"'Stay close to the money.' If you're not close to the stream of cash flow, if you're not directly responsible for winning the bread, and bringing in cash, you're expendable... Cash flow is a lifeblood."
"Time is the most important thing our brain uses to perceive causality. Anything more than 2 seconds has been shown to inhibit our ability to see a cause and effect relationship - unless a reason is given."
"And in most businesses... people end up being the most important thing you've got. Remember that more often than not you're betting not on a business, but on a person that will build, evolve and adapt a business"
"the two most important things that kids (especially inner-city kids) require for a successful education are (1) picking the right heroes and (2) developing a deep desire to learn"
"Today, we still need liquid fuels to power our cars - but soon enough we'll have electric fleets and the most important question won't be the price of oil but the price of electricity to run our cars"
"A phenomenal individual is... a spinning force that pulls people in. The most important thing we can do as a firm is have the good judgment in finding and picking these people and convincing them that Lux is their partner for the next 5 or 10 years"
"'Edge' is the most important thing any competitor in any arena must possess... Overt or covert, widely signaled or held as trade secret, it is a competitive advantage that makes playing unfair"
"Yahoo founder Jerry Yang told me he thought the market had jumped the shark... with Snapchat, Oculus, and WhatsApp. But he said the most important thing I heard: he capitulated. Now, he said, he thought it could go on for two more years and maybe more"
"the two most important questions [were/are]... Number one: Why should you exist?... Number two: If your hypothesis is right that these are the next waves, what is going to stop Kleiner, Sequoia, Benchmark, Accel from blowing you out of the water?"
"I think the most important thing in business... I am psychotic about competitive advantage. What can you do, or what can you assert that you can do that will scare competitors that nobody else can do? From that flows good unit economics"
"The most important conversation, the most memorable, was when we went to Bill... all these crazy areas of emergent tech, and I said, 'I want to put our money where our mouth is now in this space, actually I want to put your money where our mouth is'"
"Survive is number one... To me, it is the most important thing in life. Some people don't want to have kids, and some, but I just, to me it's everything."
"today, the technology, and this is actually a really crazy thing. There are tools, like something called generative design. This to me is one of the most important areas of technology that I want my kids to understand"
On the most important things that people don't know about him: "I love heavy metal and hardcore. I grew up going to a mosh pit in Brooklyn... And I like skateboarding and I like people that just have this sort of gritty rebel side"
"I think the single most important thing for anybody is to build your brand, be differentiated, be indispensable, stay close to the money, find where the capital is flowing and stay close to it"
Ask an entrepreneur about their proudest accomplishment and they’ll tell you about the organization they built. When Walter Isaacson asked Steve Jobs about the product he was proudest of, Steve surprised his biographer by not naming a device like the iPhone or Mac, but by choosing Apple the organization.
Steve Jobs: Making a product is hard, but making a team that can continually make products is even harder. The product I’m most proud of is Apple—and the team I built at Apple.
Ask an investor the same question, and they’ll tell you about their returns. Perhaps this is because of the returns they generated for their shareholders (endowments, pensions, etc.). Or perhaps this is because they focused on investing and neglected to build a firm. Or maybe, they did build a firm, but they built it around themselves.
And for good reason. In investing (as well as sports, acting, or entrepreneurship), people obsess over geniuses. But genius can’t be taught. Charlie Munger likes to tell this Mozart story:
Charlie Munger: A young man came to him, and he said, “I want to compose symphonies. I want to talk to you about that.” And Mozart said, “How old are you?” And the man said, “Twenty-two.” And Mozart said, “You’re too young to do symphonies.” And the guy says, “But you were writing symphonies when you were ten years old.” He says, “Yes, but I wasn’t running around asking other people how to do it.”
For many, investing is just as unteachable as genius. Famously, Warren Buffett, Seth Klarman, and Li Lu all believe that value investing is like an inoculation—you either get it right away or you never do.
Warren Buffett: “[Value investing] takes immediately with people or it doesn’t at all. It’s like an inoculation. If it doesn’t grab a person right away, I find that you can talk to him for years and show him records, and it doesn’t make any difference. They just don’t seem to be able to grasp the concept, simple as it is…I’ve never seen anyone who became a gradual convert over a ten-year period to this approach. It doesn’t seem to be a matter of I.Q. or academic training. It’s instant recognition, or it is nothing.”
Now, if you were to ask Julian Robertson the same question, you would get a totally different answer—you would get an answer more similar to that of Steve Jobs than Charlie Munger.
Julian Robertson: We differ from most hedge fund managers. George Soros, Stan Druckenmiller, Michael Steinhardt and Paul Jones are genius managers. And that's probably true of Lynch, Munger and Buffett. On the other hand, we don't have a genius. What we have is a very good organization. A lot of what I do is cheerlead. It's a lot more fun for me this way. What can happen to genius managers who do so much of it themselves is that they can do it, but the pressure can be pretty tough on them - and they can even burn out. I'm just glad that we have an organization rather than having everything rest on my shoulders.
While Julian didn’t consider himself a genius, he was. His genius lay perhaps not in investing, but in organization building—he was an early adopter of and popularized Alfred Winslow Jones’ hedge fund model, he innovated on the process of value-added research, he realized the advantages of and implemented the pod shop model early on, and he partnered with a psychologist to develop systematic testing procedures to identify talent.
At the end of the day, Tiger Management’s success did not stem just from Julian Robertson, but the organization he built and the Tigers he recruited—and it’s evident in what they’ve gone on to accomplish after.
And as someone who is fascinated by people, the organizations they create, and the networks they form, there are few better subjects, if any, than Tiger Management and the Tiger Cubs.
I’ve been studying Tiger for as long as I’ve been interested in investing, but only recently decided to sit down and write up my thoughts on the organization and its impact. While that essay is focused on Julian and a few select number of the Tiger Cubs (TBD if this will be publicly released), I realized that I had learned something from every person in the Tiger Ecosystem I have met or studied, and decided to put together and share this collection of quotes and lessons from some of my favorites.
*Special Request: If you worked at Tiger (or at a Cub/with someone who worked at Tiger) and are willing to share your experience, please reach out! I’d love to chat (more than happy for it to be background or off the record if you prefer).
What follows is 50 lessons from 50 Tigers—ideas that expand on the value of teamwork, the need for rigorous research, the importance of discipline and risk management, the way culture can make or break a firm, and so much more. These principles aren’t limited to hedge funds though—they speak to leaders, entrepreneurs, and strategists in any field who hope to cultivate high-functioning teams that stand the test of time.
1/ On April 3, 2024, Sapient Capital's Tom Morgan gave a presentation at the Sohn Conference titled "The Most Offensively Taboo Idea in Western Civilization" where he distilled 10 years of curiosity research into a 5 minute talk.
I found this presentation to be one of the tightest, information-dense, and thought provoking talks I've listened to. I wanted to be able to refer back to it easily, so I transcribed the talk and screengrabbed the slides.
I shared the transcript in A Letter a Day (link in bio), but people enjoyed when I shared my transcript of Bill Gurley's "2,851 Miles" presentation on X, so I thought I would share this one here too.
⬇️ Full Transcript with Slides below ⬇️
2/ So I'm not going to talk about a stock today. Instead, I'm going to talk about the most offensively taboo idea in western civilization.
3/ This is Dr. Ian McGilchrist. He wrote, probably the most interesting book I've ever read, The Matter with Things. His focus of his very long career has been the two hemispheres of the brain. Now, you're probably thinking this brain hemispheres stuff has been debunked. It hasn't. It's just nuanced.
1/ On Sept 12, 2023, Benchmark’s Bill Gurley gave a presentation at the All-In Summit titled “2,851 Miles” where he discussed the past, present, and future of regulatory capture in Silicon Valley.
He received a standing ovation and his presentation was dubbed “an instant classic.”
Former PayPal COO David Sacks immediately called it “the best talk in the history of All-In” and said “we need to get it out there immediately so it can start going viral. And I think it will go very viral.”
First Round’s Chris Fralic thought it was “So good. A Perfect TEDTalk” and “it’s gold.”
Shopify Founder and CEO Tobi Lutke commented that everyone should “definitely watch [Bill’s] incredible talk… once it comes out.”
One audience member liked it so much he yelled at Bill to run for President as the applause died down.
I found the talk full of interesting anecdotes and wanted to be able to refer back to it easily, so I transcribed the talk and screengrabbed the slides.
Thought I might try something new and share it here.
⬇️ Full Transcript with Slides below ⬇️
2/ I'm Bill Gurley. I got to Silicon Valley in about 1997. And was fortunate enough to become a venture capitalist in 98. And the entire first year of my career, I had zero interest in interacting with any form of government. It didn't seem necessary for what I was trying to do. I was working with founders and software and technology. I didn't see what it would bring me.
3/ Until one day where I ran into an issue, which I'll tell you about later, that required me to understand what was going on in Washington. So I checked in with a few advisors, they introduced me to this lawyer in DC. Turns out, DC lawyers do a lot of things that aren't lawyering. And he listened to what I had [to say], he said, I'll call you back. He calls me back. He says, Bill, I got exactly what you need. I found a congressman on the committee that matters to what you're talking about. And I can set up a meeting. I go Great, I'll fly out. He goes, No, no, no, don't fly out. He's coming to you. He's coming to me? That's pretty nice. He goes, Do you have a conference room? I said, I'm a venture capitalist. We have lots of conference rooms. So he said, I need you to get some people together. And here's the catch. They need to bring $5,000 each.
1/ With a flurry of successful U.S. tech firms absent from China, would you have been above being the one to bring them there?
Wang Xing wasn’t – creating businesses “inspired” by not just Groupon, but Facebook and Twitter too, coming to epitomize the term "Chinese copy-cat".
2/ His clones were so precise that you almost sensed pride when he added “a Mark Zuckerberg Creation” at the bottom of his Facebook clone.
But ironically, it’s actually for his innovative prowess and creating something the world has never seen before, that we know him.
3/ In 2010, after middling success with his other clones, Wang Xing set out to copy Groupon, but what resulted was one of the world’s most innovative apps.
1/ Coupang $CPNG reported 4Q21 and the market seems to be a bit disappointed (-2.5%) as they had a small miss.
But we think the market is focusing on the wrong things. An overview of earnings and their new disclosures below.
2/ Topline slightly missed at $5.1bn vs cons at $5.2bn. This represents +34% y/y growth and a 1,400bps deceleration from last Q’s +48% y/y. However, in constant currency they grew +39% y/y in 4Q vs 44% last Q.
2a/ Adjusting for currency fluctuations shows their growth deceleration isn’t so stark, but at their size they will continue to slow.
2/ 3Q21 revenues were +10% y/y, which is a 1900bp sequential deceleration from 2Q, and missed consensus by ~1.5%. Adj. EBITDA of RMB 51.3bn missed consensus by ~0.5% and is down ~25% y/y.
There are many pieces to this and we will start to unroll it with their China Commerce.
3/ To the positive, in China BABA added 20mn new users to reach 882mn and they noted on the call that annual active customers (AACs) who spend >10,000 RMB on the platform increased y/y.