강가 가이드가 5년 만에 1,000달러를 150만 달러로 만든 비밀 공개!

I would have never believed that people would hand money to an ex- river guide when they will.

 If you can show them that you can do something pretty good with the money.

 Phil Town is with us, investing guru and author of rule number one.

 Random House paid me 1.

2 million to write my first book.

 Unknown author.

 You're a Green Beret river guide, Buffett style investor, author, speaker, educator, fund manager, horse rancher, racing team sponsor.

 We're playing a game of investing.

 That's what we do.

 We want to invest.

 Be a trader or are you going to be an investor? You're going to be both.

 You're going to invest in the sense that you're going to buy great companies only when they're on sale.

 From another incredible mentor of mine who cured polio.

 This is Dr.

 Jonas Sulk, a friend of yours.

 These are Harvard Yale fabulously smart minds and yet they don't beat the market.

 There's a really extraordinary reason.

 It took a while to understand it because Welcome back everyone.

 I've just returned from my annual pilgrimage to the Berkshire Hathaway shareholder meeting and today, as you can see, I've got something really, really special to share with you.

 Before I headed to Omaha, I was actually incredibly lucky to be invited to Atlanta by none other than my own personal investing hero, Mr.

 Phil Town.

 So, a lot of longtime viewers of the channel will know just how big of a deal this was for me.

 A lot of my foundational investing knowledge came from Phil's YouTube channel and of course his book Rule Number One.

 So getting to sit down with him for a full 2hour conversation, that was a real full circle moment and I can't wait for you guys to see it.

 Now on a related note, something exciting is in the works as well.

 This September, get this, Phil and I will be co-hosting a live in-person 3-day rule one workshop in Atlanta.

 It'll be a deep dive into the Buffett style investing strategy we both live and breathe.

 And if that isn't cool enough already, we'll also be wrapping it up with an exclusive barbecue at Phil's personal horse farm just outside the city.

 So if that sounds like something that you'd love to be a part of, we're keeping it small, just 250, 300 people.

 So if you'd like to register your interest, there's a short form linked in the pin comment.

 There's no pressure at all.

 Just pop your name down and I'll keep you in the loop as more details come together.

 But in the meantime, enjoy the conversation with Phil.

 I hope you like it.

 It's been an interesting ride just trying to understand Warren Warren's strategies and Charlie's and then trying to communicate those to people like me.

 Yeah.

 Right.

 It's like, okay, how do we translate this really, really deep understanding that Charlie would express as so simple, you know, if you taught it in a week, you'd have too much time.

 Yeah.

 And um and it's based on just these these four little concepts.

 It seems so simple.

 You know, do you understand the business? Has it got an intrinsic characteristic that protects it from competition? Do you do you trust the management team? Are they talented? And can you buy it with a margin of safety? And unpacking all of that is I mean it's it's kind of years in the process of really understanding what it is.

 It's interesting because it's one of those things.

 I feel like it's simple but not easy.

 Yeah, you got it.

 Yeah.

 Simple but not easy.

 Exactly.

 That you can write it down on a piece of paper in under a minute.

 Yeah.

 But to actually apply it takes quite a lot of doing.

 Yeah.

 To me, it's like avoiding the errors takes quite a lot of doing.

 the actual if we would just do what Warren has said to do.

 If you just did that, I think you'd probably nail it right out of the right out of the gate.

 But we complicated it.

 We complicated every kind of way.

 You know, take any one of those four things and I can tell you how to complicate it.

 Yeah.

 Make make a mess out of it.

 That's I guess one of my questions I had is that on paper and you look at the research, everything tells you don't try and pick companies because most people suck at it.

 All of the research that gets done will show you that most of the time you'll underperform just an S&P 500 index fund.

 Why do you think most people can't do it? Because I look at people like you or Monish Priy or Charlie the late Charlie Manga or Warren, you guys crush it and you guys all follow very similar method.

 Why can you guys get such amazing results from finding companies whereas most people seem to really struggle? Most of that research isn't just on the general public because there's so little actual data on small individual investors.

 So not sure we can draw a conclusion about the little guy exactly.

 We we just may not know really.

 I you could say anecdotally people try it and they don't it doesn't work out right.

 Yeah.

 But the data the stuff the universities come up with is largely on the mutual funds and pension funds.

 Right.

 And I think it's pretty easy to extrapolate from the fact that they don't beat the market to a reasonable expectation that the little guy won't either because these are Harvard, you know, Yale fabulously smart Goldman Sachs juniors and that end up in their own fund and they I mean they're they're just smart great uh minds and yet they don't beat the market.

 And there's a there's a really extraordinary reason I it took a while to understand it because if you pay any attention at all and they all pay a lot of attention, you might notice that Warren Buffett has crushed the market for decades.

 It's phenomenal.

 20% return since ' 65, right? You would notice that if you're an investor.

 So, you have to say, okay, well, huh, these guys are pretty smart.

 So, let's let's assume that they know that if you invest that way, Yeah.

 you'll crush the market.

 So why are they investing some other way? That I think that's the right question and it doesn't get asked when the universities do this research that turns out they don't beat the market.

 It's because they're not playing the same game at all.

 Right? The game that they're playing on Wall Street is the game of holding on to assets under management.

 You have money in your fund and you want to keep it.

 And it helps to understand this game if you realize that a disproportional amount of that money is pension fund money.

 It's not mom and pop money.

 It's mom and pop money that went into a pension fund or into some some insurance fund or a banking fund.

 And that money is also being managed.

 It's being managed by someone we'd call a fund of fund managers, right? So he's he's managing his fund, but he's not going to invest it in Google.

 He's going to invest it in a hedge fund, right? Oh, maybe 30 or 40 hedge funds and mutual funds.

 Spread your bets.

 Exactly.

 Hedge your bets.

 Exactly.

 And so you go, "All right, well then what is what does the hedge fund manager or the mutual fund manager have to deal with if that's where their money's coming from? Can they invest it like Warren Buffett? Can they sit right now? Let's say they have the equivalent amount of money.

 Can they sit right now with $350 billion dollars in cash and sit there for a year in cash waiting patiently? And the answer is absolutely not possible.

 I get a knock on the door.

 Oh, because that guy could sit with 350 billion in cash if he wanted to and not pay your fee.

 Yeah.

 So, he's not handing you the money so you can sit in cash.

 He's handing it to you so you can invest it now.

 M so it's what are you doing for me now this month not how is it going to be down the road 3 years so they can't invest the way Buffett invests the way I invest because it's simply not allowed by the the people who are bringing the money into their fund they are going to pull that money and they can do it like that right over to another fund manager who is putting the money to work in the market and doing well now when he starts to do not well he's going to pull it and move it to someone else.

 So I I sat on a plane once with one of the top Fidelity uh fund managers.

 He said the longest and this is in a a a broad market big cap mutual fund where investors go into it and they stay in it for 30 years.

 Right.

 The longest he spends in a stock was 90 days or less.

 Yeah.

 That's 90 days because he has to keep up that's mind-blowing with the rest of what's going on around him.

 stay with the market, stay with his peer group.

 So he's not playing Buffett's game.

 Whole different game.

 They just don't want to be the person left holding the bag, right? Can't be.

 You don't want to be the last guy out of the theater.

 Yeah.

 Right.

 So if somebody smells smoke in the theater and they get up and start to walk out and you know that that guy's a really good smoke smeller and he's early on every theater that's burned down, right? And there he goes and you go like, "Hey, where you going?" and he goes, "Well, I'm just going up to the bathroom.

" You know, and you go like, "No, you're not.

 You're leaving the theater.

" And so you get up and go with him.

 And then a couple more people and pretty soon enough people are headed for the for the exit that it's a general uproar and out you try to go and then you can't get out.

 And this is what happens when the market really starts to tumble as a result of some black swan event, right? they and and I I think the next one we have is really going to tumble because 30 40% of the market is ETFs now and has to follow the market down.

 No choice about it.

 Nobody's making a decision.

 It's just sell sell because you've got to balance against the index.

 So yeah, I think uh we're playing a very different game in in the short answer to your question.

 We're playing a game of investing.

 That's what we do.

 We want to invest and that means for the long run.

 We want great results down the road 5 10 years.

 Yeah.

 Right.

 And we're willing to you know plant those trees and let them grow.

 Whereas the fund managers which is ballpark 85% of the money in the market is not managed for that.

 It's managed to retain assets under management.

 So that's the difference.

 It might be a good time to talk about the kind of current market condition because at the current time there's a lot of uncertainty.

 The S&P 500 was down 90%.

 It's rebounded 11%.

 Even still, Apple's down 15% year to date.

 Meta down 8%, Amazon down 15, Google down 14, even Nvidia's down 20%.

 I guess Trump's causing a lot of it with tariffs and whatnot.

 There's a general consensus that there's some big one or big problem coming.

 Mhm.

 And how do you approach when the market does start going south because it's obviously had an enormous run over the past well forever.

 Do you see it as this is just something getting started? Do you see as I just block it out, I don't even worry about it? Are you stuck looking at your watch list? What's your mentality? What's your headsp space? I I I would I would like to say I don't pay any attention to it.

 I think that I think that's the right answer.

 But we do pay attention to it.

 we have to because it's it's the environment we're in and it's a little bit like we want to know whether we should have a picnic and so we need to know the weather, right? What kind of picnic are we going to have? We're going to have a picnic but are we going to have a picnic in a tornado in a hurricane and a sunny day? What's the weather look like? And that's that's the general idea about the market.

 And we're not macro investors at all either.

 And the reason like I can theoretically say we don't really pay attention to the market is because the way we invest is to essentially sell into an irrationally exuberant market.

 What Warren would say is like a greedy market.

 We're we're active sellers of stocks into that market.

 When stocks that we own become irrationally priced high, we will sell them with with some rare exceptions of some franchises we just don't ever want to sell.

 But mostly we'll sell.

 And that puts us into cash when the market is really really high.

 And then we sit there and have to wait patiently getting returns on bonds or doing some very careful uh um options trades that would give us companies at really high values or or really great values.

 Yeah.

 So we'll use the cash like that, but we're we're really moving to cash automatically by the strategy that Warren's taught us, right? And then when there's fear, we are buyers.

 So, as the fear starts to grow, uncertainty is another another word for fear growing.

 As the uncertainty gets bigger and bigger, the fear starts to get really quite large.

 And then you'll start to see um investors really begin to bail out of some really, really great companies.

 They're going to go to bonds or they're going to go to cash.

 And that's when we are glad to have this cash that we've already gone to in large part to be able to put the money back into the market when we start seeing things go on sale.

 So effectively what we've done is we've created a list of companies um that we really like and really understand and then we're going to wait patiently until they get to a price that we really want to buy them and then we start buying.

 Now if we really think this market is like this big black swan event, we don't know where the bottom is.

 is it could be way down there.

 We we tend to enter every position as if that's what's going to happen.

 So cautiously, so cautiously cautiously.

 We we do tanches into it.

 So we'll we'll take maybe 25% of what we want ultimately to be in that company and we'll buy in with that when that thing goes on sale, right? And then we will have a load of ammo if it goes even more on sale and more on sale.

 So we we always our our view is we really want our emotions to be excited when the market's going down.

 We want to be thrilled with it even though we've bought in.

 We want to have ammo to buy in more at ever lower prices.

 So that's kind of how we structure it.

 We're we're getting out when there's irrational exuberance.

 It puts us in cash automatically and inevitably the market goes through a fluctuation.

 We end up with opportunities to buy with that cash.

 I like that philosophy of you're not making any bets, you're just following the strategy and the strategy dictates kind of what you do.

 A lot of my subscribers also follow the rule one kind of investing method.

 And a few got in touch saying that even though the market has come down, you know, considerably, if you just look at the, you know, price chart, it looks like it's coming down a decent amount.

 But a problem that they're seeing is that following the valuation method and the rule one approach is that even with these 20% market dips, they still really struggle to find companies that are, you know, on sale.

 It seems like they go from overpriced to just fairly priced or even still a little bit expensive.

 And I had some people asking if that's how you and your team of analysts are also kind of feeling this market cool down.

 Was it a really hot market that's just cooling its jets or are you guys finding opportunities at the current time or is it still really difficult? Well, we've found opportunities all through this market over the last five, seven, eight years where um there will be an event that happens to a company all completely aside from the sort of macroeconomics going on.

 Um and that event can put that company on sale.

 So, you know, some of the some of the ones we sort of are well known that we've done would be Chipotle Mexican Grill and BP with the well and Netflix with the big lack of subscribers and we've we've bought in uh Sprouts when it when it started uh changing its business model.

 So, we've had opportunities to buy in to really great companies and since we don't really want to own a lot of them, we only need a few opportunities to to do really well.

 and um those opportunities can come along in any sort of a market, right? So that's that's the major focus is just on waiting for an opportunity on those particular companies over time.

 But what's really great about uh a market starting to tumble is that more and more of those companies will go on sale.

 Uh well, they'll more and more of those companies will see their price starting to come down.

 Right? Now, what people are noticing is the prices are coming down to something that's reasonable as as a they're coming down to intrinsic value.

 Yeah.

 So, here we are with these really high prices that are irrational.

 Essentially, we're we've sold into those.

 Now, as these come down and you get to rational pricing, then patience has to be a a dominant philosophy.

 You you can't just go, "Whoa, the thing's down 30%, therefore I can buy it.

" Or, "It's down 50%, therefore it's on sale.

" No.

 I mean, you know, if if that's how you feel, you know, they're going to love you at a garage sale, you know, or where they you go to the gold the gold store by the beach where they sell bracelets.

 Yeah.

 And it's like mark down 80%, you know, you go in there paying 3x Walmart, right? Yeah.

 Yeah.

 So, yeah, the the prices have nothing to do with value and it's it's like, you know, the value of the business is X and until the price and and now those prices are getting to X.

 They're getting to the value.

 Yeah.

 Oh, okay, great.

 Now, should we buy them? No, we we need to have a margin of safety because we don't know what the future's going to bring for these companies and and we can only use our best guess.

 So, we want that margin of safety and very few of these companies that are headliners are anywhere near being on sale yet the way the way we look at it.

 So, we just have to keep doing our work and and remain patient.

 And that's hard for people to do who really want to put money to work.

 It's very very difficult.

 I would say that is the single most common mistake I see people making who want to be rule one type investors is they they jump the gun.

 They I mean often not to go off on a tangent but no please do what happens is we start to think we know more than we do especially when we're a beginner.

 We really have a problem with hubris.

 It's like oh yeah I got this I know all about this company that you've spent three hours on.

 Yeah.

 Right.

 bit of recency bias.

 Yeah, totally.

 Market's been going up.

 Totally.

 I'm an expert.

 And as soon as you start buying a share or two, then you really get confirmation bias and you just can't see anything except how great it is to talk yourself into buying more.

 And these these are really u kind of killer personality problems that we all share.

 And it's one of the things that we've tried to learn from Warren and Charlie over all these years is how well they control those impulses to get outside your circle of competence, you know, to get over to the boundary of it.

 And and they've just done such a good job of staying well within that boundary even while expanding the boundary, right? I mean, you start you see Warren by Apple, that's a sub substantial expansion of the boundary for sure.

 And and Charlie mentioned, I think a few years ago, how, you know, Warren is a learning machine and he just keeps learning.

 And so, yeah, we we want to be like that as well and keep expanding what we really understand.

 But meanwhile, we have to be conservative and humble about what it is we really truly do understand and stay within that area.

 Um, we don't want to learn the hard way that we didn't understand this business, right? So hubris, confirmation bias, those are are really things we try to work hard to avoid getting into um in the process of of picking really good companies.

 Yeah.

 Do you have any strategies uh or tips for people to help them regulate their emotions? Because one of the things that I have learned from what you've put out and what Buffett says and whatnot is that yeah, it's great to master your emotions, but you will still feel emotions.

 There's no when your stock goes up, you will feel good.

 When it goes down, you will feel a little bit edgy.

 Is there any sort of strategies that you personally implement or maybe some checks or things that you do with your team of analysts to make to kind of keep you guys in check and keep your thoughts grounded? Yeah.

 Yeah.

 There are there are several things.

 Um the first thing is to have a really really strong opinion about the value of the business, right? So, and you develop that by the by doing the work, right? So, you build this strong idea of what the intrinsic value of this business is.

 And so, that that immediately sets where you want to be buying this business.

 And and you see how you feeling like in the stock price is going down, we all feel like, oh, gee, we don't feel that almost ever.

 If we do feel that, it's boom.

 Oh, we didn't know enough about this business, right? Because when we know the business and the stock price is going down, all we're thinking about is where are we buying more? At what point, at what price point are we going to jump in with this next trunch and spend millions of dollars and jump in there and and buy the block of this thing? And so that's in fact what we're looking at now on several companies in our portfolio.

 It's like, okay, where are we buying the next chunk of this? So our mindset is really and we and oh man we we absolutely learned this from Warren Brandon.

 This is where he talks about how if you are a hamburger eater you remember all that where you buy hamburgers and you're all going to buy hamburgers in the future.

 So do you want the price of hamburgers to go up or go down? You want them to go down.

 So your emotions should be exuberant if the price of hamburgers are going down because you're a consumer of hamburgers.

 Well, here we are with a company that we want to consume more of and the price is going down.

 So, the fact that we've held some ammo out here allows our emotions instead of being, oh gosh, I wish we'd waited to be excited because we're going to be able to get another tunch.

 We're effectively dollar cost averaging down.

 Our basis overall is going lower.

 So, we love it when something goes down.

 The only time when you shouldn't love it if something goes down is if you've bought something you don't understand because then it's really scary.

 It's going down and you don't know why.

 And later on you're going to find out why.

 There was some really good reasons why, you know.

 Yeah.

 And so you only have to go through that once in a while in your life and you you will never want to have that experience again.

 and it will drive you to doing the work which is to get deep deep deep into this business that you are effectively becoming an owner of.

 So yeah I it our mistakes over these years have been mostly selling things too soon.

 We'll buy something, it'll go up double from where we paid for it.

 So now we've made a 100% return and it's only been two years and so we've compounded money at 36% on that one one position and we're we're like yes lock it in.

 Yeah.

 Right.

 And then I mean my classic giant screw up was Chipotle Mexican Grill which I wrote about in rule one.

 I know the business well and I still got suckered in by my own hubris.

 You know I knew this new CEO was coming in with new ways to do things.

 It was going to be really great and I still sold out after we made 100% on this thing.

 Oh no.

 And it went from like 600 up to 3,000 without me.

 So having having made the right decision and then forgot one of the critical points that Warren and Charlie talk about all the time, which is, you know, be willing to write it down another, you know, from 50% from where you own it.

 It's gotten up here.

 be willing to write it down because if you're in a great company that you understand I mean the the sky's the sky's is the limit and that that company was growing at 20% a year it's doubling every three and a half years and it continued doing that for year after year after year after year it's just no debt when it was one of these such an easy call y and I still made the mistake of getting out of it and that's that's something just hard for us to learn so I our errors are in the side of gosh it's going up oh man, now what do we do? I think that is something that people struggle with and I think it's because they get caught between the two Buffett philosophies, the old philosophy of get the puff and get out.

 Mhm.

 And now the newer philosophy of if you've got something great, hold on to it.

 And I think even people like Peter Lynch was always no, if you got something, hold on to it.

 I think the problem now is that we are seeing such upward swings in stock prices, especially over the past few years, that people feel like they're starting to that they might be holding a great company, but it's getting increasingly the price is getting increasingly away from where the intrinsic value might be.

 So, how do you guys balance that equation between the two philosophies of it's a great business, let's hold it for another 10 years versus, wow, this has gone up a lot, it's time to collect.

 Well, I think you have to decide if you're protecting a portfolio or you're building a portfolio, right? So if you're protecting one, you're sort of more Warren Buffett today where Birkshshire is giant and he's protecting the the strength of the Birkshshire balance sheet and is perfectly happy to own seas candy as seas candy grows its prices by 4% a year.

 Right.

 Right.

 Or 8% or something like that.

 And that philosophy ha means he has a company there that's just producing constant cash flow he can use other places and its growth rate doesn't really matter that much to him.

 Warren Buffett 60 years ago no way would he would have sold sees candy the moment it got up to intrinsic value or anywhere near it and moved to something else.

 But um and we do suffer from that.

 I think one of the reasons we've been a little early to sell is because I came up with that philosophy.

 You're early Warren Buffett was also early Phil Town.

 You're building a portfolio from scratch and you want to keep the velocity of your money high.

 So if you buy something and by the way, here's comes the answer to your question.

 If you buy something that has, let's say, a uh a six to 7% growth rate, but you buy it at a 50% discount to its real value because those two things are different, right? You get this slow growth, but some event happened and knocked the price of this down by 50% from where it should be.

 Okay? So, all right, now it's on sale.

 You buy it and three years later it's gone back up to its intrinsic value and you've made 26% compounded per year.

 Home run.

 Fantastic.

 Okay.

 From now on it's going to go up at 7% a year.

 It that's its growth rate in and its price its value isn't going to increase faster than the growth of the cash that it's creating which we've said is 7%.

 So you've taken something that's growing at 26% per year.

 enormous velocity of your money and turn it into a 7% grower.

 Slightly better than a bond, right? That's a sale for us.

 That's a sell.

 Time to find something else.

 Time to find something else.

 We We can make 7% a year on our own without any with sitting in liquid positions.

 So, I don't want to be sitting with a company that's going along at 7% and have it go through some fluctuations and no, as soon as it gets something up over its intrinsic value, we're going to sell it.

 we might sell calls, options into getting it to that point just so we're collecting cash flow while we while we try to scoot out the door.

 Now, the another kind of a company is one, let's say like a Chipotle, like a Netflix today or or Sprouts.

 These companies are franchises and they grow well into double digits every year.

 They're not 7%.

 They're at 14, 18, 20 and can there's no no reasonable limit that we can see out for 10 years for this growth to continue at this level.

 Super well-run companies.

 Competition can't touch them.

 And we're not getting out of that.

 Fair enough.

 We are totally just we'll just sit here for a couple of reasons.

 First off, it's going to grow at its growth rate.

 And if its growth rate is 18% a year and we bought it and we doubled our money and now it's going at 18% a year, we're good with that.

 We'll be happy to just leave it there.

 Don't even pay us dividends.

 Just keep that money building at a great return on invested capital and um and those are fabulous and they're also really hard to find and they very rarely go on sale.

 Right? So those are the two the two cases.

 The ones that are growing at 7% they tend to have problems from time to time.

 of a labor problem and the price will get knocked down or they'll have a well blow up in in the Caribbean or whatever.

 Those are not companies that we because we want to keep velocity high.

 Those are not companies we can stay in forever.

 They're growing too slow.

 Yeah.

 That that kind of makes sense, right? So Warren is protecting Birkshshire.

 most of our students and and certainly as we're we're responsible for people's retirement and their future, we we want to see velocity in that money.

 We want to grow it fast.

 When we're talking about those growers, I find that they rarely because they're doing so well.

 It's very rare that you do get a big 50% off sale in them.

 How strict are you on your buy a dollar for50 rule? If you see a grower, for example, a classic one that my podcast co-host Hamish tells me is we were talking about how expensive Nvidia was a few years ago.

 Mhm.

 The growth rate was so high.

 Mhm.

 Now you look back and you say honestly you could have paid anything for it, right? And the performance of the business has far exceeded it's made 5 years ago look tiny.

 Exactly.

 Does the philosophy is there wiggle room in the valuation or the philosophy for those growers that have potential there? Or are you very strict at all times with the valuation component and the buying a dollar for 50 cents? Would you ever buy a dollar for 90 cents or buy a dollar for a dollar knowing that or expecting that dollar would be worth a lot more? I think those are two different questions.

 At least they are to me.

 The the one way of thinking about this is would we buy a dollar for a dollar? And the answer is always no.

 And and the reason is is because if we're looking at Nvidia and we can see where this is going well enough to be comfortable to buy into it then and and we analyze this thing and decide that the value of that thing is a dollar with this with this big growth rate, right? Let's say the we put a 25% per year growth rate on that and Nvidia in fact goes out and grows at 50.

 We have to let that go because if we can't see that 50% growth rate then we can't value that thing at $2 or three or whatever it would have been.

 Right.

 Right.

 We we just we just stay with the the discipline of understanding what the valuation is and and we're happy to put a 50% growth rate on a company.

 I mean, I don't have any problem with that at all.

 Right.

 I bought into Google when it was at 200 and put a big growth rate on it and found it on sale.

 And so, we're we're we're comfortable buying into big growth rates.

 It's just interesting.

 Yeah.

 if the growth rate I mean if they just blow it out we would have never seen that.

 I mean who would have seen the AI side of this thing three years ago right? I mean I I certainly couldn't have.

 So we're going to not feel too bad about missing out on those.

 Um so I guess that that was sort of one side of it.

 I think there there there may be another way to look at that and that is that we were going to take a shot at some risky biz companies.

 Okay, we might put about 10% of the portfolio into companies that we simply have a gut feel that these guys could could just break out, right? And and make enormous growth.

 We can't put a number on it exactly, but we see the potential is there and they're so dominant in their market that at that point we don't know what that dollar is, right? It's selling for a dollar, but we don't know what the value is.

 We just think it's probably a lot more than that, right? And we will take some flyers on stuff like that.

 That might be an early Tesla, an Nvidia when it was just graphics for games, right? That kind of thing.

 Y and those are fun.

 Honestly, those those are really fun, but we won't put a huge amount of, you know, our future into that kind of a business.

 And and they don't come along very often where I feel like I I think this thing could really blow it out.

 Right.

 What would you say just from your own experience your kind of hit rate would be your success rate on the more speculative companies do you find that you have to keep it low because the the portion of the portfolio low because it is quite you know sometimes they really do maybe go to zero I I started my career in private equity and venture capital right okay so I had I had some serious experience with this and if the hit rate in early stage companies is two or three out of 10 we're probably doing pretty well.

 We're probably getting a return right on our investors capital at 25 to 30% per year and that' of course be over a decade as these things are come to a liquidity event.

 Um so that that's for early stage stuff when we do those now um where we're where we're buying a company that's public and we think it's gonna blow out.

 We just do so rarely do them.

 I'm trying to remember the last one we did.

 So, I really can't give you a stat on it.

 We We haven't made very many mistakes.

 I mean, I know I know my mistakes like the back of my hand.

 That that's really uh unfortunate, but we remember our mistakes.

 They're burned in there and and they don't tend to be companies like that, right? They tend to be um something much more mundane that I just simply didn't realize how hard it would be to finish up what they were doing, right? And they just didn't finish it ever kind of a problem, you know? Feels like the Tesla with the full self-driving at this point.

 There you go.

 Is FSD going to happen or is it going to be LAR? Yeah.

 You know, so you know, I I I don't know.

 I I mean that is exactly the kind of thing I mean Kathy Woods right now is out there projecting Tesla at 9 trillion in 2029 which is wonder what the growth rate would have to be on that very high if I know this check this out if you buy into Tesla right now and she's right you have a 65% compounded annual growth rate over the next 5 years sign me up per year.

 Sign me up per year.

 I mean it just rips.

 I mean, you can get real rich doing that.

 Um, but this is it's such a good example because, you know, they're they're at the 99.

5% accuracy level and maybe it takes 10 years to get to 99.

6.

 I don't know.

 Right.

 Whereas, right now, Whimo has 250,000 rides going on and is killing it and in just in four cities.

 So, I don't know if if they don't get there, then Kathy's wrong.

 Obviously, if they do get there and they become if FSD from from Tesla becomes the thing everybody has to use because it's approved and no one else has that kind of data, then Tesla gets to throw the switch on 10 million cars and our whole lives are changed.

 And she's right.

 M so that would be a great example of sticking it into that part of the portfolio and rolling the dice on how you how you feel about Elon Musk's, you know, ability to get there.

 Is it something that you'd ever look into or it's too far removed? It's a very controversial stock.

 I'm sure people would be very interested to hear your perspective on it.

 We'll be happy to give you our perspective down the road a little bit.

 We're actually looking at it really hard.

 Oh, okay.

 What got you interested in looking at it around now? Is it the full self drive or is it just something that one of the analysts took an interest in or Yeah, one of the analysts got real interested in it and his father-in-law bought one bought a Tesla Plaid and drove it.

 FSD worked.

 It was really extraordinary.

 It's really fast.

 This guy's a race car driver, right? Gets in this thing and it's like, "Holy smokes, this is a passenger car that tears up my Porsches, right?" Kind of thing.

 And um and from there he did the initial work and the initial work says this thing is so absurdly overpriced as if if it's a car company that there's no hope.

 I mean I think we need to buy it for $50 or some crazy price to make sense out of it.

 But if it's not a car company, if it's the automated driver FSD uh robotics company of the future, an AIdriven machine that's going to put out all this other stuff, then the sky's is the limit.

 And so he did that work and and basically came back with this has the value of this business is in that is that side of things.

 And we haven't gone far enough yet to say yeah, we we're believers.

 Is it something that you you entertain though? Because I guess a a Buffett mentality applied to the situation would be uh well we'd rather look at a Coca-Cola where we can see the last 10 years of earnings go whereas Tesla you kind of look it here and hoping for here and that's the plan but it's very different.

 It's it's super different and and I and it has to go into that risky biz side of the portfolio if we were to ever do it and we haven't done it.

 Yeah.

 Because of that, it for us our our most important thing is to see with a very high degree of confidence that we're bigger in 10 years if we own this company.

 We're bigger and better in 10 years.

 That's that's not a really high bar.

 It It's not saying, "Oh yeah, we're making 50% a year.

" It isn't saying that at all.

 It just says we're bigger.

 Yeah.

 Period.

 Protecting your downside, I guess.

 Exactly.

 It's it's it's a difference between investing with rule one strategy and investing any other way I know of.

 Rule one strategy isn't about making money at all.

 There's nothing in rule one that says it's important that you make money on your investing.

 What it says is if you do this strategy, the most important thing is to not take a loss of capital because you are going to get it right.

 As long as you don't get it wrong on the ones that don't do well, you're you're going to make a tremendous amount of money.

 Warren says if you get three companies right out of maybe the 20 that you you have punch cards for, you're going to get rich because you're if you if you don't violate rule one on those other 17, they'll all do something.

 They'll break even.

 you'll make a little and then meanwhile you bought, you know, Netflix when it was at $10 or something, right? And now it's at a thousand and you got rich.

 And we've seen that so many times.

 We we had a a workshop we did over in Singapore and the students all selected an individual company that they really liked.

 We had about 300 students in the room and then we had our analysis team go through those 300 and select the best 10 and kind of put those back to the students.

 We created a portfolio of 10 companies and had this little uh exercise where sort of a a long-term exercise.

 We said, "Okay, we're now going to have each of you have $100,000.

 You're going to invest $10,000 in each one of these 10 companies.

 So, you're going to just each one gets 10% of your portfolio and then you're going to leave them alone for 10 years and let's see how we do.

" And that was 2009.

 That portfolio had Netflix in it.

 It had uh Salesforce in it.

 It had Apple in it.

 Um and it had Blackberry in it, right? BlackBerry went to almost zero, right? A couple of the companies were sold over time, but in over the life of this portfolio, that 100,000 became about 1.

3 million over over a 10-year period.

 Yeah.

 Right at about a 30% compounded annual growth rate, doing absolutely nothing.

 Whereas the S&P 500, which was on a tear during that time as well, it did about 13% a year and that 100,000 became 300,000.

 So the the the the gap is enormous for for doing your own work initially if if if you can get those three or four right.

 Yeah.

 Then I think you will if you do 20 companies in your lifetime, I think you will get three or four of them right if you follow this this kind of code of investing.

 I do like the Buffett punch card analogy of or even more so than the punch card analogy the idea and he wrote this in one of his recent letters that over his whole career he thinks that the whole of Berkshire's success is really down to 12 in or 12 not even investments 12 decisions he made that he just stuck with and he got right and out of the what would it be hundreds if hundreds if not thousands of investment decisions that he has made over his career Yeah.

 Some of them which turned out terribly.

 Yep.

 But 12 of them carried the whole ship.

 I'm wondering even beyond investing.

 You've had a incredible career, very diversified.

 I was talking to Travis before and you're a Green Beret River guide, Buffett style investor, author, speaker, educator, fund manager, horse rancher, racing team sponsor.

 From your own perspective, what would you say your key decisions were that have kind of propelled you from where you started to where you are now? Okay, I'm going to get a little bit into the sort of software side of investing, if you will.

 The the stuff that goes on in your head that drives these decisions.

 For me, it was I was never interested in making money.

 Um, I was a soldier and then I was a river guide.

 And so over that period of time, that was about 14 years where mostly I was living out of a bag, you know, it's about this big, had everything I owned in it, and I was completely content, really enjoyed my life.

 Um, but in in one of my last trips down the Grand Canyon, I I u had a boatload of uh fairly rich people who had had been sponsors of and trustees of Outwardbound, which is a I don't know if you're familiar with it, but it's taking kids out of the city.

 A lot a lot of what they do is take kids out of the city who've gotten in trouble with the law because they're teenagers and they put them into a a tough outdoors environment and teach them how to function in that environment.

 It often changes who they think they are in in a really great ways.

 So these people were supporting something that I really think is a great idea.

 And so we we put them into small boats and gave them an outwardbound experience.

 And um about halfway down the this is about a two-e trip down the Grand Canyon.

 About halfway down, we got to a rapid called Crystal, which is some some boat people think it's an 11 on a scale of 10 at that point in time back in the late 1970s.

 And it a severe drop.

 The whole whole rapid goes like this direct like sort of straight and then hits a wall and turns and goes over a a big cliff that's about 35 ft high.

 And so you don't see the cliff, of course, because the water fills it in.

 What you see is this giant recirculating hole.

 And if you go over there, you'll die, right? So you never go over there.

 So the trick is everything is pushing you into that hole.

 So you have to come to the right side of the river and this boat load of these guys are paddling the boat.

 I'm just steering in the back.

 So I can't if I'm rowing the boat, I can make this pull.

 It's easy and and it's fun.

 And we get we get within four or five feet of that hole.

 And and when you do it perfectly, sounds a bit dangerous for it sounds.

 I mean, a a motor rig went in that hole and u somebody was shooting pictures of it and it this is a 36ft boat.

 We're in 18t boats.

 36ft boat with tubes like 3 ft high.

 Ours are like this high, foot and a half.

 Way bigger boat.

 And that hole destroyed that boat.

 It didn't let it out.

 It just completely just ripped it to pieces.

 Yeah.

 Wow.

 And one person died and 16 people were emergency lifelighted out of there.

 They saved their lives, but they were helicopters coming.

 So, we don't go there.

 Except this trip, these guys couldn't make couldn't drive the boat hard enough against the current.

 And we were going to go in that hole.

 So, I turned the boat and try to drive it over to the far bank.

 And we made it over there where there's this giant wall of water hitting this cliff.

 And we skidded along that.

 And turned out there's a ledge over there.

 So, you don't fall over the cliff.

 You you don't go into the hole.

 You go down the side of this ledge.

 We had about four feet of water over it.

 And we went around it like a ride in Disneyland.

 It was just right around this thing.

 We got over to the beach and and the first guy on the boat just got out and threw up.

 I mean, it was, you know, how were you feeling? I was so ecstatic.

 And at the same time, my I had to sit a minute in the boat because my knees weren't working.

 Oh, okay.

 You know, you have that moment of just past the real danger.

 Yeah.

 And um and this other guy that was on the boat ultimately said, "Look, you really you saved my life and I really owe you.

" And and I was teasing him.

 I said, "Yeah, I saved your life.

" Yeah.

 And he said, "Oh, no.

 You really you really did, and I I wanna I want to pay you back somehow.

" It turned out he was a a an investor who had learned from Warren Buffett how to do this stuff.

 So he pestered me for the next seven days about coming and meeting with him and he could show me how to do this kind of investing.

 But I I really wasn't I was brought up bluecollar.

 I never thought about money.

 Actually, if I had a thought about it, it's probably that rich people are stealing their money from poor people or something, you know? Right.

 And um and but that winter I spent most of the winters when I wasn't traveling I'd spent them living in a Volkswagen bus next to the shop where we kept all of our gear because we had all this free food there right from the from the canned food that we brought off the river trips and um and I was I remembered this guy said come to La Hoya California and meet with me and I'll show you what I do.

 So, I called him up and said, "Hey, Al, I'm up here freezing.

 Why don't you uh why don't you put me up for a couple weeks and so he said, "Sure, come on down.

" And he was laughing, but I got there and over a period of a couple weeks of just casual conversations, I started to understand what this rule one investing was all about.

 And I ended up apprenticing to him for about a year and then went on my own.

 And so, um, yeah, I'm not exactly sure how we got on to all that, but where were we going with that? I was asking you what the key pivotal m moment was right the software of investing that's one of them so here's the first thing that I I think I did well um is that when a door would open up and I started to feel that there wasn't I'm not happy with the choices in my life at this point like then I'm pretty good at being relatively fearless about walking through that door okay I'll step on into it even if it wasn't kind of what I had imagined for myself if it's the only door open.

 I'm not going to stay where I am because I'm uncomfortable.

 So, I'm going to move into that.

 And I would say I learned a lot of metaphors from the river.

 Unfortunately, you guys have to put up with this.

 But on the river, if you're not paying attention to the current, if there's a lot of flat water in the Grand Canyon, if you're not paying attention, you will drift into an eddy.

 And these eddies are gigantic.

 And sometimes they can be very hard to get out of.

 I've been stuck in one for as much as like an hour trying to row out of it.

 Oh.

 Uh huge eddy fence where it hits the current and a boat wouldn't go through it.

 I wasn't hitting it exactly the right way with the right speed.

 But the the sort of the metaphor is that when you're when you're in a point in your life where you're not going anywhere.

 You can you're making motion, but you're not feeling like anything good is happening.

 Then you know you've got to you got to realize you're probably out of the current of your life.

 So this is where we get into the software.

 I truly believe there's dharma in the world that you have a purpose here.

 And if you can fulfill what that is, whether it's being the the the best brick layer, the best teacher, right, the best investor, if you can fulfill that purpose that you're uniquely qualified for as you're going through life, um I think you're going to live a really, really good life.

 But the trick is you're the the river you're on, this current isn't a straight line to the sea.

 It's going to go like this.

 It's going to curve all over the place.

 And every one of those curves has the danger of you getting stuck in an eddy, of you being stuck where you were, failing to realize the current is now going that way, and you're just going around in circles.

 And so, one of the things that I learned was that in order to feel that current in your life, you have to use some sort of technique of transcendence.

 You've transcendence is just the idea that you're going deeper than the than just thinking.

 Okay? So thinking is let's say on the surface of the ocean you're a boat on the surface and the waves are all these thoughts going on.

 And if you can transcend it means you're sort of like taking a submarine.

 You're going down where it's really quiet, right? And in that really quiet part where you're not thinking, then that current of your life is pushing you and you'll feel it.

 Go there, go through that door, you know, do this thing that you're not sure about or whatever.

 So then the if if I'm right and I really spent my life with this and I'm I'm pretty confident this is true and I'm pretty confident there's some really really smart people out there that we all know who follow this idea that there's this flow in your life and you've got to get on it and stay on it and that will give you a really blissful life and you will be very successful at whatever you're doing.

 So, how do you how do you get to that quiet place? Well, for me, it was like when I was a kid, I I would kind of sneak out of my house at night and I'd walk down to the to a church that was about a mile away.

 So, I go down there at about 3:00 in the morning and I'd go in there and I'd pray and nothing ever happened.

 It's just like in an empty church.

 I mean, I was 14, 15, you know, but nothing.

 Just like, well, I'm here.

 Where are you? Yeah.

 Yeah.

 Exactly.

 Hello.

 So, the the church that we were going to did not have a technique that would cause me to dive deep.

 Not that the Christians don't have it, they do.

 And one of the best books about this is written in 1949 by a monk named Thomas Mertin who's a Catholic monk who wrote a book called Sevenstory Mountain where he had spent his lifetime transcending using contemplative prayer which my church didn't teach me about the using prayer to take you down into this silence.

 And he was interested to find out if other religions had something like that.

 And so he explored Islam and Buddhism and discovered that every religion had something like that.

 Often it's really way back hidden from the layman, right? But the priests know about it and they use it.

 And of course, Hinduism is famous for its meditation stuff as is Buddhism.

 So this guy and and other religious people have found a way to use religion as a way to get in there.

 But man, Kobe Bryant, this basketball player that that died not too long ago, described being on the court and having an experience of being in the zone with the same exact language that a Buddhist monk describes transcending, right? I mean, you could have transposed those two things.

 So, it's about finding what works for you, I guess, what works for you, right? My wife does not meditate.

 I meditate.

 I sit close my eyes a couple times a day and meditate with a mantra.

 Ray Dalio famously at Bridgewwater does the same kind of meditation that I do.

 So does Bill Aman for that matter.

 Um it's called transcendental meditation.

 It's been around for a long time and and uh it's very effective.

 There's lots of other kinds of meditation, other kinds of mindfulness.

 Yoga certainly is a way to use your body that's very meditative.

 A lot of people really love that.

 My wife loves walking in the woods and that's where she just like this, right? So, long-distance runners get into the zone.

 Long-distance swimmers.

 All I'm saying is go find it because it really is effective.

 It's effective at keeping emotions under control.

 You stay balanced.

 You don't you're not as impacted by the the things other people would consider highs and lows.

 And um and I think it gets you to be on that allimportant dharma making those allimp important decisions about when to move, when to move, when to move, when to move.

 And so that's that's the software side of investing that I think most people don't talk about too much, but I think it's critical.

 I was over in Japan um and my publisher over there brought me to meet Wahi Taquita, who is this Japanese billionaire who died a couple years ago.

 And I was thrilled to meet him and he was just the most kind just wonderful person.

 I couldn't for the life of me figured out why why he would want to meet with me.

 I mean here's a guy he's 84 years old reading my book about investing after he's a multi-billionaire, one of the richest guys in Japan.

 And there's a couple of lessons from this.

 First off, all of these guys that I've ever met that are at that level all read extensively.

 they read everything.

 So that was maybe not so unexpected.

 If it's a book, it's out there.

 It was a bestseller.

 So he picks it up and reads it.

 Now, why you'd want to go beyond that, I didn't really understand until we'd spent a couple days together and talked about investing and talked about the kinds of things he did were very similar to Warren and and therefore similar to me.

 And then he got around to it, which was that I have a big platform.

 I have a lot of people that follow me.

 We have 100,000 people a month that come to the website, you know, brand new.

 And why he said that when he began investing, he discovered a technique that made all the difference for him and he wanted to get it out to the world.

 And since I have a platform, he thought maybe I would spread this if I liked it.

 So he said calls it maru, which his translator said means thanksgiving and gratefulness.

 but in a meditative way.

 And he would be thankful for something like, "I'm very thankful that you've come all this way, Brandon.

" So that's just one one moment there.

 He would do that a thousand times a day.

 A thousand times a day.

 Wow.

 So I I I was of course I was like, "Oh yeah, gratefulness, great.

" You know, we're all into that, right? But no, no, he's into it.

 as a meditative practice a thousand times a day.

 And he said that he really believes that that helped steer him into the right investments.

 Exactly what we were just talking about.

 And then he would propose Maru to he was doing a lot of uh as he got bigger like one or two 3% of a company he'd buy.

 He'd go to the CEO and he say you would propose that this that the company use Maru.

 And the CEO would say, "Well, how should we do He said, "Well, you should have everyone be thankful a thousand times a day for something in your company.

" And some of the CEOs would adopt this and try to get that started through the rank file.

 And uh and some would go so far as to hire a choir that would sing gratefulness songs all day long.

 And some wouldn't do it at all.

 And Wahhei said he would just take his money quietly out of the companies that didn't embrace it and leave it with the guys who did.

 And he said he didn't know if it was just nature responding to to you for being grateful for what's been given, right? Kind of kind of that thought.

 Um I I really don't know.

 I don't know what the mechanism is, but I I believe it works.

 There's something there in this that is a technology that is kind of software for the way the human the way you can kind of program yourself if you will and man I think if you're using that well he was 100% right ever since I've talked to him about it I told him absolutely we'll we'll get this out there so every class we've ever taught we we talk about Maru and I I think it's such a brilliant thing it's something we can do just immediately you just be thankful for the stuff that's going on in your life no matter matter how crap it is, you have a choice always to look at it.

 Glass half full or glass half empty.

 Right.

 Which way do you want to see this? I mean, right to your deathbed.

 I mean, you could you can do this in all conditions if you want to.

 Y if you want to.

 And um man, I I just think it it is super powerful if you do it.

 I think it's another part of that software.

 So talking about the concept of transcendence and using meditation and these practices to find I guess your direction.

 How did that work for you when you were saying before as a river guide you didn't care at all about money or investing and then you had this experience and then you've gone I'm not sure the time span but you've gone from learning about investing to now today being an incredibly successful investor and being an educator and an author and you're passing on the knowledge to other people.

 So clearly at some point along the way there was a change in interest for you.

 When how did that come about? How did you actually go and get interested and feel that I guess life direction pulling you in that that way? It started with an accident that just presented an opportunity at a time when I was done living out of a bag.

 It would just I had done 40ome trips in the Grand Canyon two weeks long and been down there for years and and um you know I just got into that place where it was time for a change but I didn't know what the change would be and it didn't occur to me that it would be anything like this right ever didn't never occurred to me that it would be like this but this opportunity came and I walked through that door and then it was it just clicked with me that this was something that I could do.

 So I thought okay well I'll I'll apprentice to this guy for a year and see what happens.

 And in that year I started to understand the kind of elegant simplicity of rule one style investing and realized that I could do this.

 I I absolutely could do this.

 And one of the the kind of secrets that Warren doesn't talk about a lot about becoming a successful investor is having money to invest.

 And when you're Warren and you have no money or you're Phil Town, you have no money, you need to get it from somebody.

 And this is what Warren learned from Ben Graham, who he says is the first hedge fund manager.

 And then my teacher learned it from Warren.

 And I learned from my teacher that there are people out there who would love to have someone manage their money if that person could show them that they could make 15% a year, right? If there's some track record that indicates that that's that's what they can do.

 Warren said that people will swim across sharkinfested waters to hand you their money if you can show them that.

 Yeah.

 So, it's just a matter of showing people that you are you're a reasonably good investor.

 The the money side of it, which is what someone who's never been around money, would have I would have never believed that you that people would hand money to an ex river guide when they will if you can show them that you can do something pretty good with the money.

 And the reason for that is that there's there's an industry that is able to get you average returns.

 This whole financial services industry has made it a virtue to get average returns whatever the market's doing.

 That's the virtue of the financial services industry as a result of modern portfolio theory that says no one can ever do better than that.

 Okay.

 And that's which you're a big believer in.

 Of course.

 Of course.

 Of course.

 deep deep believer in modern portfolio theory which which is extraordinary.

 They've had three Nobel prizes awarded to to behavioral economics e economists who have proven that modern portfolio theory doesn't work and yet it's continually taught and it's what the SEC bases everything on and it's just oh my god and and Warren and Charlie have talked about this for years, right? And just kind of I hope they keep teaching it because it makes our job easier.

 So, yeah, you've got you've got um I don't know where I was going with that, actually.

 Where where were we headed with this, Brandon? Oh, you were talking about just starting starting your fund.

 Oh, yeah.

 Yeah.

 Yeah.

 So, just going out the door with uh a bit of a track record that I built in a year with very little capital was enough to get to people and get their attention because no one else is is able to offer them that.

 Now, if you have millions of dollars, you're going to have, you know, an opportunity to invest with people like Bill Aman or Manesh Bry or someone like this who's fabulous, but you better have some real money, right? Right.

 Um, so for the little guy who's got $50,000 and wants to give $10,000 to somebody and try to make a better retirement for them, there's no there's no choices out there.

 So that's what I learned passed down from Ben Graham to Warren to my teacher to me is that this is really something that you can do it.

 You don't have to know wealthy people.

 And so when I stopped the apprenticeship and started on my own, I just sent out letters to people and said, you know, here's here's what I've been doing and I just like to show you how I'm doing month by month.

 If you don't mind, I'll just keep sending you a letter.

 And within I think two months I had um 10 people with $10,000.

 And what makes this all work is this little secret where um that Warren taught us that you can take a 20 to 25% profit of profits when you're making people a good return.

 So you're taking let's say what Warren did was 25%.

 You don't have to charge anybody fees.

 you're not you don't have a lot of expenses in running this fund, but people will put their money into a limited partnership and let you manage it and then you take 25% of the profit.

 And I did that starting with I think I started with about $1,000.

 So I made 1.

5 million in five years as a result of that.

 Wow.

 Which was amazing, right? But part of it is the ability to make a consistently good return on investment that provides you with a profit, a piece of the profit.

 And then you have a bunch of happy investors and what happens is they tell their friends and more capital comes in.

 Y So initially I had, you know, 100,000 under management and then within a couple of months I did another partnership for 500,000 because they had all told their friends.

 It spreads very fast.

 Um, David Einhorn is a very famous investor in in America, very much a rule one Warren Buffett fan.

 And he started with almost no money in January, I think, of 1994.

 And by August, he had $10 million on man.

 I mean, it just pours in.

 People are not looking for some gigantic long track record.

 Just show me you can do this month after month.

 And it's a little bit like Chinese water torture on investors because if you're dripping onto them once a month that you're doing 1% 2% 3% right.

 They're like after six months of this they're thinking of all the money they lost they can't take it anymore.

 I not like exactly they can't take it anymore and they say come on do this and then you know the next thing happens which just kind of flows out of I think doing a good job and then being fully committed to this uh investing um career for me that I I just really started to enjoy it.

 It was like wow I'm doing something really good here.

 A lot of people are benefiting from this and more people want in.

 And I had I had a guy named Harry Summers contact me and say, um, hey, look at I'm I raised money for things like this and I'd like to raise money further.

 And ended up raising $18 million.

 Wow.

 Give me that pile and started.

 Yeah.

 It's like, look, I mean, think about it.

 If you make I mean 10% on $18 million.

 So, just call it roughly $2 million, right? And you're getting 25% of that.

 That's a decent year.

 You just made 500,000 bucks.

 And for a river guide who was making $4,000 a year, this is absolutely lifechanging.

 And all sorts of things.

 I went I went through a lot of different things right there.

 It was like I had never had a good car in my life.

 Um, and I I spent one winter rebuilding a Volkswagen engine only to find out that I the the shop that gave me the rods had bent one of the rods.

 Oh.

 So when I put the engine in, it just clattered and clacked like this.

 And I thought I did it all wrong.

 I had to take it all apart.

 Found out that it had a bit rod.

 This kind of thing was my life with cars.

 Yeah.

 And um and when I started getting checks in from being successful with investment capital, I went out and I bought a Jaguar and I was so proud of being in that car.

 It just like Yeah.

 This is right.

 And that lasted about a week.

 Yeah.

 And then it's becomes just a car.

 It's oneoff, right? It's just a car.

 Y and it's just like that with all this stuff that when we don't have it and we we don't even know we want it, right? I didn't know I wanted that until I could get it and then I I wanted it and then I got it and then it's like, huh, you know, not not the key to great happiness.

 M and I think that's what's led me sort of one step after another into writing books about this is just feeling like um stacking up wealth for me isn't enough at all.

 It's like I need to do something that is going to in Steve Jobs term make a ding in the universe.

 Right? And I started to see that, you know, when I'm a river guide and not dinging the universe, but now as a fund manager and and what can I do to to help other people go down this road in this incredibly simple, not easy, but simple way of investing.

 So then I thought, well, I write a book about it, you know, sort like that led to speaking in front of huge crowds.

 I mean, I was I was on this circuit for almost 10 years where I was in front of 10 to 15,000 people each day that I went out.

 It's like I'd speak for an hour to about 15,000 people.

 That was incredibly life-changing.

 How did that happen? I'm very interested in that time period where you found started finding success with your own investing and you and your fund and how did that then lead to rule one and then from was it after rule one came out that the speaking arrangements started happening? How did how did that timeline happen? No, it it started back in the in the late 1990s.

 Um, a friend of mine had friend of mine made a lot of money in in real estate and syndicating real estate deals and decided he would start up a kind of a seminar program where he would teach people how to do this and he said, "You know, you've been doing really well with stock investing.

 I'll go talk to them about real estate and you can talk to them about stocks.

" Okay.

 Right.

 So, it started right there.

 Yum.

 basically trying to explain this kind of of investing strategy to people.

 And um that led to um it led to a friend well a guy that became a friend of mine saw me speak and said you should come and speak um at an event that I'm doing.

 He said I have Donald Trump as the anchor.

 Wow.

 and I have an a lineup of good speakers and you're a good speaker and I would like to have you talk about stock investing.

 Donald's talking about real estate and that kind of thing.

 So, do you want to come and do that? I went, "Sure.

" You know, that's that's unbelievable, right? Just boom.

 So then I'm on stage with Trump.

 It's another door, I guess.

 I barely ever met him.

 I mean, I would speak at they had a day of speakers and I would speak at 11 in the morning and Donald would come in at three, right? But we crossed paths a couple times and got to meet meet the guy who became the future president and all that.

 Yeah.

 And um this friend said, you know, I've just been contacted by this group um called Get Motivated that has the former president of the United States on stage in arenas.

 So, I was speaking when I was speaking with Trump, it was in audiences of 1,000 to 2,000 people.

 This next stage was to arenas full of people.

 And this promoter who was putting this thing together with Trump said, you know, um I can get you on that stage if you want to try to speak on that stage.

 Wow.

 I said, sure.

 And so I went to um an event in Corpus Christi, Texas that had about 7,000 people in the room.

 So it was a relatively small one for these guys.

 Um a place to try a new speaker.

 It went very very well.

 And then this promoter said, "Look, TD Bank, right, had purchased TDMIR trade and they were really interested in having people become part of TDMIR trade.

" And I'm speaking to 15,000 people twice a month.

 So over the course of a year, huge number of people, right? 300,000 people or something.

 And they said, "Would you represent our class on how to use TDM trade and so on?" And I said, "Sure.

" So, at the end of my talk, I said, "If you want to learn more about this, you can go to this class by these guys and they'll teach you.

" And people flocked into it.

 Right.

 Like on average, 25% of the audience.

 Wow.

 Would go to their class.

 Phil, you were the original influencer.

 Was a serious influencer.

 I mean, I couldn't believe it.

 It was really amazing how people were were responding, you know, because you think of investing as something that relatively small number of people might be interested in in a audience of 15,000 people.

 It's maybe, let's say, in Dallas, you had 4,000 people in there from American Airlines, right? They're they're the people who run things all over the country.

 And some of them would be interested, surely, but all of them.

 M and believe me, when you're having 25% of the audience show up for something later, that means everybody in the place is interested in one way or another, which just tells you how universal this all is really.

 You know, people want to do it.

 It's just that they feel like it's something that's not me.

 I can't really do it.

 And I I honestly think there's a bit of a hero's journey here.

 You know, the the sort of who was it that put that together? It's um I think there was a book written called The Hero's Journey back in the 40s, right? And and George Lucas picked it up and read it and modeled Star Wars on it.

 The first Star Wars.

 Oh, okay.

 So, you have Luke Skywalker.

 Yeah.

 The way the hero's journey goes is you have a kid who is just a kid, just a normal person.

 And um and suddenly a plea from a princess shows up in a droid.

 Right? So this is the steps that that that this uh this hero goes through in virtually all cultures of the hero's journey to bring something new to his his people.

 And it starts with you're just an ordinary person living an ordinary life.

 And then here comes this out of the world problem.

 And so that's step two.

 Step three is you reject it because you're just a farm boy.

 You don't know anything about saving princesses.

 But then along comes a mentor.

 Obi-Wan Kenobi shows up.

 Then comes the bad guys.

 Wipe out your family.

 And you're thrown into this journey.

 Yeah.

 You don't have a choice.

 It's now you've now you're in it.

 And the next couple steps are miserable.

 You you discover it's a scary place to be.

 There are people trying to kill you.

 You discover you are certainly no hero.

 You're loaded with doubts.

 Your whole world is falling apart.

 And then something happens that takes you out of this depth of despair and you move a freighter, right? You you're trying to rescue this princess and g you do this Jedi thing and you go, "Whoa, maybe.

" Right.

 You start to have a glimmer of this possibility that you have.

 Yeah.

 and and then you begin to dive into it and pretty soon you blow up the Death Star and you save the the rebellion.

 And that's a journey that I think in that people who start off ordinary people and become investors and are successful at it, I think it's a journey they go through to a certain degree.

 They they they find a mentor, a Warren Buffett, right? And they glom onto his letters and then they start to try to work this out themselves and they start to realize I can't do this.

 I'm not built for this.

 I'm not smart.

 I'm not Harvard.

 And if they persevere, they find out, oh yeah, I I just made money on this company and it's growing and I did it right and they begin to then get to a point where you can bring that back to your to your people.

 And effectively, I think that's kind of the journey I went on without really realizing it is just and it's the same journey Warren has gone on obviously and and Charlie, talk about a reluctant hero, Charlie Mer.

 Holy smokes.

 I've been I've been with Charlie at his annual meeting and he's just laughing in a way making fun of himself about how reluctant he is to do this and that you are all cult members.

 Yeah.

 You know all bunch of weirdos who are here to listen to me say the things I've been saying for 60 years which makes you all crazy.

 So, you know, there's a there's a certain journey that that you kind of go through that is so and it fascinates me, but you know, I just kind of stepped out on that journey and wrote a book about about my my journey into this role number one.

 And man, because I was on stage in front of all these people, Random House paid me 1.

2 million to write my first book.

 Wow.

 an unknown author, but they sent their whole staff before they pulled the trigger on the contract, they sent their whole staff down to Philadelphia from New York to watch me speak in Philadelphia.

 Wow.

 And when they came out of there, they bought that book in a heartbeat and paid up for it because they could see that if people would read what I was saying up on that stage, every person, every adult in America would want to want to buy that book.

 And sure enough, it took off.

 It it sold, I think, 400,000 copies and was on top of the New York Times bestseller list.

 And now it's in 18 languages.

 It's still in print.

 You know, this is 20 years later.

 It's still in print.

 Y and this is the book that Wahi Tquita read.

 You know, it's like what? It's in I just signed a contract for the for the Chinese uh translation to go out into China now.

 Wow.

 So yeah, it's it's been a really interesting process of kind of trying to trying to give back a bit what Warren has given to us with all his time he's taken on it.

 Y um going to the trouble of and really quite strangely being willing to tell people the secrets of his success.

 It's not something everybody does, right? They're like, you know, why would you do that? You're just going to have more competition.

 And Buffett's experience has been you could talk about it all day long and very few people will actually go do it which is a bit my experience as well right you you have a lot of people who think yeah and but they just don't take that next step they they're on that hero's journey and they've found a mentor like that book or Buffett and you start on the path and immediately you run into doubts and it's holding you up.

 Doubts are holding you up.

 I I learned something from another incredible mentor of mine who cured polio.

 This is Dr.

 Jonas Sulk, a friend of yours.

 Well, he became a mentor of mine.

 He's he's passed away, but um yeah, strange.

 That's insane.

 Isn't that crazy? That's crazy.

 Yeah, I know.

 It's it's it's like how does this happen? And I think well, in this particular case, I was very very interested.

 said I'm in this meditation stuff, right? So, I was really interested in uh I had studied philosophy and on a halfbaked sort of way and western philosophy got to be kind of ultimately unfulfilling to me.

 It was all about very clever thinking and it wasn't something that I felt could change my life.

 And and so I said, I'm going to try Eastern philosophy.

 And so I went to a class on Eastern philosophy.

 And unfortunately, the person teaching the class wasn't very good at it.

 and I would ask hard questions and he couldn't answer them.

 And another guy would ask hard questions and I would follow up that guy's hard questions and we got to be friends after class and his his name was Dr.

 Peter Sulk who was Dr.

 Jonas Sulk's son.

 And so Peter and I felt a lot of sort of we had in common about how we were looking at Eastern Eastern philosophy, how we were very interested in it and this this class wasn't cutting it.

 So we we're looking into other ways and and he said, "You want to come and meet my dad?" And I went, "Of course.

" And um so we went up to the Sulk Institute and Jonas was incredibly generous with his time and we got to talking and he learned I'm an investor and I'm this is the point I've already started doing this and and um he said well hey I've got a company and it turned out long story short he was chairman of the board of a company that would do bioengineered nutrition for plants kind of fertilizer bioengineered right? Because he really believed that if you could transport some form of of plant food around the world and get higher levels of crops, then people would reduce the number of babies they have and you could help world population growth come down.

 You wrote a whole book about it.

 And so I said, "Look, I'm very interested.

 Let me dive into it with you.

" Ultimately, we funded the company and I went on the board of directors with him.

 And for a short period of time, I was actually the CEO of this company.

 because I didn't like the CEO that they had put in charge of the company and I had really put a lot of investment capital into this thing, right? Really believed in it, could see that it was going to do well.

 Um, but the guy that they had as CEO, super nice guy, but he was kind of retired in all the ways, right? And this needed somebody young and could crank it.

 So, I came into a board meeting and everyone had already been there on the board and I'd say, "I'm sorry you guys, I missed the time to start.

" and they said, "No, no, we wanted a meeting without you for a moment.

 Uh, we know how you feel about the CEO.

" So, we've decided we agree.

 We're going to we're firing the CEO and we voted for the new CEO and you're it.

 And I go, "Whoa, why me?" And and Dr.

 S said, "Because you're the only guy on the board that doesn't have a full-time job, so you're it.

 You can take this.

" There you go.

 And we're sending you to Harvard.

 Literally, he called the president of Harvard.

 When you're Jonah Sulk, you can call anybody and they'll called the president of Harvard and said, "I want to send this guy to you to be trained.

 What do you got?" He says, "Well, we have a small management program and he can come to this for nine weeks and we'll we'll teach him to be a CEO.

" There you go.

 I made it for three weeks.

 Oh, right.

 Didn't like it was like, "Oh my god, too much.

" You didn't want to do it.

 It was just not relevant.

 It was dry.

 Yeah.

 It was like I I would feel like it'd be me and George Bush in the back, you know, drinking beer and George George had to be in the back doing Coke or something.

 I don't know what he was doing his Harvard MBA, but I I was certainly like just this is boring me to tears.

 I'm not going back for the rest of it.

 But that company turned out to be the longest held position in my life of my life.

 I sold the stock like three years ago.

 Really? Yeah.

 Was forced to sell it.

 Right.

 They ultimately ended up a a much larger company bought the whole thing for a ridiculous price and Okay.

 Everybody had to sell out.

 How did it go? Fabulous.

 Yeah.

 Yeah.

 It took off and we got a good CEO in there.

 Yeah.

 Right.

 It was temporary just keeping the lid on things.

 We got a good CEO in and they took it and ran with it and and it continued growing and continued doing well.

 And um yeah, so what I learned from Dr.

 saw having worked with him a lot.

 Um I got to spend time up at his house, beautiful place.

 I got to meet his wife who is this phenomenal artist who is the u former mistress of uh Pablo Picasso.

 Oh.

 And a great artist in her own right.

 So you walk into Jonas's house and there's Picasso.

 Picasso.

 Wow.

 You're just like that looks like a Picasso, you know? Crazy.

 Yeah.

 Like that.

 like they're on that level and hearing me, you know, here am I.

 So, Dr.

 Salt told me something that changed everything about the way I thought about things.

 He said that in his life, um, when he was deciding that he could cure polio, I mean, think about that.

 What are you going to do with your life, Brandon? Oh, I'm going to cure polio.

 Sure.

 Sure you are.

 All right.

 Good luck.

 Yeah.

 So the problem with polio vaccine is that if if you make the vaccine, all the vaccines are made out of a live virus and you thin it down or whatever.

 Mhm.

 But in to some degree you're giving somebody that disease, then your immune system kicks in and then you're immune.

 Yeah.

 Well, with polio, you don't want to give kids polio and so a live vaccine was not going to do it, right? Um, so it had to be based on a killed virus.

 Yeah.

 And nobody had ever done it and they'd been trying for 20 years.

 And so Dr.

 Sulk said, "When I started down this path of of proving you could use a killed virus for a vaccine, everyone in my family, everyone who loved me, everyone who was concerned about my career said, "Don't do it.

 It's been proven you can't do it.

 You'll be wasting your time.

" But I really believed that I could.

 And then I was successful in the lab with rats and then they told me, "Yes, but it won't transfer to people.

 It's trivial.

 So stop and move on.

" And then I cured polio.

 And he said, "And all those people came back and said, "Oh, we knew it all the time.

" Yeah, of course.

 We never doubted you for a second.

 We never doubted you for a second.

 And he said this, he said, he said, "That's not the lesson.

" And although he says I'm sure there have been people like that in your life and for sure there people when I started being an investor people were like you right really right yeah is there a river involved you know so um we all face that kind of skepticism right but it's it's what you need to do to yourself mentally and I think to a degree sort of emotionally to overcome that the skepticism and your own doubt is that Dr.

 Sulk said um he said imagine you have some goals.

 I said oh yeah goal and goal like this.

 He said those are those are [ __ ] really those goals.

 And I'm thinking they're not big enough.

 What what's the deal? He said think of it like this.

 A goal is an intention.

 You intend to work out.

 You intend to lose weight.

 You intend to eat well.

 Right.

 Um but if if you tell me um Phil um my goal or if I tell you my goal is to see you for dinner tonight at 6, I'm just saying it's an intention.

 I'm just saying I'm going to be there, right? He said, so if you think about it this way, intentions are are something that's very weak and they have a very bad side to them.

 And that's why there's an old saying that the road to hell is paved with good intentions.

 And the reason is because if we can put up a good intention often we don't have to follow through with the actual action.

 We give ourselves a certain amount of credit for intending.

 Right? So you know he said I said what what what do you do? And he said for something like this where I'm going to cure polio.

 I promised myself I was going to cure polio.

 Right? I burnt the ships to cure polio.

 M and he said that when you do that nature comes in and helps.

 He says absolutely convinced that providence moves in a way to support you in this commitment.

 Won't do that if it's a goal.

 But if you have burnt the ships and you are 1,000% committed to this thing, then nature is going to move in ways that no one could have predicted to come in and help you and just out of thin air.

 And so he said you should you should promise yourself where you will be in the future.

 Can't remember what it's like the I can't remember where this comes from.

 Like backing up the army against the cliff.

 Yeah.

 It's like you either fight or die kind of thing.

 Fight or die.

 Yeah.

 Cortez literally burnt his ships on the shores of Mexico when his 300 men found out they were facing Aztec entire civilization and wanted to get back on him and he he set the ships on fire.

 And then they were they were like, "Well, we're going to kill you for that because now we're all going to die.

" And he said, "Well, you could then you don't have a war leader.

" Yeah.

 And then you will or you can follow me and maybe we'll win.

 Right.

 So, this is a a full commitment.

 And that level of commitment, Jonah said it like this.

 He said, "Look, imagine you're going to go propose marriage.

" And you get down on your knee and you say to this fabulous woman, you know, I'm I'm we're best friends and I love you to death and and um I and I want to marry you and if you promise to be my wife, then it'll be my goal to never sleep with another woman the rest of my life.

 He said, "You're going to get punched out.

" Yeah.

 You're going to get slapped.

 You're going to walk away and be done with you forever.

 Yeah.

 Because there are things that require a commitment that's full.

 And curing Polio was one of them.

 Overcoming these hurdles and these doubts on this hero's journey.

 Um Luke Skywalker didn't have a choice.

 He was 1,000% committed.

 Become a Jedi or die.

 That was it.

 Right.

 And that's part of that hero's journey is and I I took that on at that point and I just like, well, I'm going to do this do or die.

 I'm going to give this five full years, 1,000% everything I can give to it.

 And and we're talking about the education business at this point, the actual investing, the process of being an investor.

 That's what really took me into it is to this wasn't I didn't feel like this is, you know, something I was necessarily born to do.

 It was more like part of my journey to get to what I'm born to do kind of a thing.

 What you sort of find out as you go through your life and and it becomes part these things that you achieve and the thing the lessons you learn are part of what you need as you get down the river.

 You're going to need all this stuff.

 And and so yeah, this was something I needed to learn and and it was a phenomenal thing.

 I I promised myself that I would make a million dollars in five years and it it all happened within almost exactly that amount of time.

 Wow.

 So, it's it's like there are there are there are techniques here that are super important, I think, to to get you through those times when you're going to be full of doubts and insecurities because you've never done it before.

 No one in your family's ever done it or they would have told you how.

 Oh my god, there's this fabulous book that Manesh Pryo wrote called The Dondo Investor.

 It's a good one.

 Have you read that one? Isn't that good? Yeah.

 So, this whole Someone has to make a movie of the Patel family going from Uganda under threat of death coming to America in the 1960s to this racist bigoted country, right? You're coming into a Christian white nation and you're coming in as darkkinned Hindus with no money.

 Yeah.

 Things are against you at that point.

 Things are stacked.

 Yeah.

 Right.

 But you have an education and how to start with nothing and build a fortune in motel from a family that's been doing it for a hundred years successfully.

 And so you have this knowledge that carries you through those doubts that happen.

 So if you go in and you start investing in a cheap motel and the whole thing goes goes down and you've lost your $3,000, all the money you had in the world, you never have doubts about whether or not you're a Jedi because your uncle was a Jedi, your grandfather was a Jedi.

 You see what I mean? Yeah.

 The Patel family is loaded with Jedi back for two centuries.

 Yeah.

 And so, you know, you just made some mistakes.

 The path is there in front of you.

 You just got to stay on it.

 And um I've spoken to lots of of the Patel family members and it's like it's a meme that they have in their family that goes back deep.

 And so if you don't have that, then when you make your first mistakes that you will all make, they're shattering you.

 You think I'm on the wrong path.

 This doesn't work.

 It works for Warren, but it doesn't work for me.

 Right? Because it's not baked into you from your parents and from your brothers and your sisters and from being in this family and going down this path for 100 years.

 And so, one of the things I wanted to accomplish was to help hound that path down a bit to make it visible for people to see that this road this this and that's what Manesh is doing too with that book Dondo Investor.

 It's what Guy Spears done with with his book um the uh what is it? The education of a value investor.

 These these are books that are meant the these are books from super successful guys, really brilliant people that have a heart for the rest of us to to to pound the grass down and make this path visible to you so you can see how far back it goes.

 So you can see, wo, people have been doing this since the 1930s and they've been doing it successfully and and going all all the way back to your original question about, you know, why don't why don't we see more little guys making it, being successful with this.

 Well, this is a path that little guys took and became big guys.

 Ben Graham was a little guy and he became a big guy and so did Warren Buffett and so did Charlie.

 And they they they didn't come from money.

 They came from learning this and then becoming the grandfathers of this meme like the Patel family has about motel.

 All right.

 Now we have this about stock investing.

 So that that to me is something I wanted to do and be part of and and it's been great doing this stuff.

 Yeah.

 Absolutely.

 And you're three books in education business.

 Yeah.

 Three books in 25,000 people trained.

 Wow.

 So great.

 How does that make you feel like reflecting on your life and where it's kind of led to now? Yeah, it it makes me feel like I've made a a ding in the universe.

 And I I don't I can't even take full credit for my ding.

 It's sort of like Warren Buffett's ding.

 Yeah.

 But I made it bong even a little harder, right, for some people that maybe wouldn't have gotten it from Warren.

 And um and that to me is I don't know.

 I just really think it's a it's such a cool thing.

 It makes me feel very fulfilled that I have helped people get on this path because some of the people who've gone through this process with us, kind of gone through this education, are now hedge fund managers doing their own thing.

 I get letters about this has changed my life all the time.

 Got a picture from one guy.

 He's taking a picture through the front window of an RV across his computer which is looking at the stock market out across a big beautiful field up in Mammoth Mountain.

 His kids are out there playing.

 He's homeschooling the kids.

 They're touring the world and he can do it because he's he can make money just sitting anywhere anywhere there's a net.

 And so yeah, I get a I get a really big big good feeling from having done that.

 It's a pretty incredible journey.

 Yeah, it is pretty good place to round things out.

 I if if you don't mind, I promised the subscribers that I would ask some questions to you from them.

 Far away.

 So, should we end with a couple of subscriber questions? Yeah, absolutely.

 Okay, perfect.

 Um, let's see.

 A lot of them to be honest, we've already covered just in the space of what we've spoken about, but I'll ask you a few anyway.

 First one, investing related.

 Uh what are your personal thoughts on investing in China? It's a bit of a controversial topic in value investing circles.

 Pretty close to Australia.

 It is right.

 We got a tricky tricky spot, right? Alliance with the US and trade partner with China, right? And Singapore.

 I've been in Singapore several times and they it's right there.

 So first off, China is an incredible country.

 Um the people the Chinese people are astonishing in terms of they're willing to take risk and their willingness to work hard and put aside the the the payoffs till down the road.

 Um they're going to invest down the road.

 Um and they're in a structure um a governmental structure that gives them some real advantages over democracies.

 Um they've got one guy calling the shots and he's brilliant and he's got a group of lieutenants who are brilliant and um they're out to make China into a world power and it's already a world power into a bigger world power and really bring the Chinese people on this journey that was started by Mao and and finish it.

 bring bring that entire nation into wealth and prosperity and and a and a great life.

 And so the goal is phenomenal.

 um the the if there's a difficulty with investing in China, it's that we don't because of this this autocratic structure that they have in their government.

 They can decide it's better for the Chinese people to not have a stock market doing whatever the stock market's doing or the real estate market doing whatever that's doing and they can put a a real big dent in those markets as they have done just recently.

 Um, and that is very hard for an investor like like me to be able to see with a high degree of certainty where things will be in 10 years.

 So, while I think China is um is going to be a phenomenal competitor of the United States, um and we should all be walking carefully around China, not just because we're not not necessarily close to them or or we are close to them geographically, but they're they're out to to build that nation.

 And I think making them into an enemy is a really bad idea.

 Really really dumb dumb idea.

 and one that's not necessary.

 I think there's a way to get along in the world with something like that.

 But in terms of a place to invest, even though I think there's a high degree of probability that'll be a successful investment in the long term, we've started into that a little bit.

 We bought into JD.

com and Alibaba.

 We went to China.

 We looked it over carefully.

 We thought we knew what we were getting into and we did that right before President Xi shifted the game, right? And then realized when was this? Uh let's see.

 It's just before Alibaba went down to about 80.

 Ah, tick that back.

 That's what sticks in my mind.

 Right.

 Okay.

 Right.

 So, we took a loss on that.

 And um one of the real unusual things we've ever done is just exit a really good company that we know is a good company because of a political influence that we could not u fully be comfortable with.

 So, we exited.

 And that's that's where I'm at with it.

 Yeah, I can understand why you would be interested in investing in China.

 One of one of my one of the guys I really like is uh Jim Rogers and he's fullon about investing in China and Ray Dalio is a real friend of China and it's just I just can't quite get there in terms of my level of certainty.

 Right.

 I think that's fair enough.

 Next question.

 US debt, is it a crisis level problem? I think US national debt 36.

21 21 trillion.

 2024 interest expense was 1.

13 trillion.

 2020 it was only 523 billion.

 Is it a problem? The US I guess won't necessarily default in the same way that a say an Argentina or a Greece would is the debt situation problematic? Does something need to be done about it? The answer is yes.

 The short answer is yes.

 Very it's amazingly problematic.

 Um, and something has to be done about it.

 And yes, the country is not Argentina or Zimbabwe or, you know, or Greece because we have a printing press that we're able to print.

 And two things, we have a printing press and we're the world's reserve currency which gives us extraordinary uh privileges where banks have to hold dollars and and it holds up the value of the dollar around the world.

 Um but 36 trillion uh with debt running over a trillion dollar debt payments running over a trillion a year.

 Um and if this starts to falter and become scary for the world, then the interest rates go up and those debt payments will rise aggressively.

 Uh there's a there's an endgame to all debt and there's a debt cycle to all debt and we are at the last stages of a debt cycle and we ever we either get a hold of it and start reducing our debt or we go through the endgame of the debt cycle which is a default of one way or another.

 The US excuse me the US has defaulted on its obligations before a lot of people don't know this.

 Right.

 Right.

 1930s um we devalued the dollar by uh 40% overnight overnight on an executive order from FDR.

 What he did was make it illegal to own gold in America.

 And so he bought the gold in America at $20 an ounce.

 And then once that was accomplished with an executive order, he put the value of gold at roughly $40 an ounce.

 I think 36 to 40 or something like that.

 So he basically doubled the exchange rate on gold and then the European nations which were concerned as tensions were growing in Europe in the 30s took US dollars in exchange for their gold.

 Okay.

 So we go through World War II.

 World gives us the world reserve currency under the Breton words agreement and um we start printing dollars.

 So we print dollars to pay for Vietnam.

 We print dollars to pay for a welfare society.

 And Britain, Switzerland, and France noticed this by 1970.

 And in 1971 said, "Okay, then we will now exercise our right under our agreement to get our gold back.

 Here's your $40 and we didn't have enough gold to cover that for them and everybody else who would do the same thing.

" Yeah.

 Uh since we had devalued the dollar so extraordinarily and Nixon took us off the gold standard and screwed them just like that.

 I never thought of it that way, but Yeah.

 Yeah.

 And we would have been the United States would have the world would have gone into a period of time where we were trying to find some other reserve currency.

 But the US government said, um, by the way, how do you like being able to move goods around the world without pirates taking your ships? Is everybody good with this? Okay, great.

 So, here's the deal.

 We are now going to require you to exchange oil for dollars everywhere in the world.

 And the US government created the idea of the petro dollar.

 And what made that stick is that if you don't want to do that, then the US Navy will not guard your ships, which effectively means they're not going to get to port.

 You're going to send it out from some oil producer and it's not going to make it to France, right? And everybody went, well, okay, we'll do the dollar will stay the world, right? And now, of course, that's being challenged with Russia and China, Saudi Arabia moving oil over, Iran moving oil.

 We'll see where this all goes.

 That this is all coming about because the US, we spent an enormous amount of money we didn't have by borrowing it and printing it.

 And we've done a lot of that just recently.

 Um, and I think that it's going to be extremely hard for us to pay this off.

 I I don't know that our politicians in a democracy have the will to do that um without the president having a line item veto so he can balance the budget.

 Otherwise, these politicians will just they'll just trade they'll log roll it.

 You know, you need something for your constituents, I need something for mine.

 we'll get together and vote on each other's bills and pass them and to help with with the we we we give lip service to the debt, but we're not going to actually reduce it.

 And I think that's where we are.

 And I I think this effort by Elon Musk right now and Trump to um take well to take the fraud out that has to be legislated.

 It can only last for one executive order, you know, four years maybe.

 It has to be uh legislated.

 I I don't know how they're going to do that.

 No, no party wants to give the other party anything much, you know, not even the time of day.

 And so I see a democracy having real problems right here.

 And this is going to be a big bonus for China uh that does not have a democracy.

 We'll see if we can have enough statesmen in the United States to overcome what is inevitable if we keep spending money and that's a collapse of the dollar, um worldwide depression, probably worldwide war.

 So we have to do it and I don't know that we can.

 Do you think it gets to a point though where they see the writing on the wall as politicians they go look this the other outcome is catastrophic so let's get this done.

 Yeah.

 Do you think that happens or do you think the political jousting is too much? I would hope it would.

 Um and I think at at heart everyone who's a politician wants to be that statesman.

 But I don't think they'll do it until it's very clear to everyone on the street that you have to do it, which means it's already started and probably too late because they want to get reelected so badly.

 So if if they do something then their constituents don't think that was something you had to do, you know, you had to have us lose a bunch of jobs, you had to have us have a big recession.

 Um, if they don't see that, you're going to get fired and you'd rather continue to be a senator than to save the country.

 Yeah.

 It doesn't paint the best picture, but it's interesting to hear your views on it.

 Yeah.

 I I hope I'm wrong.

 I hope you are, too.

 All right, I'll finish off with another couple.

 What's the story of how you came up with the big five growth numbers? I mean, this is all from Warren.

 Basically, straight up just reading reading what he's done and digging into it.

 I read a a book by Mary Buffett, who is his son's ex-wife, who wrote a very good book about the strategy Warren uses to pencil this all out.

 Um there have been there have been quite a lot of things written that ultimately led me to understand that one of the great advantages of rule one investing is taking thousands of bits of accounting information which can swamp you um down to a handful that are really super important that Warren does look at and and they really do work.

 If you you look at these these big five numbers and you'll have a very good idea of whether this company is you know a solid company or not.

 Now these numbers are all looking out the back window of the and for context big five we're talking ROIC topline bottom line equity free cash flow.

 Yeah correct it.

 Yeah exactly.

 So when you're getting these numbers, you're looking historically and if that were all you needed, you know, then as Warren says, librarians would be rich.

 But you all you you you can't just look out the back window, but it can give you a very good idea that the road's been straight for a long time, right? And if you see that this company has a very big moat, then there's good reason to believe the road will be straight in the future.

 Even though you're looking into this fog, you can still feel comfortable that there's very unlikely that there's some cliff up ahead if this company's got this big intrinsic characteristic that protects it like railroad tracks, right? Like like shelving space for Coca-Cola, right? There's all these different ways that you can protect yourself.

 And if the company has that and it has these wonderful numbers, these five big numbers that look very very consistent through history, then there's very good likelihood just on that basis without knowing anything about it, you're looking at a wonderful business, something that has a big moat.

 And from that point, you can dive in.

 So ultimately, you're going to learn all there is to learn about that business.

 But in order to get to companies that are worth bothering to get that deep into these the big five numbers are fabulous for narrowing things down.

 Another question I had was from the rule one method that you were taught by your mentor to what rule one investing with your analysts is today.

 What's different about it and what has fundamentally not changed? It's a little bit like how Warren teaches how to invest sort of anecdotally, you know, with stories and we did this and this didn't work and you have to sort of piece it all together.

 What we've done here is we've put it into a system.

 So, we've sort of taken it out of anecdotes and made it step one, step two, step three, step four, like that.

 And I think that really helps a lot of people figure it out.

 I mean, ultimately, it's all there.

 Warren talked about every bit of it.

 I didn't make any of this up, but but laying it out so it's it's clear what you should the process you should go through is uh I think a big help.

 One of the big questions that I have gotten not just in response to the poll that I put up but when I talk about the rule one method on my own investing channel is it goes back to the concept of the three tools that you wrote about um being the MACD, the stochastics and the moving average.

 And people are wondering do you still use them? Yeah, they're they're really good tools.

 I like them a lot.

 We use them uh a bit to look at that weather report, right, we were talking about earlier.

 So um but we and when I wrote about them in rule one, I was using a fairly fast changing stochastic MACD and moving average.

 We're using using them on like a a daily a daily input, a daily period.

 And so these are going to change over relatively short periods of time before you have signals that say the MACD is saying get in.

 Right? We've moved away from that sort of swing trading kind of environment more and more toward realizing that we can use options to do trading more effectively than using stock per se, particularly in this environment where we have a lot of cash available.

 Um, so we're we're doing our trading there over in the options markets today.

 Can you explain that to how it works at like a basic level to people that are watching? Sure.

 The way we use options is is that we are looking at the value of a business and we're saying that in this case, let's say the value is $100.

 We want to buy that business at half of that value.

 So we have the price at 50.

 Okay, the price isn't at 50, so we can't buy it.

 Just discipline rules.

 On the other hand, it's at 70 and at 70, it's a 30% discount to its real value.

 It's a pretty significant discount.

 So, I now have something interesting going on in the options market.

 the options market without getting into all the thing about what options are.

 The options market is based around modern portfolio theory.

 Okay, it says very explicitly that any stock price at the money, which is if this stock is trading for $100, that's that's the money at the money.

 Any stock price at the money under modern portfolio theory has a 50% chance of going up and a 50% chance of going down.

 That that stock is priced to perfection for everything that's known about it, known about the future.

 Everything everyone can know has been priced into that to where it is a coin flip about whether that's going up or down in the future.

 But when we look at it and so they would look at that at 100 and at 90 same thing 80 same thing 70 same thing.

 Modern portfolio theory says that is just as much a coin flip at 70 bucks as it was at 100.

 Now for us we're looking at this thing and going whoa whoa wait a second this thing's worth a hundred and its price is 70.

 So we're not modern portfolio theory believers.

 We think the market can mispric thing for a lot of different reasons, but here it is mispriced.

 That means we have an edge in the options market.

 They're going to price the options wrong.

 And when they do, we can get a higher rate of return for taking an almost risk-free trade.

 So what we do since we like this business, we would own this business at $50 in a heartbeat.

 Well, I can sell an option.

 is very simplistic, but let me just say it.

 Y I can sell someone the right to force me to buy their stock at 50, maybe for a year.

 So I could sell you effectively an insurance policy that says Phil Town has to buy Brandon's stock for the next year, anytime you want to sell it to me, at $50 a share.

 And in order to get Phil Town to be willing to insure you for that, you're going to pay me an insurance premium.

 That premium is called a premium or net credit.

 So, I'm going to get paid like an insurance company be willing to ensure you to buy your stock at a price I want to buy your stock at.

 I just can't buy it at it today.

 So, I'm going to do that deal.

 Yeah.

 Right.

 So, this is a really different view of the world of options than what almost any options trader is looking at because they're all thinking, "Oh, that thing is 50/50 coin flip at $50, too.

 Every price point there is, it's a 50/50 coin flip.

" That's not the way we see it at all.

 When that thing's at 50, we're going to buy it because it is way on sale and it's very likely within the next three or four years to go up to 100.

 M so we're very happy to ensure you that we will buy your stock at that discounted price and so we do those kinds of trades all the time and those trades last three days one week right we just little chunks of time so we stay very liquid and if the stock price were to drop aggressively then we are now put the stock right at the price we want for one part of what we want to buy one tunch and Now we can load up the truck on the rest of it if we want to or we can sell some more puts.

 It's anti-brokerage.

 You It's not paying to buy the stock.

 It's being paid to buy the stock.

 Being paid to buy the stock.

 Exactly.

 Yeah.

 So, this is a fabulous way to be using the cash that we have while we wait for the market to repric everything down to that $50 level.

 If it ever does, great.

 We'll be we'll buy aggressively.

 But here's another really cool thing that happens.

 Think think about how this would go.

 What if we could get I'm picking a number here for for easy math, but what if we could get $5 from you to be willing to buy it at 50 and we could get that $5, let's say, for one month, just for fun.

 It's not going to be this lucrative, but you'll get the idea.

 So, in one month, I can pick up $5.

 Okay, cool.

 Um, what if I do it again the next month? Well, then I've got 10.

 And if I do it the next month, I've got 15 that I've collected.

 Do it the next month, I've got 20.

 The stock is selling for 70.

 So, if I were to buy the stock at 70 and I've already collected $20, I effectively have an adjusted basis of 50 and I'm now own that stock at a margin of safety price.

 So you can use options some really great ways to bring yourself down to a margin of safety to buy companies that never get there and we own them and we own them at margin of safety prices.

 There's there's some more cool things you can do with options that are great.

 But um but for that you need the workshop for that.

 Yeah, the workshop's pretty handy when when we're piling this stuff on like this.

 Yeah.

 Nice.

 And my final question for you that has been asked for multiple people is will there be another investing book from you or are you done? Ah maybe an autobiography.

 Ah I I'm I'm really seriously considering an autobiography.

 I really am.

 Yeah.

 I think there's if I can figure out the lessons, you know, it's sort of like here's all these things that have happened in a in a I've sort of had an interesting life and Yeah, definitely.

 It's kind of unusual life and and um if the if there are things to draw from that that are useful, I think I might write that book.

 That might be fun to write.

 But writing a book, Brandon, is it's tough.

 I mean, it it's like a two-year project.

 You think I'm doing it at the moment, man.

 Yeah.

 On my first book I wrote in about six months and then I sent it into the editors at Random House and Oh, no, I didn't.

 Before I sent it in, I went to I went to Italy and just took two weeks off away from it.

 And when I came back, I reread it and it was horrible.

 Uh, and then I was supposed to turn it in and I refused and I rewrote the whole thing.

 I worked like 20our days writing like a madman and rewriting the whole thing which I got done.

 Let's say I wrote July, August, and halfway through September.

 So, two and a half months at that pace.

 And then I got what now is role number one out the door.

 Wow.

 And it was it was it came out right the second time around.

 Yeah.

 But yeah, it's it's a thing, man.

 It really is.

 I hope we see an autobiography.

 I'll read it.

 I'm sure many of the people watching this will read it, too.

 If you write a book, man, I I know it's going to be phenomenal and I will get that out to all of our students.

 I would appreciate that happen.

 Sure, man.

 On the record.

 We'll do it.

 No, I appreciate that.

 Well, Phil, I've I've used up a lot of your time.

 Thank you for being very generous with your time and for hosting me here and for agreeing to do this and coming on the channel and sharing your insights.

 you really have been one of the key figures that got me into this way of investing.

 I'm still obviously very early in my journey.

 Um, but it's great that I'm still young and I've been switched on to the right path um of this Buffet style investing and I honestly I have you to thank for it through your YouTube content and through rule one and the following books.

 So that makes me very happy.

 You have no idea man.

 So, yeah, thank you very much for for all the opportunities you've given me and uh I I appreciate you sitting down to have a chat.

 Thank you.

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