#497 Sahil Bloom On Financial Education

Sahil Bloom is a Vice-President at a Private Equity Firm, as well as a frequent contributor to CNBC. He also holds a degree in economics, and a master's degree in public policy, both from Stanford University. In this conversation, we discuss financial education, mental models for investors, accreditation laws, democratization of investing, and community/audience building. ======================= Choice is a new self-directed IRA product that I'm really excited about. If you are listening to this, you are likely part of the 7.1 million bitcoin owners who have retirement accounts with dollars in them, but not bitcoin. I was in that situation too. Now you can actually buy real Bitcoin in your retirement account. I'm talking about owning your private keys and using tax-advantaged dollars to do it too. Absolute game changer. https://www.retirewithchoice.com/pomp ======================= The Rodman Law Group is dedicated to helping entrepreneurs realize their vision by helping them operate defensibly in sectors where laws and regulations haven’t caught up to the realities of the industry. The Rodman Law Group’s legal expertise combined with its understanding of blockchain technology makes it the ideal legal service provider for the industry. http://www.therodmanlawgroup.com/pomp

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Anthony Pompliano?

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Let's kick this thing off. Sahil Bloom is a Vice President at a private equity firm, as well as a frequent contributor to CNBC. He also holds a degree in economics and a master's degree in public policy, both from Stanford University. In this conversation, we discuss financial education, mental models for investors, accreditation laws, democratization of investing, and community and audience building. I really enjoyed this conversation with Sahil, and I hope you do as well. Before we get into this episode, though, I want to quickly talk about our sponsors. First up is BlockFi.

• 0:44Anthony Pompliano?

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• 1:26Anthony Pompliano?

  investors, interest accounts, US dollar loans, and no-fee trading. To start earning today, visit blockfi.com/pomp. Next up is Choice, a new self-directed IRA product that I'm really excited about. If you're listening to this, you are likely part of the 7.1 million Bitcoin owners who have retirement accounts with dollars in them, but not Bitcoin. I used to be in that situation, too. Now you can actually buy real Bitcoin in your retirement account, though. They hooked me up, and they'll hook you up, too. I'm talking about owning your private keys and using tax-advantaged dollars to do it, too. It's an absolute game changer. A self-directed IRA product that allows you to buy Bitcoin, hold your private keys, and use tax-advantaged

• 2:04Anthony Pompliano?

  dollars to do it. Head on over to retirewithchoice.com/pomp. Again, retirewithchoice.com/pomp. Retirewithchoice.com/pomp.

• 2:17Anthony Pompliano?

  Lastly is the Rodman Law Group. They are dedicated to helping entrepreneurs realize their vision by helping them operate defensively in sectors where laws and regulations haven't caught up to the realities of the industry. The Rodman Law Group's legal expertise combined with his understanding of blockchain technology makes it the ideal legal service provider for the industry. I've been investing in building companies for a long time. I know, as do you probably, that you have to have a good lawyer, but a good lawyer doesn't just understand the law. They also understand the industry in which you're operating in. Dave Rodman and his team over at the Rodman Law Group, I've had him on the podcast. He's fantastic. He's thought about everything from the blocking and tackling, super easy stuff, all the way to the really,

• 2:58Anthony Pompliano?

  really complex nuanced stuff like the legal structures for decentralized autonomous organizations. Yes, even that he's thought of. So head on over and check out the Rodman Law Group. You can go to therodmanlawgroup.com/pomp. Again, therodmanlawgroup.com/pomp and go check them out today. They're here to help. If you need a lawyer, therodmanlawgroup.com/pomp. All right, let's get into this episode with Sahil. I hope you enjoy this one.

• 3:28Speaker 01

  Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. This podcast is for informational purposes only.

• 3:59Anthony Pompliano?

  All right, guys. Bang, bang. I've got Sahil here. How are you doing, man? I'm great. Thanks for having me, man. It's a pleasure. Absolutely. Thanks so much for doing this. So you are the man with the finance education tweets and threads. I think everyone loves following you on Twitter, but who the hell are you? Let's start with your background. Where did you grow up and how did you end up in the investing world?

• 4:20Speaker 02

  Yeah, well, I ask myself that a lot, too. So I'm happy to go into it of who I am. I grew up on the East Coast, Boston area. Pops is a professor at Harvard. My mom is, my mom's from India and she's a first generation immigrant. So I grew up in a kind of mixed race, multi multicultural household, never really knew, you know, who I was, never felt like I kind of fully fit into one bucket or another. And the same was true for my like, kind of definition of myself growing up, you know, I played baseball, but I was also pretty good in school. So I didn't really feel like I fit into the whole like jock thing or the nerd thing and and kind of always tried to strafe and be in the middle of everything. Ended up being fortunate enough to get a baseball scholarship.

• 5:06Speaker 02

  Came out to California back in 2009, played baseball at Stanford, was out here for four years, way over my skis for a number of them in that regard. And a lot of people have mentioned it. I've seen on Twitter, a bunch of people calling it out when you tweeted out that we were doing this, asking about the home run I gave up. It's in my Twitter bio. So I will, I'll have to get into that story at some point on how far that ball went. But that's kind of the background on, on, you know, my pre-real world experience. Back in 2014, I was fortunate enough to get a job in the investing world at an investment fund right out here in the Bay Area.

• 5:43Speaker 02

  Generalist firm, we kind of invest all across the GDP, everything from financial services, consumer, healthcare, industrials, etc. So I got a really broad-based experience from a young age, got to invest in a ton of different kinds of businesses and really operationally focused. Got to get my hands dirty and work with the businesses, with management teams. And today, sit on the board of a number of companies in the portfolio and get to help these management teams go out and execute against the growth thesis. So it's been a, been a pretty incredible ride so far. That's awesome. Tell us the home run story. I mean, that's got to be an

• 6:18Anthony Pompliano?

  Incredible story if it makes all the way to your Twitter bio. What exactly happened?

• 6:23Speaker 02

  Yeah, well, it's kind of one of those stories. It's like the reason sports are a metaphor for life. It was like a story of the highest high to the lowest low. So this is back in 2012. We were in the playoffs, college baseball playoffs. And so we hosted the regionals, which is like the small intro round to the playoffs in college baseball. I closed the regional championship game. It was like 10,000 fans highlighted my baseball life to date. Just an incredible experience. A week later, we are at Florida State in Tallahassee, playing them in super regionals with a trip to the College World Series on the line. I came in to pitch in a close game, bases loaded and served up a little bit of a meatball

• 7:06Speaker 02

  and gave up a game losing grand slam on national television, ESPN, you know, the whole shebang, tons of friends and family watching around the country, etc. Tons of screaming fans. So it was like a, a real lesson in life of like going from that highest high to the lowest low and figuring out how are you going to pick yourself back up from this, you know, this dark moment.

• 7:29Anthony Pompliano?

  And so when you think about that, like, why did you put in your Twitter bio? Is it just something that you feel like is like a defining moment or kind of like, what's the logic there?

• 7:37Speaker 02

  Yeah, well, it's a little bit self-deprecating, obviously. It's also, you know, and as people have called me out on, there's a little bit of a flex there of like, you know, I was getting to play in a big game and, and on TV. And so it's kind of a joke I've always had with my friends, with my teammates. It was an absolute bomb. And I wish that it was like a story around, it was a nasty pitch and the guy happened to get it, but it was like a fastball, middle and, you know, probably not as fast as I would have liked it to be. And the guy just turned on it and hit it a mile. So, you know, for me, it's like, it's a moment of a humbling experience and it's a common thread throughout my life that I tried to put myself in situations where I was a little bit uncomfortable

• 8:19Speaker 02

  and, you know, could, could have those type of humbling experiences that I think are important to your development and who you become and how you grow. Like for me, going to Stanford in the first Was a humbling experience. I realized day one, I wasn't that good at baseball and I wasn't that smart. And like, I came from a small high school. I thought I was sick at baseball. I thought I was the coolest guy in the world. I thought I was brilliant. And you get there and everyone's way smarter than you and everyone's way more athletic than you. And that moment, those type of things, that's when you really force yourself to grow because you realize, like, I'm gonna have to put in work if I, if I want to achieve what I came here for. Um, and so that's just been a common thread for me and something that I try to live by is just go out and seek out those failures. Go embrace those failures and that's how you're gonna end up growing.

• 9:03Anthony Pompliano?

  Absolutely. Makes complete sense. Uh, you became very well known on Twitter for, uh, financial education. Everything from the one-off tweets to these long threads explaining, uh, kind of complex, uh, concepts in very simple terms. What is the fascination with financial education? Why do you think that's so important?

• 9:21Speaker 02

  Yeah, it, you know, it goes back to my upbringing. Um, education was always important to my family. I mentioned my father is a professor. My grandfather in India was a, was a chemist, was a professor. Um, and it, it always struck me, you know, this idea that talent is evenly distributed, opportunity is not. We talk about that a lot. I've seen it all over Twitter. People, people talk about it. And to me, education is the pathway to fixing that. Education is the path to, uh, evenly distributing opportunity across the world in the U S, but also globally. And it struck me back in like, this is March, April, May of this year of, sorry, last year, 2020.

• 10:01Speaker 02

  Covid hits, uh, the economy is an absolute disaster. People are losing their jobs left and right. But all of a sudden, the market comes roaring back. And there were all these people out there, all my friends, family, teammates. I was kind of their resident finance guy. And so I was getting texts saying like, what's going on? How the hell is this happening? Uh, why is the market roaring while the economy is in the tank? Uh, and it just struck me that all of these concepts around finance, investing, etc. Have been, uh, overcomplicated by the kind of incumbents, the, the insiders, quote unquote, for way too long. You know, it, it, to me, it's not that complicated. For the most part, and the insiders have intentionally overcomplicated things in order to keep the outsiders out.

• 10:45Speaker 02

  There's this whole environment around finance of, you know, the insiders wanting to make it seem cloudy and complicated. So that you can't, you don't feel like you can do it yourself. Like, oh, my parents feel like they need to go pay a wealth advisor some exorbitant fee. Because they're made to believe all of this stuff is too complicated for them to understand. My parents are super well educated, they're really smart, but they're made to believe that they can't figure these things out for themselves. And that's just, it just doesn't sit right with me. And so back in May, I started thinking, okay, what's, what's some way that I can in a small way? Start to be a part of a solution around this and start to spread information and make people realize that they can do these things on their own. That they can figure these, these things out.

• 11:31Speaker 02

  And so I took to Twitter, I, you know, I had 500 followers at the time. When I wrote my first thread, which was this Mr. Federico thread that, that everyone still talks about, which I find hilarious. But basically I was out on a walk and came back home, sat on the floor of my garage and basically just had this idea of a story I could tell. To explain how Fed intervention in the markets is driving up asset prices. And I did it with this fictional character, Mr. Federico, and it was very tongue in cheek. But it got picked up by a few big accounts, Chamath retweeted it, Scott Milker, my friend, retweeted it. And all of a sudden it kind of took off and it's, it's snowballed a bit from there. But the genesis of it was really, let me try to demystify these concepts.

• 12:16Speaker 02

  You know, u- using simple language, no jargon, make it accessible, make it digestible. Give people the like Toyota, not the Ferrari, for lack of a better way to say it.

• 12:28Anthony Pompliano?

  Yeah. And so when you think through, let's say that we could give financial education to everyone. It was free, it was accessible, they paid attention, they learned the lessons. What's the impact on the market and maybe on their personal wealth? Once we actually get people educated. So I think a lot of folks hear, oh, financial education. They generally think, I get that would be cool if we could do that, but they don't understand how impactful it could be.

• 12:48Speaker 02

  Yeah. Well, when I think about my own life, or anyone's life for that matter, like, what is the fundamental goal that most people have in life? It's to take care of their family and their friends, to live a happy life and to be able to support those that they love. And wealth creation, building wealth, generating income, knowing what to do with it, is foundational to that. I don't know how you can have that end without understanding, you know, the pathway to it. And that's through financial education, financial literacy. I am baffled that in high school or middle school, I learned about mitochondria. I learned about the Ming Dynasty. I learned about isosceles triangles and the Pythagorean theorem.

• 13:31Speaker 02

  But I didn't learn about taxes. I didn't learn about investing. I didn't know what the S and P 500 was.

• 13:38Speaker 02

  I didn't learn about budgeting. I mean, it's just insane that we have this education system in the richest country in the world, where we're not educating people on how to take care of themselves for the future, how to build wealth and achieve the goals that they have for themselves financially.

• 13:53Anthony Pompliano?

  What do you think the best way is to teach people this? Is it sit them in a classroom and have them learn that way? Is it give everybody a hundred dollars and say, you know, go YOLO log and GameStop options? Like, how do we just get across the information in a way that people actually internalize it and truly understand and learn the lessons?

• 14:11Speaker 02

  Yeah, it's an interesting question because I think all of traditional education needs to change and adapt. You know, we're in this tech-enabled world now. If COVID has had one positive impact, it's that technology has had a 10, 15, 20-year accelerating event. And so people are realizing that and realizing the power that technology can hold in improving education. But for me, I think the old, like, sit in a classroom for eight hours a day as a kid, be forced to wake up super early so you're not sleeping enough, go read a textbook and then come in and do a problem set, like, that model is dead. You know, it's dying and it's going to be dead. And we need to figure out broadly, whether it's financial education or any subject, how we're going to educate kids so that the information sticks.

• 14:56Speaker 02

  Important information and then make sure it sticks. And I think it's changing. I think gamifying information is a great way to do it. I mean, you joke about like YOLO and GameStop options, but the idea of like creating some form of game where people can learn about these topics in an engaging manner is very real. You know, from your own personal experience, you can probably attest to it. I know I can. I've learned way more about all of these topics by actually going out and doing it and having to engage in it. And so when I think back on my own educational experience around these things from high school, I remember it being like you have to fill out some work form around how your budget is. And I remember putting in like, what do you want to be when you grow up? And I said, like, professional athlete, I played baseball at the time. And it told

• 15:40Speaker 02

  me my, you know, income was going to be $40,000 a year. And I realized I was going to have to eat ramen noodles every night for dinner. And it's just like, that's not realistic. It's not a good way to teach kids what they need to learn about these topics. And so to me, it comes down to delivering it in a more interesting way. I think I've gotten and kind of struck that chord a little bit with what I've been doing with the threads. But it's just scratching the surface on what some amazing companies are going to come out and do around these things in the future.

• 16:06Anthony Pompliano?

  Yeah. And so do you think that the for-profit model is better because it aligns incentives and really kind of drives people to be successful and get the word out there? Is it a nonprofit? Do they coexist? Like, how do you think about the model that works best?

• 16:21Speaker 02

  Yeah, I mean, I'm a small government guy for the most part. So my bias bleeds into this. I mean, I personally believe in capitalism. I believe that the private markets handle innovation much better than the public markets. And I think frankly, that has been proven out throughout, throughout the history of our world and of our country. And so for me, it comes down to the private markets. I think we need to allow innovation to happen. There are a lot of investment funds now that are educate, that are investing heavily in ed tech. I think it's phenomenal. I think there are going to be some really differentiated, interesting models around education that are coming out. I mean, income sharing stuff, Lambda School, the cohort-based courses stuff that our friends Gagan and Wes are building.

• 17:04Speaker 02

  Like, there's just some amazing stuff that's coming, but we need to make sure we're fostering it. We need to make sure that we're getting people to see it. You know, like, there needs to be that access level so that we can start building, innovating, and iterating on it so that we can get better and better over time.

• 17:21Anthony Pompliano?

  For sure. I'm actually an investor in a company that is not yet publicly announced themselves, I don't think. But basically, what they've done is they've created a game and they're teaching young kids. It's not so much personal finance or financial education, but it's more problem solving skills and teamwork and kind of things that are just like life skills that will apply to every industry. And it's fascinating to watch how impactful it is when it's wrapped as a game versus when it is delivered in the classroom.

• 17:49Speaker 02

  Totally. And I'm super bullish on, you know, the idea of like the metaverse and the future of all of these things and how education can be conducted in a totally virtual environment in the future, right? Like Ready Player One, people have seen the movie or read the book, but that future is not that far off. I mean Fortnite is like starting to get at some of these things, but imagine a world where you can, in a virtual environment, you know, learn new information, take classes, go anywhere in the world. You know, you can study history by actually going to that place in a virtual world. Like, it's just incredible to think about the potential of these technologies if we continue to invest in them and support them. And if the government doesn't get in the way of allowing these innovations to happen.

• 18:32Anthony Pompliano?

  Absolutely. I know you had a lot of thoughts about accreditation. So do I. Maybe talk through just like the accreditation laws, why maybe it actually makes sense to have some sort of barrier to investing, but also what some of the detrimental impacts of the specific laws that we have today are.

• 18:49Speaker 02

  Yeah, yeah. You and I have interacted on this topic on Twitter a bit in the past. I mean, I think our accreditation laws are just archaic. I understand the genesis of them. You know, in principle, the idea of, you know, requiring certain disclosures and and understanding of what you're investing in prior to the investment makes sense. I get that. But the way it's applied is so absurd, almost asinine in America right now. I mean, the fact that I can like, you know, I can't invest in my buddy's startup, you know, he's starting some company.

• 19:30Speaker 02

  I can invest in a triple X levered mortgage ETN on Robinhood. Or I can go, you know, like an 18 year old can go lever up and buy a bunch of call options on Robinhood. And, you know, it like ju- ju- just that does not make any sense, right? Like it's hard to sit down and, and say that that's logical. And so that's what I really take issue with is like, if you have a system, I get it, but it needs to make sense broadly. It can't just, you know, be focused in a certain area where you can't really figure out what the rhyme or reason is behind it. I don't, what, what do you think about it? I'm curious.

• 20:08Anthony Pompliano?

  I just think it violates the American dream. Like the whole promise of the American dream is that no matter where you come from, what language you speak, the color of your skin, your race, your religion, your wealth status, your education level, anything, you can come to this country and you can make a living for yourself. And you can pursue a life of, you know, kind of happiness and economic prosperity.

• 20:28Speaker 02

  Yeah.

• 20:29Anthony Pompliano?

  We should probably do everything we possibly can to allow that to happen. And putting a, you know, kind of gate in front of some of the best investments by saying, hey, if you're not wealthy, you're not smart. Enough to, to underwrite this seems like, you know, maybe there's a better way. Which, you know, my question back to you is like, what is the better way? You know, if you, if you're given full carte blanche, you know, powers, what, what do you do to fix it?

• 20:53Speaker 02

  Yeah, no, and you're absolutely right. The whole idea of like using wealth as a proxy for intelligence is absurd. And, and we've, we've seen over the last few months, right? Like the, the, the, um, the system has changed and what wealth cannot be used as a proxy for intelligence, point blank, period. How do you fix it? You know, I, I personally think you need to make the barriers to everything much lower. I, I'm personally just pro, uh, you know, allowing markets to work and the democratization of all of this stuff. I think like Matt Levine, who's one of my favorite writers on the internet, he writes money stuff for Bloomberg. It's an amazing newsletter if you're not subscribed.

• 21:32Speaker 02

  He talks about the like, I am stupid letter, uh, which it's very tongue in cheek, but it's a funny idea where you basically have to click. And check a box that says, I understand this is a risky investment and I'm likely to lose all of my money on it. And you acknowledge it, you read it, you acknowledge it, and then you're able to make the investment. And I actually think, you know, all jokes aside, it's an interesting way of getting at it. Where you're you're forcing the person to acknowledge that it's a risky asset class. And that should apply to a triple X levered mortgage GTN or a, you know, GameStop call ups in the same way it should to my friend who's starting a restaurant startup or whatever it might be. But if you force people to have that moment of kind of recognition of the risky nature of the investment.

• 22:17Speaker 02

  You have to allow people to, you know, take care of themselves, right? It's like survival of the fittest in some sense where I don't think the government's role is to be out there trying to protect people in a weird. You know, non standardized way by placing accreditation accreditation in front of certain asset classes and not in front of others.

• 22:37Anthony Pompliano?

  Yeah, I think Europe has something where it's basically you can say, hey, I'm educated and therefore I'm willing to take much more risk. And basically there's no protections, you know, go wild, you're a cowboy, but you said that you were educated and so it's your fault, you know, if if you mess up. Or you could say, hey, I'm not educated, like basically put, you know, it's like bowling, put up the the bumpers so that that I make sure I don't, you know, throw the gutter ball.

• 23:00Anthony Pompliano?

  What what I think is fascinating conversations if we accelerate this, we say, okay, the problem gets solved. Eventually now every market is democratized, right? Public markets are basically already democratized. If you, you know, yes, you have to get an account, yes, you have to kind of go through some hoops, but if you are able to do that, then yes, you can participate in the market regardless of status or wealth. But the private markets, it seems like those would be the ones that would be most kind of materially impacted. How would that change the private market? Would a bunch of dumb ideas go get funded? Would just the returns get more distributed across, you know, kind of the investor base? Like, how do you think the private market changes with the democratization of that market?

• 23:39Speaker 02

  I mean, personally, I think democratization leads to more efficient markets. You have everyone able to participate and so like the supply and demand sides of these markets become more efficient broadly. Again, I'm a free market guy, like this is what I, this is what I believe in. But when you put up regulations in front of things, that creates issues in markets. We know this, this is like basic economics. And so, you know, if you create an environment where you allow people to invest, you know, when they acknowledge they understand the risks of something, but you allow them to invest in it, I don't think anything changes for the worse. I, you know, maybe some people lose their money on speculative investments and then they don't do that investment the next time because they've learned from it or they, you know, they have a risk tolerance around it.

• 24:22Speaker 02

  But it just doesn't make sense fundamentally that like, we're not going to put that in front of a, you know, call option on GameStop, but we are going to put it in front of a investment in their friend's restaurant startup. It just, it doesn't make sense. And there are platforms now that are, you know, doing this already, right? Like Fundrise allows you to invest in real estate as an asset class, which was previously only for accredited investors. Angel List, I think, is making progress on this for non-accredited investors. You know, there's real progress being made, but the basic thing is let's open up all of these asset classes to everyone. It shouldn't be, we shouldn't live in a world where the wealthy get to invest at higher

• 25:03Speaker 02

  returns, you know, get lower cost of capital overall and just accrue their wealth in an incredible way as a result of these advantages that exist. I believe we should live in a, you know, in a world that hasn't even playing field, at least from an opportunity standpoint. And that doesn't mean that everyone is going to take advantage and work as hard as they need to and go after things the way they need to, to become, you know, extraordinarily wealthy. But it does give everyone the opportunity to do that. And again, back to the point of opportunity being evenly distributed, that's what the end goal should be for society, in my view. And so this all gets to that.

• 25:42Anthony Pompliano?

  Once people are educated, once the laws change and there's kind of this democratized access, then we've got to do a good job educating people on how to be a good investor. And you've done a bunch around mental models for investors on threads on Twitter and elsewhere. Kind of talk through a little bit how you think about those mental models. Are there any favorites that you have? And kind of why are those so important to somebody who wants to be an investor?

• 26:05Speaker 02

  Yeah. Yeah. I mean, mental models are a fancy term that that people like to use. And I, you know, I've been a call, you know, someone that's propagated this as well. But basically, it's just ways to think about the world. You know, what ways to go think about different problems that you're encountering. And they don't need to be investing problems. You can use mental models for anything that's in your life, you know, relationships, whatever it might be. But I think mental models are important because they they allow you to simplify and solve complex problems that you're encountering. So first principles is one of my favorite mental models. You hear about it a lot, read about it a lot. No one really understands it from what I've found. I wrote a thread on it that was was really popular

• 26:49Speaker 02

  because I think a lot of people hear first principles, they say first principles, and they don't know what the hell it means. But basically, this is the idea that you need to ground things in foundational truths. So stop accepting that's just the way it's always been done, or just because. Like, if you are answering a question for someone and you find yourself frustrated and you want to react by saying, because because I said so, or because that's the way we do it, that's usually a sign that your foundational assumptions are not grounded in a real truth that you've you've proven. So like Elon Musk is the best example of this with SpaceX. And and people have talked about this in the past, it was written about in his book. Rockets were really expensive, and that was

• 27:34Speaker 02

  a huge issue for him creating this future where you could go to Mars and create a society on Mars. And so he grounded his solution to that problem in first principles. He went and looked at what were the material costs of making a rocket, and found out that actually the individual materials to Construct a rocket collectively were way less expensive than the cost of a rocket on the open market. And so he built one himself and you know, fast forward 10 plus years and you have this incredible progress being made at SpaceX. What they're doing with Starlink, by the way, is otherworldly and is going to be incredible in terms of bringing access to the internet wifi technology to people around the world that are in non, you know, city areas that have coverage.

• 28:19Speaker 02

  But just an amazing amount of progress that was all based in this idea of first principles thinking. Second order thinking is the other big one for me that I think about a lot. It's just this idea of thinking deeper, going beyond the first order effects of something. It's very easy to see the rock hit the pond and the first little ripple or splash that comes from it. It's much more difficult to think through, okay, what happens after that? And then what? And then what? And how does that all play out? Covid was a great example of that and how that played into our world. The first order thinker would have seen Covid hitting and said, oh, man, the country is going to shut down. I'm going to sell all of my money out of the markets. I'm going to, you know, buy put options on the market

• 29:05Speaker 02

  because the markets are going to crash. The second order thinker might have thought, wow, the markets are going to crash because the economy is going to shut down. People are going to be stuck at home and have to work from home. So maybe Zoom is a good buy because, you know, because people are going to be sitting on video chats all day. And here we are. But that's kind of this idea of like, think deeper, go beyond just the surface level discussion and the surface level thinking that exists and think a bit deeper. So, you know, there's hundreds of mental models. Farnham Street does a great job. Shane Parrish over there does an incredible job laying a lot of this out. I've seen James Clear talking about these things online. There's a bunch of resources. I write threads on some of this stuff.

• 29:47Speaker 02

  But it's really important and you'll start seeing the world differently and you'll start seeing these things everywhere and it will help you, I can guarantee it, make decisions in real time about the world around you, about investments, about business decisions, your own writing, whatever it might be. And so it's worth digging into.

• 30:05Anthony Pompliano?

  How do you think people can get better at implementing mental models in their daily life, right? They can read about it. Is that the best way just to be aware of them and therefore to sort of apply them? Or are there other things that you've found to be valuable in terms of the implementation or the usage of mental models?

• 30:19Speaker 02

  Yeah, I think it's a really important point. And one thing I try to do with all of my writing is, is at the end of it, talk about how you can actually implement it into your kind of daily life, whether it's investing or your business, whatever it might be. The first step is definitely understanding what it is. I find personally, and you should tell me if you don't, I personally find that when I've learned something new, I am prone to see it in action in the real world, whatever it might be. And so for me, when I first read about first principles, I found myself taking forever to answer every question because I was trying to ground everything in first principles. And that's not, that's not replicable. And you can't go do that the rest of your life. You'll drive yourself nuts. But it's an interesting

• 31:01Speaker 02

  case study of when you've learned something new, you try to go apply it. Now you've applied it a couple of times, and now you know when to use it and why not to. You're starting to build this repetition around it so that you've kind of greased the wheels. And I think that that's the most powerful thing is you learn it and then try to see it, you know, in your daily life around you a little bit. It's basically, you know, it's no different than learning a new skill. You learn how to swing a golf club, and then you want to go practice it a couple of times. And now you're better at swinging it, or baseball, or sports, whatever it might be. It's the same way with anything mental, any decision making frameworks. You need to put them into action in order to, to realize the benefits.

• 31:39Anthony Pompliano?

  For sure. What lessons from sports did you learn to kind of implement as an investor? There are specific things you took from the sports career?

• 31:47Speaker 02

  Yeah, a lot. I mean, embracing failure is the number one, right? Sports by nature, baseball in particular, is a failure driven sport. And you know, they always say as a hitter, you're great if you fail seven out of 10 times. I was a pitcher, so it wasn't quite that bad luckily. But you need to learn how to get up from those bad moments. And it's the most important thing. You can't just stay down. When you get knocked down in a sport, you need to, you know, your teammates and you need to be able to pick yourself up. And you know, go after the next hitter or go after the next rep, whatever it might be. So that's number one for me is like those failures you need to learn to embrace and even seek out. You know, I think if you you do this for a living with the podcast, but you you interview

• 32:31Speaker 02

  100 incredible people who have achieved amazing successes in their life. They will all, when you ask them to point to transformative moments in their life, point to failures. No one points to, oh, I won this great award and then that, you know, was such a great moment in my life. And now look where I am. I've made it. They all point to some point of disappointment. They point to some failure they had, a test they failed, a rejection they had, whatever it might be. Those moments of failure actually end up being the the kind of spark behind growth. And so when you think about that, that means you really need to embrace those moments. You can't hide from failure. You can't shelter yourself from failure. And it applies to being a parent as well. I mean, you can't hide your kids

• 33:16Speaker 02

  and insulate them from those moments of pain, those moments of failure, because they are so transformative. When you're growing up to to just experience that, feel that disappointment and let it let it kind of charge you for that next round of that next round of growth.

• 33:32Anthony Pompliano?

  Yeah, that's a great answer. Before we go into the rapid fire questions to to wrap up, I want to talk about one very, very big topic that's going to take us a few minutes. Audience building, community building. You've done a fantastic job, probably one of the best people on Twitter recently. What are the lessons you've learned there? And what are the tips that you have for other people in terms of how they can maybe not replicate your exact success, but take some of the ingredients and kind of implement it for themselves on a daily basis?

• 33:57Speaker 02

  Yeah, well, me and and your brother Joe have really like come up together in the Twitter world. I feel like we started right around the same time. You know, and I I personally have fed off of the energy that's come off of his growth as well. And and seeing some of the things he was doing well. But you know, for me, there's a couple of principles that I think broadly apply to anyone. Number one, my my core principle to all of this is create great product and then hustle for distribution, especially when you're starting. And so you cannot forget that first piece. I think there are a ton of people that are like churning out content and just you see them posting it everywhere and they're posting every day and they'd be much better off focusing on making sure the product is truly valuable and great.

• 34:40Speaker 02

  And the product, you know, in the, in the case of content is what are you writing? Like on Twitter, what are the threads? What are the tweets? How are they creating value for the people that you're putting them out to? Because at the end of the day, audience growth comes from people wanting to share your content. And people share your content because they got value out of it and want to share that value with others. And so that was always the founding principle for me was I was going to really put a ton of time into creating great content and creating value for people. And then I was willing to go out and hustle for distribution. I mean, I remember like posting my threads underneath people's, uh, you know, with high traffic accounts so that they would see it. Chamath retweeted my first thread because I posted it underneath one of his tweets.

• 35:23Speaker 02

  And is it a little bit shameless? Sure. Uh, but I had 500 followers at the time and my, my thread, which I knew was very good, would have gotten a thousand impressions had I not done that. And as a result, you know, it got shared much more widely and people were able to see what I was creating. So that's number one. You know, number two, I think there are a few kind of hacks quote unquote to it, you know, beyond spending a lot of time and creating great content. Personally, I think content loops are one of the most incredible things you can do when you're building audience, you know, I, I've done this. I, I learned it from like Ben Thompson with Stratechery and what he does with, he's built up this unbelievable base of content that he can be linking back to and keeping you in his content ecosystem.

• 36:05Speaker 02

  I do it with my threads. I have, you know, 90 or so threads now that I've written and a lot of them are on foundational concepts. And so when I'm writing a thread on the GameStop saga and talking about gamma squeeze, which is like this interesting concept. I'm able to link back to my thread that I did on call options or my thread that I did on short squeezes months ago. And keep people within this content ecosystem of the Sahil Bloom educational world. Um, that's really powerful. You know, it builds affinity. It builds a base. It's a moat. Like when you just think about like a business moat because no one can just go overnight have that repository of 90 plus threads, all the 50,000 words, whatever it might be that I've created.

• 36:48Speaker 02

  No one can just do that overnight. It's been built up through sheer effort over the course of the last nine, 10 months. And you can't just disrupt that out of the blue. And so as you're thinking about creating your own content and building your audience, think about ways that you can create that moat and build a moat around what you're doing. And then the third one for me is just engage with people. You know, like community, audience is great. Audience size is great, but community is much more powerful. I'd much rather have 10,000 raving fans than 100,000 people that don't really care about what I post. And so engage with people, respond to them when they, you know, send you a DM or do your best to, you know, respond to comments, reply to things thoughtfully.

• 37:32Speaker 02

  If you take the time to do that, people are much more, you know, invested in, in what you're creating. And I think that's a powerful thing.

• 37:40Anthony Pompliano?

  I know that this stuff takes a really long time. I see my brother do it, you know, almost on a daily basis. Literally can take hours to put one of these threads together. What's your exact process in terms of how do you come up with the idea? Where do you go to research it? And then how do you actually write it? And does anybody edit it for you?

• 37:56Speaker 02

  Yeah. So this is all on my own right now. I have no, there's no team. There's no Sahil Bloom Enterprise in any way. You know, my, my general process is when something piques my interest, a topic that personally I want to learn more about and feel like there's something interesting to talk about there. I generally spend, depending on the topic, an hour to two hours researching it. You know, old books that I've read on it, websites, et cetera. Then I'll draft, lay out a thread that probably takes me another hour and a half, two hours. And then I edit down a lot, you know, the whole point to these threads for me is like,

• 38:37Speaker 02

  make it look like it was effortless, but the reality is it was effortful. And you've seen this with your brother. I mean, it's hours and hours of work. To write, to write well and to write clearly. And for me, that's all about creating content that is like very well suited for Twitter in that it is punchy. It's really short and direct. It's simple. I'm not using long, complicated sentence structures. Like I literally am writing one punchy sentence at a time. And it makes it more digestible as you're reading through and you're more likely to convert from one tweet to the next because it's that way. So that's generally my process. I mean, it probably takes me somewhere between five to eight hours, depending on the topic, to get something completely done.

• 39:19Speaker 02

  Every now and then there's something that I just know really deeply before having to research and that shortens the time. But I really put a lot of effort into it. It's not like I, you know, press play and there's all these threads that just spew out of my mouth onto the paper. It's a, you know, it's a process that's intentionally, you know, i- it's intended to look like it's effortless. But the reality is there's a ton of work that goes on behind the scenes. And yeah, like David Perel has been a big inspiration around that. He's written a lot about, about that content creation process and I find, I find his work fantastic.

• 39:53Anthony Pompliano?

  Absolutely. How do you know when one's going viral? Everyone's got the thing of, is it a certain number of favorites in an hour? Is it in a minute? Like how did, what's, what's the thing where you're like, yep, that one's going viral versus, oh wow, that one didn't get as much engagement. It's not going to go as far as I thought it was.

• 40:09Speaker 02

  Yeah, that's a good question. And it's changed over time for me, you know, like what I consider a good tweet, good, good thread. Just as I've grown my following, you know, for, for me generally, like getting to 200 retweets in the first hour is usually a pretty good indication. I normally post like early in the morning, like 6:30 Pacific time, 6:30 or 7:00 Pacific time. And I always find that there's this like late surge overnight Pacific time when I think it's like when my Indian followers wake up or, or something or like are in the middle of their day and seeing it because there's always this big surge overnight. But generally speaking, I find that like in the first hour, if I, if it gets to 200 retweets, there's a lot of traction around it.

• 40:55Speaker 02

  Obviously, scale retweets from big accounts make a huge difference just in the impressions. But I've also frankly, I've never had something go viral like the way your brother has, or some of these tweets that I've seen out there. I mean, a couple of my good friends like Julian Shapiro and Greg Eisenberg, some of these guys have had tweets go forty thousand, fifty thousand likes. I've never had that. I mean, I think my biggest tweet ever is like fourteen or fifteen thousand, maybe. So for me, it's been like, you know, really just long-term compounding, plodding away, putting out what I think is high-quality content on a, you know, daily, weekly basis.

• 41:33Anthony Pompliano?

  Yeah. Is there anything that you've learned from the process that has been most surprising to you? Whether it's, you know, somebody you met, something about the actual process? Just like, what's been the most surprising thing?

• 41:46Speaker 02

  I think the most surprising has been the incredible power of social media for access to amazing people. I never thought when I got into it that this would open up my entire world to all these amazing people. I mean, I haven't directly monetized anything I've done. I'm not selling anything. You know, there's no, there's no direct monetization. But I can candidly say that the people that I've met and the friends I've made through it are worth millions and millions of dollars to me. I mean, it's just these incredible people that I have access to. I mean, like frankly, at the beginning of me posting in, you know, in May on Twitter, like the idea of sitting here and having a conversation with you would have been absurd to me

• 42:32Speaker 02

  if you had told me that that was possible. Ral Paul, the, you know, Real Vision, who's become a close friend of mine, I would have like died for him to just like one of my tweets in July or August. And, you know, now I get to work with the guy and he's a friend. And that's just amazing to me, like this idea of what social media and these social networks can open up to you from a network standpoint, from a people's standpoint. It's really, someone described it as the ability to meet amazing people at scale. And that really is what I found most surprising about it. It's just these incredible, incredible people that you have access to, that you can learn from, people that are genuine, putting out content that is incredibly informational. The learning experience, the networks, all of that has just blown my mind.

• 43:17Anthony Pompliano?

  Absolutely. Before I wrap up, I'll just ask everyone the same three questions. But before I do that, there's one question that's very important. If you're pitching and my brother Joe's hitting, are you striking him out or is he hitting a grand slam?

• 43:31Speaker 02

  I'm definitely striking him out. I don't know anything about his baseball. I could walk out there right now and strike him out. I'm sorry, Joe. My arm might fall off doing it, but I'm definitely striking you out.

• 43:42Anthony Pompliano?

  Now, I asked him before this, the exact same question, and you know what his response was?

• 43:48Speaker 02

  I bet he said he was gonna strike out.

• 43:50Anthony Pompliano?

  No, he said, listen, I never hit the ball out of the stadium, but I definitely would hit the ball out of the stadium on said hill.

• 43:57Speaker 02

  We're gonna have to talk about it later, man. I don't know.

• 44:01Speaker 02

  He looks athletic. My arm might fall off, but I think I'd rather die than give up another home run.

• 44:08Anthony Pompliano?

  What's the most important book that you've ever read?

• 44:10Speaker 02

  Anti-Fragile by Nassim Taleb, who I know, by the way, is like persona non grata within the Bitcoin community now for his recent comments. But man, that book is foundational.

• 44:23Anthony Pompliano?

  Yeah, he, he wrote a great book about being anti-fragile. He somehow became fragile, though, I think, because he started blocking people.

• 44:29Speaker 02

  There's a real, there's an irony there.

• 44:32Anthony Pompliano?

  Yeah, I don't know what's going on, but hey, to each their own. As long as he's happy, good for him. Second question is about sleep. Comes from our friends over at Eight Sleep. I sleep on their thermo-regulated bed and sleep like a baby now, but I used to be like a six-hour sleeper. What is your sleep schedule? And do you use any products when you go to sleep? And how's that evolved over time?

• 44:52Speaker 02

  Yeah, and I've actually been looking into getting an Eight Sleep bed as well. Big, big fan of what they're building over there and think it's incredible, the power of the wearable side of it in the future. I don't sleep enough. I, I'm a morning person, so I'm up by 3:45 or 4:00 every single morning, regardless of what time I go to sleep. I probably get to sleep by like 9:00 PM on most nights. So I kind of have a like 80-year-old man schedule, for lack of a better way to put it. I don't really use any sleep products. When I'm training hard, I'll take like ZMA or some form of magnesium before bed. Just goes back to my baseball days from that. But, but no, I don't have a great sleep schedule, frankly. I need to get better about it.

• 45:34Anthony Pompliano?

  What uh, what are you doing at 3:45, 4 o'clock in the morning?

• 45:37Speaker 02

  It's quiet, man. That's when I get my work done. No, I normally, I read for an hour to start the day. So I'll read from four to five, whatever I'm excited about. I try not to have, I kind of follow like the Naval rule around books. I try not to like, just read something through to the finish, even if it's miserable. So I'm bouncing around different books, different articles, things I'm excited about, areas I want to learn more about. So I spend the first hour doing that, and then I normally reserve from about five to 7 a.m. for like, I call it deep work. Uh, basically like whatever my big, time-intensive, really thought-provoking task is for the day. I'll spend the first two hours of the morning working on that. And it's before any emails come in, it's before you have meetings, and so you're really able to focus and not have those distractions. I, I find it really, really helpful.

• 46:22Anthony Pompliano?

  Got it. Uh, last question is more fun aliens, are you a believer or non-believer?

• 46:28Speaker 02

  Believer for sure, man. Come on.

• 46:31Anthony Pompliano?

  Why? Why?

• 46:32Speaker 02

  I, I just, I cannot believe that there is, you know, an infinite universe out there and that other life does not exist. I, I'm like, again, I'm a, I'm a math, I'm a probabilities guy. Like, it's just unfathomable to me to believe that. And uh, I have a friend out there, uh, close, close friend from my childhood, who, he and I talk about this all the time and share all of the articles and everything that's been, uh, been coming out over the last year or so. So definitely believer on aliens.

• 47:02Anthony Pompliano?

  You get to ask me one question to finish up. What you got for me?

• 47:05Speaker 02

  How do you do it, man? How do you manage all the different things you've got going on in your life? With Bitcoin ripping 52,000 plus, whatever it's at right now? How, how do you manage all the different, uh, different work streams, different things in your life?

• 47:19Anthony Pompliano?

  I just do the best I can. Uh, frankly, I'm not good at it, right? That, that's like the short answer. Uh, I miss emails. I literally missed an email the other day, uh, for a company that is super hot now, and I was pissed at myself. Um, but I've learned over time, like, you know, just shit happens, right? Like, you're gonna miss some stuff. Uh, and so you can either optimize for, let's say, from a communication standpoint, missing nothing. But then you're not. Not as productive, right? And so you don't actually have as much output. And so if you kind of have to come up with that balance, it's just look, be as output productive as possible and do the best you can with the inbound. And then when it comes from kind of like, how do you actually do the amount of work? It's just an efficiency thing.

• 48:00Anthony Pompliano?

  And I'm actually very inefficient with my time. Like, you know, has always given me shit. She's like, dude, you're on Twitter all day long. And I'm like, yeah, but like, I'm staying in the flow of things. I'm under, I'm reading things. I'm seeing what's happening. Like, it all kind of feeds into the various activities that I do. But I probably spend too much time on Twitter. Like, I don't know what my time spent per day is, but like, it's probably pretty high. And it's probably too high, right? And so even with somebody who's got a pretty rigid schedule, and I stay pretty efficient, and I've got kind of blocks of time to do certain activities, and kind of really make sure I hit the output goals that I have, I still waste time. And so I'm super envious of people who are able to basically just go through their data like a machine, waste zero time. But like, I always joke around, like, I just like to screw around on the internet.

• 48:45Anthony Pompliano?

  I find enjoyment in doing that, so let me do it, right? And that's pretty much it.

• 48:50Speaker 02

  Yeah, I love that. I love that. I think there's a lot of interesting learnings in there for a lot of people.

• 48:55Anthony Pompliano?

  Where, where can we send people to find you on the internet or anything that you're writing?

• 48:59Speaker 02

  Yeah, well, follow me on Twitter at Sahil Bloom, just my name there. You'll see the the baseball grand slam thing in my bio. And then I also publish all of my content via newsletter. That's Sahil Bloom dot sub stack dot com.

• 49:14Anthony Pompliano?

  Awesome, man. Listen, thank you so much for doing this. You're doing a great job on the, on Twitter. I think people learn a ton for you. I completely agree in financial education, the lack of accreditation laws, and a whole bunch of other stuff. So we'll do this again in the future.

• 49:28Speaker 02

  Yeah, absolutely, man. Thanks for having me on. It was a pleasure.