Infinite Loops

Key Takeaways

Investing is a service-based business; focus on the karma!
“The four horsemen of the investment apocalypse are fear, greed, hope, and ignorance. And only ignorance is something that you can address.” – Jim O’Shaughnessy
Take actions that increase the surface area of your luck
Ironically, in a changing world, playing it safe is one of the riskiest things that you can do
Learn how you are going to react to every phase of the market
You have to be selective, but you also have to be okay with rejection
Trust is a function of experience, and experience is a function of time
You do not need to be right every time to dominate; the best traders in history are right just a little more than 50% of the time
How to add value early in your career: Find the 10% of a person’s life that they hate, and make that problem go away for them
The investing industry is based on trust and reputation – it is wise to remember this

Read the full notes @ podcastnotes.org

Let me introduce you to the four horsemen of the investment apocalypse:

Fear.

Greed.

Hope.

Ignorance.

Notice anything?

Three of four are emotions.

I’ve long argued that effective investing is far more about emotional control than technical know-how (although the latter certainly helps!) By hook or by crook, the best investors can find a way to tame their pesky emotional impulses and overcome that primal urge to respond impulsively to panic, passion, or pride.

My guest, the razor-sharp Ateet Ahluwalia, is a veteran trader and investor who has spent well over 15 years at the coalface, from trading at Goldman at the dawn of the financial crisis to his current role as founder and managing director of the venture capital firm Island Green Capital Management. As you’ll hear from our conversation, Ateet has built an insanely deep understanding of the emotional constitution required to succeed in finance and venture capital, which informs his approach to risk management, hiring, investing, due diligence, and everything in between.

I hope you enjoy our wide-ranging conversation, whose implications extend well beyond investing. For episode takeaways, a full transcript, and various other goodies, check out our Substack.

Important Links:

The Thinker and The Prover; by Jim O’Shaughnessy
Ateet’s LinkedIn
Island Green Capital Management

Show Notes:

Why Venture Capitalists Should Shun the Glory
“In a changing world, playing it safe is one of the riskiest things you can do."
Risk: Why Size Matters
The Emotional Constraints of Investing
How to Find Out What Someone Really Wants
The Purifying Power of Mistakes
Pick up the Phone!
Being Humbled by the Market
Public vs Private Investing
Why Hit Rates Matter
Assessing the Macro Position
Bullshitting, Question-Dodging, and Other Red Flags
The Many Bosses of the Venture Capitalist
Be a Painkiller
Ateet as Emperor of the World
MORE!

Books Mentioned:

The Enlightenment Trilogy; by Jed McKenna
Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist; by Brad Feld & Jason Mendelson
Financial Intelligence: A Manager’s Guide to Knowing What the Numbers Really Mean; by Karen Berman, Joe Knight & John Case
Adventures of a Bystander; by Peter F. Drucker

Ateet Ahluwalia — The Many Bosses of a Venture Capitalist (EP.227)

Podcast Notes Playlist: Startup