Kind: captions
Language: en
the only person who can cause you more
harm than a thief with a dagger is a
journalist with a
pen the following is a conversation with
Bill Amman a legendary activist investor
who has been part of some of the biggest
and at times controversial trades in
history also he is fearlessly vocal on X
FKA Twitter and uses the platform to
fight for ideas he believes in for
example he was a central figure in the
resignation of the president of Harvard
University Claud Dean gay The Saga of
which we discuss in this
episode This Is The Lex Freedman podcast
to support it please check out our
sponsors in the description and now dear
friends here's Bill
Amman in your lecture on the basics of
finance and investing you uh mention a
book intelligent investor by Benjamin
Graham as being formative in your life
what key lesson do you take away from
that book that informs your own invest
sure actually it was the first
investment book I read and uh as such it
was kind of the inspiration for my
career and a lot of my life so important
book you know bear in mind this is sort
of after the Great Depression people
lost confidence in investing in markets
World War Two and then he writes this
book it's for like the average man and
basically he says that you have to
understand the difference between price
and value right price is what you pay
value is what you get and he said ' the
stock market is here to serve you right
and it's a bit like the neighbor that
comes by every day and makes you an
offer for your house makes you a stupid
offer you ignore it uh makes you a great
offer you can take it and that's the
stock market and the key is to figure
out what something's worth and you have
to kind of weigh it he talked about the
difference between you said the stock
market in the short term is a voting
machine it represents speculative
interests you know supply and demand of
people uh in the short term term but in
the long term it's the stock market's a
weighing machine you know much more
accurate it's going to tell you what
something is worth and so if you can
Divine what something's worth then you
can really take advantage of the market
because it's really here to to help you
and that's kind of the message of the
book in that same way there's a kind of
difference between speculation and
investing yeah speculation is just a bit
like buying trading uh crypto right
you're strong words well uh short-term
trading crypto maybe in the long run
there's intrinsic value but uh the you
know it's many investors you know in a
bubble going into the you know the the
crash uh were really just pure
speculators they didn't know what things
were worth they just knew they were
going up right that's speculation um and
investing uh is you know doing your
homework uh digging down understanding a
business understanding the competitive
dynamics of an industry understanding
what Management's going to do
understanding what price you're going to
pay you know the value of anything I
would say uh other than love let's say
uh is the present value of the cash you
can take out of it over its life now
some people think about love that way
but it's not it's not the right way to
think about love but it's um yeah so
investing is about basically building a
a model of what this business is going
to produce over its lifetime so how do
you get to that this idea of called
value investing how do you get to the
value of a thing even like
philosophically value of anything really
but we can just talk about the things
that are on the stock market sure
companies the value of a a security the
value uh is the present value of the
cash you can take out of it over its
life so if you're think about a bond a
bond you know pays a 5% coupon interest
rate you get that let's say every year
or twice a year split and half and it's
very predictable and if it's a US
Government Bond you know you're going to
get it so that's a pretty easy thing to
value a stock is an interested in a
business it's like owning a piece of a
company and a business a profitable one
is like a bond and that it generates
these coupons or these earnings or cash
flow you know every year the difference
with uh a stock and a bond is that uh
the bond it's a contract you know what
you're going to get as long as they
don't go bankrupt in default with a
stock you have to make predictions about
the business you know how many widgets
they going to sell this year how many
going to sell next year uh what are
their costs going to be how much of the
money that they generate do they need to
reinvest in the business to keep the
business going um and uh that's more
complicated um but you know what we do
is we try to find businesses where with
a very high degree of confidence we know
what those cash flows are going to be
for a very long time and there few
businesses that you can have a really
high degree of certainty about as a
result you know many Investments are
speculations because it's really very
difficult to predict the future so we
what we do for a living what I do for a
living is find those rare companies that
you can kind of predict what they're
going to look like over a very long
period of time so what are the
factors that indicate that a company is
something is going to be something
that's going to make a lot of money it's
going to have a lot of value and it's
going to be reliable over a long period
of time and what is your process of
figuring out whether a company is or
isn't that so every consumer has a view
on different brands and different
companies and you know what we look for
are sort of these non-d disruptable
businesses a business where you can kind
of close your eyes stock market shuts
for a decade and you know that 10 years
from now it's going to be a more
valuable more profitable company so we
own a business called Universal Music
Group uh it's in the business of helping
artists become Global artists uh
recorded music business uh and it's in
the business of you know owning rights
uh to sort of the music publishing
rights of
songwriters and you know I think music
is forever right music is is a many
Thousand-Year old uh human part of the
human experience and I think it will be
you know thousands of years from now and
so that's a pretty good backdrop to
invest uh in a company and the company
basically owns a third of the global
recorded music that's you know the most
dominant sort of market share in the
business they're the best at taking an
artist who's 18 years old has got a
great voice and has started to get a
presence on YouTube and uh Instagram and
helping that artist become a superstar
and that's a unique talent and and the
result is the best artist in the world
want to come work for them but they also
have this incredible library of you know
the Beatles the rolling ston YouTube Etc
so and then if you think about um what
music has become used to be about
records and CDs and you know eight track
tapes for those of whom it was about a
new format and that's how they drive
sales and it's become a business which
is like the podcast business about
streaming and you can streaming is a lot
more predictable than what than selling
records right you can sort of say okay
how many people have smartphones how
many people going to have smartphones
next year there's a kind of global
penetration over time of smartphones you
pay call 10 11 bucks a month for a
subscription or last for a family plan
and you can kind of build a model what
the world looks like and predict you
know the growth of the streaming
business you predict what kind of market
share univers is going to have over time
and you you can't get to a precise view
of value you can get to an approximation
and the key is to buy at a price that
represents a big discount to that
approximation and that gets back to Ben
Graham Ben Graham was about what he
called uh invented this concept of
margin of safety right you want to buy a
company at a price that if you're wrong
about what you think it's worth and it
turns out to be worth 30% less you paid
a deep enough discount to your estimate
that you're still okay it's about
investing a big part of investing is not
losing money if you can avoid losing
money and then have a few great hits you
can do very very well over time well
music is interesting because uh yes
music's been around for a very long time
but the way to make money from music has
been evolving like you mentioned
streaming there's a big transition
initiated by I guess Napster that
created Spotify of how you make money on
music W with with apple and with all of
this and the question is how well are
companies like umg able to adjust to
such Transformations one I could ask you
about the future which is uh Artificial
Intelligence being able to generate
music for example there have been a lot
of amazing advancements with so do you
have to also think about that like when
you close your eyes all the things you
think about are you imagining the
possible ways that the the future is
completely different from the the
present and how well this company will
be able to like surf the wave of that
sure and they've had to Surf a lot of
waves and actually the music business
peaked the last time in like the late
'90s or 2000 time frame and then really
Innovation Napster digitization of Music
almost killed the industry and Universal
really LED an effort to save the
industry and actually made an early deal
with uh Spotify that enabled you know
the uh the industry to really recover
and so by virtue of their Market
position and their credibility and their
willingness to kind of adopt new
technologies they've kept their position
now they of course had this huge
Advantage because I think the Beatles
are forever I think You2 is forever I
think Rolling Stones are forever um so
they had a a nice base of of assets that
were important and I think will forever
be and forever is a long time but you
know
the uh again there's enormous there are
all kinds of risks in every business
this is one that I think has a very high
degree of persistence and I can't
Envision a world where Beyond streaming
in a sense now you may have a neural
link chip in your head that instead of a
phone but the the music's going to come
in a digitized you know kind of format
you're going to want to have an infinite
library that you can walk around in your
pocket or in your brain it's not going
to matter that much if the form factor
you know the device changes um it's not
really that important whether it's
Spotify or apple or Amazon uh that are
the so-called uh dsps or the or the
providers uh I think the value is really
going to uh reside in the in the content
owners and that's really the artists uh
and the label and I actually think AI is
not going to be the primary creator of
music I think we're going to actually
face the reality that it's not that
music has been around for a th thousands
of years but musicians and music has
been around like we actually care to
know who's the musician that created it
just like we want to know that Who's the
artist human artist that created a piece
of art totally agree and I think if you
think about it there's other lots of
other
Technologies uh and computers that have
been used to generate music over time
but no one wants to No One falls in love
with a computer generated track right um
and you know Taylor Swift you know you
know incredible music but it's also
about the artist and her story and her
physical presence and you know the uh
the live experience I don't think you're
going to sit there uh and someone's
going to put computer up on stage
and then and it's going to play and
people are going to get excited around
it so I think AI is really going to be a
tool to make artists better artists um
and and uh you know the I think uh like
a synthesizer right uh really created
the opportunity for you know one man to
have an orchestra um maybe a bit of a
threat to uh a
percussionist um but maybe not maybe it
drove even more demand for for for the
live experience unless that computer has
humanlike sence which I believe is a
real possibility but then it's really
from a business perspective no different
than a human if it has an identity
that's basically Fame and influence and
there'll be a robot Taylor Swift and it
doesn't copyrightable asset I would
think MH right yeah and then there'll be
not sure that's a world I'm excited
that's a different discussion um the
world is not going to ask your
permission to become what it's is
becoming so uh but you can still make
money on it uh presumably there'd be a
capital system and there would be some
laws under which AI which I believe AI
systems will have rights that are akin
to Human Rights and we're going to have
to contend with what that means well
there's sort of name and likeness rights
yes right that have to be protected now
can a name be attributed to a a Tesla
robot I don't know I think so I think
it's quite obvious to okay those are
more more potential artists for us to
represent at universe exactly exactly
all right that's sort of one example
another example could be just you know
the restaurant industry right if you can
you look at businesses like a McDonald's
right it's a whatever the company's like
a
1950 vintage business and here we are
it's you know 75 years later and uh you
can kind of predict what it's going to
look like over time and the menu is
going to you adjust over time to
Consumer tastes and but I think the
hamburger and fries is probably
Forever The Beetles The Rolling Stones
the hamburger and fries are forever I
was uh eating at Chipotle last night as
I Was preparing know EXC thank you thank
you and uh yeah it is it is one of my
favorite places to eat you said it is a
place that you eat you obviously also
invest in it uh what do you get at
Chipotle I tend to get a double chicken
bowl or burrito um I I like the burrito
but I I generally try to order the bowl
yeah cut the carb for heal reasons all
right and uh you know double chicken
quac lettuce black beans and uh I'm I'm
more of a steak guy just just putting
that on the rec
record uh what's the actual process you
go through like literally
like the process of figuring out what
the value of a company is like how do
you do the research is it reading
documents is it talking to people is how
do you do it so all the B so Chipotle
What attracted us initially is a stock
price dropped by about 50% uh great
company great concept um cons you know
athletes love it consumers love it
healthy sustainable uh fresh food made
in front of your eyes and uh you know
great Steve ell's the founder did an
amazing job but ultimately the company's
lacking some of the systems and had a
food safety issue consumers got sick
almost killed the
rent uh but the reality of the fast food
quick service industry is almost every
fast food company has had a food safety
issue over time and the vast majority
have survived uh and we said look such a
great concept but they they you know
their approach was not was far from
ideal but we start with usually reading
the SEC violing so companies file a 10K
or an annual report they file these
quarterly reports called 10 Q's they
have a proxy statement which describes
kind of the governance the board
structure um conference call transcripts
are publicly available it's kind of very
helpful to go back five years and kind
of learn the story you know here's how
management describes their business
here's what they say they're going to do
then you can follow along to see what
they do uh it's like a historical record
of you know of how competent and uh
truthful they are you it's a very useful
device and then of course looking at
competitors uh and thinking about you
know who could what could dislodge this
company um uh you know and then we'll
talk to if it's an industry we don't
know well we know the restaurant
industry really well music industry you
know we'll talk to people in the
industry we'll try to understand you
know the difference between publishing
and recorded music we'll look at the
competitors um we'll talk to we'll read
books you I read a book about the music
industry or a couple books about the
industry um so it's it's a bit like a
big research project uh and you there
these so-called expert networks now and
you can get pretty much anyone on the
phone uh and they'll talk to you about
an aspect of the industry that you don't
understand want to learn more about uh
try to get a sense you know public
filings of companies generally give you
a lot of information but not everything
you want to know and you can learn more
by talking to experts about some of the
industry Dynamics the personalities you
want to get a sense of management uh I
like watching you know podcasts if a CEO
were to do a podcast or a YouTube
interview you get a sense of the people
so in the case of Chipotle for example
by the way I could talk about Chipotle
all day I just love it I love it I wish
there was a
sponsor uh I'll mention it to the CEO
don't make promises you can't keep Bill
I'm not making can't Brian Nichol is a
fantastic CEO he's not going to spend
one doar that he doesn't think is the
company's best interest all right all I
want is free Chipotle come on
now uh what was I saying oh and so you
look at a company like Chipotle and then
you see there's a difficult moment in
its history like you said that uh there
was a food safety issue and then you say
okay well I see a path where we can fix
this and therefore even though the price
is low we can get it to where the price
goes up to its value MH so the kind of
business we're looking for is sort of
the kind of business everyone should be
looking for right a great business it's
got a long-term trajectory of growth out
into the for you know even beyond the
fores seable distance right those are
the kind of businesses you want to own
you want businesses that generate a lot
of cash you want businesses you can
easily understand you want businesses
with these sort of huge barriers to
entry where it's difficult for others to
compete you want companies that don't
have to constantly raise Capital um and
these are some of the great businesses
of the world but people have figured out
that those are the great businesses so
the problem is those companies tend to
have very high stock prices and the
value is generally built into the price
you have to pay for the business so we
we can't earn the kind of returns we
want to earn for investors by paying a
really high price price matters a lot
you can buy the best business in the
world and if you overpay you're not
going to earn particularly attractive
returns so we get involved in cases
where a great business has kind of made
a big mistake or or you a company that's
kind of lost its way but it's
recoverable and that's we buy from
shareholders who are disappointed who've
lost confidence selling at a low price
relative to what it's worth if fixed and
then we try to be helpful in fixing the
company you said that uh barriers to
entry you said a lot of really
interesting qualities of companies very
quickly in a sequence of statements that
took like less than 10 seconds to say
but some of them were fascina all of
them were fascinating so you said
barriers to entry how do you know if
there's a type of moat
protecting of the the competitors from
stepping up to the plate I mean the most
difficult analysis to do as an investor
is that is kind of figuring out how wide
is the moat how you know how much at
risk is the business to disruption and
we're in I would say a period the
greatest period of disrupt ability in
history right
technology you know a couple of
19-year-olds can you know leave whatever
University or maybe they didn't even go
in the first place
uh they can raise you know millions of
dollars uh they can get access to
infinite uh bandwidth storage uh they
can contract with uh engineers in
lowcost markets around the world they
can build a virtual company and they can
disrupt businesses that seem super
established over time and then on top of
that you have major companies with
multi-trillion dollar market caps
working to find profits wherever they
can and so that's a dangerous World in a
way to be an investor and so you want to
you have to find businesses that it's
hard to foresee a world in which they
get disrupted and the beauty of the
restaurant business and we've actually
our best track record is in restaurants
we've never lost money uh we've only
made a fortune interestingly investing
restaurants a big part of it it's a
really simple business and if you you
know get your pootle right and you're at
a 100 stores you know it's not so hard
to Envision getting to 200 stores and
then getting to 500 stores right and the
key is maintaining the brand image
growing intelligently having the right
systems uh you know now when you go from
100 stores to 3500 stores you have to
know what you're doing there's a lot of
complexity right you know if you think
about your local restaurant uh you know
the family's working in the business
they're they're watching the cash
register and you can probably open
another restaurant you know across town
but there are very few restaurant
operators that own more than a few
restaurants and operate them
successfully and the and the quick
service business is about systems
and building a model that uh a stranger
who doesn't know the restaurant industry
can come in and enter the business and
build a successful uh successful
franchise now Chipotle is not a
franchise company they actually own all
their own stores but many of the most
successful restaurant companies or
franchise models like a Burger King a
McDonald's Tim Horton you know all these
various Brands Popeyes and there it's
about systems but the same systems apply
whether you own all the stores and it's
run by a big Corporation or whether the
owners of the restaurants are are sort
of franchisees you know local
entrepreneurs so if the restaurant has
scaled to a certain number that means
they've figured out some kind of system
that works it's very difficult to
develop that kind of system so that's a
moe a moe is you get to a certain scale
and you do it successfully and the brand
is now in the in the understood by the
consumer and what's interesting about
Chipotle is what they've achieved is
difficult right they're not buying
frozen hamburgers getting shipped in
they're buying fresh you know
sustainably sourced ingredients the
preparing food in the store that was the
first right the quality of the product
that chipotle is incredible it's the
highest quality food you can get for you
can get a serious dinner for under 20
bucks uh and eat really Health you know
healthfully and very high quality
ingredients and that's just not
available anywhere else and it's very
hard to replicate and to build those
relationships with you know Farmers
around the country it's a lot easier to
make a deal with one of the big you know
massive food food producers and buy your
pork from them uh than to buy from a
whole bunch of farmers around the
country and so it's that is a big moat
for Chipotle very difficult to replicate
and by the way another company I think
you have a stake is is McDonald's no we
own a company called restaurant Brands
restaurant Brands owns a number of Quick
service companies one of which is Burger
King Burger King okay well um it's been
a meme for a while but I've Burger King
is great too Wendy's whatever but
usually go McDonald's I'll just eat
burger patties I don't know if you knew
you could do this but a burger patty at
Burger King can do this McDonald's it's
actually way cheaper they'll just sell
you the Pat the Patty and it's cheap
it's like $150 or $2 for per Patty and
it's about 250 calories and it's just
meat and despite like the criticism of
memes out there that's pretty healthy
stuff it's healthy stuff and so when I
do when I go my the healthiest I feel is
when I do carnivore it doesn't sound
healthy but if I eat only meat I feel
really good I lose weight I have all
this energy it's crazy and the when I'm
traveling the easiest way to get me is
that did you go to McDonald's you order
six patties exactly so there's this sad
meme of me just sitting alone in a car
when I'm traveling just eating beef
patties and McDonald but I love it and
you got to do what what you love what
makes you happy and that's what makes me
happy we should maybe we'll have Burger
King feature in what about flame world
what what's with these fried burgers we
got to get you to Burger King you know
grilled burgers wait is this like fast
food trash I didn't know I don't know
the details of how they're made I'm not
not I don't have Allegiance I think we
got a chance to switch you to Burger
King great we'll see I I'm I'm making so
many deals today it's wonderful okay you
were talking about most and this kind of
remind me of um alphabet the parent
company sure we're made where's it's a
big position for us so it's interesting
that you're uh think that maybe alphabet
fits some of these
characteristics It's tricky to know with
everything that's happening
in in Ai and I'm interviewing s Pai soon
it's interesting that you think that
there's a mo and it's also interesting
to analyze that because a consumer as
just a fan of Technology why is Google
still around like they've been it's not
just a search engine it's doing it all
the basics of the business of search
really well but they're doing all these
other stuff so what's your analysis of
alphabet why are you still positive
about it sure so it's a business we've
admired as a firm for you know whatever
15 years um but rarely got to a price
that we felt we could own it because
again the expectations were so high and
price really matters and really the sort
of AI scare I would call it you know
Microsoft comes out with chat GPT uh
they do an amazing demonstration people
like this most incredible product and
Google which had been working on AI even
earlier obviously the Microsoft
Microsoft was behind an AI it was really
their chat GPT deal that gave them a
kind of a market presence um and then
Google does this fairly disastrous uh
demonstration of Bard and the world says
oh my God Google's fallen behind an ai
ai is the future stock gets crushed
Google gets to a price around 15 times
earnings uh which for a business of this
quality is an extremely extremely low
price and our view on Google one way to
think about it when a business becomes a
verb that's usually a pretty good sign
about the mode around the business so
you know you open your computer and you
open your search and very high
percentage of the world starts with a
Google you know page in a on
line uh you type in your your search you
know the Google advertising search
YouTube franchise is one of the most
dominant uh franchises in the world very
difficult to disrupt uh extremely
profitable uh the world is moving from
offline advertising to online
advertising and that Trend I think
continues why because you can actually
see what your ads work you know they
used to say about advertising you know
uh you spend a fortune and you just
don't know which 50% of it works but you
just sort of spend the money because you
know ultimately that's going to bring in
the customer and now with online
advertising you can see with
granularity which dollars I'm spending
you know when people click on the search
term and end up buying something and I
pay you know the it's a very high return
on investment for The Advertiser and
they really dominate that business now
ai of course is a risk if all of a
sudden people start searching or asking
questions of chat GPT and don't start
with the Google search bar that's a risk
to the company and so our view based on
work we had done and talked to Industry
experts is that Google if anything had a
a uh by virtue of the the investment
they've made the time the energy they
people put into it we felt their AI
capabilities were if anything
potentially greater than uh Microsoft
Chat GPT and that the market had
overreacted and I because Google you
know is a big company uh Global business
Regulators uh scrutinized it incredibly
carefully they couldn't take some of the
same Liberties a startup like open AI
did in releasing a product and I think
Google took a more cautious approach in
releasing an early version of Bard in
terms of its capabilities and that let
the mark the world to believe that they
were behind and we ultimately concluded
if any they're tied or ahead and you're
paying nothing uh for the that potential
business and they're going to and they
also have huge advantages by you think
of all the data Google has like the
search data um all the various app you
know applications you know email and
otherwise and the kind of the Google
Suite of of products it's an incredible
data set so they have more training data
than pretty much any company in the
world they have incredible Engineers
they have enormous Financial Resources
uh so that was kind of the BET and um
and we still think it's probably the
cheapest of the big seven companies in
terms of price you're paying for the
business relative to its current
earnings it also is a business uh that
has a lot of potential for efficiency
you know sometimes when you have this
enormously profitable dominant company
you know all of the technology companies
in the post March 20 world uh grew
enormously in terms of their teams and
they probably over hired and so you've
seen some you know the Facebooks of the
world and now even Google starting to
get a little more efficient in terms of
their operation so we P up low multiple
for their the business um one way to
think about the value of the business is
the price you pay for the earnings or
alternatively what's the yield if you
flip over the price over the earnings it
gives you kind of the yield of the
business so a 15 multiple is about a
almost a 7 a half% yield and that
earnings yield is growing over time as
the business grows that's a you know
compared to uh what you can earn lending
your money to the government you know 4%
that's a very attractive going in yield
and then there's all kinds of what we
call optionality in all the various
businesses and Investments they've made
that are losing money they've got a
cloud business that's growing very
rapidly but they're investing basically
100% of the profits from that business
in growth so you're in that earnings
number you're not seeing any earnings
from the cloud business and you know
they're one of the top Cloud Player so
very
interesting generally well-managed uh
company with Incredible assets and
resources and dominance you know and has
no debt it's got ton of cash and so
pretty good story is there something
fundamentally different about AI that
makes all of this more complicated which
is the sort of the exponential
possibilities of the kinds of products
and impact that AI could create when
you're looking at meta Microsoft
alphabet Google all these companies
xai or maybe startups like is is there
some more risk introduced by the
possibilities of AI absolutely that's a
great question um you know business
investing is about finding companies
that can't be disrupted AI is the
ultimate disruptable asset uh or
technology and it that's what makes
investing treacherous is that you own a
business that's enormously profitable
management gets if you will fat and
happy and then a new technology emerges
that just takes away all their
profitability and AI is this incredibly
powerful tool which is why every
business is saying how can I use AI in
in my business to make us more
profitable more successful grow faster
and also disrupt or protect oursel from
the
you know the incomings you know it's
it's a bit like you know Buffett talks
about um a great business like a castle
surrounded by this really wide mode but
you have all these barbarians trying to
get in and uh steal the uh princess and
uh it happens you know Kodak for example
was an amazing incredibly dominant
company until it disappeared Polaroid
you know this incredible
technology and that's why we have tended
to stay away from companies that are
technology companies because technology
companies generally the world is such a
dynamic place that someone's always
working on a better version and you know
codec was caught up in the analog film
world and then the world changed well
Google was pretty fat and happy until
chadti came out how would you rate their
ability to wake up lose weight and be uh
less happy and aggressively ReDiscover
their search for happiness I think
you've seen a lot of that in the last
year here uh and uh I would say some
combination of embarrassment and pride
are huge motivators uh for everyone from
Sergey Brin you know to the management
of the company um and Demis Saab is
throw in into the picture and all of
Deep Mind teams and the unification of
teams and like all the shakeups it was
interesting to watch the chaos I love it
I love it when uh everybody freaks out
like you said partly embarrassment and
partly that competitive drive that
drives into engers is great I can't wait
to see what um there've been just a lot
of improvement in the product let's see
let's see where it goes you mentioned
management how do you analyze the
governance structure and the individual
humans that are the managers of a
company so as I like to say incentives
drive all human behavior uh and that
certainly applies in the business world
so understanding the people and what
drives them and what the actual
financial and other incentives of a
business are very important uh part of
the analysis for investing in a
company and you can learn a lot you know
I mentioned before one great way to
learn about a business is go back a
decade and read everything that
management has written about the
business and see what they've done over
time see what they've said you know
conference calls are actually you know
relatively recent uh when I started in
the business there weren't conference
call transcripts now you have you know a
a written record of everything
management has said in response to
questions from analysts at conferences
and otherwise
and so just you learn a lot about people
by listening to what they say how they
answer questions and ultimately their
track record for doing what they say
they're going to do are do they under
promise and overd deliver do they
overpromise and underd deliver um do
they say what they're going to do do
they admit mistakes um do they build
great teams do people want to come work
for them are they able to retain their
talent um you know and then part of it
is do they how much are they running the
business for the benefit of the business
how they running the business for the
benefit of themselves um and uh you know
that's kind of the analysis you do are
we uh talking about CEO Co what what
what does management mean how deep does
it go sure so this very Senior
Management matters enormously you we use
the Chipotle example uh Steve 's great
entrepreneur business got to a scale he
really couldn't uh run it we recruited a
guy named Brian helped the company
recruit a guy named Brian nickel uh and
he was considered the best person in the
Quick Service indust
he came in and completely rebuilt the
company actually we moved the company
reply was moved to
California and sometimes one way to redo
the culture of a company is just to move
it geographically and then you can kind
of reboot the business but a great
leader has great followership you know
over the course of their career they'll
have a team they've built that will come
follow them into the next opportunity uh
but the key is you know really the top
person matters enormously uh because and
then it's who they
recruit uh you know you recruit an A+
leader and they're going to recruit
other a type people recruit a b leader
you're not going to recruit any great
talent beneath
them uh you mentioned Warren Buffett you
said you admire him as an investor what
do you find most interesting and
Powerful about his
approach what aspects of his approach to
investing do you also practice sure so
most of what I've learned in the
investment business I've learned from
waren Buffett he's been my great
Professor uh of this business I my first
book read in the business was the Ben
Graham intelligent investor but fairly
quickly you get to learn about Warren
Buffett and I started by reading the
Berkshire hathway and reports uh and
then I eventually got the Buffett
partnership letters that you can see uh
which are an amazing read to go back to
the 19 mid1 1950s and read what he wrote
to his limited partners when he first
started out and just follow that
trajectory over a long period of time so
what's remarkable about him is one
duration right he's still added at
93 uh you know to uh you know takes a
very long-term view um but a big thing
that you learn from him investing
requires this incredible dispassionate
uh on emotional quality you have to be
extremely economically rational uh which
is not uh a basic it's not something you
learn in the jungle you know I don't
think it's something that you know if
you think about the the um you know
surviving the jungle uh you know the
lion shows up uh you know you everyone
starts running you run with them uh that
does not work well uh in markets in fact
you generally have to do the opposite
right when the Lemmings are running over
the cliff that's the time where you're
facing the other direction and you're
running the other direction I.E you're
stepping in you're buying stocks at
really low prices um you know Buffett's
been great at that and great at teaching
about what he calls temperament which is
this sort of emotional kind of or
unemotional uh quality that you need uh
to be able to dispassionately look at
the world and say okay is this a real
RIS risk or people
overreacting um people tend to get
excited about Investments when stocks
are going up and they get depressed when
they're going down and that I think
that's just inherently human you have to
reverse that you have to get excited
when things get cheaper and you got to
get concern when things get more
expensive you've been a part of some big
battles some big losses some big wins so
it's been a roller coaster so in terms
of temperament psychologically how do
you not let that break you how do you
maintain a
calm uh demeanor and avoid running with
the
Lemmings I think it's something you kind
of learn over time uh a key success
factor is you want to have enough money
in the bank that you're going to survive
uh you know regardless of what's going
on with volatility and markets you know
people who uh one you shouldn't borrow
money so if you borrow money you own
stocks on margin markets are going down
and you have your livelihood at risk
it's very difficult to be rational so
key is getting yourself to a place where
you're financially secure you're not
going to lose your house right that's a
kind of a key thing and then also doing
your homework you know stock prices
stocks can trade at any price in the
short term and if you know what a
business is worth and you understand the
management you know it extremely well
it's not nearly as uh it doesn't bother
you when a stock price goes down or it
has much less impact on you because you
know you know again as uh Mr Graham said
you know the short- term the markets a
voting machine you have a bunch of
lemmings voting One Direction that's
concerning but if it's a great business
doesn't have a lot of debt and people
going just listen to more music next
year than this year you know you're
going to do well uh so it's a bit some
combination of being personally secure
and also just knowing what you own uh
and over time you build uh uh calluses I
would say so psychologically just as a
human being speaking of lines and gazel
and all this kind of stuff yeah is there
some is it as simple as just being
financially secure uh is there some just
human qualities that you have to be born
with Slash develop I think so I think uh
now I'm a pretty emotional person I
would say or I feel pretty strong
emotions but not an investing I'm remark
ably immune to kind of volatility and
that's a big advantage and it took some
time for me to develop that so you
weren't born with that you think no so
being emotional you want to respond to
volatility yeah and you just it's a bit
again I you can learn a lot from other
people's experience it's one of the the
few businesses where you can learn an
enormous amount by reading about other
periods in history uh you know watch you
know following Buffett's career the
mistakes he made if you're investing a
lot of capital every one of your
mistakes is going to be big right so
we've made big mistakes uh the good news
is that the vast majority of things
we've done have worked out really well
and so that also gives you you know
confidence over time but because we make
very few Investments you know we own
eight things today or seven companies of
that matter um if we get one wrong it's
going to be big news and so the other
nature of our business you have to be
comfortable with is a lot of public
scrutiny a lot of public criticism and
that requires
some uh experience call that I think
we'll talk about some of that yeah uh
financially secure is something you I
believe also recommend for even just
everyday investors is there some general
advice from the things you've been
talking about that applies to Everyday
investors sure so never invest money you
can't afford to lose where it would if
you l lost this this money and you know
you lose your house Etc so
having being in a place where uh you're
investing money that you don't care
about the price in the short term it's
money for your retirement and you take a
really long-term view I think that's key
uh never investing where you borrow
money against your securities you know
the the markets offer you the
opportunity to leverage your investment
and in most worlds you'll be okay except
if you know there's a financial crisis
or you know a nuclear device gets
detonated God forbid somewhere in the
world or there's a unexpected war or you
know someone kills a leader unexpectedly
you know things happen that can change
the course of history and markets react
very negatively to those kinds of events
and you can own the greatest business in
the world trading for $100 a share and
next moment it could be 50 so as long as
you don't borrow against Securities you
own really high quality businesses and
it's it's not money that you need in the
short term uh then you can you can
actually be thoughtful about it and that
is a huge Advantage the vast majority of
investors it seems tend to be the ones
that panic in the downturns get
overrated and when markets are doing
well so be able to think longterm and be
sufficiently financially secure such
that you can afford to think long term
yeah that Buffett is the ultimate
long-term thinker and just the decisions
he makes uh the consistency of the
decisions he's made over time and
fitting into that sort of long-term
framework is a very uh very educational
let's put it that way for the for
learning about this business so you
mentioned eight companies but what do
you think about mutual funds that for
everyday investors that diversify across
a larger number of companies I think
there are very few mutual funds uh there
thousands and thousands of mutual funds
they're very few that earn their keep in
terms of the fees they charge uh they
tend to be too
Diversified um and
uh you know too shortterm and you're
often much better off just buying an
index fund and many of them
perform they look if you look carefully
at their portfolios they're not so
different from the underlying index
itself and you tend to pay a much higher
fee uh now all of that being said
there's very talented mutual fund
managers a guy named will danoff at
Fidelity had a great record over a long
period of time you the famous Peter
Lynch uh Ron Baron another great
long-term growth stock investor so
there's some great uh mutual funds but I
put them in the handful versus the
thousands and if you're in you know the
thousands I I'd rather someone bought
just an index fund basically yeah index
funds but what uh what would be the leap
for an everyday investor to go to
investing in a small number of companies
like 2 three four five companies I even
recommend for individual investors to
invest in you know a dozen companies you
don't get that much more benefit of
diversification going from a dozen to 25
or even 50 you know most of the benefits
diversification come in the first you
know call it 10 or 12 uh and if you're
investing in businesses that don't have
a lot of debt they're businesses that
you can understand yourself you
understand you know actually individual
investors did a much better job
analyzing Tesla than the so-called
professional investors or analysts the
vast majority of them so if it's a
business you understand you if you
bought a Tesla you understand the
product and its appeal to Consumers you
know it's a good place to start when
you're analyzing a company um so I would
invest in things you can understand
that's kind of a key uh you know you
like Chipotle you you understand why
they're successful you can you know go
there every week week and you can
monitor you know is anything changing
you how these new uh kind of how's
chicken alpastor is that is that a good
upgrade from the basic chicken you know
the drink offerings improving uh the
stores clean I think you should invest
in companies you really understand
simple businesses where you can predict
with a high degree of confidence what
it's going to look like over time and if
you do that in a not particularly
concentrated fashion and you don't
borrow money against your securities you
probably do much better than your
typical mutual fund yeah it's
interesting consumers that love a thing
are actually good analysts of that thing
or I guess a good starting point by way
there's much more information available
today when I was first investing
literally we had people faxing us
documents from the SEC filings in
Washington DC now everything's available
online conference call transcripts are
free um you know there you have you have
ai you know you have uh unlimited uh
data and uh all kinds of mess M boards
and Reddit forums and things where
people are you know sharing advice and
everyone has their own you know by
virtue of their career or experience
they they'll they'll know about an
industry or a business and that gives I
would take advantage of your own
competitive advantages I'm just afraid
if I invest in Chipotle I'll be like
analyzing every little change of menu
from a financial perspective and just be
very critical um if it's going to affect
your experience I wouldn't I wouldn't
buy the stock yeah I mean I I should
also say that I am somebody that
emotionally doesn't respond to
volatility which is why I've never
bought index funds and I just I just
noticed myself psychologically being
affected by the ups and downs of the
market I want to tune out because if I'm
at all tuned in it has a negative impact
on my life yeah that's really important
can you explain what activist investing
is you've been talking about investing
and then looking at companies when
they're struggling stepping in and
reconfiguring things within that company
and helping it become great uh so that's
part of it but let's just zoom out what
what's this idea of activist investing I
think recently in the last couple of
days I read an article saying that more
than 50% of the capital in the world
today that's in invest in the stock
markets passive indexed money that's the
most passive form right so if you think
about an index fund a machine buys a
fixed set of Securities in certain
proportion uh there's no human Judgment
at all and there's no real person behind
it in a way um they never take steps to
improve a business they just quietly own
Securities what we do is we invest our
capital in a handful of things you get
to know them really really well because
you're going to put 20% of your assets
in something you need to know it really
well but once you become a big holder
and if you've got a some thoughts on how
to make a business more valuable
you can do more than just be a passive
investor so our our strategy is built
upon uh finding great companies in some
cases that have lost their way and then
helping them succeed and we can do that
with ideas from outside the boardroom
sometimes we take a seat at on a board
or more than one um and we work with the
best management teams in the world to
help these businesses succeed so when I
first went into this business no one
knew who we
were and we didn't have that much money
and so to influence what was to us a big
company uh we had to make a fair bit
more noise right so we would buy a stake
we' announce it publicly we attempt to
engage with management the first
activist investment we made at persing
Square was Wendy's I couldn't get the
CEO to ever return my call didn't return
my call so we actually in that case uh
our idea was Wendy's own a company
called Tim Hortons which was this coffee
donut chain and you could buy Wendy's
for basically $5
billion and they owned 100% of Tim
Horton's which itself was worth more
than 5 billion so you could literally
buy Wendy's separate Tim Hortons and get
Wendy's for negative value that seemed
like a pretty good opportunity even
though the business wasn't doing that
well uh so we bought the stake called
the CEO couldn't get a meeting nothing
so we hired actually Blackstone which
was at that time had at Investment Bank
and we hired them to do what's called a
fairness opinion of what Wendy's would
be worth if they followed our advice and
they agreed to do it paid them a fee for
it and then we mailed in a letter with a
copy of the fairness opinion saying
monies would basically be worth 80% more
if they did what we said and six weeks
later they did what we said so that's
activism at least an early form of
activism with that kind of under our
belt we had a little more credibility
and now we started to take things and
stakes in
companies uh the media would pay
attention so the media became a kind of
an important partner and uh you know
some combination of Shame embarrassment
and opportunity
uh motivated management teams to do the
right thing and then you know beyond
that uh there's certain steps you can
take if management is Rec Cal trint and
the shareholders are on your side but
it's a bit like running for office
you've got to get all the constituents
to support you and your ideas and if
they support you in your ideas you can
overthrow if you will the board of a
company you bring in new talent and then
take over the management of a business
and that's the most extreme form of
activism so that's kind of the early
days what we did and a lot of the early
things that we did were um you know call
it what we call sort of like Investment
Banking activism where we'd go in and
recommend something a good investment
bank would have recommended and if they
do it we make a bunch of money and then
we moved on to the next one and then we
realized an investment in a company
called General growth uh was the first
time we took a board seat on a company
and there was some Financial
restructuring and also an opportunity to
improve the operations of the business
sit on the board of a company and that
was one of the the best investments we
ever made and we said okay we can do
more than just be an outside the
boardroom investor and we can get
involved in helping select the right
management teams and helping guide the
right management teams and then we've
done that over years uh and then I would
say the last seven years we haven't had
to be an activist an activist is
generally someone who's outside banging
on the door trying to get in we're sort
of built enough credibility that they
open the door and they say hey Bill what
ideas do you have so welcome would you
like to join the board we're treated
differently today than we were in the
beginning and that uh um is I would say
some people might just call it being an
Engaged owner that by the way that's the
way investing was done in the Andrew
Carnegie JP Morgan days you know 150
years ago right you had these iconic
Business Leaders that would own 20% of
us steel and when things would go wrong
they'd replace the board and the
management and fix them and over time we
went to a world where mutual funds were
created like in the 1920s 30s index
funds uh with Vanguard and others and
that all these controlling shareholders
would you know kind of gave their stock
to society or their children and
multiple generations and there were no
longer kind of controlling owners of
businesses or very few and that led to
underperformance and the opportunity for
for activists over time and what
activism has done I think we've helped
lead this movement is it restored kind
of the balance of power between the
owners of the business and the
managements of the company and that's
been a very good thing for the
performance of the of the US Stock
Market actually so the owners meaning
the shareholders yes and so there's a
more direct channel of communication
with with activists investing between
the shareholders and the people running
the company yes so activists generally
never own more than five or 10% of a
business so they don't have control so
the way they get influence is they have
to convince the other you know M they
have to get to sort of a majority of the
other shareholders to support them and
if they can get that kind of support
they can behave almost like a
controlling shareholder and that's how
it works so the running of a compan is
uh according to bill akman is more
democratic now it is it is but you need
some thought leaders so activists are
kind of thought leaders because they can
spend the time and the money uh you know
a retail investor that owns a th shares
is doesn't have the the the resources of
the time they got a dat job whereas an
activist day job is finding the handful
of things where there are
opportunities so on average is it good
to have such an Engaged powerful
influential
investor helping control direct the
direction of a company it depends who
that investor is but generally I think
it's a good thing uh and that's why you
know one of the problems with being CEO
of a company today and having a very
Diversified shareholder base is the kind
of short-term long-term balance and you
have investors that have all different
interests in terms of what they want to
achieve and when they want it achieved
and uh CEO of a new company hasn't a new
CEO of an old company let's say hasn't
had the chance to develop The
credibility uh to make uh the kind of
longer term decisions and can be stuck
in a cycle of being judged on a
quarterly basis and a business the best
businesses are forever assets and
decisions you make now have impact 3
four or 5 years from now in order to
make and sometimes there are decisions
we make that have the effect of of
reducing the earnings of a company in
the short term because in the long term
it's going to make the business much
more valuable uh but it sometimes it's
hard to have that kind of credibility
when you're a new CEO of a company so
when you have a major
owner uh that's respected by other
shareholders sitting on the board saying
hey the CEO is doing the right thing and
making this expensive investment in a
new Factory we're spending more money on
R&D uh because we're developing
something that's going to pay off over
time that large owner on the board uh
can help buy the time necessary for
management to behave in a longer term
way and that's I think good for all the
shareholders so that's the good story
but can it get bad can you have a a CEO
who is a Visionary and sees the
long-term future of a company and an
investor come in and have very selfish
interest in just making more money in
the short term and therefore destroy and
manipulate the opinions of the
shareholders and other people on the
board in order to syn the
company maybe increase the increase the
price but uh destroy the possibility of
long-term value could theoretically
happen but again the the activist in
your example jally doesn't own a lot of
stock uh the shareholder bases today the
biggest shareholders are these index
funds that are forever right the Black
Rock Vanguard State Street their
ownership Stakes are just at this point
only growing because of the inflows of
capital they have from shareholders so
they have to think or they should think
very longterm and they're going to be
very skeptical of someone coming in with
a short-term idea that drives the stock
price up you know in the next six months
but impairs the company's long-term
ability to compete and basically that
ownership group uh prevents this kind of
activity from really happening so people
are generally skeptical of short-term
activists in investors yes they're and
they're very few I don't really know any
short-term activist investors that's a
not ones with
credibility you mentioned uh General
growth I read somewhere called arguably
one of the best hedge fund trades of all
time so uh I guess it went from $60
million to over three billion it was it
was a good one all right but it wasn't a
trade I wouldn't describe it as a trade
a trade is something you buy and you
flip this is something where we made the
investment initially in November of
2008 uh and uh we still own a company we
spun off of General growth and it's now
15 years later so can can you describe
what went into making that decision to
actually increasing the value of the
company sure so this was at the time of
the financial crisis uh Circa November
2008 what real estate's always been a
kind of sector that I've been interested
in I began my career in the real estate
business working for my dad actually uh
ranging mortgage Is For Real Estate
developers so I I have uh kind of deep
deep ties and interest in the business
and general growth was the second
largest shopping mall company in the
country uh Simon properties many people
have heard of General growth was number
two they own some of the best malls in
the country and at that time people
thought of shopping malls as these non-d
disruptable things again we talk about
disruption malls have been disrupted in
many ways uh and general growth stock uh
the general growth the company the CFO
in particular was very aggressive in the
way that he borrowed money and he
borrowed money from a kind of Wall
Street uh not long-term uh mortgages but
generally relatively short-term
mortgages he was pretty aggressive as
the value went up he would borrow more
and more against the assets and that
helped the shortterm results of the
business the problem was during the
financial crisis the the market for
what's called cnbs commercial mortgage
back Securities basically shut and the
company because its debt was relatively
short-term had a lot of big maturities
coming up that they had no ability to
refinance and the market said oh my God
the lenders are going to foreclose and
the shareholders going to get wiped the
company's going to go bankrupt they
going to get wiped out the stock went
from $63 a share to 34 so and there was
a family the buck bound family owned I
think about 25% of the company and the
they had a $5 billion five billion stock
that was worth 25 million or something
by the time we bought a stake in the
business and what interested me was uh I
thought the assets were worth
substantially more than the liabilities
the company had 27 billion of debt and
had $100 million value of the equity
down from like 20 billion okay and one
that you know sort of an interesting
place to start with a stock down
99% but the fundamental drivers the mall
business are occupancy how occupied are
the malls occupancy was up year on-year
between 07 and 08 interestingly net
operating income which is kind of a
measure of cash flow from the malls that
was up year on-ear so of the underlying
fundamentals were doing fine the only
problem they had is they had billions of
dollars of debt that they had to repay
they couldn't repay and if you kind of
examine the bankruptcy code um that it's
precisely designed for a situation like
this where it's kind of this resting
place you can go uh to kind of re re uh
restructure your business now the
problem was that every other company
that had gone bankrupt the shareholders
got wiped out and so so the market
seeing every previous example the sholds
get wiped out the assumption is the
stock is going to go to zero that's not
what the bankruptcy code says what the
bankruptcy bankruptcy code says is that
the value gets apportioned based on
value and if you could prove to a judge
that there was the assets worth more
than the liabilities then the
shareholders actually get to keep their
investment in the
company and that was the bet we made and
so we stepped into the market we bought
25% of the company in the open market
for we had to pay up it started at at 34
I think there were 300 million shares so
it was at a $100 million value by the
time we were done we paid an average of
we paid 60 million for 25% of the
business so about $240 million for the
equity of the company and then we had to
get on the board to convince the
director is the right thing to do and
the board was in complete Panic didn't
know what to do spending a ton of money
on
advisers and you know I was a
shareholder activist you know four years
into persing square and no one had any
idea what we were doing they thought we
were crazy every day stop every day we'
go into the market and we'd buy this
Penny Stock and we'd file what's called
a 13d every 1% increase in our stake and
people just thought we were crazy we're
buying stock in a company that's going
to go bankrupt Bill you're going to lose
all your money you know run okay and I
said well wait you know bankrupcy code
says that there's more asset value than
liabilities we should be fine and the
key moment if you're looking for uh fun
moments is there's woman named Maddie
Buck bound uh who was from the buck
bound family and uh her cousin John was
chairman of the board CEO of the company
and I said as she calls me after we
disclose our stake in the company she's
like Billy Amman I'm really glad to see
you here and I met her like I don't
think it was a date but I kind of met
her in a social context when I was like
25 or something and she said look I'm
really glad to see you here and there
anything I can do to help you call me I
said
sure uh we kept trying to get on the
board of the company they wouldn't
invite us on couldn't really run a proxy
contest that you know not with a company
going bankrupt and their advisers
actually were Goldman Sachs and they're
like you don't want the fox in the hen
house and they were listening to their
advisors so I called Maddie up and I
said Maddie I need to get on the board
of the company to help and she says you
know what I will call my cousin and I'll
get it
done uh like you know she calls back a
few hours later you'll be going on to
the board I don't know what she said to
her but she was convincing next thing
you know I'm invited to on the board of
the company and the board is talking
about the old Equity of General growth
old Equity is what you talk about the
shareholders are getting wiped out I
said no no no this board represents the
current Equity of the company and I'm a
major shareholder John's a major
shareholder there's plenty of asset
value here this company should be able
to rest be restructured for the benefit
of shareholders and we let a
restructuring for the benefit of
shareholders and it took let's say uh
eight months and the company emerged
from chapter 11 we made an incremental
investment into the
company and the shareholders kept the
vast majority of their investment uh all
the creditors got their you know face
amount of their investment par plus a c
crude interest and it was a great
outcome all the employees kept their
jobs the mall stayed open there was no
liquidation the bankruptcy system worked
the way it should uh you know I was in
court you know all the time and the
first uh meeting with the judge the
judge is like look this would never have
happened were it not for a financial
crisis and once the judge said I knew we
were going to be fine because the
company really not done anything
fundamentally wrong maybe a little too
aggressive in how they borrowed money
and uh stock went from 34 cents to $31 a
share and actually fun little anecdote
um we made a lot of people a lot of
money who follow us into it I got a lot
of nice thank you notes which you get on
occasion in this business believe it or
not and then one day I get a voicemail
this is when there was something called
voicemail probably a few years later
and it's a guy with a very thick
Jamaican accent leaving a message for
Bill Amman so you know I return all my
calls call the guy back he's like hi
it's Bill Amman I'm just returning your
call he's oh Mr
Amman uh thank you so much for calling
me and I said oh how can I help he says
I wanted to thank you I said what do you
mean he said I saw you on CNBC you know
a couple years ago and you were talking
about this General growth and the stock
I said where was the stock at the time
he said it's 60 Cent or something like
this and I bought a lot of
stock and I'm like well how much did you
invest oh I invest all of my money in
the company and he was a New York City
Taxi Driver and he invested like $50,000
or something like this at 60 cents a
share and he was still holding it and he
went into retirement and he made you
know 50 times his money and uh yeah
those are the moments that you feel
pretty good about investing well give
you confidence through that went to
Penny Stock and I'm sure you were
getting a lot of naysay and people
saying that this is crazy it's the same
thing you just do the work like we got a
lot of push back from our investors
actually because we had never invested
in a bankrupt company before it's a
field called distressed investing and
they're dedicated uh distressed
investors and we weren't considered one
of them so Bill what are you doing you
don't know anything about distressed
investing you don't know anything about
bankruptcy
investing um but I can read I can you
learned and I learned and it sometimes
it's very helpful not to be a
practitioner an expert in something
because you get used to the conventional
wisdom and so we just you know
abstractly read the uh step back and
look at the facts and and it was just a
really interesting setup for uh one of
the best investments we ever made how
hard is it to learn some of the legal
aspects of this like you mentioned
bankruptcy code like I imagine it's very
sort of dense language and dense ideas
and the loopholes and all that kind of
stuff like if you're just stepping in
and you've never done distressed
investing how hard is it to figure out
it's not that hard no it's not that hard
okay me I literally read a book on
distress investing okay Ben Branch or
something something on distressed inest
so you were able to pick up the
intuition from that just all the uh the
basic skills involved the basic facts to
know all that kind of stuff most of the
world's knowledge has already been
written somewhere you just got to read
the right books
and uh also had great
lawyers uh you know built up some great
relationships we we work with svin and
Cromwell and the lawyer there named Joe
Shanker who I met earlier in my career
persan square is actually my second act
in the hedge fund business I started a
fund called Gotham Partners when I was
26 one of my early Investments was a
company called Rockefeller Center
properties that was heading for
bankruptcy and uh the lawyer on the
other side representing Goldman Sachs
was a guy named Joe Shanker so he was
like an obvious phone call because had
yet another real estate State bankruptcy
in that one we we did very well but I
missed the big opportunity and uh I I I
suffered severe psychological torture
every time I walked by Rock pH Center
because we could have made we knew more
about that property anyone else but I
knew less about deal making and didn't
have the resources and I was 28 years
old or
27 um and they hired a better lawyer
than we did and uh they outsmarted us on
that one in a way so I said okay I'm
going to go hire this guy the next time
around so okay well well we'll probably
talk about Rockefeller Center and some
failures uh but first he said fox in the
hen housee yes something that the board
and the chairman were worried about why
would they call you a fox so you you
keep saying activist investing is uh
there's nothing to worry about it's
always good sure mostly good but you
know that expression applied in this
context you know they were still worried
about that sure and so I mean there's a
million questions here but first of all
what does the process of getting on the
board look like so a board can always
admit a member at any time in their
discretion for a US company um you that
maybe there's some jurisdiction where
you need a shareholder vote but in most
cases a board can vote on any director
that they want if the board doesn't
invite you to the party you have to
apply to be a member in effect and that
process is called um you know basically
is this the process of uh ultimately
running a uh a slate for a meeting where
you propose a number every any
shareholder can propose to be on a board
of a company if they own one share of
stock uh in the business and uh getting
your name in the company's uh you know
the materials they sent to shareholders
those rules were written in a way that
were very unfavorable and very difficult
to get in the door those rules have been
changed very recently uh where the
company now has to include a candidate
really all the candidates in the
materials they send to shareholders so
the shareholders pick the best ones when
we applied we applied when we ran proxy
contests in the past that was not the
case and so you have to spend a lot of
money mostly mailing fees and all kinds
of other legal and other expenses to to
let everyone know you're running like
running a political campaign and then
you got to run around and meet with the
big shareholders you know fly around the
country explain your case to them and
then there's uh a shareholder meeting
and if you get a majority of the votes
you get
on uh what's this proxy contest SL
battle idea what's what's what's battle
when they don't want you go okay and a
lot of that has to do with I would say
Pride normal human kind of stuff you
know a lot of times a board of an
underperforming company doesn't want to
admit that they've underperformed and
Boards of directors 20 years ago we
started persan Square were pretty cushy
jobs sit on a board of a company uh you
play golf with the CEO you know at nice
golf courses you make a few hundred
thousand a year to go to four
meetings uh it was kind of a rubber
stamp world where boards you know at the
end of the day uh they the CEO really
ran the
show uh once shareholders could actually
dislodge board members and they could
lose their seats and that's really the
the rise of shareholder activism board
started taking their responsibilities
much more seriously because directors
are typically you know there many cases
they're retired CEOs this is kind of how
they're making a living in the later
part of their career they sit on four
boards they collect you a million a
million half dollar a year in director's
fees if they get thrown off the board by
the shareholders that's embarrassing
obviously uh and it affects their
ability to get on other boards so you
know again incentives as I said earlier
drive all human behavior the incentives
directors they want to preserve their
board seats so if you have a director
now the directors on board serve in
various roles the most vulnerable ones
are ones who for example chair a
compensation committee and if they put
in a bad plan or they overpaid
management you know they're subject to
attack by shareholders but you know
these contests are not disimilar to
political contests where there
mudslinging and other side puts out
false information about you you have to
respond and they're spending the
shareholders money so they have sort of
unlimited resources and you're spending
your and your investors money you know
when you're a small firm finite
resources so they can outspend you they
can sue you they can try to you know uh
Jigger the uh the mechanics and such a
way uh that you're going to lose there's
some unfortunate stuff that's happened
in the past you know manipulative
so also some stuff that's public like in
the press and all this kind of stuff of
course you know there'll be you know
articles about you know you know the
dirty days where they would uh go
through your trash and you know make
sure that you know you're not sleeping
around and you know things like this but
that's okay I I can I'm subject I can
survive extreme scrutiny because I've
been through this for a long time so
you're saying the fat and happy
hens um can get very uh wolflike when
the fox is trying to break in is this
how do we extend this the fox is a
threat to the hens yeah but but you're
you've just Charis the charismatic Fox
just explained to me why the fox is good
for everybody in the hen house at the
end of the day it's actually very good
on a board to have someone you know if
you there are many examples over time
and some handful of high-profile ones
where the board fought tooth and nail to
keep the activist off the board and then
once the activist got on the board they
said you know the guy's not so bad after
all the shareholders voted them on he's
got some decent ideas and let's all work
together to have this work out and so
there very few cases where after the
contest when the uh by the way sometimes
you have to replace the entire board
we've done that um but some most cases
you get a couple of seats on the board
and it's just you know you you want to
build a board comprised of diverse
points of view uh and that's how you get
to the truth what was the most dramatic
battle for the board
that you have been a part of uh the
Canadian Pacific proxy contest so
Canadian Pacific was like considered the
most iconic company in Canada it
literally built the country because the
the rail that got built over the over
Canada is what United the various
provinces into a country and uh and then
over time because the railroad business
is pretty good business they built a ton
of hotels they owned a lot of real
estate and it became this massive
conglomerate but it was horribly
mismanaged for decades by the time we
got involved it was by far the worst run
Railroad in North America they had the
lowest profit margins they had the
lowest growth rate um the every quarter
management would make excuses generally
about the weather as to why they
underperform versus and there there's a
direct competitor company called
Canadian national has a rail goes right
across the country and Canadian Pacific
would constantly be complaining about
the
weather basically you know same country
same regions tracks weren't that far
apart um and uh but it was a really
important company and being on this
board was like an honorary thing and
everyone on the board was an icon of
Canada you know the chairman of the
Royal Bank of Canada you know the head
of the most important grain privately
held Grain Company the you know sort of
an important collection of um you know
big-time Canadian Executives here we
were you know this is
probably about 13 years ago and uh you
know still uh maybe 44y old
uh from New York not a Canadian uh
basically saying this is the worst run
Railroad in North America and we bought
12% of the railroad at a really low
price and we we brought with us to our
first meeting the greatest Railroader
ever a guy named Hunter Harrison who had
turned around Canadian national so we
like okay we've got a great asset we've
got the greatest railroad CEO of all
time he's come out of retirement to step
in and run the railroad and we brought
him to the first meeting and they
wouldn't even meet with him and uh and
they wouldn't certainly W consider
hiring him and that led us to a proxy
contest and this is where the the engine
starts churning to to figure out how
this contest can be won so what what
what's involved in the key is we had to
one come up with a group of directors
who would be willing to step into a
battle and we didn't want a bunch of New
York directors or even American
directors we wanted Canadians the
problem was this was the most iconic
company in Canada and we wanted
high-profile people so we talk to all
the high-profile people in Canada every
one of them would say Bill you're
entirely right this thing is the worst
run the road it needs to be fixed but
you know I see John at the club you know
I see him at the Toronto Club you know I
can't you know I can't do this but
you're totally right and uh we had to
and that was the concern because we're
you have to file your materials by a
certain day you got to put together a
slate we needed a big slate because we
knew that we had to replace basically
all the directors uh and then one I
spoke to uh a guy who was one of the
wealthiest guys in Canada who was on the
board at one point in time and he said
uh uh bill I have an idea for you
there's this woman Rebecca McDonald why
don't you give her a call and I called
Rebecca and she was the first woman to
take a company public in Canada as CEO
and she was a kind of anti-establishment
not afraid to take on anything kind of
person and I called her we had a great
conversation
and she she was in the Dominican
Republic at her house and I flew down to
see her and she said yeah I'm all in and
actually once we got her that enabled us
to get others and then we put together
our slate and uh we had some pretty
interesting dialogue with the company
they tried to embarrass us all the time
in the Press publicly what what are we
talk press publicly you know at one
point I wrote a email saying look let's
come to peace on this thing um but if we
don't you're you're really forcing my
hand and we're going to have to rent the
largest Hall in Toronto and invite all
the shareholders and it's going to be
embarrassing for management and I I made
reference to some nuclear winter let's
not have it be a nuclear winter and they
thought they'd embarrass me by releasing
the email but it would only inspired us
and we rent to the largest Hall in
Canada and we put up a presentation
walking through you know here's Canadian
national here's Canadian Pacific here's
what they said here's what they did and
we had Hunter get up who was this
incredibly charismatic guy from
Tennessee uh an amazing you know he's
like a
lion incredibly deep voice unbelievable
track record incredibly respected guy
it's like getting Michael Jordan to come
out of retirement and
uh and come and run the company and he
Hunter was incredible and uh other Paul
La other members of my team were you
know super
engaged and the board you know Canadians
are known to be nice so one of the
problems we had is shareholders would
never tell management or the board that
they were losing it was not until the
night before the meeting when the vote
came in the management realized they
they lost we got 99% of the vote and
they they offered us a deal when they
begged us to take a deal they said look
we'll resign tonight so that we don't
have to come to the meeting tomorrow
that's how embarrassed they were but
that that was kind of a interesting one
so for in both this proxy battle and um
the company itself this was uh one of
your more successful Investments it was
I mean the stock up about 10 times uh
and it's an industrial company it's a
railroad it's not like a growth like
it's not not Google uh so it's a great
story and the company's now run by a guy
Nam Keith creel and Keith uh it was
Hunter's prote and in some many ways
he's actually better than Hunter uh he's
doing an incredible job and we're uh the
sad part here is we made it we did very
well we tripled our money over several
years and then I went through a very
challenging period because of a couple
bad Investments and we had to sell our
Canadian Pacific to pay uh to raise
Capital to uh pay for investors who were
who are
leaving uh but we had another
opportunity to buy back more last in the
last couple years and so we're we're now
again a major owner of the company but
had we held on to original
stock it would have been uh epic if you
will so on this one you were right yes
and uh I I I read an article about you
and there's many articles about you I
read an article that said bill is often
right but you approach it with a
scorched Earth uh approach that can
often do more sort of can do damage I
haven't read the off and right article
but the good news is we are off and
right and I say we because we're a team
uh small team but a but but a
fortunately very successful one you know
so our batting average as investors is
extremely high and the good news is our
record is totally public you can see
everything we've ever done but the Press
doesn't really generally write about the
success stories uh they write about the
failures and so we've had some epic
failures you know big losses U good news
is they've been a a tiny minority of the
cases now no one likes to lose money
it's even worse to lose other people's
money uh and I've done that occasionally
uh the good news is if you stuck with us
you've done very well you know over a
long time on a small tangent since we
were talking about
boards did you get a chance to see what
happened with the open AI board cuz I'm
talking to Sam wman Soon
um is there any insight you have just
maybe lessons you draw from this kind of
sure these kinds of events especially
with an AI technology company such
dramatic things happening yeah that was
an incredible Story look governance
really matters and the governance
structure of opai I think leaves
something to be desired you know I think
Sam's Point was this and maybe musk Elon
Musk Point originally set up as a
nonprofit uh and uh reminds me actually
I invested in a nonprofit run by a
former Facebook founder where he was
going to create a Facebook like entity
for nonprofits to promote you know
goodness in the world and the problem
was he couldn't hire the talent he
wanted because he couldn't Grant stock
options he couldn't pay Market salaries
um and ultimately we ended up he ended
up selling the business to a for-profit
so it taught me for-profit solutions to
problems are much better than nonprofits
and here you had kind of a blend right
it was set up as a nonprofit but I think
they found the same thing they couldn't
hire the talent they wanted without
having a for-profit subsidiary um but
the nonprofit entity as I understand it
owns or a big chunk of open Ai and the
investors own sort of a capped interest
where their upside is capped uh and they
don't have representation on the
board and I think that's a you know was
a setup for a problem and that's clearly
what happened here and there's I guess
some kind of complexity in the governor
I mean because of this nonprofit and cap
profit thing it seems like there's a
bunch of complexity and um non-standard
aspects to it
that perhaps also contributed to the
problem yeah uh governance really
matters Boards of directors really
matter um giving the shareholders the
right to uh have input at least once a
year on the structure of the governance
of a compan is really important
and private you know Venture back boards
are also not ideal you know I'm an
active investor and
venturers and uh there are some more
complicated issues that emerge in
private sort of venture stage companies
um where board members have somewhat uh
Divergent incentives from you know the
long-term owners of a business and what
you see a lot in Venture boards is you
know they're presided over generally by
uh you know Venture Capital investors
who are big investors in the company
and often times it's more important to
them to give the uh to have the public
perception that they're good directors
so they get the next best deal right if
they get a you know if they have a
reputation for kind of taking on
management too aggressively word will
get out in the small community of
Founders and they'll miss the next
Google and so they their interests are
not just in that particular company
that's also you know one of the problems
again it all comes back to incentives
can you explain to me the difference you
know Venture back like VCS and
shareholders so this means before the
company goes public yeah so private
Venture back companies the boards tend
to be very small uh could be a handful
of the Venture investors and management
they're often very rarely uh independent
directors it's just not an ideal
structure oh I see you want independent
it's beneficial to have people who have
an economic interest in the business and
they care only about the success of that
company uh as as opposed to someone who
you know if you think about the Venture
business getting into the best deals is
more important than any one deal and you
see cases where you know the boards go
along with in some cases bad behavior on
the part of management because they want
a reputation for being kind of a a
Founder friendly director you know
that's that's kind of problematic you
don't have the same issue in public
company boards so we talked about some
of some of the big wins and your track
record but you said there was some big
losses so what what's uh what's the
biggest loss of your career biggest loss
of my career is a company called valali
and pharmaceuticals we made an
investment in business that didn't meet
our core principles uh problem of the
pharmaceutical industry and there are
many problems as I've learned is it's a
very volatile business right it's based
on drug Discovery uh it's based on you
know predicting uh kind of the future
revenues of a drug before goes off
patent um you know lot lots of
complexities and we thought we had
founded a a pharmaceutical company we
could own because of a very unusual
founder in the way he approached this
business um we it was a company where
another activist was on the board of
directors of the company and kind of
governing and overseeing the day-to-day
decisions and we ended up making a
passive investment in the company and up
until this point in time we really
didn't make passive
Investments and the company made a
series of decisions that were you know
disastrous and then we stepped in to try
to solve the problem it was the first
time I ever joined a board and the mess
was much larger than I realized from the
outside and then I was kind of stuck and
it was a very much a confidence
sensitive strategy CU they they built
their business by acquiring
pharmaceutical assets and they often
issued stock when they acquired uh
targets and so once the market lost
confidence in management the stock price
got crushed and impaired their ability
to continue to acquire lowcost you know
drugs and uh we lost $4 billion $4
billion yeah how's that for a big loss
that's it's up
there I'm sweating this whole
conversation both the wins and the
losses and the stakes involved and by
the way that that loss catalyzed other
what I call marketto Market losses so
very high-profile huge number disastrous
press uh then people said okay Bill's
going to go out of business so we're
going to bet against everything he's
doing and we know us entire portfolio
because we only own 10 things and we
were short a company called urbal life
uh
very famously we've only really shorted
two companies the first one there's a
book the second one there's a movie okay
we no longer short companies but uh so
people pushed up the price of verbal
life um which is when you're a short
seller that's catastrophic I can explain
that and then they also shorted the
other stocks that we owned and so that
Valiant loss led to an overall more than
30% loss in the value of our portfolio
the Valiant loss was real and we was
crystallized we end up selling the
position taking that loss most of the
other losses were what I would call
marketto Market losses that were
temporary but many people go out of
business because as I mentioned before
large move in a price if investors are
redeeming or you have leverage you know
it can put you out of business and if
and people assumed if we got put out of
business we'd have to sell everything or
cover our short position and that would
make the losses even worse so Wall
Street is kind of Ruthless so they can
make money off that whole thing
absolutely so they use the opportunity
of valant to try to destroy you yes
reputation financially and then
capitalize and make money off of that
yes well that's a terrifying spot to be
in what was the like going through that
was pretty Grim uh it was uh it's
actually much worse than that because I
had a lot of stuff going on personally
as well so and these things tend to be
correlated the Valiant mistake came at a
time where I was contemplating my
marriage uh and uh I was also we you
know the problem with the hedge fund
business business is when you get to a
certain scale the CEO becomes like the
chief marketing officer of the business
and I'm really an investor as opposed to
a marketing guy um but when you have
investors who give you a few hundred
million dollars they want to see you you
know once a year Bill I'd love to see
you for an hour but if you got a couple
hundred of those you find yourself on a
plane to the Middle East to Asia uh
flying around the country this was
preum uh and uh that takes you away from
the investment process you have to
delegate more that was a contributor to
the Valiant mistake so now we lose a ton
of money on Valiant my ex-wife and I
were you know talking about separating
getting divorced I put that on hold I
didn't want to make a decision in the
middle of this
crisis and things just kick getting
worse we were also sued when you lose a
lot of money we didn't get sued by our
investors but we got sued by a
shareholder because when the stock price
goes down shareholders Sue we' done
nothing wrong other than make a big
mistake but you know so you have
litigation uh your investors are taking
their money out um I'm in the middle of
a divorce uh the divorce starts to
proceed U my my ex-wife's lawyer
expectations of what my net worth was
was about three times what it actually
was and it was going lower right in the
middle of this and I I remember the
lawyer saying um look bill you know you
know we've estimated your net worth at X
but don't worry we only want a third but
X was 3x so a third was 100%
and um and then we had I had litigation
uh and actually never before publicly
disclosed and I'll share it with you now
um we had a a public company that owned
U about a third of our portfolio that
was called our version of Burkshire
hathway I tried to you know learn from
Mr Buffett over time and it was so to
speak permanent Capital the beauty of
problem with hedge funds people can take
their money out every quarter um what
Buffett has is is a company where people
want to take their money out they sell
the stock but the money stays so we set
up a similar structure in October of
2014 and then a year later Valiant
happens and then a year later we're in
the middle of the mess and we're still
in the mess you know like by kind of mid
uh 2017 we've got a litigation
underway uh and a another activist
investor a firm called Ed Associates
which is uh run by a guy named Paul
singer took a big position in our public
company that was the bulk of our capital
and they shorted all the stocks that we
owned and they went long the short
probably went long the short that we
were short and they were making a bet
that we'd be forced to liquidate and
then they would make money on you know
our public company was trading at a
discount to what all the Securities were
worth so they bought the they bought the
public company they shorted the
Securities and then they you know came
to see us and to try to you know be
activists and force us to
liquidate and uh that sort of wow so I
thought this was going to be wow I I
envisioned an end where the divorce
takes all of my resources the permanent
Capital vehicle ends up getting
liquidated and another activist in my
industry puts me out of business and I
had met ner oxman right around this time
and I'd Fallen completely in love with
her and I was envisioning a world where
I was bankrupt a judge found me guilty
of you know whatever you know he sends
me off to jail or not that judge because
he was a civil judge but another judge
sues the SEC Department of Justice and I
find myself in this incredible mess uh
and I decided I didn't want things to
end that way so I uh I did something I'd
never done before I talked all before
about you don't borrow money I borrowed
money and I borrow $300 million uh from
JP Morgan in the middle of this mess and
uh I give JP Morgan enormous Credit in
seeing through it um and also uh you
know I had been a a good client over a
long period of time and it's like a you
know it's a handshake bank and they bet
that I would succeed and I took that
money to buy enough stock in my public
company I could prevent an activist from
taking it over and effectively buy
control of our little public
company and I got that done and that I
knew was the moment the turning point
and uh I resolved my divorce and
divorces get easier to resolve when
things are going badly I was able to
resolve that we settled the litigation
like was buying blocks of our stock in
the market I remember a day I bought a
big block of stock in the market I get a
call from Gordon singer who is Paul
Singer's son who runs their uh London
part of their business he's like Bill
was that you buying that block I said
yes and he's like
fuck so he knew uh he knew that once I
got that they were not going to be able
to succeed and they went away and that
that was the
bottom uh and then I I uh we've had an
incredible run since then and then you
were able to protect your reputation
from the Valiant uh failure still I mean
you know this is a business where you're
going to make some mistakes it was a big
one it was very reputationally damaging
uh the Press was a total
disaster uh but I'm not a quitter and
actually the the key moments for us uh
we had never taken our core investment
principles and actually really written
them down something we talked about at
meetings uh invest you know kind of our
investment team meetings had a member of
the team I said look go find a big piece
of granite and a chisel and let's take
those core principles I want them like
Moses's Ten Commandments okay we're
going to Chisel them and then we're
going to put it up on the wall and once
we produce those we put one on
everyone's desk I said look if we ever
again Veer from the core principles you
know hit me they with a baseball bat
yeah and that was the bottom and then
ever since then we've done we've had the
best six years in the history of the
firm so refocus on the
fundamentals story love helps I I
literally met ner at the absolute bottom
our first date was September 7th of 2017
that was very close to the bottom
actually there's one other element to
the story so this went on for a few
months after I met her the other element
is that uh one day I get a call from ner
she's like Bill guess what I'm like what
Brad Pit is coming to the media lab he
wants to see my work I'm like that's
beautiful sweetheart I didn't know Brad
Pit was interested in in your
work as a man that's a difficult phone
call to take and apparently uh he's
really in architecture okay um now n and
I were like you know we would WhatsApp
all day every day we talk throughout the
day uh Brad Pit shows up at the media
lap at 10 o'clock I you know talk to her
in the morning I kind of text her to see
how things are going don't hear back and
on WhatsApp you can see like whether the
other person's read it or not okay yeah
no response Yeah couple hours later send
another text no response six o'clock no
response 8 o00 no response 10 o'clock no
response
and uh you know yeah she finally calls
me at 10:30 and tells me how great is so
I had this scenario okay I'm GNA a judge
is g to find me uh we're going to lose
to the
judge uh all my assets will disappear
yeah and then Brad Pit's going to take
my girlfriend yeah Brad Pit's your
competition this is great so it was like
a moment yeah that that was sort of the
bottom and then sort of you know the
motivational thing I didn't want to lose
to an activist didn't want to lose my
girl to some other guy so
Brad Pit and you emerg from all that the
winner on all fronts I'm a very
fortunate guy very fortunate and lucky
you talked about some of the technical
aspects of that but psychologically just
is there
uh like what are you doing at night by
yourself that was a hard time hard time
because I was separated from my wife and
my
kids uh I was living in you know not the
greatest apartment uh you know I'm you
know had a beautiful home and so I had
to go find like a bachelor place and I
was I didn't want to be away from my
kids I I I moved like 10 blocks away and
I wasn't seeing them and they didn't
like it so I ended up buying an
apartment I didn't like uh in the same
building as my kids like with a
different different entrance so I could
be near them but I was home alone I got
a dog that was a uh Babar we call him
Babar the not the elephant uh he's a
black labber dooodle ni nice uh he was
supposed to be a mini but he's not so as
mini um but I got him at six weeks old
and he would keep me company and I
started meditating actually uh and uh a
friend recommended um
TM and I would meditate 20 minutes in
the morning 20 minutes in the evening
and I also big believer in exercise and
you know weightlifting and I play
tennis and uh i' I had been this is not
my first you know proximity to disaster
I had another moment uh in my career
like uh you know 200
uh two and I learned this method for
dealing with these kind of moments which
is uh you just make a little progress
every day so today I'm going to wake up
I'm going to make progress you know I'll
make progress on the litigation I'll
make progress on the portfolio I'll make
progress with my life uh and progress
compounds a bit like money compounds you
don't see a lot of progress in the first
few weeks but like 30 days in like okay
you know like you can't look up the
mountain top where you used to be
because then you'll you'll give up right
but you're just okay just make step by
step by step uh and then 90 days in
you're like okay I was way down there
okay okay I don't look up just keep
making you know progress progress
progress and progress really does
compound and and one day you wake up I'm
like wow it's amazing how far I've come
and if you look at a chart of Persian
Square our company you know you can see
the absolute
bottom you can see where we were you can
see the drop and you can see where we
are now and and that huge drop that felt
like a complete unbelievable disaster
looks like a little bump on the curve
and uh it really gives you perspective
on these things you just have to power
through and I think the key is you know
I've always been fortunate like from a
mental health point of view and you know
nutrition sleep exercise and a little
progress every day it's you know very
that's it and you know good friends and
family you know I had uh you know
go take a walk with a friend every night
um you know and a sister who loves me
and parents who are supportive but they
were you know they were all worried
about their their son their brother you
know it was it was a moment and also by
the way the other thing to think about
is uh when you recover from something
like this you really appreciate it you
know and uh and also the you know as
much of the the media loves okay when
some successful person falls they love
writing the story of success they love
even more the story of failure but when
you recover from that it's kind of like
the American story yeah right you know
America you know you think of the great
entrepreneurs and how many failures they
had before they succeeded you know how
many rocket launches you know did SpaceX
have explode on the pad right and then
you look at success I mean that's why
musk is so admired you mentioned Herbal
Life can you take me through The Saga of
that it's historic
so we at persing Square um shorted very
few stocks and the reason for that is
short selling is just inherently
treacherous uh so if you buy a stock
it's called going long right you're
buying something your worst case
scenario you lose your whole investment
you buy a stock for 100 goes to zero you
lose $100 right per share you buy one
share you 100 your shortest stock at 100
what it means is you borrow the security
from someone else the analogy I I gave
that made it easy for people to
understand and it's a bit like you think
you know silver coins are going to go
down in value and you have a friend
who's got a whole pile of these uh 1880
uh silver silver US Dollars and you
think you're going to go down value you
say hey can I borrow you know 10 of
those dollars from you he like sure but
what are you going to pay me to borrow
I'll pay you know um I'll pay you
interest on your on the value of the
dollars today so you borrow the dollars
that are worth $100 each today you pay
them interest while you're borrowing
them and then you go sell them in the
market for $100 that's what they're
worth and then they go down in price to
50 you go back in you buy the silver
dollars back at $50 and you give them
back to your friend your friend is fine
you borrowed 10 you gave him the 10 back
and he got interest in the meantime he's
happy he made money on his coin
collection you however made $50 times
the 10 coins you made 500 bucks that's
pretty good the problem with that is
what if you sell them and they go from
100 to a th now you got have to go buy
them back and you got to pay you know
whatever uh $10,000 to buy back coins
you know that you would you sold for
$500 you're going to lose $9,500 and
there's no limit right to how high a
stock price can go companies go to
three3 trillion dollar in value right
Tesla a lot of people shorted Tesla
saying oh it's overvalued he's never
going to be able to make a successful
electric
car well I'm sure there people went
bankrupt uh shorting Tesla that's why we
didn't short stocks but I was presented
with this actually reporter that covered
the other short investment we made early
in the career a company called mbia came
to me and said bill I found this
incredible company you got to take a
look at it it's a total fraud and
they're scamming poor people and we
should say that NB was a very successful
short it was big part of it was that we
used a different kind of instrument to
short it where you we revers that sort
of we made the investment asymmetric in
our favor meaning put up a small amount
of money if it works to make a fortune
whereas Short Selling is you kind of
sell something and you have to buy it
back at a higher price urbal life didn't
have the what's called credit the fall
swaps that you could purchase not a big
enough company didn't have enough debt
outstanding to be able to implement you
had to short the stock in order to make
it as successful to bet against the
company and the more work I did on the
company the more I was like oh my God
this thing is an incredible scam you
know they report to sell weight loss
shakes uh but in reality they're selling
you know kind of a fake business plan
and the people that adopt it lose money
and they they go after poor people they
go after after actually in many cases
undocumented immigrants who are pitched
on the American dream opportunity and
because they have few other options
because they can't get legal employment
they become R life Distributors and it's
a business where you so-called
multi-level marketing or P you know
multi-level marketing is sort of the the
the name for a legitimate uh company
like this or it's a pyramid scheme where
basically your sales are really only
coming from people who are you convince
to buy the product by getting them them
into the business that's precisely what
this company is and uh like okay
shorting a pment scheme seems like one
we'll make a bunch of money but you know
two the world will be behind us because
they're harming poor people you know
Regulators will get interested in a
company like this and we said you know
the FDC is going to shut this thing down
and we did a ton of work and I gave this
sort of Epic presentation laying out all
the facts stock got completely crushed
and we were on our way and the
government actually got interested early
on launched an investigation pretty
early SEC and other otherwise um but
then uh a guy named Carl icon showed up
and there's we have a little bit of a
backstory uh but his motivations here
were not really principally driven by
thinking Herbal Life was a good company
he thought it was a good way to uh hurt
me so he he basically bought a bunch of
stock and said it was a really great
company and you know Carl at least at
the time threw his weight around a bit
it was a credible investor had a lot of
resources and uh that began the Saga so
he was we should say
uh a legendary investor himself I'd say
legendary in a sense yes for sure an
iconic iconic Carl icon oh that's very
well done so definitely a iconic
investor so what was the backstory
between the two of you so uh I mentioned
that I had another period of time where
significant business challenges this was
my first called Gotham partners and we
had a court stop a transaction between
some private a private company we owned
and a public company it's another long
story if you want to go I would I would
love to hear it as well um but it was
really my deciding to wind up my former
fund and we owned a big stake and a
company called hallwood realy Partners
which was a company that owned real
estate assets and it was worth a lot
more than where was of trading but it
needed an activist to really unlock the
value and we were in fact going out of
business and didn't have the time or the
resources to pursue it
so I sold it to Carl
icon uh but and I sold it to him at a
premium to where the stock was trading I
think the stock was like 66 I sold to
them for 80 but it was worth about
150 and I said look uh and part of the
deal was Carl's like look I'll give you
schmuck Insurance you know I'll make you
sure you don't look bad and I had
another deal at a higher price without
schmuck insurance but I deal with Carl
at a lower price with schmuck insurance
and the way the schmuck Insurance went
he said look Bill if I sell the stock
and next three years uh you know for a
higher price I'll give you 50% of my
profit that's pretty good
deal so we made that deal and because I
was dealing with Carl icon who had a
reputation for you know being difficult
I was you know very focused on the
agreement and we didn't want him to be
able to be cute so the agreement said if
we sell if he sells or otherwise
transfers his shares and I we came up
with a definition that include every
version version of sale okay cuz you
know it's
Carl uh well he then uh buys the Stak
and then makes a bid for the
company and you know plan is for him to
get the company and he bids like 120 a
share and the company hires Morgan
Stanley to sell
itself and he raises bid to 125 and 130
eventually gets sold I don't remember
the exact price let's say $145 a share
and Carl's not the winning
bidder and he sells this stock or loses
or transfers his shares for $145 a share
so he owes actually our investors the
difference between 145 and 80 uh times
50% and I had like you lawyers never
like you to put like a arithmetic
example I put like a formula you know
like out of a math book in in the
document so there can be no confusion it
was only an eight-page really simple
agreement so the deal closes and he's
supposed to pay us in two business days
or three business days I wait a few
business days no money comes in I call
Carl I'm like Carl um congratulations on
on the uh hallwood realy thanks Bill I
think Carl just want to remind you I
know it's been a few years but um you
know you we have this agreement remember
the schmuck insurance it's like yeah I
said well you owe us our schmuck
insurance he what do you mean I didn't
sell my shares I said do you do you
still have the shares he says no I said
what happened to them well the company
did a merger for cash
and they took away my shares but I
didn't sell
them you understand what happened so I
had I said car I'm going to have to sue
you said sue me I'm G to sue you he
says so I sued him and uh the legal
system in America takes can take some
time and what he would do is we sued and
we won in the in the whatever New York
Supreme
Court uh and then he
appealed and he you can appeal like 6
months after the case we waited to the
179th day and then he would appeal and
then we fought it at the next level and
then he would appeal and he appealed all
the way to Supreme Court of course the
Supreme Court wouldn't take the case it
took years now we had as part of our
agreement we got 9% interest on the
money that he owed us so I viewed as my
Carl icon money market account with a
much higher interest rate and eventually
I won what was the amount just tiny now
it was material to my investors so my
first fund I wound it down but I wanted
to maximize everything for my investors
right these are the people back me at 26
years old I was right out of business
school had no experience and they
supported me so I'm going to go to the
end of the Earth for
them uh and 4 and a half million
relative to our our fund at the end was
maybe 400 million so it wasn't a huge
number but it was a big percentage of
what was left after I sold all our
liquid security so I was fighting for it
so we got four and a half million plus
interest for 8 years or something that's
how long the litigation took so we got
about
double uh so he owed me 9 million which
to Carl icon who had probably a $20
billion net worth at the time this was
nothing but to me it was like okay this
my Investor's money I'm going to get it
back um and so you know eventually we
won eventually he paid and then he
called me he said Bill
congratulations now we can be
friends and we can we can invest do some
investing together I'm like Carl fuck
you you actually said fuck you yes I'm
not that kind of person generally but uh
you know he made eight years to pay me
not me even me my investors money they
owed so I yeah so he probably didn't
like that so he kind of hung around in
the weeds waiting for an opportunity and
then from there I you know started
purging we had kind of straight line up
you know up the first 12 years we could
do nothing wrong then
Valiant Herbal Life right uh he sees an
opportunity
and he buys the stock he figures he's
going to run me off the road and so that
was the beginning of that and kind of
the the moment uh and I think it's the
I'm told by CNBC it's the most watched
uh segment in business television
history uh they're interviewing me about
the urbal Life Investment on CNBC and
then Carl icon calls into the show and
we have kind of a interesting
conversation where he calls me all kinds
of names and stuff so it's it was a
moment it was a moment in my life it
wasn't public information that he was
long on herb life he didn't yet disclose
he had a stake yeah but he was just
telling me how stupid I was to be short
this company so for him it wasn't about
the fundamentals of the company it was
about it was just personal 100% is there
part of you that regrets saying fuck you
on that phone call to Carl ion
no I I generally have generally have no
regrets uh um because I'm very happy
with where I am now and I feel like you
know it's a bit like you know you step
on the the butterfly in the farest and
the world changes because you know every
action has a reaction you know if you're
happy with who you are where you are in
life every decision you've made good or
bad over the course of your life got you
to precisely where you are I wouldn't
change anything he said you lost money
on Herbal Life so what so he did the
long-term battle what he did is he he
got on the board of the company and used
the company's Financial Resources plus
his stake in the business to squeeze
squeeze us and a squeeze in Short
Selling is where you restrict the supply
of the Securities so that there's a
scarcity and then you encourage people
to buy the stock and you drive the stock
up and as I explained before you short
those coins at 10 they go to 100 you can
lose theoretically an unlimited amount
of money and that's scary that's why we
don't short stocks that's why I didn't
short stocks before this but uh this was
unfortunately I had to have the personal
lesson so how much was for him personal
versus part of sort of the game of
investing well he thought he could make
money doing this he wouldn't have done
it if he did otherwise he thought his
bully pulpit his ability to create a
short squeeze his control over the
company uh would enable him to achieve
this uh and he made a billion we lost a
billion so you think it was a financial
decision not a personal it was a
personal decision to pursue it but he
was waiting for an opportunity he could
make money at our expense and was kind
of a brilliant opportunity for him now
the irony is well first of all the FTC
found a few interesting facts so one the
government launched an investigation
they ended up settling with the company
and the company paid $220 million in
fines uh I I met a professor from
Berkeley a couple years ago who told me
that he had been hired by the government
as their expert on Herbal Life and he
got access to all their data was able to
prove that they're a pyment scheme but
the government ultimately settled with
Carl because they were afraid they could
you know they could possibly lose in
court so they settled with him uh but if
you look at the stock if we' been able
to stay short the entire time we would
have made a bunch of money because the
you know stock had a$6 billion doll
market cap and we shorted it today it's
probably a billion a billion and a half
so you left the short POS or whatever
that's called Clos covered closed it out
yeah we sold Valiant we covered Herbal
Life that was the resetting moment for
the firm because it would just
psychologically and you know the beauty
of investing is you don't need to make
it back the way you lost it right you
can just take your loss by the way
losses are valuable and that the
government allows you to take a tax loss
and that can shelter other gains and we
just refocused can you say one thing you
really like about Carl icon and one
thing you really don't like about him
sure so uh he's a very Charming guy so
in the midst of all this uh at the
hallwood one he took me out for dinner
to his favorite Italian restaurant
really yeah uh we were in the middle of
the litigation to see if he could
resolve it and he offered 10 million to
my favorite
charity uh the problem was that it
wasn't my money it was my Investor's
money so I couldn't settle with him on
that basis uh but uh you know I had the
chance to spend real time with him at
dinner he's funny he's charismatic he's
got incredible stories um and you know
actually I made peace with him over time
we had a little hug out on CNBC even had
him to my house believe it or not um I
hosted a uh something called the finance
cup which is a tennis tournament between
uh people in finance in Europe and the
us and we had the uh the event at my
house and one guy thought to invite Carl
icon and so we had Carl ion there to
present Awards and and again I have to
say I kind of like the guy so um but was
I didn't like him much during this is
there because at least from The Outsider
perspective there's a bit of a personal
Vengeance
here or anger can build up do you ever
worry the personal attacks between
powerful investors can Cloud your
judgment or what is the right financial
decision I think it's possible but again
I try to be extremely economically
rational and actually the last seven
years been quite peaceful you I really
have not been uh an activist in the old
uh form uh for many years and the vast
majority of even our activist
Investments historically were very
polite respectful cases the Press of
course focuses on the the more
interesting ones like Chipotle was one
of the best investments we ever made uh
we you know we got four of eight board
seats and we worked with management it
was a great outcome I don't think ever
been a story about it and the stocks up
you know almost 10 times from the time
we hired Brian Nichol CEO but it's not
interesting because there was no battle
whereas Herbal Life of course was like
an epic battle battle even Canadian
Pacific so you know for a period there
you most people when they meet me in
person they like wow B you seem like a
really nice guy but I thought you know
so uh but things have been pretty calm
for the last uh seven years of course
there's more than just the investing
that your life is about especially
recently let me just ask you about
what's going on in the world first uh
what was your reaction and what is your
reaction
thoughts uh with respect to the October
7th attacks by Hamas on Israel you know
it's a sad world that we live in uh that
uh one we have terrorists and two that
we could have uh such barbaric terrorism
and yeah just a reminder of that so
there's several things I can ask here
first on the your views on the the
prospects of the Middle East but also on
um the reaction to this war and um in
the United States especially on
University campuses so first let me just
ask you've said that you're Pro
Palestinian can you explain what you
mean by that you know with all of my
posts about Israel you I'm obviously
very supportive of the country of Israel
Israel's right to exist Israel's right
to defend
itself my Arab friends my Palestinian
friends you know we kind of saying hey
Bill where are you uh you know what
about Palestinian lives and you I was uh
pretty early in my life a guy named
Marty parrat who's been important to me
over the course of my life a professor
first investor in my fund introduced me
to ner uh asked me when I was right out
of school to join this uh nonprofit
called the Jerusalem Foundation which
was a a charitable Foundation that
supported Teddy Kik when he was mayor of
Jerusalem I ended up becoming the
youngest chairman of the Jerusalem
foundation in my 30s and I spent some
time in Israel and uh the early
philanthropic stuff I did uh with the
Jerusalem Foundation I thing I was most
interested in was was uh kind of the
Palestinian the plight of the
Palestinians and kind of peaceful
coexistence and so I had kind of an
early kind of perspective and you know
as chairman of the Jalem Foundation I
would go into you know Arab communities
I would meet with families in their
homes you know you get a sense of the
the humanity of of a people and I care
about Humanity uh I generally take the
side of people who've been disadvantaged
you know almost all of our philanthropic
work has been in that capacity so it's
sort of my
natural uh perspective but I don't take
the side of terrorists ever
obviously and uh you the whole thing is
just a tragedy so to you this is about
Hamas not about Palestine yes I mean you
know the the problem of course is when
Hamas controls you know for the last
almost 20 years has controlled Gaza you
know they've including the education
system they're educating you know you
see these you know training videos of
kindergarteners uh indoctrinating them
into hating Jews and Israel uh so it's
it's uh and of course you don't like to
see uh Palestinians celebrating you know
some of those early videos of October
7th with you know dead bodies in the
back of trucks and people you know
cheering uh so it's it's a really
unfortunate situation but I you know I
think about you know a Palestinian life
is
important as valuable as a Jewish Life
as a American life and you know what do
people really want they want a place
they want a home uh they want to be able
to feed their family they want a job uh
that generates the resources to feed
their family they want their kids to
have a better life than they've had uh
they want peace I think these are basic
human things I'm sure the vast majority
of Palestinians share these views uh but
it's such an embedded situation with
hatred and as I say indoctrination and
then you know going back to incentives
you know terrorists generate their
resources by committing terrorism and
that's how they get funding uh and
that's you know there's a lot of
graft uh you know there it's a
plutocracy right the top of the
terrorist pyramid you know if you accept
the numbers that are in the Press you
the top leaders you know have billions
of dollars you know 40 billion or so has
gone into Gaza over the last and and the
West Bank over the last 30 years a
number like that uh and a lot of it's
disappeared into some combination of
corruption or tunnels or weapons and the
tragedy is you know you look at what
Singapore has achieved in the last 30
years right do you think that's still
possible if we look into the future of
10 20 50 years from now absolutely so
not just
peace but peace comes with
prosperity uh um you know people are you
know under the leadership of terrorists
you're not going to have prosperity and
you're not going to have peace and I
think the you know the Israelis withdrew
in 2005 and fairly quickly Hamas took
control of the situation that would that
should never have been allowed to happen
um and I think you know if you think
about I I have the opportunity to spend
a what call it an hour with Henry
Kissinger uh a few months before he
passed away and we were talking about uh
Gaza or in the early stage of the war he
said look you know this is
not uh you can think about Gaza as the
as a test of a two-state solution is not
looking good these were his words uh so
the next time round you look Palestinian
people should have their own state but
it can't be a state where you know 40
billion resources goes in and is spent
on weaponry and missiles and Rockets
going into Israel and I I do think a
consor
of the Gulf States you know the Saudis
and others have to ultimately oversee
the governance of this region if I think
if if that can happen I think you can
have peace you can have
Prosperity um and uh you know I'm
fundamentally an optimist so Coalition
of uh
governance governance matters you know
going back to what we talked about
before and you know that that kind of
approach can give the people a chance to
100% 100% I mean look at what Dubai has
accomplished with you know Nomads in the
desert right and that's become a major
uh it's a tourist destination Gaza could
have been a tourist
destination Take Me Through The Saga of
University
presidents testifying on this topic on
the topic of uh protests on college
campuses protest that call for the
genocide of Jewish people and the
University
presidents uh maybe you can describe it
more precisely but they fail
to
denounce the calls for
genocide so it begins on October 8th
probably uh
and you know you can do a compare and
contrast with how Dartmouth managed uh
the events of October 7th and the
aftermath and how Harvard
did and on October 8th or shortly
thereafter uh you know the Dartmouth
president who had been in her job for
precisely the same number of months that
the Harvard president had been in her
job the first thing she did is she got
the most important professors of Middle
East studies who were Arab and who were
Jews uh and they convened them and held
a you know an open session Q&A for
students to talk about what's going on
in the Middle East and began an
opportunity for common understanding
among the student body and Dartmouth has
been a relatively benign environment on
this issue uh and students are able to
do work and there aren't disruptive
protests with people with bullhorns
walking into classrooms interfering with
you know people pay today $882,000 a
year which itself is crazy to go to
Harvard but imagine your family borrows
the money or you borrow the money as a
student and your learning is disrupted
by constant protest and the university
does nothing you know when George Floyd
died you know the Harvard president
wrote a very uh strong letter denouncing
what had taken place and you know
calling this an important moment in
American history and uh took it
incredibly seriously her first letter
about October 7th was not that let's put
it that way and then her second letter
was not that and then ultimately you
know she was sort of forced by the board
or the pressure to make a more public
statement U but it was clear that it was
hard for her to come to an understanding
of uh of this terrorist act and then the
protest erupted on campus and they
started out recently benign uh and then
the protesters got more and more
aggressive in terms of violating
University rules on things like bullying
and the university did nothing and that
obviously for the Jewish students the
Israeli students the Israeli faculty
Jewish faculty created an incredibly
uncomfortable environment and the
president seemed indifferent and you
know I went up to campus and I met with
hundreds of students in small groups and
larger groups and they're like Bill why
is why is the president doing nothing
why is the administration doing nothing
and that was really the beginning and
that you know I reached out to the
president reached out to the the board
of Harvard I said look this thing is
heading the wrong direction and you need
to fix it and I have some ideas love to
share and uh I got the Heisman as they
say you know they just kept pushing off
the opportunity for me to meet with the
president and um meet with the
board and at a certain point in time I
pushed you know I'm kind of a activist
when he pushed me it reminded me of you
know like early days of activism where I
couldn't get the CEO of Wendy's to to
return my call I couldn't get the CEO of
CEO of Harvard you know to take a
meeting uh and then finally I spoke to
the chairman of the board Woman by the
name of Penny pritzer who I you know
knew from on a business school board
with her and it was as I describ one of
the more disappointing conversations of
my life and it did not seem she seemed a
bit like uh if you will deer in the
headlights they they couldn't do this
they couldn't do that um the law was
preventing them from doing various
things and that led to my first letter
to the university and I sort of ended
the letter uh you know sort of giving
this president of Harvard had darare to
be great speech this is your opportunity
you know you can fix
this uh this could be your
legacy and I sent it to the I emailed it
to the president and the board members I
whose email addresses I had I posted it
on Twitter and I got no response no
acknowledgement nothing and in fact the
open dialogue I had uh with a couple of
people on the board basically got shut
down after that and that led to letter
number
two and then ult and then when the uh
Congress led by leis
stonic uh announced an investigation of
anti-Semitism on campus and concern
about uh you know violations of law the
president was called to testify along
with two other you know the president of
MIT um you know the President of
University of Pennsylvania who were
having similar issues on campus I
reached out to the president of Harvard
and said well one the Israeli government
had gotten in touch and offered the
opportunity uh for me to see the Hamas
if you will GoPro film and I said you
know what I'd love to show it at Harvard
and they thought that would be great
idea and so I partnered with the head of
Harvard kabad uh guy named Rabbi hershy
and uh we were putting the film up on
campus and I thought you know if the
president were to see this would it
would give her a lot of perspective on
what happened and she should see it
before her
testimony and so I reached out to her or
actually Rabbi uh uh Hershey did and uh
he was told she'd be out of town and
couldn't see it um and then I reached
out to her again said look I'll I'll
facilitate your attendance in the in the
Congress you know come see the film I'll
fly you down that was rejected and then
she
testified and I watched you know a good
percentage 80% of the testimony of all
three presidents and it was an
embarrassment to the country
embarrassment to the universities you
know they were evasive they didn't
answer questions they were rude they
smirked you know they looked you know
very were disrespectful to to our
Congress and uh and then of course there
was that several minutes where finally
at least toonic was not getting answers
to her questions and she said you know
let me be you know kind of clear what if
protesters were calling for genocide for
the Jews does that violate your rules on
bullying and harassment and the three of
them basically gave the same answer you
know it depends on the context and not
until they actually executed it on the
genocide does the University have the
right to intervene and the the thing
that perhaps bothered me the most was
the incredible hypocrisy you know
Harvard was you know each of these
universities are ranked by this entity
called fire which is a nonprofit that
focuses on free speech on campus and
Harvard uh has been in the bottom
quartile for The Last 5 Years and
dropped to last before October 7th out
of like 250 I should mention briefly
that I've interview on this podcast the
founder of fire and the current head of
fire we discussed this at length um
including running for the board of
Harvard and the whole procedure of all
that it's it's quite a fascinating
investigation of free speech who for
people who care about Free Speech
absolutism that's a good episode to
listen to Because those folks kind of
fight for this idea it's a it's a
difficult idea actually to internalize
what does free speech in college
campuses look like Harvard has become a
place where free speech is not tolerated
on campus or at least free speech that's
not part of the accepted dialogue or you
know this whole notion of speech codes
and microaggressions really emerged on
the elite you know the Harvard Yale uh
campuses of the world and uh you know
the president of Harvard's uh then
president of Harvard's explanation for
why you know you could call for the
genocide of the Jewish people on campus
was Harvard's commitment to free
expression
and you know one of the more
hypocritical statements of all time and
you really can't have it both ways
either Harvard has to be a place where
it's a free speech she she basically
said we're a free speech absolutist
place which is why we have to allow this
and Harvard could not be further from
that and so that was a a big part of it
and I I I uh I was in the uh Barber
chair if you will getting haircut and uh
I had a guy on my team send me the three
minute section I said cut that line of
questioning and I put out a a little
tweet on that and call my greatest hits
of of of of posts got something like 110
million views and and you know everyone
looked at this and said what is wrong
with you know University
campuses and and their leadership and
their governance by the way you know in
a way this whole conversation's been
about governance Harvard has a
disastrous governance structure which is
why we have the problem we have and just
to linger on the the
testimony you mention you know smirks
and this kind of stuff and you mention
dare to be great I myself I'm kind of a
sucker for great leadership and those
moments you mentioned Churchill or so on
even great speeches people talk down on
speeches like it's uh maybe just words
but I think speeches can define a
culture and
Define a place Define a people that can
inspire and I think actually the
testimony before Congress could have
been an opportunity to redefine what
Harvard is dared to be great for dared
to be a great leader president Harvard
had a huge opportunity because she went
third right the first two gave the
world's most disastrous answers to the
question and she literally just copied
their answer which is itself uh you know
kind of ironic in light of ultimately
what happened it's tough because uh
you can get busy as a president as a
leader and so on there's these meetings
so you think Congress maybe you're
smirking at the Ridiculousness of the
meeting you need to
remember that many of these are
opportunities to like give a speech of a
Life Time sure like that if there is
principles which you want to see a an
institution become and embody in the
next several decades there's
opportunities to do that and you as a
great leader also need to have a sense
of when is the opportunity to do that
and October 7th really woke up the
world uh on all sides honestly like
there is serious issue going on here and
then the protests woke up the university
there's a serious issue going on here
it's an opportunity to speak on free
speech and on genocide
both
yes do you see the criticism that you
you are a billionaire
donor and you sort of used your power
and financial influence unfairly to
affect the governing structure of
Harvard in this case first of all I I
never threatened to use Financial other
resources the only thing I did here was
wrote I wrote public letters I spoke
privately to a couple members of the
board I spoke for 45 minutes to the
chairman none of those conversations
were effective or went anywhere as far
as I could tell I think my public uh
letters and and then some of the posts I
did twet yeah uh and that you know that
little uh 3 minute uh video excerpt had
it had an
impact um but it wasn't about I mean you
can criticize me for being a billionaire
but that had you know it was really the
words uh it's a bit like again going
back to the corporate analogy it's not
the fact that you own 5% of the company
that causes people to vote in your favor
it's the fact that your ideas are right
and I think you know I was disappointed
after the Cong pressional testimony the
board of Harvard said that they were
100% behind unanimously 100% behind
president gay and so clearly I was
ineffective and ultimately what took her
down was uh other I would say activists
who identified issues with academic
Integrity uh and then she lost the
confidence of the faculty and once that
happens it's hard to stay uh and I
wanted her to be fired basically or be
forced to resign because of failures of
leadership because would have sent a
message about the importance of
leadership you know failure to stop a
emergence of anti-Semitism on campus and
you know there's some news today the
protests are getting worse is there some
tension between free speech on college
campuses and disciplining students for
calls of genocide yes there's certainly
a tension and I think first of all um I
think free speech is incredibly
important and I'm on the side I'm a lot
closer to absolutism on Free Speech than
otherwise the issue I had was the
hypocrisy right they were restricting
other kinds of speech uh on campus
principally conservative speech
conservative views um so it wasn't a
free speech absolutist uh campus and the
protests were actually quite threatening
to students and there are limits to even
absolutist free speech and they begin
where people feel you know intimidation
harassment and you know threat to bodily
harm Etc you know that kind of speech is
generally uh again it's pretty technical
uh but is people feel like they're an
imminent harm by virtue of the protest
that speech is at risk of not meeting
the standards for Free Speech but
Harvard is a private
Corporation and as a private Corporation
they can put on what restrictions they
want and Harvard had introduced only a
few months before bullying and
harassment policies and that's why
representative stefanic focused on does
this it's not like she said this calling
for genocide against the Jews violate
your free speech policy she says it's
calling for genocide against the Jews
violate your policies on bullying her
harassment and I think everyone looked
at this when they said it depends on the
context and they said look if you
replace Jews with some other ethnic
group students have been who've used the
n-word for example have been thrown off
campus were suspended you know students
who've uh you know hate speech directed
at uh lgbtq people has led to
disciplinary action but you know
attacking spitting on Jewish students or
you know kind of roughing them up a bit
uh seemed like you know we calling for
their elimination didn't seem to violate
the policiy so it's uh you know look I
think a university should be a place
where you have broad views and open
viewpoints and Broad
discussion um but it should also be a
place where students don't feel
threatened going to class where their
learning is not interrupted when final
exams are not interrupted with uh by you
know people coming in and with loud
protest students asked me when I went up
there what would you do if you were
Harvard president I said and this was
before I knew what was happening on the
depart with campus I said I would I
convene everyone together this is
Harvard we have access to the best Minds
in the world let's have a better
understanding of the history let's
understand the backdrop let's focus on
Solutions let's bring Arab and Jewish
and Israeli students together let's form
groups to create communication that's
how you solve this kind of problem and
none of that stuff has been done it's
not that hard do you think this reveals
a deeper uh
problem in terms of ideology in the
governance of har
in
the maybe the culture
Harvard yes so on governance the
governance structure is a disaster so
the way it works today is Harvard has
two principal boards there's the board
of the corporation the so-called fellows
of Harvard it's a board of uh I think 12
independent directors and the president
uh there's no shareholder vote there's
no proxy system it's really a
self-perpetuating board that elects it
effectively elects its own members so
there's you know once it becomes once
the balance tips politically one way or
another they can you know it can be kept
that way forever there's no kind of
rebalancing system you know if a US
Corporation goes off the rails so to
speak the shareholders can to get
together and vote off the directors
there's no ability to vote off the
directors then there's the board of
overseers which is I think 32 uh
directors and there a few years ago if
you could put together 600 signatures
you could run for that board and put up
a bunch of candidates and about five or
six get elected each year
and uh a group did exactly that and it
was an oil and gas kind of disinvestment
uh group uh they got the signatures a
couple of them got elected and uh
Harvard then changed the rules and they
said now we need 3,200
signatures and uh and by the way if if
there are these dissident directors on
the board we're only going to allow
we're going to cap them at five so if
three were elected in the oil and gas
thing now there are only two seats
available MH and then a group of former
students kind of younger alums one of
whom I knew approached me and said look
Bill we should we should run for the
board and they decided this pretty late
uh only a few weeks before the
signatures were due and we love your
support you know I took a look at their
platform I thought it looked great I
said look happy to support and I posted
about them you know did a zoom with them
and they got thousands of signatures you
know collectively the four got whatever
12,000 signatures or something like this
and they missed by about 10% uh the
threshold and what did Harvard do in the
middle the election they made it very
very difficult to sign up you know for a
vote and it just makes them look
terrible and they've got now thousands
of alums uh upset that and again this
wasn't an election it was this was just
to put the names on the Slate so the
only candidates on the Slate are the
ones selected by the you know the
existing members and so it's it's
uh businesses fail because of governance
failures universities fail because of
governance failures it's not really the
president's fault because the job of the
board is to fire hire and fire the
president and help guide the institution
academically otherwise so that's
governance an
ideology I was like how can this be
October 7th the event that woke me up
was 30 student organizations came out
with a public letter on October 8th that
literally the morning after this letter
was created and said Israel is solely
responsible for hamas's violent Acts
again Israel had not even mounted a
defense at this point and there were
still terrorists running around in the
southern part of
Israel um and I'm like H Harvard
students you know 34 Harvard student
organizations signed this letter and I'm
like what is going on you know WTF right
and uh that's when I went up on campus
and I started talking to the faculty and
that's where I started hearing about
actually bill it's it's this Dei
ideology I'm like
what like diversity Equity inclusion you
know you know obviously I'm familiar
with these words and and you know I see
this in the corporate context they say
yeah and they started talking to me
about this oppressor
oppressed uh framework uh which is
effectively taught at on campus and
represents the backdrop for many of the
courses that are offered and and in the
various uh some of the studies and other
degree offerings I'm like I had not even
heard of this and you know I'm pretty
aware person uh but I was completely
unaware and and basically they're like
look Israel is deemed an
oppressor and the Palestinians are
deemed the oppressed and you take the
side of the the oppressed and any acts
of the oppressed to dislodge the
oppressor regardless of how vile or
barbaric or
okay I'm like okay this is a super
dangerous ideology and so I I wrote a
like questioning post post about this
like here's what I'm hearing you know am
I is this right then I had someone a
friend of mine sent me a Christopher
rufo book America's cultural revolution
which is sort of a sociological study of
the origins of the Dei movement and
critical race Theory and uh I found it
actually one of the more important books
I've read and uh also found it quite
concerning and and really the it's sort
of a ultimately Dei comes out of it a uh
kind of a Marxist uh socialist backdrop
way to look at the world and so I think
there a lot of issues with it but it
unfortunately it's advancing like
ultimately
concluded uh racism uh as opposed to
fighting it which is what I thought it
was ultimately about so maybe you can
speak to that book a little bit so
there's a history that traces back
across
decades and then that infiltrated
college campuses
so basically what rufo argues is that
the Black Power movement of the 60s
really failed it was a very violent
movement and many of the protagonists
ended up in jail and uh out of that
movement a number of uh kind of thought
leaders this guy named maruse uh and
others built this framework kind of an
approach said look if we're going to be
successful can't be a violent movement
number one number two need to infiltrate
if you will the universities and we need
to uh become part of the faculty and we
need to teach the students and then once
we take over the universities with this
ideology then we can go into government
and then we can go into corporations and
we can change the world so I thought
important book and the more I dug in the
more I felt there was credibility to
this not just the kind of sociological
uh backdrop but to what it meant on
campus and faculty Harvard faculty were
telling me that you know there's really
is no such thing as free speech on
campus and that you know there was a
survey done I don't know a year or so
ago the Harvard faculty and only 2% of
the faculty admitted even in an
anonymous survey admitted to being
having a conservative point of view so
we have a campus that's 98%
non-conservative liberal
Progressive uh that's adopted this Dei
construct um and this and that I learned
from a member of the search committee
for the Harvard president uh that they
were restricted in looking at candidates
only those who met the Dei offices
criteria and I shared this in one of my
postings and I was accused of being a
racist
um but uh and that's someone who
believes in that diversity is a very
good thing for organizations and that
Equity fairness is really important and
having an inclusive culture is CR
critical you know for functioning of
organization you know so here I was
someone who was like okay di sounds good
to me you know at least in the small D
Small E uh I uh version of events but
this di ideology is really problematic
so what's the way to fix this in the
next few
years uh the in infiltration of Dei with
the uppercase version of universities
and the things that have troubled you
the things you've saw at Harvard and
elsewhere in the same way this was an
eye openening event for me it has been
for a very broad range of other people
I've never gotten you know I mentioned
General growth I got a lot of nice
letters from people for making money on
a stock that went up a 100
times uh but I literally get uh hundreds
of emails letters texts handwritten
letters type letters from people the
ages of 25 to 85 saying bill this is so
important thanks for speaking out on
this you were saying what you know so
many of us believe but have been afraid
to say you know it's a I described it as
almost a mccth esque kind of movement
and that if you challenge the Dei
construct people accuse you of being
racist it's happened to me already uh
you know I'm perhaps uh you know I'm I'm
much less vulnerable than a university
Professor who can get shouted off campus
cancelled I'm I'm sort of difficult to
cancel uh but that doesn't mean people
are going to try and uh you know had
I've been the victim of a couple of uh
interesting articles in the last few
days or at least one in particular in
the Washington post written by what I
thought was a well-meaning reporter but
it's just clear that you know I've taken
on some big parts of at least the
progressive establishment Dei I'm also a
you know believer that Biden should have
stepped aside a long time ago and it's
only getting worse um and so I'm I'm
attacking the president
Dei Elite I
ities um and uh you make some enemies
doing that well I should say I you know
I'm still at MIT and I I love MIT and I
believe in the power of great
universities to uh explore ideas to
inspire young people to think to be to
inspire young people to lead let me ask
okay how can you explore how to think
when you're only shared a certain point
of view right right how can you learn
about leadership when when the the
governance and Leadership of the
institution is is broken and exposure to
ideas if you're limited in the ideas
that you're exposed to so I think
Universities at risk I mean the
concerning thing right is if 34 student
organizations that each have I don't
know 30 members or maybe more right it's
a thousand okay that's a meaningful
percentage of the of the campus perhaps
that ultimately respond now a 10 or so
of the 30 withdrew the statement once
uh many of the members realized what
they had written so I don't think it
seems like the statement was signed by
the leadership and not necessarily
supported by all the various students
that were uh were members but if the
university teaches people these
precepts this is the next generation of
lead you know normally if you think
about I wrote my college thesis on
University of missions the reason why
controlling you know the gates of the
Harvard uh institution the missions is
important isn't that many of these
people who graduate end up with you know
the top jobs in government and and uh
ultimately become judges um they're uh
you know permeate through society and so
it really matters what they learn and if
it if they're limited to one side of the
political aisle uh and they're not open
to a broad array of of of views uh and
this represent some of the most elite
institutions in our country I think it's
very problematic for the country long
term
yeah I 100% agree and I also felt like
the
leadership wasn't
even part of the problem as much as they
were almost out of touch like
unaware that this is an important moment
it's an important crisis it's an
important opportunity to step up as a
leader and Define the future of an
institution so I don't even know where
the source of the problem is it could be
literally government struct
as we've been two things I think it's
governance structure I also think
universities are selecting they're not
selecting leaders yeah U you know it's
not clear to me that
uh University should necessarily be run
by academics right you know the the the
dean of a
university uh you know the person who
helps
um sort of the business of the
University right and then there's the
academics of the university and having a
I would argue having a business leader
run these
institutions uh and then having a board
that's invol a board that has itself
diverse viewpoints and by the way
permanently structured to have diverse
viewpoints uh is a much better way to
run a university than picking an
academic that the faculty supports
because you know one of the things I
learned about how faculty get hired at
universities ultimately it's signed off
by the board
but you know the new faculty are chosen
by each of the various departments and
once the Departments tip uh there's sort
of a Tipping Point politically where if
once they tip in One Direction The
Faculty uh recruit more people like
themselves and so the Departments come
more and more Progressive if you will
with the passage of time and they only
Advance candidates that that match their
U they meet their political objectives
it's it's not a great way to to build an
instit institution which allows for
small D diversity allows for yeah
diversity and diversity by the way is
not just race and gender and uh that's
also something I feel very strongly
about well luckily engineering robotics
is touched Last by this it is touched
but you know uh I've when I'm at the
Computing building stata and the new one
politics doesn't infiltrate or I haven't
seen it infiltrate quite as deep Place
elsewhere but it's in the biology
department at Harvard because biology is
controversial now yes yes yes because
biology and gender you know there there
there are faculty there's a woman at
Harvard who was literally canceled from
The Faculty as a member I think she was
the med school uh and she was you know
she made the argument that there are
basically you know two genders
determined by biology and she wasn't
allowed to
stay oh that's another topic for another
time topic you should do a show on that
one that would be an interesting one so
as you said technically Claud gay the
president of Harvard resigned over
plagiarism not over the thing that you
were initially troubled by it's hard to
really know right it's not like a
provable fact I would say at a certain
point in time she lost the confidence of
the faculty and that was ultimately the
Catalyst and whether that was how much
of that was the plagiarism issue and how
much of that was some of the things that
preceded it or was it all these issues
in their entirety we don't really
there's no way to do a calculus can you
explain the nature of this plagiarism
from what you remember uh so Aon sarum
and Christopher rufo one from the Free
Beacon and Chris you know surfaced some
allegations on or identified some plager
issues that I would say the initial
examples were you know uh use of the
same words with proper attribution some
missing quot you know
footnotes and then over
time uh with I guess more digging they
released I think ultimately something
like 76 examples of uh what they call
plagiarism in I think eight of 11 of her
articles and one of the other things
that came forth here is as president of
the University she had sort of the
thinnest transcript academically of any
previous president you know very small
relatively small body of work and then
when you couple that with the amount of
plagiarism that was pervasive
and then I guess the some of the other
examples that surface were not missing
quotation marks where the authors of the
work felt that their ideas had been
stolen and really plagiarism is academic
fraud there's there indic one indic of
plagiarism is a missing footnote that
could also be a clerical error and so
when a you know Professor is accused of
plagiarism University does sort of a
deep dive they have these administrative
boards and it can take 6 months N9
months a year to evaluate you know
intent matters was this intentional
theft of another person's idea that's
academic fraud or was this sloppy you
know you missed or just Humanity right
you you miss a footnote here or there
and uh I think once it got to a place
where people felt it was theft of
someone else's intellectual property
that's when it became intolerable for
her to stay as president of Harvard so
is there a spectrum for you between
a different kinds of plagiarism maybe U
plagiarizing words and plagiarizing
ideas and plagiarizing novel
ideas of course the common understanding
of plagiarism if you look in the
dictionary it's about
theft theft requires a
intent did the person intentionally take
someone else's ideas or words now if
you're if you're writing a novel right
words matter more right if you're taking
Shakespeare and presenting it as your
own words uh if you're you know writing
about ideas you know ideas matter but
you're not supposed to take someone
else's words without properly
acknowledging them whether it's
quotation marks or otherwise but in the
context of a academic's life's work
before
AI everyone's going to have missing
quotation marks and footnotes I remember
writing my own thesis you know I would
write I would take there books you
couldn't take out of Widener Library so
I'd have index cards and I write stuff
on index cards and I put a little
citation to make sure I remember to
cited properly and you know scrambling
to do your thesis get it in on time
what's the chances you forget at what
point what are your words versus the
author's words and you forget to put
quotation marks just the humanity you
know the human uh fallibility of it so
you know you don't get it's not academic
fraud to have human fail ability but
it's academic fraud if you take someone
else's ideas that are an integral part
of your work is there a part of you that
regrets that at least from the
perception of it the the president of
Harvard stepped down over plagiarism
versus
over refusing to say that the calls for
genocide are wrong again I think it
would have sent a better
message if a fail if a leader fails as a
leader
and that's the reason for their
resignation or dismissal then she gets
if you will caught on a technical
violation that had nothing to do with
failed leadership because I don't know
what lesson that that you know what
lesson that teaches the board about
selecting the next candidate I mean the
future of Harvard a lot of it's going to
depend on who they pick as the next
leader um here's an interesting
anecdote uh that I think is not surfaced
publicly so um a guy named Larry beo was
the previous president of Harvard Larry
beo was on the search
committee uh and they were looking for
new
president and what was strange was they
picked an old white guy to be president
of Harvard when there was you know a
call for a more diverse president and
what I learned was Harvard actually ran
a
process had a diverse new president of
Harvard and in the due diligence on that
candidate shortly before the
announcement of the new president they
found out that the president that
presidential candidate had a plagiarism
problem and the search had gone on long
enough they couldn't restart a search to
find another candidate so they picked
Larry backo off the board off the search
committee to be the next president of
Harvard as kind of an inim
solution and then there was that much
more pressure to have a more diverse
candidate this time around because it
was a big disappointment to the Dei
office if you will and I would say to
the community at large at the Harvard of
all places couldn't have a you know a
racially diverse present would send an
important
message um so the strange thing is that
they didn't do due diligence on
President gay and that was a relatively
quick process um so the whole thing I
think is worthy of further you know
exploration so this goes deeper than
just the president yes for sure when a
company fails most people blame the CEO
I generally blame the
board right because the board's job is
to make sure the right person is running
the company and if they're failing help
the person if they can't help the person
make a change that's not what's happened
here the board's hand was sort of forced
from the outside whereas they should
have made their own decision from the
inside you still love Harvard sure it's
a 400 odd year uh institution it uh
enormously helpful to me in my life I'm
sure uh my sister also went to Harvard
um and you know the experiences
learnings friendships
relationships uh you know again I'm very
happy with my life uh Harvard was an
important part of my life I went there
for both undergrad and business school I
learned a ton met a lot of Faculty a lot
from number of my closest friends who I
I still really keep in touch with how I
made then so yeah it's a great place but
it needs a a reboot yeah I I still have
hope I think uh universities are really
important institutions you know when I
went to Harvard there were 1600 people
in my class I think today's class is
about the same
size and uh their online education
really has not sort of taken off right
so I heard Peter teal speak at one point
in time and he's like what great
institution do you know that's truly
great that hasn't grown in 100 years
right and uh you know the incentives in
some sense of the alums are for it it's
a bit like a club if you're proud of the
elitism of the club you don't want any
that many new members but the fact that
the population has grown of the country
so you know significantly since
certainly I was a student in
1984 uh and the fact that Harvard
recruits people from all over the world
it's really serving a smaller and
smaller percentage of the population
today and you know some of were most
talented and
successful uh Entre anyway you know it's
a it's a token of success that they
didn't make it through their
undergraduate years you know they left
as a freshman or they didn't attend at
all for entrepreneurs yes but it's still
a place very important for research very
important for advancing
ideas uh and yes and and shaping
dialogue and the next generation of
Supreme Court Justices yes and you know
the members of government politicians so
yes it's critically important but it
it's
not not doing the job it should be
doing Nar oxman somebody you mentioned
several times throughout this podcast
somebody I had a wonderful conversation
with a friendship with I've known looked
up to her admired her has been a fan
I've been a fan of hers for a long time
of her work um and of her as a human
being uh looks like you're a fan of hers
as well yes
uh what do you love about AR what do you
admire about her as a scientist artist
human being I
think uh she's the most beautiful person
I've ever met and I mean that from like
the center of her
soul uh she's the most caring warm
considerate you know
thoughtful uh person I've ever met and
uh and she couples those remarkable
qualities with Brilliance incredible
creativity Beauty Elegance
Grace um yeah I'm talking about my wife
um but I'm talking incredibly
dispassionately um but I I mean what I
say uh she's the most remarkable person
I've ever met uh and I've met a lot of
remarkable people and I'm incredibly
fortunate to spend a very high
percentage of my life time with her ever
since I met her uh you know six years
ago so she's been a help to through some
of the rough moments you describe for
sure I mean I met her at the bottom uh
which is not a bad place to meet someone
if it works
out uh is there some degree of uh yin
yang with the two personalities you have
you have described yourself as uh
emotional and so on but it does seem you
the two of you have slightly different
styles about how you approach the world
well interestingly we there's we have a
lot of like um you know we come from
very similar places in the world you
know there are times where we feel like
we've known each other for centuries you
know I met her parents for the first
time uh you know a long time ago almost
six years ago as well and uh I knew her
parents were from Eastern Europe
originally so I asked her father like
what you know what city that her family
come from
originally and uh I called my father uh
and asked him you know Dad what's you
know Grandpa Abraham where's he what's
the name of the city and then I put uh
the two CI into Google Maps and they
were 52 miles apart which I thought was
pretty cool um then of course at some
point we did genetic
testing make sure we weren't related
yeah which we were not um but uh we
share incredible commonality on
values uh we are attracted to the same
kind of people you know she loves my
friends I love hers uh we love doing the
same kind of things uh we're attracted
to you know we like spending time the
same way um
and she has yes more emotion uh more
Elegance U she doesn't like battles but
she's very strong uh but she's more
sensitive than I am yeah you you are
constantly in multiple battles at the
same time and there's often the media
social media is just fire everywhere you
know that hasn't really been the case
for a while I've had Rel of Peace for a
long time because I as I stopped being
as I haven't had to be the kind of
activist I was earlier in my career uh I
think since October 7th yes I do feel
like I've been in a war can you tell me
The Saga of the accusations against Nar
so I did not actually surface the
plagiarism allegations against uh
president gay that surfaced by you know
Aaron and uh maybe Christopher rufo as
well or maybe Chris helped promote what
Aaron and some Anonymous person uh
identified but I certainly it was a
point in time where the board had said
we're 100% behind her and uh unanimously
and I really felt you had to go so it
didn't bother me at all that they had
identified problems with her work so I
shared I I reposted those posts and then
when the board she ultimately resigned
and she got a $900,000 a year
professorship continuing at Harvard I
said look in light of her limited
academic record
and these plagiarism allegations I she I
she had to
go um I knew when I did so I assumed I
was actually a bit paranoid about that
thesis I had written I only had one
academic
work um but I hadn't checked it for
plagiarism and I thought that's GNA
that's going to happen actually I had it
uh I I had someone I I did not have a
copy on hand so I got a copy of my
thesis and I and I remember writing it
Harvard at the time was pretty uh they
kind of gave you a lecture about making
sure you have all your footnotes and
quotation marks I learned later that
apparently they had a copy of my thesis
at the New York Public Library and a
member of the media told me he was there
uh online with you know a dozen other
members of the media all trying to get a
copy of my thesis to run it through some
AI they had to First do optical
character recognition to convert the uh
paper document into uh digital um but
fortunately uh through a miracle uh I
didn't have an issue I didn't think
about ner of course who has whatever 130
academic
works and so we were just at the end of
a vacation for Christmas break and uh I
was early in the morning uh for vacation
time and uh all of a sudden I hear my
phone ringing in the other room or
vibrating in the other room multiple
times I'm like I pick up the phone it's
our communication guy friend Miguel and
he's like bill um Business Insider has
apparently identified a number of
instances of plagiarism in nar's
dissertation let me send you this email
he sent me the email and uh they had
identified four paragraphs in her 330
page dissertation where she had cited
the author but she had used the vast
majority of the words and that those
paragraphs were from the author and she
should have used quotation marks and
then there was one case where she
paraphrased correctly an author
uh but did not uh footnote that it was
from his
work uh and so we were presented with
this and told they're going to publish
in a few hours and we're like well can
we get to the next day we're just on you
about to head home and they're like no
we're publishing by noon we need an
answer by noon and uh so we downloaded
the copy of her thesis on like the slow
internet and uh you know ner checked it
out and she said you know what looks
like they're right uh and I said look
you should just admit admit your mistake
and she wrote a very simple gracious yes
I should have used quotation marks and
on the author I failed to site uh she
pointed out that she cited them eight
other times and wrote a several
paragraph uh section of her thesis
acknowledging you know his work um and
none of these were like important parts
of her thesis but she acknowledged her
mistake and she said you apologize for
my mistake and I apologize to the author
who I failed to site and I stand on the
shoulders of uh you know all the people
came before me and looking to advance
work we sort of thought it was over we
head home
um in flight on the way home although we
didn't realize this till we got back the
following day uh Business Insider
published another article and it said
ner oxman admits to
plagiarism plagiarism of course is
academic fraud and this thing goes crazy
viral oh Bill the title is Bill amman's
wife MH
celebrity academic ner oxman and they
use the term celebrity
because there are limits to what
legitimate media can go after but you
know celebrities there's a lot more
leeway in the media into what they can
say so that's why they call her a
celebrity first time ever she'd been
called a
celebrity and uh and they they basically
she's admitting to academic fraud and
then they said and then the next
day uh at 5:19 p.m. I remember the
timeline pretty well uh an email was
sent to Fran McGill
saying um you know we've identified you
know two dozen other instances of
plagiarism in her work 15 of which are
Wikipedia entries where she copied
definitions and uh the others were
mostly software Hardware manuals for
various devices or software she used in
her work most of which were in footnotes
where she described a nozzle for a 3D
printer or something like
this and they said we're publishing you
know
tonight the email they sent to us was
6900 words it was 12 Pages was
practically inable you couldn't even
read it in an hour and we didn't have
some of the documents they were
referring to and I'm like Nar you know
what I'm going to do it I think it would
be useful to provide context
here uh I'm going to do a review of
every MIT professor's dissertations
every published paper AI has enabled
this um and so that was I put on a tweet
basically saying that and we're doing a
test run now we have to get it right and
I think would be a useful exercise
provide some context if you will and
then this thing goes crazy viral uh
and you know ner is a pretty sensitive
person pretty emotional person and
someone who's a
perfectionist and having everyone in the
world thinking you committed academic
fraud is a pretty daming thing now they
did say they did a thorough review of
all of her work and this is what they
found I'm like sweethe that's remarkable
I did 130 Works 73 of which were peer-
reviewed blah blah blah and she's
published in nature science and all
these different Publications that's
actually it's a pretty good batting
average but you know they can't this is
wrong right this is not academic fraud
okay these are inadvertent mistakes and
the Wikipedia entries ner actually used
Wikipedia as a dictionary this is the
early days of Wikipedia and they also
referred to the MIT handbook which has a
whole section on plagiarism academic
handbook and if you read it which I
ultimately did they make clear a few
things number one there's plagiarism
academic fraud and there's what they
call inadvertent plagiarism which is
clerical errors where you make a mistake
and it depends on intent and there's a
link that you can go to which is a
section on if you get investigated MIT
what happens what's the procedure what's
the initial stage what's the
investigative stage what's the procedure
if they identify it and they make very
clear that academic fraud is and they
list plagiarism you know research theft
a few other things but it does not
include honest errors honest errors are
not plagiarism under mit's own policies
and in the handbook they also have a big
section of what they call common
knowledge and common knowledge depends
on who you're writing your thesis
for uh and so if it's a fact that is
known by your audience you're not
required to quote or site and so all
those Wikipedia entries were for things
like sustainable design computer AED
design she just took a definition from
Wikipedia common knowledge to her
readers no obligation under the handbook
totally exempt on the using the same
words she referred to like an whatever
some kind of 3D printer she was the
straty 3D printer and she quoted from
the manual right away strates as a
company you consulted for they're very
you don't need to that's not something
you're not stealing their ideas you're
describing a nozzle for a device you use
in your work and a footnote that's not a
theft of idea
right and so I'm like this is crazy and
so this has got to stop and so I reach
out to uh the a guy I knew was on the
board of Business Insider the chairman
and his name is going to come public
shortly I committed to that time to keep
his name confidential it's now surfaced
publicly in the Press can I just pause
real quick here just to
I don't know there's a lot of things I
want to say but you made it pretty clear
but just as a member of the
community there's also like a common
sense test I think you're more precisely
like legal and looking at but there's
just like a bullshit test and like
nothing that ner did is plagiarism in
the bad meaning of the word plagiarism
right now is becoming another ISM like
racist ISM or so on using an attack word
I don't care what the meaning of it is
but there's the bad academic fraud like
theft yes theft of an idea and maybe you
can say a lot of definitions and this
kind of stuff but then there's just a
basic bullshit test where everyone knows
this is a thief and this is definitely
not a thief and there's nothing about
anything that ner did anything in her
thesis or in her life everyone that
knows her she's a rock star right I just
want to make it clear it really hurt me
that the internet whatever is happening
could go after could go
after a great scientist because I love
science and I love celebrating great
scientists and it's just really messed
up that whatever the machine and we can
talk about business inside or whatever
uh social
media Mass hysteria whatever is
happening like we need the great
scientists of the world cuz that's like
the future depends on them and so we
need to celebrate them and protect them
and let them flourish and let their do
their thing and like keep them out of
this what whatever shit storm that we're
doing to get clicks and advertisements
and drama and all this kind we need to
protect them so I just want to say there
there's no there's nobody I know and
million friends uh that are scientists
uh world- class scientists snowball
Prize winners they all love ner they all
respect ner there's she did zero
wrong and then the rest of the
conversation we can have about how
broken journalism is and so on but like
I just want to say that there's nothing
um that ner did wrong it's not a great
area or so on I also personally don't
love that claudian gay is a discussion
about plagiarism because it distracts
from the
fundamentals that is broken um it's
becomes some weird technical
discussion but in case ner did nothing
wrong great scientist great engineer at
MIT and Beyond she's doing the cool
thing now so anyway could not have said
it better myself now obviously I'm
focused on the technical part right he
want to be yes precise here well it's
not even that I mean yes I have said uh
that we're going to sue Business Insider
and and in 35 years of my career of
someone who is not every article has
been a favorable one not article has
been an accurate one I've never
threatened to sue the media and I've
never sued the media uh but this is so
egregious it's not just that she did
nothing wrong but they accused her of
academic fraud they did it knowing they
they make reference to mit's own
handbook so they had to read all the
same stuff that I read in the handbook
uh they did that
work then after I you know escalated
this thing to the you know Henry bed the
chairman of Business Insider to the CEO
of Axel Springer I even reached out to
Henry kravis at a certain point in time
one of the controlling shareholders of
the company through
KKR
um laying out the factual errors in the
article business iner went public after
they said ner committed academic fraud
and plagiarism and said we never CH we
didn't challenge any the facts remain
Undisputed in the article so so it's
basically Nar committed plagiarism
that's Story one ner admits to
plagiarism she admits to plagiarism she
admitted to she admitted to making a few
clerical errors that's the only thing
she admitted to and she graciously
apologized so they said ner admits to
plagiarism apologizes for plagiarism
that's incredibly damning and by the way
we're doing an investigation because
we're concerned that there might have
been inappropriate process but the facts
of the story have not been disputed by
ner oxman or Bill akman and that was
totally false I had done it privately I
done it publicly on Twitter on X I laid
out I I have a whole text stream a
WhatsApp stream with the CEO of the
company and they and they double down
and they double down again and so I
don't sue people
lightly and uh you stay tuned so
you're at least for now moving forward
with it's a certainty we're moving
forward uh there's a step we can take
prior to suing them
where we
basically send them a letter demanding
they make a series of
Corrections that if they if they don't
make those Corrections the next step is
litigation I hope we can avoid the next
step and I'm just making sure that we we
present the demand to Business Insider
and ultimately to Axel Springer that
it's incredibly clear how they defamed
her the factual mistakes in her stories
uh and what they they need to do to fix
it and if we can fix it there we can
move on from this episode and hopefully
avoid
litigation um so that's where we are I
don't know you're smarter than me
there's technical stuff there's legal
stuff there's journalistic stuff but
just fuck you Business Insider for doing
this I don't
know I don't know much in this world but
journalists aren't supposed to do that
no look it we're going to surface all
this stuff publicly
ultimately the email was not to ner
saying there was plagiarism in her work
the email came from a reporter named
Katherine long and the headline was your
wife committed plagiarism shouldn't she
be fired from MIT just like you caused
clotting gay to be fired from Harvard
yeah it it was a
political agenda she doesn't like me
okay and she was trying to hurt me and
they couldn't find plagiar in my thesis
and you know being the subject of short
being a short seller the Herbal Life
battle went on for years
uh they tried to do everything to
destroy my reputation so they already
gone through my trash they already done
all that work so uh anything they could
possibly find you know and I I I've I've
always lived a very clean life okay
thankfully and if you're going to be an
activist short seller you better because
they're going to find out dirt on you if
it exists and so they're like how can we
really hurt bill by the way MIT ner had
left MIT years earlier when the reporter
found out she was no longer a member of
the MIT faculty they were enraged they
didn't believe us they made us like you
know prove to us she's no longer on the
M fact because they wanted to get her
fired and by the way malice is one of
the you know uh important factors in
determining whether someone whether
defamation taken place and this was a
malice driven uh this was not about news
and the S the unfortunate thing about
journalism is business ins made a
fortune from this this story was
published and republished by thousands
of media organizations around the world
world it was the number one trending
thing on Twitter for like two days uh it
every newspaper every was on the front
page of every Israeli newspaper uh you
know was on the front page of the
financial times okay so this and she's
building a business and you know if if
you're CEO of a science company and you
commited academic fraud that's
incredibly damaging but I ultimately
convinced her that this was good I said
sweetheart you're amazing you're
incredible you're incredibly talented
but you're mostly known in the design
world now everyone in the universe okay
has heard of ner oxman okay we're going
to get this thing cleared up you're
going to be doing an event in in six
months where you're going to tell the
world you're G to go out of stealth mode
you can tell the world about all the
incredible things that you building and
you're designing and you're creating and
you're going to it's going to be like
the iPhone launch cuz everyone's going
to be paying attention and they're going
to going to want to see your work and uh
you know that's how I try to cheer up
but I think it's true it is true but and
you're doing your your job is a good
part in seeing the silver lining of all
this how how is uh just from observing
her how
did uh she you
know stay strong through all of the
psychologically because at least I know
she's pushing ahead with the work oh
she's Full Speed Ahead in her work she's
built an amazing team she's hired 30
scientists um
roboticists people who uh biologists
plant specialists material
scientists engineers really Incredible
Crew uh she's built this 36,000 foot lab
in New York City that's a one of a kind
it's still you know they're working out
of it it's still under construction
while they're working out of
it um and so she's going to do amazing
things but um as I said she's an
extremely sensitive person she's a
perfectionist okay imagine thinking that
the entire world thinks you committed
academic fraud and so that was very hard
for her she's a very positive person but
I saw her in I would say her darkest
emotional period for sure she's doing
much better now but you can kill someone
you can kill someone with by destroying
the reputation people people commit
suicide people go into these deep dark
depression well my worry primarily when
I saw what Business Insider was doing is
uh that they might dim the light of a
uh of a truly special scientist and
Creator it's not going to happen but I
also worry about
others like ner young nar's that are
that this sends a signal to um that
might scare them and you know Jour
journalism shouldn't scare aspiring
young scientist the problem is the
defamation law in the US is so favorable
to the publisher to the media and so
unfavorable uh to the victim and the
incentives are all wrong you know the
when you went from a paper version of
Journalism to digital and you could
track how many people
click uh and it's a medium that
advertising drives the economics and if
you can show an Advertiser more clicks
you can make more money right so a
journalist is incentivized to write a
story that will generate more clicks how
you write a story the G more clicks you
get a billionaire guy okay and then you
go after his wife and you make a
sensationalist story and you give them
no time to respond right you know look
at the timing here they on the first
story you know they gave us three hours
on the second one the following day 5:19
p.m. the email comes in not to ner not
to her firm but to my communications
person who tracks us down by 5:30 you
know 10 minutes later and they published
their story 92
minutes uh after and they sent us we're
going to surface all these documents in
our
demand read the email they sent whether
you could even decipher it it's you know
it's uh there was no and by the way
there's a reason why academic
institutions when a professors is
accused of plagiarism why they have
these very careful processes with
multiple stages and they take they can
take a year or more because it depends
on intent
was this intentional in order to be a
crime an academic crime you got to prove
that they intentionally stole look in
some cases it's obvious in some cases
it's very subtle and they take this
stuff super seriously but they basically
accus ner of academic crime and then 92
minutes later they said she committed an
academic crime and that should be a
crime and that should be punishable with
litigation and there there should be a
real cost and we're going to make sure
there's a real cost reputationally and
otherwise to Business Insider and to
Axel Springer because ultimately you got
to look to the controlling owner you
know they're
responsible I'll just say they you in
this regard are inspiring to
me uh for for for facing
basically uh an institution that whole
purpose is to to write articles so
you're like going into the fire my kids
school the uh epithet for the school or
the saying is go forth unafraid I think
it's a good way to live and again I'm
words can't harm me you know the uh the
power of X and and we do owe Elon
enormous thanks for this is now so for
example The Washington Post wrote a
story about me a couple days ago and I
didn't I didn't the story was a fair
Story So within a few hours of the story
being written I'm able to put out a
response the story and send it to a
milli2 200,000 people and it gets read
and reread I haven't checked but you
know probably five million people saw my
response now those are the people on X
it's not everyone in the world there's
still there's a disconnection between
the X world and the offline World um but
you know reputation in my business is
basically all you have uh and as they
say you can can take a lifetime to build
reputation and take five minutes to have
it disappear and the media plays a very
important role
and they can destroy people at least we
now have some ability to fight back we
have a platform we can Surface our views
you know the typical old days they write
an incredibly damning article and you
point out factual errors and then like
two months later they bury a little
correction on page Whatever by then the
person was fired or or their life is
destroyed or the reputation's damaged
you know I was with Warren Buffett
talking about media it's something he a
business he really loves he says you
know what Bill he said a thief with a
dagger the only person who can cause you
more harm than a thief with a dagger is
a journalist with a pen and those were
very powerful words so you think
X formerly known as Twitter is a kind of
neutralizing force to that to the power
of centralized journalistic institutions
100% And I think it's a really important
one and it's really been eye opening for
me uh to see how stories get covered in
mainstream media and then you actually
what I do on X is I follow people on
multiple sides of
issue and you can or I post on a topic
and I get to hear the other side you
know I read the replies uh and it you
know the truth is something that people
have had a lot of question about
particularly in the last uh I would say
five years you know beginning with uh
you know Trump's uh talking about fake
news and a lot of what Trump said about
fake news is true you know the world a
big part of the world hated Trump and
did everything they could to uh
discredit them destroy him uh and you
know he did a lot of things perhaps
deserving of being being discredited
he's by by a very imperfect and some
cases harmful uh leader uh but you know
everything from pre-election you know
the the hunter at Biden laptop story in
the New York Post that uh you know then
Twitter uh you know uh made difficult
for people to uh to share and to read
um you know uh Co you know the the the J
badar of the world questioning the
government's response questioning you
know uh the you know long-term lockdowns
questioning keeping kids out of school
questions about masks about
vaccines which are still not
definitively answered um no
counterbalance to the power of the
government when the government can shut
down avenues for free speech
uh and where the mainstream media has
kind of towed the line and many extents
to the government's uh action so having
a independently owned powerful platform
is very important uh for Truth uh for
free speech for hearing the other side
of the story for counterbalancing the
power of the government Elon is getting
you know uh a lot of uh push back uh you
know the spacex's and Teslas of the
world are
experiencing a lot of government uh you
questions and investigations and you
know even the president of United States
came out and said look he's worth he
needs to be
investigated you know I'm getting my own
version of that in terms of uh some
negative media articles I don't know
what's next um but yeah if you stick
your neck out in today's world and you
you go against the establishment or at
least the existing uh Administration uh
you can find yourself uh in a very
challenged place and that discourages
people from sharing stuff and that's why
Anonymous speech is important some of
what you find on Twitter you mentioned
Trump I have to talk to you about
politics sure amongst all the other
battles you've also been a part of that
one maybe you can correct me on this but
you've been a big supporter of various
Democratic candidates over the
years uh but you did say a lot of nice
things about Donald Trump uh in 2016 I
believe so I was interviewed by Andrew
sorin a week after Trump won the
election yes and I made my case for why
I thought he could be a good president
yes so what was the case back then and
to which degree did that turn out to be
true and to which degree did it not to
which degree was he a good president to
which degree was he not good president
look I think what I said at the time was
the United States is actually a huge
business and it reminds me a bit of the
type of activist Investments we've taken
on over time where this really really
great business has kind of lost its way
and with the right leadership we can fix
it
and if you think about the business of
the United States today right you've got
$32 trillion wor the debt so it's
overleveraged and or it's highly
leveraged and The Leverage is only
increasing we're losing money I.E
revenues aren't covering expenses uh the
cost of our debt is going up as interest
rates have gone up and the debt has to
be rolled over we have enormous
administrative bloat uh in the uh the
country uh the the regulatory regime is
incredibly complicated burdensome and
impeding
growth um our relations with uh our
competitor Nations and our friendly
nations are are are far from ideal and
those conditions were present in 2020 as
well they're just I would say worse now
and I said look it's a great thing that
we have a businessman as president and
in my lifetime I was really the first
businessman as opposed to I mean maybe
Bush to some degree was a business
person uh but I thought okay I always
wanted the CEO to be CEO of America and
now we have trump it look he's got some
personal qualities that seem less ideal
but he's going to be president the
United States he's going to rise to the
occasion this is going to be his legacy
and uh he knows how to make deals and
he's got uh he's going to recruit some
great people into his administration I
hoped uh and you know growth can solve a
lot of our problems so if we can get rid
of a bunch of regulations that are
holding back the country we can have a
president Obama
uh was a I would say not a pro business
president he did not love the business
Community he did not love successful
people um and having a president who
just changed the tone on on um being a
pro business president I thought would
be good for the country and that's
basically what I said and I would say
Trump did a lot of good things uh and a
lot of people you can get criticized for
acknowledging that um but you know I
think the the country's economy
accelerated dramatically
and that by the way you know the the
capitalist system helps the people at
the bottom best when the system does
well and when the economy does well you
know the black unemployment rate was the
lowest in history when Trump was
president and that's true for other
minority groups uh so he was good for
the
economy um and he you know uh he
recognized uh some of the challenges and
issues and threats of China
early uh he kind of woke up NATO uh now
again the way he did all this stuff you
can object to um but you know NATO
actually started spending more money on
defense in uh the early part of Trump's
presidency because of his threats which
turned out to be a good thing in light
of uh you know the ultimately the Russia
Ukraine uh War uh and I think if you
analyze Trump objectively based on
policies he did a lot of good for the
country um I think what's bad is uh he
did some harm as well uh you know the uh
I do think civil
disappeared in America with Trump as
president a lot of that's his personal
style and how important is civility I do
think it's I do think you know he was
attacked uh very aggressively by the
left by the media uh that made him
paranoid it probably interfered with his
ability to be successful he had you know
the Russian collusion investigation
overhang uh and when someone's attacked
they're not going to be at their best
particularly if they're paranoid I think
there's some degree of that um but you
know I'm giving kind of the the best of
Defense of trump you know just uh you
look at how he managed his team right
very few people made it through the
Trump Administration without getting
fired or quitting uh and you who would
say they're the greatest person in the
world when he hired them and they're
total disaster when he fired them uh
it's not an inspiring way to be a leader
and to attract really talented people I
think the events surrounding the
election
uh you know I think January 6 he could
have done a lot more to stop uh a riot I
I don't consider it an Insurrection um
but a riot that takes place in our
capital and where police officers are
killed or die commit suicide uh because
for failure as they s to do their job
you know he stepped in way too late to
stop that he could have stopped it early
you know many of his words I think
inspired people you know some of whom
with Mal intent to go in there and cause
harm and literally to shut down the
government there were some evil people
unfortunately there so he's been a very
imperfect president and also I think in
and contributed to the uh you know
extreme amount of divisiveness in our
country so I was ultimately disappointed
um by you know the note of optimism and
again I
always uh you know support the president
I trust the people ultimately to select
our next leader you know it's a bit like
um Who Wants To Be A Millionaire you
know when you go to the crowd and the
crowd says a certain thing you got to
trust the crowd um but uh usually and
Who Wants To Be A Millionaire it's a
landslide in One Direction so you know
which which led her to pick here we had
an incredibly close election which
itself is a problem so you know my dream
and what I you know tried a little bit
played politics in the last little
period to support some alternatives to
Trump so that we have a president you
know I I use the you know example
imagine you woke up in the morning it's
election day whatever it is this
November 4th whatever 20 24 and you
still haven't figured out who to vote
for cuz the candidates are so appealing
that uh you don't know which lever to
pull because it's a tough call that's
the choice we should be making As
Americans it shouldn't be I'm a member
of this party I'm only going to vote
this way I'm a member of that party
going to vote the other way and I hate
the other side and that's where we've
been unfortunately for too long or you
might be torn because both candidates
are not good yeah so you want to I I
love a future where I'm torn because the
choices are so amazing the problem is
the party system is so screwed up and
the parties are self-interested and
they're they're there another governance
problem right an incentive problem uh
Michael Porter who was one of my
professors at har business school wrote
a brilliant piece on the American
political system and all the incentives
and market dynamics and what you call
the competitive analysis uh and it's a
mustre I should dig it up and you know
send it around on X uh but it explains
how the you know the parties and the
incentives of these sort of
self-sustaining entities that you know
were the people involved are not
incentivized to do what's best for the
country it's a problem you've been uh a
supporter of Dean
Phillips yes for the 2024 US
presidential race yes what do you like
about
Dean I think he's a honest smart
motivated capable proen guy as a
business leader and I think in uh six
almost you know with in his three terms
in Congress he ran when Trump was
elected he said his you know kids cried
his daughters cried inspired him to run
for office uh ran in a republican
District in Minnesota for the last 60
years uh was elected in the landslide
has been reelected twice moved up the
ranks in the
Congress um you know uh respected by his
fellow members of Congress Advance some
important Legislation during covid uh on
you know senior roles on various foreign
policies
committees
Centrist you know considered I think the
second most bipartisan member of the
Congress I'd love to have a bipartisan
president that's the only way to get
kind of go forward but we'd enormously
benefit if we had a president
that chose policies on the basis of
what's best for the country as opposed
to what his party wanted what I like
about him is he's financially
independent he's not a billionaire but
he doesn't need the job the party hates
him now because he challenged the king
right and so uh but he's willing to give
up his political career because what he
thought was best for the country he
tried to get other people to run who
were higher profile had more name
recognition none would no one wants to
challenge Biden you know if they want to
be have a chance to stay in office or
run in the future uh but he's very
principled uh I think he would be a
great president um but he needs uh his
shot is Michigan but he needs to raise
money in order to he's only got a couple
weeks and he's got to be on TV there
that's expensive uh so uh we'll see so
he has to increase name recognition all
that kind of stuff also as you mentioned
he's young yeah he's 55 but he's a young
55 you see him play hockey yeah I mean I
guess 55 no matter what is a pretty
young age 57 I feel young I can do more
pull-ups today than I could as a kid so
that's a standard you're at the top of
your tennis game the top of my tennis
game for sure maybe there's someone that
would disagree with that and by the way
the other thing to point out here is and
I have been pointing this out as of
others Biden is I think is done I mean
it's embarrassing it's embarrassing for
the country having him as a as a
presidential candidate let alone the
president of the country it's crazy and
it's just going to get worse and worse
and he should you know the worst of his
legacy is his ego that prevents him from
stepping aside and that's it it's his
ego and it is so wrong and so bad and so
embarrassing uh you know you talk to
people I was in Europe I was in London
few days ago and people were like Bill
how can this guy be your president and
and it's a bit like again I go back to
my business analogy being a CEO is like
a full contact sport being president
United States is like some combination
of wrestling Marathon running you know
try being a triathlete I mean you got to
be at the serious physical shape and at
the top of your game to represent this
country and he is a far cry from that
and it's just getting worse and it's
embarrassing and I and he's got he
cannot be and by the way every day he
waits he's handing the election uh to
Trump because it's harder and harder for
an alternative candidate to surface now
Dean is the only candidate left on the
Democratic side that can still win
delegates he's on the ballot in 42
States uh and the best way for Biden to
step aside is for Dean to show well in
Michigan and so you think there is a
path with the delegates and all that
kind of stuff 100% so if he if what has
to happen is what New Hampshire he went
from zero uh to 20% of the vote and and
10 weeks with no name recognition you
know I helped a little bit Elon helped
we did a spaces for him we had 350,000
people on the spaces some originally
40,000 live or something and then the
the rest after um and then he was on the
ground in New Hampshire and New
Hampshire is one of the states where you
don't need to be registered to to a
party to vote for that candidate so it's
like jump ball and he got 20% and that's
with a lot of Independence and Democrats
voting for
Haley um Haley who I like and who I've
supported um does not look like she's
going to make it uh you know Trump is
really kind of running the table and so
vote for Haley as an independent in
Michigan maybe throw away your vote I
think it increases the likelihood that
Dean can get those independent votes if
he he could theoretically again he needs
he needs money he could beat Biden in
Michigan Biden's doing very poorly in
Michigan his polls are terrible the
Muslim Community is not happy with him
uh
and uh he really spent no time there and
so if he's embarrassed in Michigan it
could be a catalyst for him withdrawing
then Dean will get funding if he wins
Michigan or shows well in Michigan and
people say he's viable he's the only
choice we have he'll attract from the
center he'll attract from people
Republicans who who won't vote for Trump
in which they're a big percentage could
be 60% or more it could be 70% won't
vote for Trump and also from uh the
Democrats so I think he's a really
interesting candidate uh but we got to
get the word out yeah I got a chance to
chat with Dean I really like him I
really like him and I think uh the next
president of the United States is going
to have
to meet and speak regularly with zansi
Putin Netanyahu with world leaders and
have some of the most historic
conversations agreements
negotiations and I just don't see Biden
doing that no um and not
for uh any reason but sadly age I mean
think about it this way when Biden's in
present now you saw his recent impromptu
press conference which he did after the
uh special prosecutor you know report
basically saying the guy was way past
his Prime and then he confused the
president of Mexico and the president of
Egypt
so they're very careful when they roll
him out and he's scripted and he's
always reading from elector imagine the
care they have in exposing him and it
when they expose him it's terrible okay
imagine how bad it is for real um so
it's not good no bad really bad for
America and I'm upset with him and upset
with his family I'm upset with his wife
you this is the time where the people
closest to you have to put their arms
around you and say you know Dad you know
honey okay you've you know you've done
your thing uh this is going to be your
legacy and it's not going to be a good
one great leaders should also know when
to step down yeah one of the best tests
of a leader is succession planning this
is a massive failure of succession
planning outside of
politics let me look to the
Future first in terms of the financial
world what are you looking forward to in
the next couple of years you have a new
fund like what are you thinking about in
terms of
investment um your own and the entire
economy and maybe even the the economy
of the world sure so the SEC doesn't
allow uh doesn't like us to talk about
uh new funds that we're launching that
we filed with the SEC sure um but I
would say I do uh and by the way if
anyone's ever interested in a fund they
should always read the prospectives
carefully including the risk factors
that's very very important but I like
the idea of democratizing access to good
investors uh and uh I think that's an
interesting Trend so we want to be part
of that Trend in terms
of financial markets generally the
economy you know a lot of is going to
depend upon the next leader of the
country so we're kind of right back
there um you know the leadership the
United States is important for the US
economy it's important for the global
economy it's important for Global
Peace and we've gone through a really
difficult uh period and it's time we
need to break but you know look I think
the United States is an incredibly
resilient country we have some
incredible Moes among them we have the
Atlantic and the Pacific and we have you
know peaceful neighbors to the North and
the South we're an enormously rich
country uh capitalism still works
effectively here uh I get optimistic
about the world when I talk to my
friends who are either Venture
capitalists or uh my hobby of backing
these young entrepreneurs I talk to a
founder of a startup if you want to get
optimist about the world so I think
technology is going to save us
uh I think AI of course has its
frightening uh Terminator like scenarios
but I'm going to take the the opposite
view that this is going to be a huge
enabler uh of uh productivity scientific
discovery drug Discovery and it's going
to make us healthier happier and and
better so I do think you know the the
internet Revolution was you know had a
lot of good some obviously some bad I
think the AI Revolution is going to be
similar but we're at this other really
interesting juncture
uh in the world uh you know with uh
technology and we're going to have to
use it for our good uh on the media
front I'm happy about X and I think uh
elon's going to be successful here uh I
think advertisers will realize it's a
really good platform the best way to
reach um me I want to sell something to
me post I've actually bought stuff on uh
some some ads in X I don't remember the
last time I responded to direct response
advertising you know in terms of uh my
business I have an incredible team it's
tiny we're one of the smallest firms
relative to the assets we manage uh it's
a bit like uh you know the uh the Navy
Seals you know not the US Army we we
have only 40 people at persing Square so
it's a a tight team I think we'll do
great things I think we're early on you
know my ambitions investment wise I've
always wanted to uh I've I've always
said I'd like to have a record as good
as Warren buffets the problem is each
year he adds on another year he's now in
his 93rd year so I've got 36 more years
uh to just get where he is and I think
he's going to add a lot lot more years
uh I'm excited about seeing what ner is
going to produce um you know she's
building an incredible company they're
trying to solve a lot of problems with
respect to products and buildings and
their impact on the environment her
vision is how do we design products that
by virtue of the products existence the
world is a better place you know today
uh you make you know her her world is a
world where the existence of the new car
actually is better for the environment
than if the new car hadn't existed and
think about that in every product scale
that's what she's working on I don't
want to give away too much but you're
going to see some early examples of what
she's working on uh so again I get
excited about the
future um and uh and crises are sort of
a terrible thing to waste and we've had
a number of these here I think this
disaster in the Middle East my
prediction is the next few months uh
this war will largely be over in terms
of getting rid of Hamas I think a uh I
can Envision a world in which Saudi
Arabia some of the other Gulf States
come together take over the governance
and reconstruction of of of Gaza
security guarantees are put in place the
Abraham Accords continue to grow a deal
is made terrorists are
ostracized um that this October 7th
experience on uh the Harvard uh Penn MIT
Columbia unfortunately other campuses is
a wake-up call for universities
generally um you know people see the
problems with Dei but understand the
importance of diversity and and
inclusion but not as a political
movement but as a way um that we return
to a meritocratic world where someone's
background is relevant in understanding
their contribution uh but it's not we
don't have race quotas and things that
were made illegal years ago actually
being implemented uh in in organizations
on campus so I think there's we can go
through a corrective phase and I'm an
optimist and I hope hope we get there so
you have hope for the entirety of it
even for Harvard I hope even even for
Harvard it's generally hard to break 400
year old things well I share your hope
and um you are a fascinating mind a
brilliant mind persistent as you like to
say and fearless The Fearless part is
truly inspiring and this was an
incredible conversation thank you thank
you for talking today Bill thank you Lex
thanks for listening to this
conversation with Bill Amman to support
this podcast please check out our
sponsors in the description and now let
me leave you with some words from
Jonathan
Swift a wise person should have money in
their head but not in their
heart thank you for listening and hope
to see you next
time