awful. And then I thought, okay, I'm going to edit this. And then I had the thought, no, let them see me as I actually am. We lose a lot of the essence of a person when it's highly polished. When it's now, of course, if I told you I'm writing a fictional thriller, and of course, the book for a great number of people has to be very highly polished, well-edited. But when it's a familial uh communication, what I felt was going to be more valuable for them was, hey, okay, this is what Dad looks like at 24. This is what he believes. Let's see how that changes over time. It was not a diary. It was basically kind of lessons I hoped that they would learn.
>> Yeah, that that's so interesting. Um, when I was 18, I started filming videos for my future children on on my birthday. So, on my 18th birthday, 19th, I skipped, I missed a few years, but >> And I'm planning on showing them [laughter] Exactly. >> And I'm planning um, I'm planning uh to show them on their 18th birthday and their 19th birthday for that very reason. Wonderful. And I think it's precisely as you say, because the letter writing is a lost tradition. When I, I was just in Tuscany studying Machiavelli, and one of the most famous letters in modernity is a letter from Machiavelli in his state of exile to his friend, I believe uh Francesco Vettori. And all he's doing is describing his daily routine, how he goes in the morning and he takes care of his like wood cutting business. And the the part that people always love is when he goes back to his home, he takes off his dirty work clothes, and he's he's coming home to read the classics, Cicero, Plato, and he puts on his best clothes.
>> Alone to to to digest. "These are his his words, the food for which is mine alone." So he compares this to a great feast. And it's precisely because of that authenticity, precisely as you say, that makes the letter so gripping because you're because it's a letter between friends, and you're and you're given a a real a real view into someone's life.
>> Exactly. And you know, there's so much artifice in the world today. I think that, you know, moving into the new age, authenticity, uh, the ability to be who you really are and let people you love, in my instance with my kids, uh, but also a wider audience. Try to be as authentically yourself as possible. In such a family that is very successful both intellectually and economically, entrepreneurially, historically, there seems to be a tension, almost a faction. I'm thinking about people like Wittgenstein, whose dad was one of the big uh industrialists. Engels would be another another example. And the sort of character today would be like the rich hedge fund dad and and and and the, you know, the philanthropy mom, and the daughter is like a socialist at Oxford. Right. [laughter]
>> Right. Classic.
>> Was there a kind of, I don't know, like faction or resent? How do how do you manage that part where where you know, the pure intellectuals might look down upon businessmen? The businessmen might might see the intellectuals as being useless or something like that.
>> So, I think that um it was all handled with a great deal of kindness and charity. Um, we we didn't tease people because of their interests. We were interested. Uh, I have a cousin who spent a good deal of his time basically trying to come up with a new concept for time. Uh, and I'm like, Kevin, uh, how's that going? [laughter] But never in an insulting or, um, derogatory way. Well, I was incredibly blessed to be surrounded by a family that just, like me, kind of had that voracious curiosity. And if if you're that curious, you can't help but go to the classics. And you know, so so we didn't even think about it.
>> It was the water you were the water. Yeah. We're like the old story about the fish who is a prince, right? And what's water?
>> Right?
>> And and so um we were just incredibly lucky that everybody had a variety of, you know, passions, obsessions, etc. And when we were all together, it was like it was almost like the the the best visits ever because I would talk to a cousin who was doing deep work on something I didn't know anything about. Um, you know, it kind of reminds me again back to environment. Um, I'm a huge uh classical and Baroque music fan and uh I don't, this is not a memory of mine, let's be clear. But I was told this by my mom and dad so many times it became a memory as well. Yeah.
>> Um, my my father had a stereo system because he loved music. Um, and one time he said he found me in the family room at five and sitting there like this, and he said, "Jim, what are you doing?" He had Bach on. And apparently I looked up at him and said, "Daddy, what is this wonderful music?" So like I was hooked. And then he was also into the big bands and all of that. So, I was able to get a musical musical education right there at home.
>> Right?
>> Um, one of my favorite quotes from Marcus Aurelius is uh, "Happiness is possible even in a palace." Because the the assumption is that the palace corrupts people, whereas most people's assumption is everything associated with the palace, power, glory, wealth, is what makes a good life. And so what I find so extraordinary over these four generations is not just how you guys have managed to keep the success alive, but also a deep sense of humility. Do do you think there's something about the the study of liberal arts, the joint study of liberal arts as a family, that has preserved u preserved that in a way that it wouldn't have been?
>> Oh, I think definitely. I think that um, you know, the the more you study the classics, the more we mentioned Shakespeare, um, you you begin to see quite clearly, even when you're young, the fragility of the average human being, yourself included. And I think that leads to a kind of generosity of spirit.
>> Not only for yourself but for others as well.
>> Marry that to my mother who beat manners into me. Um, and I I remember one of her rules was, "Jim, you treat the gas station attendant the way you would treat the president of the United States if you met him, with respect and with dignity, etc." And then she would always add a line, "Until they've proven otherwise." [snorts] Which I always thought was interesting.
>> But so,
>> You always want to keep the dagger just in case. [laughter] Yeah.
>> Exactly. And but but the point I think was really great and it led to a lot of the way I behaved in business as well. Um, you know, old-fashioned notions like where much is given, much is required. Uh, honor your word um on a simple handshake. It doesn't need to be in writing. Um, and that might sound quaint now, but I think that uh bringing those back could do a lot for society. I think that, you know, everybody's scamming, everybody's a hustle bro, everybody's all of these things. And I don't know that that is a sustainable path.
>> That's the entry point to our interview, which is this a fascinating kind of family history. I I want to spend the rest of the interview um really uncovering your intellectual biography and understanding perhaps the deeper currents that have motivated uh what you described as the the four acts in your life. So tell us about act one.
>> Well, so act one was, you know, learning all this stuff. Um, most of my learning, interestingly enough, was done independently. When I was in third grade, we used to have kind of a silly reading system called SRRA. And what it was was a box of mini essays, right? You would read it on the just the one side of a card, big card, but you would read the essay, turn it over, questions. You would answer the questions and then move on. Well, I loved it. I I loved writing. I loved reading. And so I got ahead of the other members of my class and went all the way through the eighth grade. And rather than take me to the library, they basically punished me. They made me sit at my desk making a Christmas tree with my hands. And I think that that was the moment that radicalized me. [laughter] Um, and I was pretty angry. And so I went home complaining bitterly to my mother, and she's rolling her eyes and she said, "Well, you know, they can't give you the special pro." She was always great at bringing you back down. My dad walked in. He was overhearing the conversation and he went, "What?" And I told him, and he goes, "He had he was on my side." So he said, "Come with me." And we walked into the library and he pointed to the Encyclopedia Britannica and he goes, "Read that." And I did [clears throat] because I just thought it was amazing and so much fun to learn about all these various things. And and that was the accelerant. I just became obsessed with knowing about things, not just knowing about them, trying to understand, and then where do they fit in my life, if anywhere, right? Like there's some things that are really nice to know, but they're not going to really fit in your life, etc. The ones I went really deep on were the ones like, oo,
>> That spoke to your soul.
>> And so it wasn't just facts. This is how Beatles reproduce. It was, this is what a good life is, or this is.
>> Exactly. So tell us about some of these uh philosophies that that really spoke to you, that you really went deep on.
>> So when I was probably 16, uh, I was in a library and I was perusing the Eastern philosophy section and I found Lao Tzu's the Tao Te Ching and read a couple of the chapters. You know how easy it is to read. You could read it easier.
>> Well, yeah, let's get to that. Um, so I'm like, huh, this looks interesting. Uh, at the same time, I was reading like books on emerging quantum uh physics. I loved that aspect of science. Um, so The Dancing Wu Li Masters was a classic back then. That was a little later. Um, but so I took it out, brought it home, and read it like five times. And I was young, and so I'm like, wow, this is really cool. I really like this. And you know, I had, if you read Schrödinger's "What is Life?", he has a sentence in there that says, "If you added all the minds of the world uh up together, the result would be one." And so this idea of non-duality, I found very fascinating. Um, and so I really went deep on Eastern philosophy first um and just found it. I I I really resonated with it. But then like as I read uh the Western philosophers, I'm like, that's the same, they're saying the same thing in just a very different way. But but I think that my love of literature and philosophy was also kind of dual-tracked on how can I apply this what I'm learning over here to other things that I'm really interested in. I think it's the synthesis of ideas that gets you into a really interesting space that absent these ideas over here, you'd never get to. As far as the Tao Te Ching is concerned, I wrote a piece where I was talking about how I read it every year, etc. And and then I said, when I got into my late 40s, early 50s, I finally began to understand it. And so I tell that story because I I'm an adherent to the idea you should reread your favorite books a lot.
>> Right.
>> Because
>> They have something different to tell you.
>> As >> They absolutely do. Right. Heraclitus, "The same man cannot step in the same river twice," because the man is different and the river is different. And another example on that, Zen and the Art of Motorcycle Maintenance by Bob Persig. Um, I read that when I was a teenager, loved it. Um, but didn't reread it until I was in my late 20s. I'd suffered some pretty emotional uh, devastating uh, problems because my oldest sister had died, my mom in 1989 had died, and I was really struggling. And so I thought, you know what? I'll reread this. Completely different take on the book given what had happened and transpired before when I read it when I was a teenager.
>> Um, same thing with the Tao Te Ching, same thing with even Shakespeare. Um, and poems. Another one I'm I love poetry. And so when I was younger, I memorized a hundred poems. Um, and even that proved incredibly useful and applicable elsewhere, right?
>> And and by that I mean it's like, oh, that that reminds me of Kubla Khan where where he's like, "A damsel with a dulcimer in a vision. Once I saw she was an Abyssinian maid, and on her dulcimer she played, singing of Mount Abora." I'm like, oh, that that he this works perfectly over here with what I'm trying to develop in this particular essay. So the the cross-pollination, cognitive diversity, those are those are the big wins. And you mentioned how you you are most pulled by the philosophies that have a potential to radically change how you live or how you see life, at least. What specifically from these Eastern philosophies like changed how how you see um life?
>> When I was younger, I was a proselytizer. I thought, my way or the highway. I am right, you are wrong. I have the truth, you don't. That's nonsense. And as I read like the Tao Te Ching, there's a great passage in there. You know, the the ca the worst king is feared and hated by his people. The next best king uh is uh respected. The next best king is loved. The the very best of kings has things happen. And then says, "The people did it themselves." And so it really tempered my youthful combativeness,
>> Right? Or or the inner authoritarianism and something like that, right? That you wanted to have a hand in all things.
>> Yeah. I don't even know that I was I wanted a hand in all things. It was like I thought that a lot of my early market work, like if you put yourself back in time, most people had no idea about quant, about factors, about any of that kind of stuff. Uh, tons of academic papers, but come on, who reads academic papers on Wall Street? You're lucky to get those guys to read the New York Post. [laughter] And you know, kind of that's when I discovered Ben Graham, and I'm like, oh my god, like this is fabulous. Um, and actually, you know, I was in the right place at the right time. If Graham had the access to computers that I had, no what works on Wall Street, cuz he would have written it.
>> You mentioned um both a deep engagement with Daoism as well as Zen Buddhism. Um, your grandfather was a quite devout Catholic, right? He donated to Notre Dame, St. Thomas uh including a building in Jerusalem, right?
>> Um, is that descriptive of your religious beliefs as well or?
>> No. Um, I I uh the joke with me was uh I I was first at the University of California uh La Jolla. Um, and then I decided because I had it in my head that I was going to be in the music industry or in the movie industry.
>> And you are now.
>> Uh, and I am now.
>> We'll talk about it. [laughter] But, uh, after two years, I kind of realized I'm an East Coast guy. I'm I'm not a West Coast guy. I'm definitely not a Minnesota guy. I loved Minnesota. Great place to grow up, but I wanted to be where the action was.
>> Yeah. And so I transferred to the School of Foreign Service at Georgetown and used to love playing uh poker with the Jesuits because the Jesuits are the the Catholic priests that I admire and adore the most. They're drinkers, smokers, but they're incredibly smart. But one of the Jesuit priests joked a after I said something having to do with Eastern and he goes, "Yeah, we're never getting you, are we, O'Anison?" [laughter] So yeah, I I grew up post-Vatican II. Um, and it just uh as as an earlier priest when I was an altar boy said to me, he goes, "We're just not going to ever get you, are we?" Because you know, like that's back during my very combative uh phase. And he he would ask me questions about like, well, you you seem awfully full of yourself and you know what you're saying about our belief system. And I'm like, I I I switched the argument. I'm like, well, like, do you believe in Odin? Do you do you believe in Poseidon?
>> Well, th those are myths. And then I would go.
>> Right. So, is it fair, and this is kind of my struggle, where I'm I'm pretty certain at this point for reasons we can get into that the naive scientific materialist view of consciousness being being completely reductive into matter is wrong, that there's more out there. Um, but my struggle with religion, maybe I'm hearing a similar thing with you, is the existence of multiple divergent and mutually exclusive claims towards authority. Is is that kind of your your struggle as well?
>> A little bit? Um, I look, I am not an atheist by any means. Um, I am uh curious. I I I suspect that there are other dimensions. I suspect that there are that potentially we do have souls. I don't know. I lack the authority to even have an opinion on that, in my opinion. So I like you agree that the materialist view is played out. It worked well for what we needed when we needed it. But you have to have the humility to know, how could I possibly know? And and so with me, it was simply the idea that myths, traditions, etc. are very important. Uh, they shape society. I I think everything is downstream of culture, religion also. Um, but I just had a very hard time with all of the catechisms and all of the rules and you know, the classic.
>> Really eating meat on a Friday, I'm going to hell.
>> Right. Right.
>> That just doesn't make sense to me.
>> Right. Although it seems like we're in a similar position where we think there's probably more and and there's there's a lot more that we don't know. Um, for me, that lights a fire and it's turning me into a seeker. And and so for the the spoiler for the audience, for the next few months or maybe years, I'll be focused on the great world religions, when I do Daoism, Buddhism, Hinduism, >> of course the Abrahamic religions as well. Um, does it does that light a similar fire in you? Are you do you have this urgent need to try to to try to answer this because what they claim about the consequences if you don't right is quite.
>> It's not so weird.
>> Yeah. [laughter]
>> So I I'd like to tell a story about Mesopotamia and Babylonia uh because religion, organized religion, is generally speaking a power play. Uh, Babylonia thought, you know, we should be the city-state that rules all of Mesopotamia. But they had a problem. They had a puny god. And they thought about it and they were like, "Time for a rewrite." And so they took this tiny, puny god, rewrote his story entirely. Marduk, I'm sure you're familiar with it. And Marduk was like the the main god. He he had this battle with a sea god or creature. He tore her in half. He threw half up and that created the sky. And he threw the other half down and that created the earth. And they seriously upgraded their god. And guess what? All of the other city-states were like, "Whoa, that god is like the most powerful. That's the real god." And boom, all of a sudden Babylonia is running Mesopotamia. So I think this sounds a bit cynical, but I actually find it rather amusing. A lot of religions are used to not only begin but to perpetuate power in human society.
>> Right. Right. Uh, someone said to uh the philosophers, "The religions are all equally wrong. To the people, they're all equally true. And to the politicians, they're all equally useful."
>> Right?
>> I love that. Um, but but again, that doesn't, the fact that these cultural traditions and philosophies have been used ideologies in the same way have been perverted, maybe even likely to have been perverted in these ways, does not mean that there is no there there.
>> Right. I guess what I'm trying to say is, if you're in the similar position as me, why isn't this the core problem, the core question that you're trying to answer?
>> Because I I passionately believe that there is no capital T Truth out there.
>> I think that there we spend so much time looking for the answer, and I think that there are more than one answers uh depending on the framework in which you are looking at something. So my approach is to synthesize. Like I really like this bit from the Christian Bible. This from uh Daoism fits perfectly with it. I I I I love Atman and Brahman. Uh, that is a very instructive uh religious belief for me because it fits really nicely with the other ones. For those unfamiliar, Brahman, perfect infinite intelligence, bored. [laughter] He's like, "Do I really know everything? I wonder." And so he creates infinite Atmans, that's us, me and you, that are him. But he's taken their memory away. And he wants to see if these Atmans can find anything that he didn't know. But then he got hooked on the drama, right? Because we Atmans, we don't have our memory of Brahman, and so it's like the greatest show on earth. And so my approach is to look at it in more of a, how do I better understand the human story using these myths? Now, I'm also very interested in, it seems very fascinating to me that death and rebirth is part of virtually every major religion I've ever studied. Um, well, before Jesus Christ, there were, I think, eight to ten legends that were almost identical.
>> In that same region.
>> In that same region, right? So, right down to virgin birth. And when I found that, I'm like, "Okay, now this is beginning to make sense." And and then you go a level deeper, and it's like, to truly become the human you want to be is kind of a death and a rebirth cycle. You have to molt the old you and be reborn into the new you. Now, you can pick any avenue for making that happen. I particularly believe that it happens when you have a particular insight. Uh, you look at the old mental models you were using and you're like, I really need to upgrade all of those. Um, but but this similarity in vastly different religions really fascinated me. Another similarity, all of them have a flood. All of them. And so that gets me going on maybe there was one. And so I don't know the answer to that. But another aspect that I find really interesting about religion, Jesus Christ was not a Christian and wrote nothing down. Buddha was not a Buddhist and wrote nothing down.
>> Socrates, same. Socrates never conf >> And on and on and on.
>> And so that really gets me thinking about.
>> Uh, they were inspiring their followers, disciples, right? But it was through the eyes of their disciples or followers that we saw these rules and ideas promulgated. And you know, telephone, right? The the you you say one thing to me, and then it goes all the way down the line, and it's completely different over here. And so I I I think that by reading the various religious texts, they're information-rich, but you have to approach them with the mind of.
>> Skeptic.
>> Yeah, skeptic. What what am I, what what what can I take away that's going to improve my life, my family's life, the society as a whole?
>> Right. That's act one. Voracious, slightly re, maybe not slightly rebellious kid. Tell us about act two and building your mutual fund empire.
>> So, so act two um, I had become obsessed with, as I mentioned, I originally thought I wanted to work in music or uh movies. Um, but and my father and uh my uncle were arguing about a particular investment. I was listening and I'm like, you know, you don't seem to be talking about anything that I would think would be really important, like how much money do they earn? What's their uh revenue run rate? All these things. And they just kind of looked at me like I had three heads. You have to remember this is 1976, '77. And yeah, sure, Ben Graham was popular on Wall Street, but most people made their investment choices based on who they golfed with. I'm I'm like, I go, John, that makes no sense to me at all. And he looked at me and he goes, "Oh, Mr. Smart Guy, uh, you got a better argument?" I go, "Not yet, but let me work on that." So, I went down to the James J. Hill Library, which is a research library in St. Paul, Minnesota. And uh, I was going to be very ambitious. I was going to go through the entire S&P 500 uh book that lists each of the stock in the S&P 500, go back through all their earnings, their revenue, you know, revenue, debt, etc. I'm also extremely lazy. So I looked at that book and I'm like, yeah, this is never going to happen. Uh, so I lighted on the Dow, which has 30 stocks in it. And I did manage to get a foothold on, huh, doesn't matter who's running this company in terms of the investment potential. It doesn't, all the things people talk about are soft. They're not analytical. What if we just ran the numbers? You know, back when I was a kid, there was a very famous broadcaster who would say when they were arguing, "He was in. He was obviously in. That ref is a bum, etc. The other guy, oh, he was so out." He'd go, "Stop. Let's go to the videotape." And that was kind of my approach with markets. I'm like, "What if we study not the CEO or the board or any of those things? What if we just looked at the results and will we learn anything then?" And I went searching for all sorts of sort of back-testers of, hey, if you buy the 50 stocks with the lowest PE ratio over 40 years, you do this well. And if you buy the 50 highest PE, you do this well. And that was the beginning of my conversion to the more analytical, algorithmic approach to investing because I think I was lucky enough at the time to know that, you know, I am not God's gift to markets. I am not going to be able to do this in the manner of an artist. Um, and and that was underlined when my first strategy that I came up with was a mathematical strategy that looked at the Black-Scholes implied volatility differential between security options in the same class. So IBM 50s versus 55s versus 45s, and it stopped working. And I'm like, what the heck is going on here? And so I went back to my my uh favorite uh James J. Hill Library, found a very obscure journal of, you know, mathematical economics and finance, and a professor had discovered that same formula. The minute a mechanical non that's just math. The minute one of those is discovered, the market arbs it away. What doesn't the market arbitrage? Me and you. We are the ones deciding whether to buy, hold, or sell a security. So that got me very interested in behavioral psychology. And again, back then, the book, it was a reach to find a book that addressed this. "The Limits of Scientific Reasoning" was one of them. Then I found a compendium of tests that had been done versus what they called actuarial decision-making and normal decision-making, and my eyes were kind of like wide open. I'll give you an example. In one uh test, they were giving doctors X-rays and asking them, "Is this cancer or not?" The expectations of the person doing the test was that the actuarial approach would be a floor, that the human forecaster soared above. It was a ceiling that the human forecasters couldn't touch. And the conclusion was, this is because the same methodology is applied time in time out. Humans, we're much more interesting. In other words, we feel right or like, "Oh, I've got a feeling about this particular thing." I'll get to imbued intuition later because I'm not saying that's valueless. It's very valuable. But you only get that by forever and over decades seeing the same pattern again and again and again. But in this particular thing, it got me to understand that there's a famous cartoon called Pogo, and it he's sitting there, he's saying, "We've met the enemy, and it's us." And essentially, I locked on to that. And it was like, I'm going to have greater insights if I'm just looking at the historical record of how these particular stocks do in the market. Um, and I wasn't a full quant then uh because and then I'm going to use my own brilliance [laughter] to to select the security. Well, I wasn't so brilliant. And um, the story about that is I was still doing options, a different strategy, much more in this vein, based on a very rigorous backtest of using a particular formula to select the options. Um, but going into the crash of 1987, I had amassed the biggest put position. That means you are rewarded if the market declines. Um, in my young life, I was 27 years old. And all the numbers said this is the right move. Uh, but then I got a call. Most people don't know this. The day before the crash was a really wicked day. So, I think the market was down, I don't know, 70 or 100 points. And back then, that was a lot. Um, and I got called by all the brokers. I got called by my friends. I got called by everyone was like, "You got to get out of that position because we're going to get the biggest rally in the world next Monday." I think it was Monday. Um, get out, get out, get out, get out, get out. And I was sweating bullets and I sold.
>> Wow. Right before the day before. The day before the market going down nearly 24%, I would have made a fortune had I simply held those options one more day. This taught me a great deal, and it was emotions and emotional overlays in financial trading decisions are often subtracting value, not adding value. Because when you think about it, you You know, I'm famous for saying the four horsemen of the investment apocalypse are fear, greed, hope, and ignorance. And only ignorance is not an emotion. Fear, greed, and hope have wiped out more portfolio value than any bear market or any bubble. And that's what got me thinking on, you know what, Jim,
>> You are not this God-given talent that has the ability to just fine-tune your emotions so much that you're going to be right all these times.
>> Right? So, um, the starting intuition you had was a negative one from behavioral economics because of how flawed you thought human nature was. This goes back to our discussion of Shakespeare and all the classics.
>> Let me insert. I wouldn't call it flawed, right? I I would call it it is what it is.
>> I because of how it's structured.
>> Yeah. Exactly.
>> You wanted to find the objective within the and and weed away all all of the other stuff. And so hence the very analytical approach.
>> Yes. So, I'm curious, what do you make of people who do read companies as these live organizations and personas and do incredibly well? For example, uh, you watched the first episode of this series with Colin Moran.
>> And he he takes the exact opposite of approach. He's highly concentrated. I was hanging out with him yesterday actually.
>> Um, and he studies companies as if they're techs or cultures.
>> What do you make of these differing approaches to investing? Is it just not for you or?
>> Yeah. Um, that's uh remember when I mentioned that I was a proselytizer when I was younger? What I came to understand is there are many paths to heaven, and it depends on the way a mind works that is going to be the right path for them. So I am absolutely open to all sorts of methodologies, but it has to be the process has to be right for you. In the old days, I used to say, no, this is the process that is going to be the most consistent winner. You'll have a bunch of losers, but over long periods of time, this does very, very well. And then I saw the artists, and actually, I admire the artists. Um, I've found that I've actually, in shifting to precede and seed venture investing, I'm relying more on that. But I'm lucky because I have, you know, 40 years of history looking at these situations and learning from them. Like again, back to journals, anytime I see something that is non-quantitative based, but really is a signal, I write it down.
>> Right?
>> And then try to figure out exactly how I'm going to use it.
>> And why investing? Because in our discussions, it's become crystal clear that you don't care about money that much. No. Right? Like never in our conversations has has the topic been how to make a lot of money. It's been sometimes how to give that money away or like how to use it to to further scientific, entrepreneurial, other endeavors. So why investing?
>> I kind of viewed Wall Street as the Olympics of business.
>> Um, you had to know not just about one domain or one industry, you had to know about them all.
>> It was the same kid digesting the encyclopedia.
>> Yeah.
>> Right. And on top of that, given the agents making the trades, you had to know about human psychology. You had to know about evolutionary psychology and biology. Why are we making these particular uh decisions when we're making? I found one paper that um they looked at a set of identical twins um and this is somewhere in Scandinavia where they keep all the records on everyone. Um, and they did the research and their conclusion was 45% of investment choices and decisions are genetic and cannot be educated against. There's a reason why this bookshelf back here could be filled with behavioral economics books. Doesn't matter. That is where I got to the point of education doesn't work in overcoming these genetic ticks. And so therefore, I really need to understand what they are.
>> Right?
>> And try as best I can to build them into the way I do the review. In other words, it was the domain where your fascination, your broad fascination with the humanities and studying who humans are.
>> All came together.
>> Was not just rewarded, but tested.
>> Right.
>> That that's a and really good choice of words. I I'm a believer in I want feedback because without feedback, you're not going to be able to improve what you're doing. Markets give you instant feedback, and it is often quite brutal. Uh, a friend of my sons uh my son Patrick has this wonderful rubric which is, is the person pre-fall or.
>> Post-fall?
>> And when you think about it, it's really a wonderful way to think about people. Prefall was the proselytizer Jim. [laughter] That was the I am certain, I am right, you are wrong. And then the market punched me very severely in the face. And the real body blow was that time that I sold the uh puts the day before.
>> The day before.
>> The day before. And that is a very humbling experience, and that is where you either get the insight or don't.
>> The insight being the market is greater than me. I as an individual, if I have one opinion, it's like Feynman, if you've got a wonderful theory, but the facts don't support it, your theory is wrong. And so I took that approach to my own work and said, basically, the market is going to be right. Now, it does crazy things, and it has bubbles and it has crashes, but ultimately, the market is right. And you get the feedback back pretty quickly. I loved that because it allowed for, okay, I'm on the right path here. Uh, I might have to modify this or that, but the market is telling me, bingo. You want feedback.
>> So, for our audience who's less familiar with your work, you made your career in finance, this act two, eventually building a series of mutual fund families that implemented factor investing. And again, for our audience uh factor investing was, you could trace it back maybe to CAPM and and Sharpe and Fama-French, and who who literally built on it was a series of somewhat esoteric academic theories that you through your books have popularized. And that's something I want to focus on um because the way you built your eventual uh uh finance empire was through writing these series of books, right? So so tell us, and this is why for what you're doing now, you're so focused on media. So tell us why. Tell us about the relation between media, book writing, and your success in act two.
>> So you can scream a great idea from the rooftops, but if nobody's listening, it doesn't really matter. Uh, back in that uh time period, which is the early to mid-90s um, you had to have a book because that was the way that people looked at you as, oh, he might actually know what he's talking about. Um, so and also let me say, I owe a huge amount of my career success to the books I wrote. Um, I would have not had that happen had I not written those books. So that that kind of feeds into the doer part of our conversation. It's not enough, in my opinion, to do all the research and kind of like hold it to yourself because that isn't the way the world works. Um, I I was running a uh investment strategy for Merrill Lynch. I was one of the first outside consultants hired by Merrill uh different, not mutual fund. Um, and they got wind of what works and they tried to buy O'Shaughnessy Capital Management because what they wanted to do was not publish what works on Wall Street. They were going to use it for proprietary models within Merrill Lynch. And there was still enough of the rebel left in me that really wanted a level playing field. Okay. So, I believed it was part of my mission in life to put this knowledge out into the world, selfishly because then they would understand the way that I was going to manage money, but also for the people who didn't want to hire me. I wanted to give them the tools that they could use to improve their investing. And so, but but the idea was, there was no back-tester of this type of book available. It, you know, most people on Wall Street who you would call practitioners, right, didn't read academic journals. And so also practitioners are very different than academics because we actually have to trade the stocks. And so when I would go into the academic literature, I would be like.
>> Mistakes.
>> Like, wait a minute, they're not implying huge bid-ask spreads here. Wait a minute, you can't buy like there's a tiny micro-cap index uh that Ibbotson made famous. Um, and I and I guest-lectured a class of his, and I was like, "Professor, I two questions. Um, do you consider liquidity about uh how easy it is to buy or sell this stock?" He's like, "No, we just do the numbers." I'm like, "You are aware of market impact?" And he's like, "Yeah, yeah, but it comes out in the wash." And I said, "The second problem I've got with this, what you're calling the small-cap index or micro-cap index, you you hold them for five years. Do you see the problem in that?" He's like, "No, what do you mean?" I said, "Well, I went through.
All your data and most of the effect is from one of those tiny little acorns growing into a mighty oak. But that's no longer a small cap stock. It's now a large cap stock. What you really ought to do is just consistently focus on just the small cap ones. He wasn't terribly pleased with me, but it's a good example of why you need testing, why you need the feedback.
And also the practitioner, I got to roll up my sleeves and do this in the real bloody world of trading and investing. And so I also wrote the book putting all of those constraints onto the models. So oftentimes you'll see that an academic paper on it. And by the way, this is this is they inspired me. They gave me these good ideas. I'm in no way putting down their efforts. The French and VOMA are are famous, rightly so. But if you're going to actually try to implement it, you've got to let reality insert itself a little bit. And that's what I did with the book.
Um, but I was very convinced that the book would in fact make my career. And it did because it absolutely did. But you know, again, back to the rebel, I took the manuscript and sent it to Barons. At the time, Barons was the imperator to end all imperators. If it was picked up by Barons, every financial publication either reprinted it, you know, talked about it, etc. And so I took a risk. I'm like, I want people to know about this now, even though the book isn't going to be available for a couple of months. And so rather than ask for permission, I ended up pleading for forgiveness because I sent it to Andrew Barry at Barons. Loved it. Did a two-page spread on it. I I love that he referred to me as a young little known asset manager. [laughter] And McGraill was furious with me. They're like, "You know nothing about book marketing. You've blown the entire campaign. Shame on don't blame us if this book doesn't do well." Well, I had the idea that no, no, no, no. That article because they didn't really know the pull and the hold that Barons had on investors would increase demand for the book, not decrease it. Wonder of wonders, the book came out, instantly went on the New York Times bestseller list.
Um, and by the way, it's a boring book. Oh, [laughter] I have been reading all four of your books and I can and I can say as someone who's who's not investing as a profession, I do [laughter] not recommend it. Uh, so yes, I second you there. Here's something I found very concerning is the wrong word, but but I I want to hear your reaction to it. So, you wrote four books in your investing career. Uh and the first three were historical. They back tests uh or they were applying it for example to retirement. How how to retire rich. Your fourth book is prediction.
Okay. It's about predicting the the markets and and the idea was I've run all these back tests. I've I've looked at the history. I've gotten away from this behavioral nonsense. Let's see what the next future 20 years entails. Okay. Okay. So, I'm going to read you the three three of the key predictions you made in that book. Yeah, this is 2006. So, the period is 2006-2026. Point of clarification, this came from work that started in 2000. Indexing to the S&P has had its day. That fund is over. The S&P 500 index will likely return only 3 to 5% annually over the next 20 years. Number two, small cap stocks which began a rally in 2000 will continue to do significantly better than large cap stocks over the next next 10 to 15 years. Number three, large cap value stocks will once again outperform large cap growth stocks. [laughter] Didn't happen.
I I think I think they might have sent you a piece that I wrote uh that was entitled Mistakes Were Made and Yes by Me. [laughter] Yes. Yes. Um, so the first forecast actually came true, but it came true because of the great financial crisis. It it essentially crammed all of those rotten returns for the S&P 500 into a couple of years. If you look because it was such a sharp drop, such a sharp drop. If you actually look at rolling 10-year and 20-year periods, um the 10-year return through February of 2009 was the worst in 110 years to investors. Um so probably should have qualified myself a little bit more uh than I did in the book, but it did in fact in a very short period of time happen. Small cap stocks. Oh, it was so wrong. [laughter] Value stocks so wrong. And and I laugh about it today because looking back, that probably shouldn't have been a physical book. That should have been a Yeah. It should have been a continually updated blog post because when the facts change, I changed my mind and the facts changed.
And so the idea that I had set it in stone, so to speak, uh was daring, uh but also a wonderful educational lesson. One of the uh subchapter titles um is brain damage can create superior investment results in your book. And what I found really charming like again slogging through all four of your very I got to give you props for that. Analytical uh treatments is you can't help yourself. Every beginning of every chapter there's a Ger quote. There's a reference to Oscar Wilde. What are the core things about human nature that you've taken away through that through through this act two? Like what what parts of the classics and and what what the greats have said about human nature has been validated or reaffirmed in in act two.
Well, I instantly thought of Lear, um, where people oftentimes are really painfully unaware of who their true friends are and who their not so true friends are. Um, and by removing the emotion and being quantitatively oriented, I didn't suffer under a lot of the impulses that I might have had I not taken that lesson from Lear. But let's be very clear. We live in a consensus reality. And if every mind in the world is focused on one thing, it gives that thing great power. As an example, I wrote a piece in April of 1999 called The Internet Contrarian. In the piece, I said, "This is the biggest bubble I have ever lived through in my career." I was all of 39 at that time. Um, and 85% of these companies are going to be carried out feet first. It was my first experience with hate mail. Everyone was like, "You're only 39. You sound like an old fogy to me. Like, you don't get it. You don't get it at all." Ended up being pretty correct. But that's not why I'm saying this. What did I do in September of 1999?
I found it an internet company because if you put yourself in back in that time you mentioned the being overwhelmed by the the uh dominating uh mind share back then you I don't think anyone has ever really experienced in a positive way literally I had some of the brightest people in the world telling me bricks and mortar is dead. The internet is going to take over everything. Your stuff is ideal for the internet. And so I'm like, it is. [laughter] Why, thank you, sir. You make Thank you, sir. Um, and so I started a company called Metfolio, which we were going to develop via the internet. Um, what we called personal portfolios. We were robo advisors essentially basically except we were actually selecting the stocks. Um and so I I I I'm a big believer can't tell till you ask. So I thought you know what I'm going to patent this. We got the patent. The idea was hey like the internet can do all this and not only can it do this it can customize to the individual. Let's say like my mom who died of emphysema. I'm not very pro-smoking. I don't think I want to invest in Philip Morris. Netfolio made it simple. Just click don't want. It gave you the next stock in the uh selection list. So, I was pretty excited about it. Um, and yet reached a point where one of the major investment banks made me a ridiculous offer to invest in Netfolio and I declined. Jonathan, why did I decline? Because my board of directors was made up of venture capitalists who truly truly believed that bricks and mortar was done. This investment bank was bricks and mortar and they're like, "Jim, do you want to destroy all of your chances to have an IPO? If you take this deal, not going to be not going to happen." The old Jim, the financial Jim, was like, "Every fiber of my being wanted to take this deal, but I didn't because I was going to be a poor pure play." Of course, we all know what happened afterwards. Um, but again, I don't I don't regret this at all because a I probably at age 40 wasn't mature enough to like do an IPO and become a billionaire. I probably would have screwed it up pretty badly. [clears throat] Back to what we talked about how wealth can corrupt. Yeah. Yeah. And so, but I learned a tremendous amount. Um in fact I wrote a long kind of dissertation or memo to myself and comes back to hubris. It comes back to um intellectual humility. You look there's a lot of people preaching humility and and all of that. I I really prefer to define it as specifically intellectual humility because you're not going to make it if you're just like a wallflower sitting over here and like, "Oh, don't don't ask me about my books. Uh, you know, oh, you know, Jonathan, I I made this whole thing, but don't you don't have to watch it, right? You you you got to engage. Most things, this is another insight that most people don't understand. Most things are sold, not bought. And you have to be kind of a beacon to attract any attention at all.
Yeah. And uh to fast forward the story of act two, you eventually successfully sold the mutual fund business uh in in the 2020s, right? Y and now you're starting act three OSV. Tell us about that. So OSV Ventures is everything that I have been interested in all of my life but didn't have the time to pursue because running an asset management uh company is takes a lot of time um and it takes a lot of understanding of the human psyche. I I used to joke that um I really ought to build my clients as a psychiatric visit rather than a uh financial one. It seems to me that money is the last taboo. People will tell you about their sex life. They'll tell you what their politics are. They'll tell you virtually anything. But when you get to money, zip the lip. And I think that's because we have this equation that kind of money equals life. It uh it equals what can I do? How can I provide for my children? I I personally looked at at money as an information system. And um when you look at it that way, it makes a lot more sense. Anyway, I couldn't be pursuing these things. I have been writing fictional treatments since I was 20, uh which I love. um love movies um and also believe I had a thesis that began in call it uh 2017 that massive changes were coming and I titled it the great reshuffle. Uh we had planned to do a bunch of videos on it and we got distracted with other things, but the thesis remained pretty valid, which is the idea that with all of the new innovation coming online, specifically AI, um all the playbooks were going to get ripped up and rewritten. And so it was kind of like right place, right time. Um, I had sold OSAM. Um, and so I decided why not create a uh company that is all about culture, that is all about books and reading and podcasting and lectures and all of those things because I passionately believe everything is downstream of culture and I was not pleased by the anti-growth, the very pessimistic attitude that was pervading society at that particular time. And my idea was I got to try.
Yeah. I find act two and act three interesting when you put them together because act two is almost about trying to reject the not reject but see through the mimetic or social qualities of human nature to get at the analytical core. Whereas act three OSV in some sense it's the exact opposite company of OSAM of your of your mutual fund index you know the factor investing when you invest you do preede and we talked about how it's very artistic right you give out grants to like things that don't even have monetary feedback loops because it's philanthropy you're investing in film and media square the square that square that for me.
Sure. Um, so I think that money is an objective, you're on the wrong path. If you decide I'm going to get rich, you probably won't. You'll probably have a miserable life because you have so reduced the aperture of your view that you're not going to be able to see things that are obvious to anyone else. Um and and so I still quantitatively invest in public markets, right? Because it works. Uh private markets were a completely different thing. But by this time, I had I had that imbued or saturated intuition. I had looked at the same pattern happening time and time and time again. And so I thought I could harness that to look at founders as humans, look at founders ideas on where I think we're going and add some value there. And so it's really kind of an experiment to be honest. Uh but it's about things that I care very deeply about. I I have six grandchildren and I want the world that they live into to be better than the world I lived in. And the world I lived in was pretty damn good. And we are at a crossroads, I think, in that with all of the new innovation, with all of the new tools available, the the direction is not set in stone. You still have a group that wants to keep it tightly controlled, that wants to keep it only a few people. Talking about AI systems here specifically. Um, and I don't think that that is going to advance human flourishing. I think that what will advance human flourishing is by now we're getting to the fellowship aspect or the grantee aspect. For all of human history, a genius could be born, lived, and died and not even know they were a genius themselves. That is no longer the case. And so I felt compelled that now that I can find those geniuses, I got to fund them. And why do I got to do that? Because you you cast a thousand seeds, right, when you're trying to grow a wonderful new forest. And I was in a position where I could do that and where I could find a a great example. Um this year we gave a fellowship to a woman who is going around to all the dilapidated houses in Japan and fixing them. And I just fell in love immediately. Like we need to do that here too, but why not experiment there and see what happens and then synthesize? I'm really big on synthesizing ideas and borrowing. And so we made the fellowships one of our lead aspects, but also books, the publishing industry of today. And again, let's be clear, I owe my career because they said yes to me. So I have the greatest respect for what they do as a mission. The problem that I have is that they're using best practices from 1925. It's 2025. And there is a difficulty that I understand. If I was the head of one of the biggest traditional publishers, it would be very difficult for me to radically change the way that firm was run just because of all of the people involved because the history and the inertia coming in as a new entrant. I don't have to worry about any of that.
And so we have a infinite books is run by writers. I'm the founder and chairman. Our editor-in-chief and CEO is Jimmy Soni, uh, who's a brilliant writer. Um, and we're writing all of the tools for writers. That gets us to a place where it's going to be much better for the reader. But we also are taking a bit of a shot across the bow of the gatekeeping function. You know, in the old days, if uh it wasn't a financial book, if it was a financial book, it was going to be three publishers, basically. And if you couldn't convince one of those three, you were flat out of luck. Um, but also on the the bigger books, right, the the more story-driven books, if they weren't talking about it at a cocktail party right here in Manhattan, good luck. Now, that is no longer the case. We have the ability to not only assess but evaluate thousands and thousands of manuscripts because we have built a very sophisticated AI engine that does the initial work. This is another area where people get confused. All it's doing is the initial work, the drudgery of, okay, on all of the essay scores, on all of the best thrillers that we've fine-tuned on or romances or, you know, public events, here's how it scores. We're ultimately going to make what we call the portal available to the public. Imagine the author whose sweat, blood, and tears went into a manuscript. In the current environment, they send it to the big publishers and what do they hear? Crickets. They don't read it. It goes into a slush pile. If you don't have an agent, you're not going to get any feedback. With infinite books, you when we finally do make the portal public, you will get actionable feedback that yes, the first sweep is AI, but importantly, we have great human editors who then look at the material and add to that feedback. Imagine the joy of somebody who has that book in the third drawer down being able to finally send it somewhere and get actionable feedback on their work. The writers that we've talked to are like I feel like I've died and gone to heaven [laughter] because what they normally hear was silence. Film same sort of thing. We think there are a lot of po Look, we root for things to be we root for things. We look for things to root for, not against. It's so easy to be a pessimist. Like, yeah, that's never going to work because of this, this, this, this, and this. It's lazy. What you really want to do is uncover things that are worthy of being rooted for. And that's kind of our general mission across all of the verticals that we have.
And you can relate to a lot of these uh book writers um because not only have you written four financial books, you're now writing on your first fiction. So tell us about that process.
So this is fun. Um, I got the idea for this book more than 30 years ago when I was an emerging asset manager who got an article in Barons and that's where I learned, boy, you get in Barons, you go worldwide. Um, and people started sending me copies of the rewrites of the Barons article. One day I got a letter from Switzerland. My assistant brought it in and said, "This is kind of interesting. You might want to read it." So, I read it. It was from an elderly gentleman who lived in Zurich, I believe. Um, and his letter basically said, I read the article about you and your methodology, and I have a proposal for you. I am setting up a trust in Liechtenstein for an unborn child, which may or may not appear depending on how things go. [laughter] and he said, "I would like you to manage that." He included a check in 1993 or whenever it was for $200, which was significant. He also included his Swiss banker's direct number and he urged me to call him. And so I'm like, "Okay, I'm curious." So I call the banker and he's like, "Oh, Mr. So and so very Germanic name uh has well above your minimum. Uh he could transfer a hundred times that to you." I ended up saying no to it. But then my imagination ran wild. Wait a minute. [laughter] I have a very rich German with a numbered bank account in Switzerland. This is a novel. And so the basic premise is we have a genius Nazi who made it out was blessed as a good German but his interest is he worked for Goring and if you know anything about Goring if you think that you know how crazy and theatrical that man was let me tell you you don't. This guy was Caligula. And so the the plot has Goring establishing an extra legal division called the Geheime Staatspolizei. And my villain Reinhardt Falenbach is the first person hired. Goring was also the greatest thief in history. And what he liked to steal was art. Another one of my passions. And so let me see if I brought it with me. Um, the the star of this particular novel is this guy. [snorts]
What you're holding is a Monuments Men card for the Monuments Men were the allies who went searching for all of the art. This is the ace of spades for a very easy reason. It is considered the most valuable piece of art still missing. It's by Raphael and it's called Portrait of a Young Man. This is a central part of the plot of the book. And so what I've managed to do is take all the things that I really love and put them together. And like Nazis just make such bad guys. [laughter] And Geheime Staatspolizei was the the grunts in the German troops called them the ghost apo because they were above the law. A Geheime Staatspolizei agent had a pass that was signed by Goring who by the way controlled most of Germany. That was another little hiccup that I'd forgotten. He didn't run just the Luftwaffe. He ran the Four Year Plan. He ran all he ran everything. He was Hitler's number two. So signed by Goring, signed by Himmler, the real bad guy, and signed by somebody you might not have heard of, Funk. He ran all the money. And so this pass literally makes him invulnerable. He can look at a Gestapo general and say, "You are going to do what I tell you you're going to do, or I'm going to shoot you in the head, and nobody is going to hold me accountable." And so I love him as a villain because he's also a genius and he has studied Raphael. He has studied the Renaissance. He has studied the German tradition. And so midway through the war, he sees Goring for the fool that he is. And he gets really bitter about this band of idiots mucking up our ability for the thousand-year Reich. And he starts planning. And the planning is funded by the trust. By no because we declined. Right. Right. But what's interesting about it and now I'm not going to give too much more away.
So it's a it's a romp. I'm writing it intentionally that people are going to want to bring it to the beach. Um, I'm writing it for people who might not know the interconnection of things. For example, do you know what the Bank for International Settlements is? So, I had found it back in my asset management days and I was like WTF like this can't be real. The International Bank for Settlements is very real. It's in Basel, Switzerland. It was created in 1930 and it is extra-legal, meaning the Swiss authorities cannot enter the building. It is treated as foreign land. They cannot arrest any of the bankers. They have diplomatic privileges when traveling through countries. They can have canvases with them. They can't be opened. And so it still exists and you might guess that it plays a pretty prominent role uh in the book. So what I've done is I love history as well. So I've actually had to tone Goring down [laughter] by by the way I Shakespeare had to had to tone Anthony down. Oh yeah. In Julius Caesar, like if you read Julius Caesar you think this is dramatic. No, no. The history from the history is more is more dramatic. Much more dramatic, right? But anyway, it took my love of all these things and the way I'm writing the book is it's targeted as a fun beach thriller. Um, it the original plot I actually told my friend Ron Howard and he looked at me and he goes, "If you write that as a screenplay as opposed to a book, I'll option it right now." So, it's a fun story and you know, spoiler alert, the bad guys lose.
Two questions. Why write such a book? And um the second question is how is writing the process of writing this book? I'm it's drastically different from writing what works on Wall Street. How?
Very different. Um I'm very experimental and I am always willing to be the guinea pig. Um, so I am writing this book in a very different fashion that I nevertheless think might catch on five years from now. You still have a lot of people, you know, with the setting their hair on fire. Oh, they used AI. Um, I'm using AI aggressively. I couldn't have done the research that I have done would have taken me years and years and years with an army of postgrads because there's a lot going on in this story. Um, so but I'm not only using it for research. I am using it to criticize my writing, to improve my writing, to offer suggestions on that all the ideas. The only thing that I don't take anything from the AI is the plot. Like I own that and occasionally it will make a suggestion that I'm like, "Oh, that's a good idea." Uh, but we are also using a writer's room with human writers and AI writers in there. We have an installed we have our own on-prem AI uh stack and so we're able to fine-tune it in ways that commercial models are not. So, we're very aggressively using the process to see how it works, to see if we can get across the plot in such a way that people are just like, I gotta I honey, I might be late for work tomorrow because I got to finish this book. Um, but it's really fun. I I love the giving it to one of my editors and who thinks about things very differently than I do and he's like first he's kind of like but then when he gets to the end of the chapter oh my god [laughter] so but I'm also way past fall you want to offer corrections you want kill my darlings kill them just kill them.
Um, so it's it's just a very fun way to both create a book, but also the way we're going to market it is completely different. It's going to be continuously marketed. If you have a book right now and you're with a traditional publisher, you basically have a two-week window, right? And then they move on. And because they have to, I'm not blaming them in any way at all. But AI doesn't have to move on. AI doesn't get tired. AI just keeps saying, "Oh, sales just quintupled in Omaha. Let's do a search for all the podcasts in Omaha that are about history or about World War II or about this. Let's send them a letter saying, "Hey, you might want to have the author on because you really jive." The idea that marketing is going to change dramatically is just baked into this as well. So my book, a lot of authors like you see people on Twitter, I can't use the em dash anymore because AI uses it. To me, that is crazy. That's crazy. And we're in one of these cycles that I think will ultimately emerge from. But it's also consistent. Like when calculators came on the scene and I wanted a calculator like I got it but didn't take but a month before the professor took it away from me and gave me back my you know abacus. It it it's this pink in human OS that has fear trepidation of like is that going to be uniquely me? And and so that's common, right? Um, Socrates was very opposed to writing. And so I think that the in in doing this experiment, the intelligence amplification, if you look at it that way and you don't just like, you know, tell me about this, this, or that. If you have a thesis and you have a great plotline, the ability to research what things were trading at in this small town in rural France. Now, of course, you check it all. Right. Right. But bam, the speed of iteration and the ideation like I can't I can't have him there because, you know, of this history that I didn't know. Um it's just it's just so.
So I read act three as um creating an ecosystem just like in act two where you can learn and be given feedback loops about the things you care most about and that's media film podcasts books writing your own as well as substacks. Exactly. Tell us about act four which I know is what you're building towards.
So when I was 36, I got a problem with my neck that literally my neck was frozen and I couldn't move it beyond there. So I did what you always do. I went to the doctor who referred me to a specialist and they went through all of the things that it could be. And guess what? My neck was still frozen. I was put in traction. I was given injections. I was given all sorts of like I even went to chiropractors. They did their thing. Nothing worked. And I found this book by a guy by the name of Dr. John Sarno. And it was called Mind Over Back Pain. And I'm like, h I was very skeptical, but I bought it. First time I read it, I literally threw the book across the room. And I'm not going to swear, but imagine the torrent [laughter] of expletives that came out of me. I'm like, this is the this is mumbo jumbo. This is woo woo. This is And my wife picked up the book and kind of looked at it, read a couple pages, and she goes, "I see you on a lot of these pages." And I'm like, "Oh, you know, I was very combative." She goes, "Just reread it." So I did. Basically, Sarno's theory is that mind-body Descartes did us a disservice by removing mind and body. And let's not just pin it on him. But the idea that they are not incredibly intertwined is foolish. They they really are. And that Sarno's theory, he was an MD practicing here at NYU, rehabilitative medicine, um his idea was that it was emotional suppression that was causing the pain. And I'm like was not buying it. But I read the book, I think six times, and guess what happened, Jonathan? My neck was completely cured.
And just reading was was sufficient. Reading was sufficient. Basically, the thesis breaks down to if you have an emotion that you feel would make uh would be crazy to let people know you're feeling, you suppress it. But the body keeps the score and it will give you physical symptoms to divert your attention from the emotional issues that are going on within you. And they don't have to be these great incredible things. They can be just something that's really gnawing at you. Like a classic case is a young mother who is happier than any other time in her life. She's seeing her new child. She's holding her new child, but her back goes out. Well, having a child is also quite difficult. You don't sleep. So, philosophically, I think that a reintroduction to the idea that we are mind-body, they're not separate. Um will go a long way towards helping people who are currently on disability uh suffering greatly. And I think that I might be able to put together a group of people from across various disciplines that allows people to solve mind-body problems even if they don't believe it's going to work. And I think the coolest thing from the way I look at it is like what an accomplishment if you could put together a team that stopped all that suffering. That's needless suffering that allowed people to more fully enjoy their lives and everything. That's quite the capstone I think at a career.
Right. And so the idea is that the third act of what you're funding when it comes to uh creative endeavors, it's not exclusively building towards this, but it's kind of building up the knowledge, the resources, and the network to assemble the Avengers essentially and and to eventually try to tackle an issue you care deeply about because you experienced it. I've experienced it, but I've also seen how um it is absolutely pervasive everywhere in Western society. And like now that I know as much about it as I do, and I never point this out to a person, right? Because if they're not prepared for it, they might have a hostile response. Oh, so you're telling me it's all in my mind? Um which you're really not telling them. But um to have a process where I see it everywhere. I see it everywhere.
And sorry the claim is pure semantic content that you're holding in the mind creates a whole host of bodily issues that you're not aware of. And the correction is purely semantic as well like i.e. reading something.
Yeah. Now that's Dr. Jean Sarno's uh correction version I think it can be advanced. I think that the that there are other ways hypnotism uh a var the frequency there are variety of ways but I'm totally open to just getting it right because I think people are suffering needlessly and by the way this is primarily a western affliction. It is not nearly as prevalent in developing countries um etc. Why do you because the mind-body divide is stronger like potentially or potentially that the mind-body uh is stronger but they're dealing with real problems in developing countries. Right. And if you're if you're facing like I don't want to be too dramatic but if if you're facing life and death. Right. Who cares if your neck doesn't work. Exactly. But I I I definitely think that there is a there there. Sarno's record is amazing. The number of people he cured is quite extraordinary. And who does this sound like? Getting back to philosophy, William James. We are right now there is a treasure trove of James's writings in Boston that have not been digitized. We're digitizing them all. And the idea of course James famous for saying the greatest invention during my lifetime was that a man could change his being by changing his mind. And I think that that is incredibly generative all over the place. But that final act will be can we solve this particular problem.
Awesome Jim. I wish you the best of luck and thank you so much for the great conversation. Sure thing. Thanks for watching this interview. If you like these kinds of discussions, I think you fit in great with the ecosystem we're building at Cosmos. We deliver educational programs, fund research, invest in AI startups, and believe that philosophy is critical to building better technology. If you want to join our ecosystem of philosopher builders, you can find roles we're hiring for, events we're hosting, and other ways to get involved on jonathanb.com/cosmos. Thank you.