This Hedge Fund Manager Got Away With Insider Trading… Then Made Billions

Episode 509: Shaan Puri (https://twitter.com/ShaanVP) and Sam Parr (https://twitter.com/theSamParr) dive into the white collar crimes of Steve Cohen, the pros and cons of working 100 hours a week, and how to play the right game as a founder, investor, or asset manager. Want to see more MFM? Subscribe to our YouTube channel here. Want MFM Merch? Check out our store here. Want to see the best clips from MFM? Subscribe to our clips channel here. — Check Out Sam's Stuff: • Hampton - https://www.joinhampton.com/ • Ideation Bootcamp - https://www.ideationbootcamp.co/ • Copy That - https://copythat.com/ Check Out Shaan's Stuff: • Try Shepherd Out - https://www.supportshepherd.com/ • Shaan's Personal Assistant System - http://shaanpuri.com/remoteassistant • Power Writing Course - https://maven.com/generalist/writing • Small Boy Newsletter - https://smallboy.co/ • Daily Newsletter - https://www.shaanpuri.com/ — Show Notes: (0:00) Intro (2:00) Steve Cohen's $19b insider trading empire (12:30) 996 Work Culture (20:00) Sam and Shaan's daily work schedules (24:00) Best Career Advice: Stuff the "Other" column (30:30) Law and Crime acquired for 9-figures (40:00) Tyler Hogge on sardines and tech valuations (44:00) Profit is a hypothesis. Cash is s fact (49:00) Know what game you're paying (53:00) Inside the weird world of Bryan Johnson — Links: • Black Edge: https://tinyurl.com/j5646dbd • GLG Insights - https://glginsights.com/ • Sapiens - https://www.ynharari.com/book/sapiens-2/ • Abrams Media - https://dan-abrams.com/projects/ • Soap Hub - https://soaphub.com/ • Margin of Safety - https://tinyurl.com/5etkzb7t • Tyler Hogge article - https://tinyurl.com/4wmjnmfm • The Smartest Guys in the Room - https://tinyurl.com/2jec5z23 • Blueprint | Bryan Johnson - https://blueprint.bryanjohnson.co/ Past guests on My First Million include Rob Dyrdek, Hasan Minhaj, Balaji Srinivasan, Jake Paul, Dr. Andrew Huberman, Gary Vee, Lance Armstrong, Sophia Amoruso, Ariel Helwani, Ramit Sethi, Stanley Druckenmiller, Peter Diamandis, Dharmesh Shah, Brian Halligan, Marc Lore, Jason Calacanis, Andrew Wilkinson, Julian Shapiro, Kat Cole, Codie Sanchez, Nader Al-Naji, Steph Smith, Trung Phan, Nick Huber, Anthony Pompliano, Ben Askren, Ramon Van Meer, Brianne Kimmel, Andrew Gazdecki, Scott Belsky, Moiz Ali, Dan Held, Elaine Zelby, Michael Saylor, Ryan Begelman, Jack Butcher, Reed Duchscher, Tai Lopez, Harley Finkelstein, Alexa von Tobel, Noah Kagan, Nick Bare, Greg Isenberg, James Altucher, Randy Hetrick and more. — Other episodes you might enjoy: • #224 Rob Dyrdek - How Tracking Every Second of His Life Took Rob Drydek from 0 to $405M in Exits • #209 Gary Vaynerchuk - Why NFTS Are the Future • #178 Balaji Srinivasan - Balaji on How to Fix the Media, Cloud Cities & Crypto • #169 - How One Man Started 5, Billion Dollar Companies, Dan Gilbert's Empire, & Talking With Warren Buffett • ​​​​#218 - Why You Should Take a Think Week Like Bill Gates • Dave Portnoy vs The World, Extreme Body Monitoring, The Future of Apparel Retail, "How Much is Anthony Pompliano Worth?", and More • How Mr Beast Got 100M Views in Less Than 4 Days, The $25M Chrome Extension, and More

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

• 0:00Shaan Puri?

  Uh, Sam, what's up, man? I got a, I got some good news for you.

• 0:03Sam Parr?

  Great.

• 0:03Shaan Puri?

  Click that link I just put in there. It's, uh,

• 0:06Sam Parr?

  Uh-oh.

• 0:07Shaan Puri?

  It's your lucky day, bro. Here's an article in the Financial Times called "The Alpha of Ugliness." And it turns out that being ugly outperforms. They analyzed a bunch of investors and the investors who were conventionally ugly uh, outperformed by 2%, I think, so, uh...

• 0:26Sam Parr?

  Yeah, I, I saw that. But here's the problem. I'm, I'm a fi- I'm 5'10". I'm not ugly enough to be made fun of, but I'm definitely not hot enough to be 6'4".

• 0:36Shaan Puri?

  To get any advantages.

• 0:37Sam Parr?

  Yeah, so...

• 0:38Shaan Puri?

  Damn it.

• 0:41Sam Parr?

  That's the issue. Should I get uglier or hotter? I guess uglier.

• 0:45Speaker 02

  I feel like I could rule the world. I know I could be what I want to. I put my all in it like my days off on the road.

• 0:53Shaan Puri?

  Yeah, when I was in second grade, I really liked this one girl and I was like, um, "Hey, uh, I'm gonna ask that girl to the, whatever, the dance or something." We had like some party in like third grade. And, um, now that I think about it, that's kinda young to be asking girls, but that's what happened. So I went up to her, or no, my friend went up to her and he was like, "Hey, Sean likes you." And she goes, "Um, Sean's ugly." And then that was third grade and then I'm still reeling. I'm 30, I'm 35 now. I'm hoping at 36, I'm, I'm off that, but, uh, you know, still recovering, I would say.

• 1:25Sam Parr?

  So Anon, the founder of CB Insights tweeted this out, I think a week ago. And he does really in-depth tweets where he looks at data and stuff. And he had this one thing where he said, um, he said, uh, "I've found this data that talks about how good you look and your returns." And a lot of people think that the hotter you are, or the taller you are, the better returns you're gonna have, which, which makes sense. Taller people get more, get better treatment. And he said, "No, it's the opposite. There's a, uh, correlation between attractiveness," or I guess an opposite correlation. So between attractiveness and rate of returns for investment managers.

• 1:59Shaan Puri?

  Well, yeah, 'cause the, the investment doesn't know how tall you are.

• 2:03Shaan Puri?

  Tall guy probably could raise more money, but not necessarily make more money.

• 2:06Sam Parr?

  Well, and it's, uh, I guess, is it the uglier you are, the harder you've had to work?

• 2:10Shaan Puri?

  Yeah, that's what I've been clinging to.

• 2:14Shaan Puri?

  That's the story I've been telling myself.

• 2:16Sam Parr?

  So, speaking of hedge funds or investments, let me ask you a question.

• 2:21Shaan Puri?

  Okay.

• 2:23Sam Parr?

  Do you know anything about hedge funds?

• 2:25Shaan Puri?

  Not a lot.

• 2:26Sam Parr?

  Okay, what you need to know is they work really hard and it's a really intense lifestyle. So you understand that, I'm sure. If I paid you $10 million a year, if you could earn $10 million a year, would you be a hedge fund? Would you work at a hedge fund as like a portfolio manager? Would you live that lifestyle for $10 million a year?

• 2:46Shaan Puri?

  I don't know the lifestyle, but probably not because I really like my lifestyle. So I would not trade it for a worse lifestyle, if that makes sense. But like, let's assume, let's assume 10 years ago, would I have made that trade? Yeah, I would have made that trade. And that's what I think they do. I think they make that trade earlier in their career and then they get, that's what they do.

• 3:04Sam Parr?

  So I'm reading this book about Steve Cohen. Do you know who Steve Cohen is?

• 3:07Shaan Puri?

  I know that he owns sports teams and he's like one of the, he's one of the most successful hedge fund guys. But, and I think Billions is based off of him, right?

• 3:16Sam Parr?

  Uh, roughly, yeah. So Bobby Axelrod is off him, but basically Steve Cohen, he started as a, he's basically a day trader, a glorified day trader. That's how he made his first couple billion. Worked at like, almost like a wolf-

• 3:28Shaan Puri?

  Billion dollars day trading?

• 3:30Sam Parr?

  Yeah, that, that's not the best explanation, but, but, but basically it's day trading on steroids. So it's kind of like calling like a bodybuilder, like, oh, you like to exercise. But it was basically-

• 3:40Shaan Puri?

  His own money or he was at a-

• 3:43Sam Parr?

  It started with his own. So, well, he started as a, he started as a kid, 23 years old. He worked at like something that looked like the Wolf of Wall Street style setup, where it was like a dingy, in the beginning of that Wolf of Wall Street, he's selling petty stocks at like a, like a garage, basically in a small, like 30 person operation. He kind of started at a thing like this. The story is, and, and they interviewed his boss in this book, they're like, dude, on this first day of work, he came in and he goes, if I was you, I would do that and make that trade. And the, the boss was like, who do you think you are telling me what to do on your first day of work? And Steve was like, that's, I'm telling you, that's going to work. Within a few hours, it made eight grand a profit. After two years, he was making 100 grand in profit a day for the firm. And it was like a day, it was like a day trading firm where they, basically in the eighties,

• 4:28Sam Parr?

  it wasn't quite popular to do day trading. It was more so, uh, hold something for a long period of time, pick stocks based off the businesses.

• 4:34Shaan Puri?

  He's so good because he's a savant, because he figures out some arbitrage and he's exploiting that. Why is he making 100 grand a day?

• 4:42Sam Parr?

  So at first, it was, he claimed it was intuition, which I believe. He claims that he's bad at math, which is uncommon for a lot of these folks. But he claims he's bad at math and it was intuition. He said, I would just look at the ticker. It was, at the time, it was a physical ticker that would be on the board and it would like change stock prices. And he was like, I would just find these weird arbitrages. And it was, he, he, he would short stocks based off of like, this just changed by $1. I think it should be 50 cents higher. I'm going to buy it and sell it within a few hours. It's incredibly challenging, reading this book, to figure out exactly how he did this.

• 5:14Shaan Puri?

  That's so frustrating as an answer, by the way. It's like, you know, that's like my idiot friend from college who's looking at the roulette wheel and is like, guys, it's gotta be red. It's been black four times in a row. And I'm like, that's not how this works. That's very frustrating if that's the answer of how this guy became, you know, a billionaire is good old gut. I just don't, I don't know. I don't believe that. That sounds crazy to me.

• 5:37Sam Parr?

  It's very frustrating.

• 5:38Shaan Puri?

  Like he looked at the ticker like Rain Man and just figured out which direction things are going to go.

• 5:42Sam Parr?

  Well, I tweeted out about it and Martin Scarelli, who worked in the hedge fund world, has been replying to my tweets and he's like, yeah, it does seem like intuition based, more so intuition based, like when you're playing blackjack or poker, you know roughly the odds as you're going really quickly. The problem with Steve Cohen is he's never done a wonderful job of explaining exactly how he did it. However, at the age of like 32, he started his own fund. He had $10 million of his own money and that's where he started SAC. That's what the, his firm was called. And he hired a bunch of people and he gave them like crazy commissions where you could earn 30% of the profits you made the firm. And by the time he's like 42, SAC, which is mostly his own money, accumulates like $10 billion.

• 6:23Sam Parr?

  However, after the first like $600 million, then it's all, not all, but it's a lot of insider trading and they would do crazy shit. Like they would fly to conferences, take the conference speaker out to dinner at a, at a conference where they're like talking about like different drugs that might become legal based off of different trials that they're currently running. They basically bribed these guys to give them information like this trial's going really bad.

• 6:46Shaan Puri?

  So he got in trouble for this or, or no? Cause he's, I'm looking it up. Steve Cohen net worth 19.8 billion. And appears to be a free man. So.

• 6:55Sam Parr?

  Yeah. So here's the, here's, here's the rub. He does get in trouble for it, but after he's worth already probably five or $10 billion. He's, they do it very quietly. He's been very quiet for years, building, accumulating about a billion dollars.

• 7:07Shaan Puri?

  The old whoopsie do later, huh?

• 7:10Sam Parr?

  Then he gets in trouble and you want to know something? He completely gets away with it. He gets convicted and he gets in trouble. SAC has to shut down technically, although now it just becomes his family office. A year later, he starts another firm called Point 72. The guy, he, he did not get in trouble at all. Clearly broke the law many, many, many, many times. However, as I'm reading this book, I'm reading about the lifestyle of what it's like. It is seven days a week, 12 hours a day, more than 12 hours.

• 7:37Shaan Puri?

  Before you do the lifestyle thing, I want to read Martin's reply to you. So you were like, this guy, Steve Cohen, fascinating. What I don't understand, you know, he's basically became worth over a hundred million dollars as a day trader on steroids. It says he followed his intuition as bad as math. What does that mean? So great question. So here's what Martin says. I studied Cohen for a good part of my life. And I think these were the key components. As a trader, he has an unbelievably capacious memory for stocks. Capacious. Wow. That's a word. I love that. I don't, I don't quite know what it means, but you'll see me sprinkling that around for, for the next three days.

• 8:10Sam Parr?

  I guess it means good. We'll just say good.

• 8:13Shaan Puri?

  Good or spacious, one of the two.

• 8:14Sam Parr?

  Yeah.

• 8:16Shaan Puri?

  For any given stock, he literally knows what is the situation and controversy. This is a little bit like how it impresses some people that Kramer knows most of the stocks he's asked about. They are similar animals. Number two, he's unwavering on discipline and portfolio slash firm structure. With leverage and a diversified group of portfolio managers, the net result for investors is incredible. Other firms like Millennium and Citadel have figured this out too. Cohen is also a very smart business person, which most traders are not. He can attract impressive talent because he speaks the trader's language, whereas other similar firms don't have active traders managing the company. I think it's a competitive advantage. The style has been somewhat effectively replicated by his competitors, however, and the arbitrage has all but vanished in US public equities.

• 8:57Sam Parr?

  Yeah, so that's still not the best answer, right? That's a very, um, that answer doesn't feel good. Like, it's not giving me exactly what I wanted.

• 9:06Shaan Puri?

  He said one more thing that I think is great. You were like, it's crazy that he was getting, you know, 30 to 50% annual fees. He goes, remember, Martin goes, remember, that's 50% net of fees. So his fees were 50%. So basically, he had 10 years, we made about 100% a year. It's arguably the strongest stretch of high returns ever done, similar to Renaissance Capital.

• 9:23Sam Parr?

  It's amazing. And this guy, he's, he's sneaky. He's a sneaky guy. He's, he does, he does a lot of bad things in this book.

• 9:31Shaan Puri?

  Okay, tell me some of them.

• 9:33Sam Parr?

  For example, um, you know GLG, which we've talked about constantly.

• 9:37Shaan Puri?

  Expert.

• 9:37Sam Parr?

  He was, yeah, so basically what GLG does, I'm a consultant technically every once in a while on GLG. So, uh, a bank is going to take a company public. They, let's say it's, um, HubSpot, for example. They want to know all about email marketing. They find email marketers and ask them about which software they use. They want to learn about if it's a good company or not, whatever. Well, Steve Cohen was GLG's biggest customer. He spent millions of dollars a year. He would become friends with the quote consultants, get their information, take them out to dinner and be like, look, just tell me the truth and I'll put you on salary. Tell me, like, for example, if you're, uh, if you're on this board, if you work for the government and you're getting ready to approve a drug, just tell me if it's going to get approved. Tell me how the trials are going.

• 10:18Shaan Puri?

  He's like, on this napkin, I've written the number three. And as you keep talking, I will start adding zeros. Go.

• 10:26Sam Parr?

  Yeah, I mean, it was basic like that, like that. And then they get the information from the guys and they just, they basically like, they, they honeypot these guys. But they become friends with them, ask about their families, and then they get the information and they bail. They never see him again.

• 10:41Shaan Puri?

  Sounds like your dating life back in the day. By the way, this GLG thing is really funny. Uh, so when you do these calls, tell me if you're like me. So I've done a couple of these calls.

• 10:49Sam Parr?

  Talk really slow.

• 10:51Shaan Puri?

  Yeah, first of all. It's like eighth grade and I'm trying to hit the word count.

• 10:56Sam Parr?

  Yeah. Yeah. So basically GLG, they pay by the hour. You can charge three grand an hour.

• 11:01Shaan Puri?

  I become very capacious.

• 11:02Sam Parr?

  Yeah.

• 11:04Shaan Puri?

  I feel absolutely silly doing these. Like I know in my head, like there's an intellectual part of me that's like, of course, $2,000 an hour. Hell yeah, I should be making that. And you know what? This is gonna be such, this, I'm giving them liquid gold. That's what in my head I say that. However, during it, I become very insecure about what I'm saying. And I'm like, none of this is special. This is all so basic, what I'm saying. And I feel like I'm a high-paid escort that doesn't know how to have sex. And I'm like, I hope they're happy with what they're getting here for this $2,000 hour because.

• 11:35Sam Parr?

  Did he ask if it was good for them afterwards?

• 11:39Sam Parr?

  It's a, it's a weird thing. I don't actually do it anymore. But in this book, so one of the ways they made like a billion dollars was doing this for drugs. And they found out through their investigation that 10% of US doctors admitted to being one of these consultants on some of these networks. And that's only the people who admitted it. And so it was like, it's like a pretty widespread problem. My takeaway so far in the book is if you're a white collar criminal, you could basically get away with it. You can get away with it.

• 12:09Shaan Puri?

  That's crazy. So he got convicted of insider trading. And what did he have to pay? And did he go to jail?

• 12:14Sam Parr?

  He paid billions. He did not go to jail.

• 12:16Shaan Puri?

  Wow.

• 12:17Sam Parr?

  Maybe he paid two billion, but he started a new firm the next, the next year.

• 12:21Shaan Puri?

  Right. He paid two billion as he laughed uncontrollably. Alright, so you were gonna talk about like their work culture, sounded like.

• 12:29Sam Parr?

  Yeah. So I got obsessed with this work culture and I saw this quote by Keith Raboy. And so Keith Raboy was at POMS conference. And he talks about 996. Do you know what 996 is?

• 12:40Shaan Puri?

  It means Chinese work schedule.

• 12:42Sam Parr?

  That's the Chinese work schedule. It stands for 9am to 9pm, six days a week. And he, Keith's stance, it seems, is he loves 996. And he tells a story about one of his portfolio companies. They just hired the CFO and the woman who'd got the job, she was like, I was specifically looking, looking for a 996 culture. And I Googled and I found out that on your job listing, you said that you guys were 996. And that seems crazy to me because that I don't think is a lifestyle that I want. And so I was curious about 996. And so I got down this, I went down this rabbit hole of, of, of working. So do you know the history? Have you ever read the history of like the 40 hour work week? Do you know how it came to be?

• 13:22Shaan Puri?

  Um, roughly, here's what I know. You tell me where I'm missing something, which is just that when we went to like the factory industrial thing, that's when the 40 hour work week of going into the quote, quote, office, the, the, the plant, the factory became a thing. Um, it wasn't that way before.

• 13:39Sam Parr?

  So somewhat, yeah. So basically, in the book Sapiens, the author hypothesizes that hunter gatherers, you know, we're talking pre-civilization, worked something like 30 hours a week and spent a lot of time just being idle with family. Then the industrial revolution comes along and factories and machines come about. And in the late 1800s, early 1900s, uh, there was a bunch of surveys done amongst the workers and it was found on average, most of them were working 100 hours a week, six days a week. Uh, so they're working constantly and it was a grind. There was constant like protests. There was constantly people fighting over this. There was legisla- legislation that went into, uh, power in both England and America in like the 1920s where

• 14:23Sam Parr?

  it was like government workers, you don't have to work that much. We're going to give you a normal work week. But basically factory workers didn't get shit. Then in the 1920s, Henry Ford was like, hey, look, uh, the thing about our guys working so much and my company is so big at Ford, Ford Motor Company, I need people to buy cars because if they're working so much, they can't buy pants. They can't buy shirts. They can't go out to eat and thus they can't buy cars. Therefore, I'm going to try this thing where we're going to create the weekend. We're going to give Saturday and Sunday off because if they don't buy shit, people aren't going to buy cars. So in the 1920s, Henry Ford says the weekend's a thing. And that was the beginning of the 40 hour work week, at least in terms of like it being systematic.

• 15:07Shaan Puri?

  Henry Ford created the weekend?

• 15:10Sam Parr?

  Uh, he made it like a thing. Yeah. Uh, yeah. He was the, he was the first big company to make it a thing. Yeah. And he, he made it a thing. And what he found was he did something crazy at the time. He goes, hey, workers, guess what? I'm giving you Saturday and Sunday off. I'm not even going to touch your pay. Your pay's going to stay the same. And that was really revolutionary at the time. His workers ended up loving him more. He also did a bunch of crazy stuff. So he built towns. So there's towns, similar to what Facebook does now and Google, they actually like give you a stipend if you live within five miles of the office. Because he was like, I want you to be close to the office. I want you to be available when you can, but I'm going to give you Saturdays and Sundays off. And that was kind of the beginning of the weekend. And then, since then, that's kind of become standard. Even though he gave them the weekend, people were still working 12 hours a day.

• 15:54Sam Parr?

  So he was, people were working 60 hours a week. But then he eventually lowered it a bit to 40 hours a week. And that became kind of what the 40 hour work week in America is for workers. And so he sort of invented that.

• 16:04Shaan Puri?

  What a legend.

• 16:05Sam Parr?

  Yeah, well, he's done a lot of bad stuff, too, so.

• 16:08Shaan Puri?

  So I just Googled, uh, so Sundays were kind of casually off, but it was like for church. But he's the one who made Saturday also off, basically. And then also the, the 40 hour work week versus 70 hour work week, which is crazy.

• 16:19Sam Parr?

  Yeah, and he didn't change their pay. He goes, I'm gonna, I'm gonna give you what you want anyway.

• 16:22Shaan Puri?

  Henry Ford did, like, how bad? How bad are we talking?

• 16:25Sam Parr?

  Super anti-Semitic. So he, big fan of Hitler, uh, wrote books called like, I think, he has a famous book. I forget exactly what it's called, but it's called like Our Problem. And it's like, basically why Jews are bad.

• 16:37Shaan Puri?

  Oh, wow.

• 16:37Sam Parr?

  So, yeah, he's so very, very imperfect person. But that's okay. We could talk about the 40 hour work week, which is interesting. And so that worked out. And that's how the 40 hour work week came to be. Now, over time, a lot of companies have tested four day weeks and some claim that it's effective. But I think the verdict's still out. These things are really hard to measure. And then I went and read a bunch of studies on what's the optimal amount of work time? Have you ever studied what the optimal amount of work time is?

• 17:04Shaan Puri?

  No.

• 17:05Sam Parr?

  A lot of research says that humans can only focus and concentrate really hard five hours a day. That's what some of this research says. There's also a ton of research that shows that there's like, um, stupidly high, uh, it's like 30% increase of heart attack, blood pressure, things like that, of anything above 50 hours a week. And so there's like a huge issue at 996 and health. And I've read enough biographies to know there is definitely a trend like, can it like, have you ever heard the story of like, rich people having in the 18 or 1900s, having to go to Florida for fresh air? Cause they needed to like relax or they have like stomach ulcers. Have you ever like heard like, there's like a

• 17:43Shaan Puri?

  No, I don't read history books.

• 17:44Sam Parr?

  There's a pretty like common story amongst tycoons.

• 17:46Shaan Puri?

  Because of air pollution or because of something else?

• 17:49Sam Parr?

  Well, they were just like having nervous breakdowns. Like it was like, it's like a common thing amongst the biographies. And the doctors would be like, you need fresh air. You have to go to Florida. You need fresh air. You're having a nervous breakdown. It's a very common thing of these, of these guys like Joseph Kennedy, John Rockefeller, having to retire for basically, or take a three month sabbatical because they're broken. You know, John Rockefeller, at the end of his life, you know what alpecia is?

• 18:11Shaan Puri?

  Yeah.

• 18:12Sam Parr?

  He had alpecia. So at the age of 50, he lost all of his hair. And that's a stress induced disease, at least a lot of people think so.

• 18:17Shaan Puri?

  So is your, first of all, a couple of questions. Number one, is 996 still in effect? I thought I had heard something that China was like rolling that back, that they don't do that anymore.

• 18:27Sam Parr?

  Technically, it's illegal.

• 18:29Shaan Puri?

  But still, maybe some people are doing it.

• 18:31Sam Parr?

  But still, it's practice. So for example, there's a lot of quotes that says, like JD.com, as well as Jack Ma from Alibaba, there's quotes where they're like, look, like, do you want to be successful? If you do, you have to do 996. And they like say this on record in their WeChat, talking about it.

• 18:47Shaan Puri?

  Right.

• 18:48Sam Parr?

  So it's still common. I think though, there is an interesting point here, which is I think Americans in particular don't want,

• 18:57Sam Parr?

  you want to create a narrative about why China can potentially beat us. And you say to yourself, like, all they care about is work, work, work, work, work. And I just don't want that life. And so there could be this, the case of like, well, they don't actually work significantly harder than Americans. But that's just the excuse that we're going to give in our head. Because in reality, I think a small percentage of Chinese companies are still doing 996. In general, a lot of the young Chinese are revolting against that. And that's one of the reasons why you see a lot of Chinese American workers, I think, because they prefer the American style over the Chinese style.

• 19:27Shaan Puri?

  So, okay, so that's what's going on in China. Keith Rebois says that he runs his companies on 996? No. You guys have Barry's Bootcamp like twice a day. What do you, what's he talking about?

• 19:38Sam Parr?

  So here's what he said. So there's a company called Tava, which ironically is a software for, or it's a service for warehouse workers to help factories find warehouse workers. He says, it's a 996 in the office, every single person, every single day. It's very impressive and it's not surprising why that company has done so well. In fact, or he says, this is why the Asian companies succeed, because they do 996. So.

• 20:05Shaan Puri?

  Yeah, as an investor, you love when your companies do 996. Why not? Of course, of course you love it. Okay, next thing. Do you?

• 20:15Shaan Puri?

  Do you feel that with Hampton, you're gonna be the Henry Ford of our generation and take us down to the five hour workday rather than the eight hour workday? Is that a thing you're doing? Cause I'm trying to bring it, I'm trying to revolutionize the adult nap, right? Like, you know, the adult nap is gonna be my lasting legacy. Uh, when I die, people are gonna be napping in the middle of the day and they're gonna, every day, they're gonna thank Sean for, for bringing this new nap culture to, to adulthood.

• 20:38Sam Parr?

  By the way, naps, I've read thousands, or I've read hundreds of biographies, naps are very common amongst a lot of the people I've read about, by the way. So if it makes you feel good, naps are common.

• 20:47Shaan Puri?

  You read about legends, legends nap, I nap, therefore Sean Lee equals legend.

• 20:52Sam Parr?

  Yeah, you're Indian, you're good at math, you get it. Um, uh, do I think that, no, I think the 40 hour work week, I, I don't think it's broken. That's what I think. I, I don't think it's broken.

• 21:04Shaan Puri?

  Like how many, how many hours a day do you, are you like actively trying to work? And then how many hours a day do you think you're productive? Those two numbers?

• 21:11Sam Parr?

  So like, I don't plan nine to six, I don't like, that, that's, I, I treat my, running my companies, I like, I remember my parents were like, oh, you work for yourself, you can come out to lunch with us. I'm like, no, nine to six, it's my job. I'm available and I'm working.

• 21:24Shaan Puri?

  Right.

• 21:25Sam Parr?

  So I say that I'm nine to six, I spend a lot of time thinking, like I'll literally just be sitting there thinking, writing notes. So if you consider that work, I think I work 40 hours a week. If you consider work, like typing and actually contributing to a product, way less, 10 hours a week.

• 21:40Shaan Puri?

  Yeah, I do the same thing where I'm like, it's awesome, I'm my own boss. Problem. I'm an asshole as a boss to myself. You know, like, I work harder when I'm my own boss versus if somebody else was managing me. But nowadays with kids, uh, my schedule is very different. I basically do these sort of like three hour sprints, three times a day, but at different times. So like, this right now is my first sprint. It basically starts at usually eight 30 or nine, and I'll go till 11:30 or noon. Then I go play with my kids for a little bit, which is honestly only like 20, 30 minutes, but we'll do something fun. And then I'll come back, I'll do another 90 minutes in that, that next block, then I'll go work out. And

• 22:22Shaan Puri?

  then after the workout, I got another 90 minutes. So that's kind of like the second block is those two 90 minutes to split with a workout. And then late at night, after my kids sleep, I'll do another 90 minutes. And so I don't know what that adds up to 90, 90, 90, uh, plus the three hours in the morning, but that's how much I work, which is probably like six, seven hours a day.

• 22:41Sam Parr?

  And by the way, I think I kind of glossed over this, but at ByteDance, they currently have employees work six days a week, every 14 days. And then, what's the big, what's the big like phone company over there? Is it called the Hawaii? How do you pronounce that?

• 22:57Shaan Puri?

  Huay?

• 22:58Sam Parr?

  They routinely ask staff for six day weeks every month. And they give, and they pay them extra for it.

• 23:04Shaan Puri?

  Right.

• 23:05Sam Parr?

  So like, it's still pretty common. But at the end of a 40 hour work week, where it's been a hard week, I find myself fried. Like, I'll sit and like, either play a video game or like, watch TV. Like, I can't do much. I don't know how a guy like Elon Musk or some of these folks like have intellectual stimulation for that long. I find it to be very, very challenging and I personally cannot do it. So would I take $10 million a year to be a hedge fund portfolio manager? And live that life where you're on call 20 hours a day? Maybe for $20 million a year. For 10 million, probably not. I think it'd be hard.

• 23:42Sam Parr?

  I mean, there's a number, right? There's a number where you would do it for a couple of years.

• 23:45Shaan Puri?

  I mean, that's to put you on blast, but like, you're already going to be creating that much or more value without doing it. So why would you ever make that trade, right? Like, it's not, it doesn't make sense.

• 23:53Sam Parr?

  I didn't say I would. I said maybe. I said there's a number. There is a number. That number has to be pretty high. 10 million, not a chance. 20, probably not. I don't know.

• 24:03Shaan Puri?

  Yeah, but that sounded like, that probably not there sounded like, give me three more seconds of silence and I'll change my mind.

• 24:11Sam Parr?

  But have you ever read a book, like, have you ever watched James Bond? And you see the villain's lifestyle and you're like, that's exciting. I want to do bad stuff. That's what, that's what working at a hedge fund is. Yeah. Just doing, just doing hood rat stuff with your friends. That's what it feels like. You're doing bad stuff with your homies and that does seem appealing.

• 24:30Shaan Puri?

  You know, the one sexy thing I like about hedge funds, so there was a guy, when I was in college, guy comes into the office, or guy comes into our class, slicked back hair. And I forgot his name, but his dad is like a legend in the hedge fund game. Like, he was like, one of the OG hedge fund guys who made a billion dollars or whatever. This is the son. Son's got his own hedge fund. And he comes in and he just had, you know, when you like, you guys were talking before we started recording about like the somehow the like more successful and rich people get the actually the more like at peace and like chill they are when they're they're more generous with their time ironically and they're nicer and kinder. So this guy kind of had that energy where he was in no rush. And I just remember I could literally feel that energy coming off and that

• 25:13Shaan Puri?

  this guy was in no rush, which was very different than every other person I had seen.

• 25:17Sam Parr?

  Who was this person?

• 25:18Shaan Puri?

  We're always rushing from one class to the next or cramming for finals and shit like that. Like it's like high achiever stress. It's just like.

• 25:24Sam Parr?

  And who was this person?

• 25:26Shaan Puri?

  I forgot his name. Regardless, guy comes in and he's there to give a talk and he says basically two interesting things that always stuck with me. First thing he said was he's talking about his hedge fund and blah blah blah. We're all kind of like eating out the palm of his hand. And he's like, you know, who here would find it fun to work at a fund like ours and do this, like make big bets for a living. And like, you know, 80% of the class hands up. And he goes, um, he goes, okay, so look around. Here's 80% of the people, 80% of the class just raised their hand. And imagine if you all applied, because somebody had asked him a question about risk, like how much, you know, should I, should I work this career ladder? Or should I try this thing? That's like a little bit of a risk. And so he's explaining, he goes, look around, he goes, imagine all of you applied to this

• 26:10Shaan Puri?

  job. What would your resume look like? All of you would just give me a white piece of paper with black text. You put your little name at the top and then you'd put Duke University and you'd put your stupid GPA and then you put your internships, you put four internships and you'd make it sound like you're you changed the world in those internships. He goes, there is nothing that differentiates you. He goes, you have a degree. Great. That's table stakes. Like, you know, like, oh, great. You went to a good school. Like, so what? So did everybody else that applies to this job. He goes, the only thing I can look at to even decide, do I want to meet this person is the bottom fifth of your resume, the very bottom 20% where it says other. And that's your chance to say other stuff you're into, your interests,

• 26:53Shaan Puri?

  your stories, something you've done that's remarkable or notable. He goes, that's the only way I'm going to differentiate. Between all of you that are raising your hands right now because otherwise you're all students. You all did an internship. You all got a three point, whatever GPA. It doesn't matter. That you were on student council, like no one cares. And when he said, he goes, so I would take the next three years, four years of your life after college. And I would go stuff that other column because either you're going to make it big doing something cool. Or even if all those fail, when you go to apply to a job like mine, I'm going to have some reason to actually want to talk to you. And that was one of the most, I don't know, profound things, but like best pieces of career advice that I had ever heard. And actually changed my, I went and started a goddamn sushi restaurant afterwards.

• 27:36Shaan Puri?

  Because I was like, that's part of my other, either this works and I create the next Chipotle. Or it's a great story for my other section because he's right, like that ring, that that was, the truth was told to me.

• 27:48Sam Parr?

  And the commonality between a lot of these folks, which I think you have.

• 27:53Sam Parr?

  They play poker and they got really comfortable gambling.

• 27:56Shaan Puri?

  So, so that was the other thing that stood out. He's looking around and in class, everybody's got a laptop open. And he's looking around. I'm like, I could see he's like counting or something. He's measuring something and I asked him, I go, are you, I was like, what are you counting? What are you, what are you doing? He goes, oh, I'm looking at how many of you guys have Macs versus PCs. He goes, because my entire year right now is I'm going to make a long, short bet. I'm either going to go long Microsoft and short Apple, or I'm going to go long Apple and short Microsoft. And he was like, I was like, what? I don't even know what, I didn't even understand what he was talking about, like a long, short sort of spread trade. And he was like, um, yeah, so like, you know, my entire, like, he's like, I'm going to make a $10 million bet or I'm going to make a whatever. He said some ridiculously big number. He goes, I just have to make one bet this year.

• 28:40Shaan Puri?

  And I'm going to bet 10 or 50 million dollars on either Apple or Microsoft here. And so I'm just trying to understand, like, what are you guys using and why, why, why do you pick this? And I thought that was the coolest shit in the world like that was like, you know, he could have lit up a blunt in front of me and I wouldn't have thought he was cooler than what he just said that his entire year was to figure out, should he be long Apple or Microsoft? And he was just gonna walk around the world trying to figure this out. He's gonna make a $50 million bet on it. And I was like, that's so cool. That's incredible. And I'm sitting here playing like poker during class, you know, on the one, two tables, trying to make 200 bucks. And this guy was like gambling at a whole nother level on one concentrated bet. That shit was like very attractive to me.

• 29:24Sam Parr?

  I wonder which one he picked. Hopefully, I think.

• 29:27Shaan Puri?

  He had told us at the time, I had asked him, I was like, so which one? He's like, I think Apple, because, and he had said some reasoning because of Apple. It wasn't just like Apple, because it's cool. It was something like, he was looking in the education market to figure out, like, basically, our age cohort, what were we buying? What were the schools like recommending? And then what was like the, he had done, I forgot exactly what he was doing, but he was like, looking at basically, like, he thought that it was important to know what high schoolers and college kids and like, young professionals were being told to buy and buying voluntarily. And if there was like some difference there, he had said something. Now, this is like 15 years ago. I don't remember the exacts, but I remember it being Apple that he was leaning towards.

• 30:06Sam Parr?

  So that's my whole summary of hedge funds of the 40 hour work week. This stuff interests me. Henry Ford, by the way, came up with a lot of good stuff, invented Kingsford charcoal. That was his doing, obviously, Ford, the assembly.

• 30:19Shaan Puri?

  He's like, yeah, I got a coal side hustle.

• 30:22Sam Parr?

  The assembly line. The guy is super fascinating, a very imperfect person, did a lot of bad stuff too, but very interesting. What do you want to do?

• 30:30Shaan Puri?

  All right. So I saw something come by that I think you'll find pretty fascinating. Have you heard about this company called Law and Crime?

• 30:38Sam Parr?

  I saw they were acquired recently.

• 30:40Shaan Puri?

  They were acquired. And so this is a media company. That does a combination of like true crime plus just coverage of trials. And media company started by this guy, Dan Abrams, and they got acquired for a rumored nine figures. And I was like, wow, that's a pretty impressive exit for like this kind of like crime niche media thing. Do you know about this guy, Dan Abrams? He got a like an interesting backstory.

• 31:07Sam Parr?

  No, what's he do?

• 31:08Shaan Puri?

  So he's basically pretty prolific with these like niche media sites. So 2009, he launches something called Gossip Cop. It's celebrity gossip blog and it gets to eight million monthly uniques. So he goes into celebrity gossip. That's number one.

• 31:24Sam Parr?

  I go to TMZ.com every day.

• 31:27Shaan Puri?

  Homepage?

• 31:28Sam Parr?

  A homepage every single day, every day. That's what that's on my list of things that I check every morning.

• 31:33Shaan Puri?

  As part of your eight hour work day?

• 31:36Sam Parr?

  Well, you know, you got like the same news websites that you check. I just want to see what's going on.

• 31:40Shaan Puri?

  I check no news websites. But anyways, this guy, so then he creates Geekosystem. It was just an internet site for meme culture, launches that in 2010. He creates something called Mediate, which is basically power rankings for media personalities. That one gets to 14 million monthly unique, still going today. He launched something called Stylite, which is kind of like the same thing, power rankings, but for designers, models, writers, like people in the style business.

• 32:04Sam Parr?

  Holy shit.

• 32:06Shaan Puri?

  Sports Grid, which is a sports news business that was acquired in 2013. So he's creating a bunch of these all in this period of like 2009 to 2015, roughly. He created all of those that I just mentioned. He created one more in 2012 called Brazer, which was basically personality, like chef personalities. And I'm like, this guy's like, A, that's just interesting, like an interesting model. But B, like all of those are like the right niches, like there's a missionary versus mercenary people. Like he strikes me as somebody who's mercenary where he's like, oh, these like these idiots care about like, you know, celebrity chefs? All right, here you go. I'm going to tell you every goddamn thing you need to know, news, information, you know, stories about these celebrity chefs. Oh, these people love.

• 32:51Shaan Puri?

  You know, whatever, whatever it is, style, media personalities, or style, or celebrity gossip. Great. I'm gonna create, I'm gonna fulfill demand. I got thirsty customers. I'll go open up lemonade stands right next to them. That's the, that's the style of entrepreneurship that I get out of this guy.

• 33:05Sam Parr?

  And if you Google this guy and you click images, most people will recognize him. Do you recognize him? I, he's on MSNBC. He's on TV all the time.

• 33:13Shaan Puri?

  Yeah, exactly.

• 33:13Sam Parr?

  He's like really good looking. He's got a great voice. He's always commenting on like, like one, another guilty pleasure. I watch Cops all the time. I freaking love Cops. That's my favorite show. And they have like a spinoff called Live PD. He's always on there saying like, oh, what she did, she's about to get charged with X, Y, and Z.

• 33:30Shaan Puri?

  Right. So this guy, he's basically a media entrepreneur and he's on, yeah, like all the, all the things that you mentioned. He, um, so Abrams Media, I guess, is the thing that's like launching all this stuff. One of the things he launches, so 2016, he launches Law and Crime. That's the one he just sold. It's basically, it starts, you know, legal news website. Then it's live streaming trials. Then they have a cable show. They have an OTT show. They have a YouTube channel. They got 5 million subscribers on YouTube. They cover every trial because like, I'm like pretty knee deep in this SBF trial right now. Can't look away from the car wreck. You know, like rarely does news get me, but this one, I mean, I'm, I'm, I'm embraced in its arms.

• 34:12Sam Parr?

  Lapping it up.

• 34:12Shaan Puri?

  Yeah, I'm just fully engulfed by this SBF trial. And so, um, definitely there's like this like part of our brains that's just wired to tune into the stuff. Like I watched the Depp versus Heard Netflix show. I don't know if you saw that one really, really well done, like the Netflix documentary on the Johnny Depp trial. And, uh, you can't, I mean, you, you watch these things and you just get fully engrossed in them. So he, you know, he sees that, creates this, and they raised 5 million bucks. And reportedly have sold for nine figures, so over a hundred million dollars. I don't know if that's exactly true. Uh, three years ago, the reported revenue was like 13 million top line. And so, you know, who knows where it landed at? Maybe it's at 20, 25 million now. I'm not exactly sure, but

• 34:54Shaan Puri?

  amazing exit and kind of amazing entrepreneurial career. He also, by the way, launched during the time he was launching True Crime, Law and Crime. He launched a Christian TV streaming service called Ambo TV, which I bet is also like, that's, I love that niche, um, you know, the

• 35:08Sam Parr?

  Which is crazy. I mean, the guy's not Christian, um, at all. Uh, so that's really

• 35:14Shaan Puri?

  I said, do you know Dan Abrams? You didn't know the guy. You're like, he's not Christian.

• 35:19Sam Parr?

  Well, Abrams is a Jewish last name and I'm looking at his, um, um, I'm looking at his Wikipedia and he's, he's, it says he was raised in a Jewish family and his, his father has a Wikipedia page and

• 35:29Shaan Puri?

  Fair enough. Okay, okay, okay. You win.

• 35:31Sam Parr?

  So that's I'm looking.

• 35:32Shaan Puri?

  Point, point, point, Sam. Um, all right. So this

• 35:35Sam Parr?

  What's the Christian show?

• 35:37Shaan Puri?

  So go to amboTV.com and so they're just live streaming like, you know, uh, I don't know. Good old Christian entertainment. Uh, I don't, I don't know what that is. It's not something I normally watch, but like you can watch basically like live biblical literacy. You can watch like, you know, inside one of these churches, the Christ Evangelical like church live. You can view past sermons. You can watch interviews and shows. And, uh, this thing doesn't seem to have a ton of traffic on here, but let me look at the YouTube channel. I bet the YouTube channels. Uh, it's pretty small too. So that this Christian site thing, it looks like hasn't, hasn't quite taken off, uh, yet, but I do like this niche. I feel like this could be, could be successful as well.

• 36:16Sam Parr?

  And then he has another one called the Whiskey Raiders, a site that uses a proprietary algorithm to rate whiskeys on a scale of 50 to a hundred.

• 36:24Shaan Puri?

  Yeah. I mean, this guy's just goes into passion niches, right? So it's like passionate niche. Let me create it, right? Like this is what Ramon did with a soap opera blog. It's like, wow, you built and sold a soap opera blog for $9 million? That's like incredible. How'd you even have this idea? And he was like, well, I created Facebook pages around a bunch of niche topics, wrestling, politics, um, soap operas and others. And I saw that the fan page for the, these soap operas was like popping off. It was like the second or third most, most popular one. And so then he created a blog where he'd never seen a soap opera in his life and created a blog where they would write spoilers and, and recaps and stories about these soap operas. And built up so much traffic that he was able to sell it for almost $10 million without ever raising any money. It was incredible.

• 37:08Sam Parr?

  By the way, the, the, what this guy's doing, uh, Abrams, Dan Abrams, how he's launched, he's prolifically launching new stuff. I think. Media is the best industry if your intention is to launch a lot of things. Someone kind of described it once where they told me that a media company is basically a collection of different projects, all under one brand, whereas a software company typically is one product with added features and you're just scaling it. The interesting thing about media is when you understand what types of things grabs people's attentions, attention and how to look at certain numbers to understand where there's an underserved nerd, underserved need.

• 37:50Shaan Puri?

  And nerd.

• 37:51Sam Parr?

  And nerd, yeah. You can basically do that for any niche that like you're like, it's a formula. A lot different than software.

• 38:02Shaan Puri?

  E-commerce is a lot like that, too. You notice that somebody who knocks it out of the park with one e-commerce thing, they know that they could do this five times over. It's just due to have the energy and the desire to create an organization that's going to launch multiple brands versus the one. But it's so applicable to do exactly what you did for one.

• 38:20Sam Parr?

  But there's a problem with e-commerce, which is your cash is tied up in the inventory. With media, you typically have more operating cash flow and so you have more money to deploy to some of these resources. How many, how much of your, how much of your business, so you have a business, an e-commerce business, how much of the money is in inventory? A significant amount, without saying like particular numbers?

• 38:43Shaan Puri?

  Probably 30% in inventory.

• 38:46Sam Parr?

  That's not horrible. That's not horrible. A lot of times it's worse, though, I would imagine.

• 38:51Shaan Puri?

  It can, you can go wrong if you, if you mess up, if you miss forecast or you get a bunch of dead stock, slow-moving inventory, yeah, you can, that can stockpile real quickly and become a big issue for you. But also, it depends how you run it. So in the same way that there's 100 people now trying to create newsletter businesses and those 100 are not going to have the same success that you did with the Hustle or that I had with Milk Road, why is that, right? Because it's how you operate and the same thing with e-commerce. You know, with e-commerce, if you set up the right payment terms with your factory, for example, like for us, we sell inventory before we have to pay money for it.

• 39:25Sam Parr?

  Yeah, so that's great.

• 39:27Shaan Puri?

  Right. Negative cash conversion. So, once you get set up like that, then you're, you know, you're an idiot if you're, if you're losing money or you're tying up too much money in inventory, right? Because that's not necessary. If you run it well, it's when you make a mistake or the market turns that, you know, you can get in trouble.

• 39:45Sam Parr?

  Tell me about this guy Tyler and what his post said. I think I know who he is.

• 39:50Shaan Puri?

  Yeah, so I don't know a ton about this guy. This guy Tyler Hodge, I've seen him on Twitter. He's around on Twitter. But he wrote a great blog post that I loved. I don't know if you saw this, but it was about sardines. Did you see this blog post about sardines?

• 40:03Sam Parr?

  So I didn't see it, but I'm pulling it up now. By the way, the blog post, it's gonna make a comeback, I think.

• 40:08Shaan Puri?

  Dude, I'm with you. I read this one post and I was like, I don't know who this Tyler guy is, but I like him. I was like, I like him and I respect him. One blog post could do that for you. It's very hard for that to happen in like, you know, a single tweet or an Instagram story or a TikTok short, right? Like it's like, it takes a little bit more. One blog post.

• 40:29Sam Parr?

  You need more time.

• 40:30Shaan Puri?

  Yeah, exactly. I think podcasts work well with it, but.

• 40:33Sam Parr?

  Podcasts, YouTube videos, if they're longer, it's basically the amount of time that you've taken from someone. So that's how invested.

• 40:40Shaan Puri?

  He writes this post and he's like, he's like, I'm reading this book Margin of Safety and in it, he writes about this famous bubble that happened that you probably haven't heard of. I guess not that famous, but there was a bubble that happened that you probably are not aware of, which was the sardine bubble in Southern California. So I'm going to read it out for you here. He goes, "There's an old story about a market craze in sardine trading where sardines disappeared from their waters in Monterey. And so the commodity traders started bidding up the price of a can of sardines. The price of one can of sardines soared. And everybody's buying up these cans of sardines. They're making a bunch of money flipping them. And one day a buyer decides, you know what? I'm going to treat myself to, I'm going to take one of these expensive cans of sardines.

• 41:20Shaan Puri?

  I'm going to pop it open and I'm going to enjoy. He pops it open and immediately just becomes sick. He's vomiting and he's like, oh, he's like, tells the seller, he's like, hey, man, I bought these expensive sardines for you. These are no good. And the seller's like, you don't understand these, these are not eating sardines. These are trading sardines. And he's like, so then Tyler draws the point. He's like, "It feels like this is what's happened in the last few years with like tech company valuations." He's like, there was a, like, there was a game to be played. You would invest in the seed round and then the A. And you're, this company's trying to use that money to grow. It's not really profitable, but don't worry about that, right? We're losing money, but it's, it's all good. We're growing and we got this narrative and the narrative just needed to be sold to the next round investor.

• 41:58Sam Parr?

  Well, you know, the better analogy for this is crypto.

• 42:02Shaan Puri?

  Well, I don't think it's quite, there is some in crypto, right? But like, there's the NFT stuff in crypto. But the difference is, to get to the point of what he's saying, so crypto is a different type of asset, right? Crypto is not a productive asset. It's not a cash flowing asset. So what he's talking about, he's like, you would get these businesses that would go later and later stage. And each round is getting bigger and bigger because everybody is basically is greater fool theory, right? They're thinking, well, I don't care if this business actually generates a lot of free cash flow. I can just sell it to the next, to the next buyer. And they would do that. They would get to the point where it goes public. But now the music stopped and these companies have to be, you know, they're opening up the cans of sardines and realizing that, oh shit, these were not eating sardines. These are trading sardines. And so you see a company like Hoppin,

• 42:47Shaan Puri?

  go from $4 billion valuation or $2 billion valuation, whatever it was, to I think it sold for like 10 million bucks or 20 million bucks the other day, like, you know, it's down whatever 100x from, from its peak valuation just two years ago. And there's another company called Better, which is like a mortgage company that's also like, you know, about to go bankrupt after a billion dollar valuation. And this is going to keep happening. You're going to see a bunch of, you know, this sort of dead unicorns. And in crypto, there was a version of this, like NFTs, for example. Are you buying this because you love the art? Are you buying this because you think the price is going to go up? And for 95% of people, 99% of people, it was, I'm buying this because the price is going to go up. That works until the price stops going up. And then at that point, we all are sitting here holding these like, you know,

• 43:32Shaan Puri?

  these trading sardines that we don't want to eat. The difference, of course, is that, and the point that Tyler's making is that what's in vogue now is eating sardines. Companies where if you couldn't sell it to the next, but if you can't exit, if you can't IPO, if you can't go raise the next round, well, doesn't matter. Just pop it open and eat it, right? Doesn't matter. The company has profits. It has cash flow. So we can, we don't need to flip this to the next person. It produces enough cash flow. And, you know, this sounds very basic to a lot of people, like, The whole idea of crypto is triggering to them. Or the idea of venture capital and these unprofitable tech companies that raise money at these crazy valuations. That's just triggering to them.

• 44:15Shaan Puri?

  And so, you know, for the cash flow kings out there, this is like, you know, today is your day. Now is your era. You're, you're, you are now kind of like king of the hill at the moment. And I wanted to bring this up with you because I feel like you have really never gotten into any of these trading games. I have never seen you get swept up in angel investing where you're like, yeah. This, this company today, it's worth 10 million, even though it's got no product and no revenue. But it doesn't matter because they'll raise an A at 50 million. I'll be marked up 5X and then it will raise a B at 120 million. I'll be marked up 10X or whatever. I've never seen you fall into that one or crypto, really any of these trading games. You seem to be a guy who always goes into eating Sardine's games. Whereas I've dabbled in both and made money and lost money in, in sort of both.

• 45:00Shaan Puri?

  I'm curious what your reaction is to this.

• 45:02Sam Parr?

  Yeah, so a bunch. The first thing is the reason I've never got into that is I think people default to being too optimistic about particular businesses. You know, what's interesting is one of the very, one of the very first signs or pieces of writing that humans have ever discovered. We're talking caveman era. They wrote on the, on the, they wrote on the cave that said, the generation after them is lazy. And they just don't care. And that's like a common theme. Every generation says the late, the one after them is lazy. They just don't care.

• 45:33Shaan Puri?

  And their music sucks.

• 45:34Sam Parr?

  Yeah, and their music sucks. It's like the same thing over and over again. And you said something about we're caught up in this at the moment. My philosophy is we have always been caught up in that. Human nature doesn't change. We have been the same for almost forever. And the way that we act today is the way we have always reacted. And so when I see new things, I think this isn't new. This has been here at many, many, many, many times. And my goal is to find out what has been here for hundreds and hundreds and hundreds of years and what, or thousands of years. And that is where I choose to place my time in. For example, in this blog post, she, he quotes Sarah Gao, who says, who's like a famous investor. And apparently one of her portfolio companies said, Sarah, tell all the founders their job is to generate cash flow.

• 46:19Sam Parr?

  Because no one has ever told me that. And that's crazy, but that's a common thing. And I was, I'm taking this, do you know how to read a balance sheet or cash flow statement or P and L?

• 46:30Shaan Puri?

  Yes, but you know, of course, there's, there's levels to that game.

• 46:33Sam Parr?

  So I, I, I don't really know how to read it. And so I'm taking a, I intend to take a course at like, I want to do like one of these executive MBA classes, like one of these fancy ones. But before I even did this, I bought this course. It's called the four day MBA where this guy's teaching me how to read a balance sheet. And his whole course is summarized in a very simple way. And it's basically the point of cash is to generate or just to buy, uh, buy stuff that you can then sell to create profit, which that profit can turn into cash flow. And a lot of times people focus on profit, but profit is a, is a hypothesis. Cash is a fact. And it took me to take that course to realize and get back to basics of like, wait, everything is about creating cash flow.

• 47:16Shaan Puri?

  Yeah.

• 47:16Sam Parr?

  And he uses this wonderful example of Enron. He's like, check this out. Look at this balance sheet. They're generating lots of profit, lots of profit. Goldman, Morgan Stanley, they're all saying buy this company, buy this company. Their stock is great.

• 47:28Shaan Puri?

  Look at the P and L. The P and L will show you the profit.

• 47:30Sam Parr?

  No, that's the issue is profit isn't important. Operating cash flow is on paper, they were making lots of profit. The problem is, is that it was all, they weren't like, they, they weren't actually making profit. Uh, or they were rather, but they weren't creating operating cash flow. The vast majority of their cash came from financing activities, AKA raising more money. And this is why there's a book called The Smartest Guys in the Room, because apparently everyone was like, oh, they'll be fine. They're the smartest guys in the room. And you see these trends today with crypto, with web three, now with AI, before that with social media, where the smartest guys in the room say it's okay that they're not making profit. It's okay that they're not making cash. It's okay that this evaluation is huge.

• 48:11Sam Parr?

  But that's like just a common problem that we see over and over and over again. And so I get suspicious of all of those things because I read a lot of history and you see patterns. And this is a very common thing. We have thought this way from the beginning.

• 48:22Shaan Puri?

  Yeah, but the, the story of the tech industry, like the story of all the, the startup industry, Silicon Valley is that that actually was correct. Like you're saying it like, uh, what social media, the story was these companies, um, you know,

• 48:37Sam Parr?

  Yeah, but most of them fail. Most fail.

• 48:39Shaan Puri?

  Of course, of course.

• 48:39Sam Parr?

  Some worked.

• 48:40Shaan Puri?

  But you, that's what I think what it is, the real, the real lesson is you have to know what game you're playing. So for example,

• 48:47Sam Parr?

  Correct. I agree.

• 48:48Shaan Puri?

  When you're playing the Silicon Valley game, the Silicon Valley game is most of these companies are going to fail or be sort of inconsequential to your returns. The only thing that matters when you're doing venture capital or doing tech investing is every year, there's like 20, maybe 30 companies that matter. Did you get into them? How many of those did you get into? Is it zero? Is it one? Is it two? Is it three?

• 49:11Sam Parr?

  The issue though, is that people put too large of a percentage of their net worth into these things. That's where it becomes a huge problem and a lot of people do that.

• 49:20Shaan Puri?

  I, I don't think that's true. I think most people are not even invested in startups. The average person is not invested in startups, right?

• 49:25Sam Parr?

  Like zero. Let, get startups out of this example. You could say crypto. You could, I mean, a lot of people have gone broke because of it. Um, and at the, the underlying asset still does not have like a repeatable way to deliver cash flows.

• 49:37Shaan Puri?

  And that is, That's a, that's the difference. Uh, you know, uh, there are different types of assets. So for example, um, you could buy a watch or you could buy art. They're never going to produce cash flow. Uh, you could buy gold bars. They're never going to produce cash flow. There's different types of assets.

• 49:52Sam Parr?

  Certain types of art, certain Rolex, Rolex's have grown.

• 49:56Shaan Puri?

  They're not, they're non-productive assets.

• 49:57Sam Parr?

  But they are collectibles, but there is a history of, uh, hundreds, a hundred years, 50 years of repeat of people wanting to purchase it.

• 50:05Shaan Puri?

  Of course, of course.

• 50:06Sam Parr?

  Not as much, not, not as much with crypto.

• 50:09Shaan Puri?

  Yeah. And of course, and of course that the, of course you don't get the same, same upside because it's sort of a, you know, that game is played out. It's more efficient market versus crypto collectibles came out. So here's a new, new version of collectibles. And in this one, you could be Jack Butcher and you could make millions and millions of dollars. Because you understood that crypto collectibles are going to be a thing. Or you could have come in at the wrong time or put the wrong percentage. And of course you could make money and lose money in any of these. But the idea is you have to know what game you're playing. If you're playing the game of crypto or investing in gold or investing in art or investing in watches. You are not playing the same game as somebody who's investing in cash flowing businesses. If you're investing in startups, you're not playing the same game as somebody who's investing in cash flow businesses. So I think the important thing is you have to know which game are you even playing?

• 50:52Shaan Puri?

  And then what are the rules and topology of that game? So for example, with venture investing, the mindset is actually, I'm gonna lose money eight out of 10 times here. And then if you go read Warren Buffett, you're like, oh, this guy's the greatest investor of all time. Let me learn something about that that I can apply to angel investing. And Warren Buffett's first rule is don't lose money. His second rule, don't forget rule number one. If you use Warren Buffett's rule, you could never be Peter Thiel. If you use Peter Thiel's rules, you could never be Warren Buffett, right? Like, you know, these are, they're different games and you have to know the rules of that game in order to play it. What I think is interesting is that at different times, that at different times, each game might have a sort of like hot season. There's a, there is a, there are these like windows where certain games are more ripe or more, more attractive, more lucrative to play.

• 51:38Sam Parr?

  But my point is, you asked why I don't do this type of stuff, is I get nervous about many of those games, because I believe that, for example, before startups in the early 1900s, there was car companies. Do you know how many car companies existed in the 1920s and 1930s? Tons, tons. Most, all of them went bankrupt, except for like five. There was tons of car companies, and it was the exact same thing as tech companies today. And so I'm wary of those types of games where I, I fall a little bit more into the Warren Buffett thing, where I'd rather have steady but smaller returns as opposed to big lumpy jumps. I do get big lumpy jumps, but I do those in things with things that I can control, which is starting and selling companies. I just prefer not to do it in things that I don't have control in.

• 52:22Shaan Puri?

  Yeah, and to be clear, you don't actually play the Warren Buffett game. You play the index investing, you know, basically, I don't try to make my money on the investments. I try to be sort of safe and conservative with my investments, because I'm going to be aggressive and risky with entrepreneurship.

• 52:35Sam Parr?

  Yeah.

• 52:36Shaan Puri?

  Which is not what Warren Buffett does. He doesn't, he doesn't start companies. He buys companies in.

• 52:40Sam Parr?

  I met Warren Buffett in the sense of, I'll try not to lose money, and I will do, I'll take a somewhat more conservative approach than many of my peers.

• 52:49Shaan Puri?

  Yes, yes, yes. The startup game is a, the startup investing game is a chasing and waiting game, which is a very strange combo. You're trying to chase to find these, one of these breakouts that are going to become the, one of the 20 companies that mattered this year, not the 2000 that didn't matter. And then you have to play a waiting game to let those seeds kind of bloom over the next, you know, seven to 10 years.

• 53:13Sam Parr?

  A month ago, you went to Brian Johnson's house. I want to ask you about that. Or do you want to save it for Friday?

• 53:18Shaan Puri?

  You could do it. Let's do it.

• 53:20Sam Parr?

  Well, so Brian Johnson, the, the crazy guy who I love, who claims he'll, or he's trying not to die by decreasing his age. You went to his house, you interviewed him. That's going live soon. How was it? Was there any like spectacular learnings from him?

• 53:36Shaan Puri?

  Yeah, going to his house is kind of remarkable. Um.

• 53:39Sam Parr?

  So, big house?

• 53:40Shaan Puri?

  Uh, not huge, but um, like nice, definitely a nice place. Um, walk in and actually meet his son first. So I see his son. His son who's on the same.

• 53:50Sam Parr?

  I've seen him on Instagram.

• 53:51Shaan Puri?

  He's on the same protocol as his dad, pretty much.

• 53:53Sam Parr?

  Yeah, ripped, right?

• 53:54Shaan Puri?

  But he's like 20, whatever, he's like 20 years old or 19 years old or something like that. And so he's like, I think he's in college or going to college, something like that. He is super ripped, super kind guy. And, you know, I was like, so like, what's it like to be, you know, eating lunch with your friends and you've got the green sludge and they're, you know, they're eating nachos or whatever. And he's like, yeah, it's cool. It's not, I don't care. You know, I'm doing what I want to do. And he's like, you know, the, the independent mindedness that it takes to live a lifestyle of Brian Johnson. You could see like, you know, from as, even as a parent, how that like shapes your kids to be a little bit different.

• 54:28Sam Parr?

  Yeah, you're like, oh, you're emotionally healthy. That's boring.

• 54:30Shaan Puri?

  He was like, you know, I, he's like, I was like, what do you think would be great out of this interview with him? And he was like, you know, I hope you clear up like some of the misconceptions. Like, there's a bunch of misconceptions as to why he's doing this. And if people understood why he's actually doing this, they would feel a lot differently about what he's doing. And um, and so, you know, I just, I enjoyed that. Got a tour of his house, showed us, you know, showed me where he works out, how he, where he eats. He opened up his fridge and literally, I was like, let's see what's in here. He opens up his fridge and there's literally nothing in the fridge. It's like, there is absolutely nothing in the fridge. There's like one bottle of red wine on the side. And he's like, then he's like, oh yeah, um, he like opens up his, he opens up his freezer and there's like some medicine in there. I'm like, oh, what's that for?

• 55:15Shaan Puri?

  He's like, oh, that's like this drug that they give to people with leukemia, but I just take it proactively. I was like, oh, cool. Um, you know, you're trying to find rapport when you go to someone's house. And I was like, so I wear this Fitbit. Um, I'm cool. I'm into tracking too, right? Like, yeah, I work out sometimes. Uh, I eat, sometimes I eat chips. Uh, you know, like, you know, it's like, wow, they, it's literally like me meeting a bit of an alien person because their, his lifestyle and his discipline and his values and his priorities are just very, very different than mine. But also very cool, very inspiring. He's very, very cool guy. So he was, um, like, when you go to someone's house, you meet somebody and they're off camera.

• 55:57Shaan Puri?

  Within three minutes, you get a vibe of like, what's this person's vibe? Some people will give you a hardcore fuck off vibe. Some people are kind of like, uh, let's get this done, you know, vibe. And he was totally different. He was very kind, very curious. Uh, you know, what, you know, it felt like, you know,

• 56:17Shaan Puri?

  respectful, uh, very, very respectful, very nice. What was he curious about you? Um, well, first he was just like thankful. He was like, oh yeah, the first episode we did was a lot of fun. The one that we had him on a long time ago. And he's like, that really kind of like, you know, helped get the word out there, got a bunch of good messages from it, and that led to more good things. So I think first thing was like, kind of like, thanks for, you know, thanks for doing that. Um, that was the first thing. The second thing was like, you know, how do you react to this? He's like, so I'm curious, like, what do you think of this? And is this something you would do? And how can I make this more approachable? And like, what do you find? Um, you know, he was like, almost like doing a bit of research in a way to like, versus just being a know it all. Like,

• 57:02Shaan Puri?

  I already know the answer. I have the answer. You guys are all idiots for not following. For, you know, versus having an open mind on, on, you know, what's a no, you know, a, a person who's not in the protocol, what's their reaction to this?

• 57:14Sam Parr?

  And did he have help running around his house? Like doctors and shit?

• 57:18Shaan Puri?

  He's like, kind of like number two person who she like helps do a bunch of things. Um, but not like, it's not like house help. That's like his, like, you know, she's like-

• 57:27Sam Parr?

  No, I meant like nurses.

• 57:29Shaan Puri?

  Oh, there was no doctors or nurses there when I was there. We went up to like his room where he's got like all the heavy machinery to like, measure your skin and then measure your eyes and measure your ears and all that stuff. And I was like, I was like, so you're really measuring like every organ separately? He's like, of course, you know, skin is the largest organ in your body. It needs to be healthy. And like, you know, my eyes are important. That's how I see. And I'm like, well, would you say it like that? Yeah, sure. Um, I was like, so what's the weak link? And he's like, left ear. Uh, or like one of right or left ear. I can't remember. And I was like, he's like, I have the ear of like a 70 year old. And I don't know why. He goes, from shooting. He's like, you know, I used to whatever. He's like, one ear is down, but the other ear is exposed. And so he's like, when I would shoot that loud gunshot that I used to do, like, you know, with some frequency,

• 58:15Shaan Puri?

  it messed up my ear and it's very hard to rejuvenate or recover an ear. And he's like, so you know, this goddamn thing is the weak link.

• 58:22Sam Parr?

  Did you change anything in your life after seeing him?

• 58:26Shaan Puri?

  I tried his protocol for about 20 days. Um, so I-

• 58:30Sam Parr?

  No way.

• 58:31Shaan Puri?

  Yeah. So I ate the, I told my chef, I was like, hey, this is the new thing. I would, I would like some sludge for lunch and then I want some nutty pudding. And, um, and I tried to buy, I didn't do all of his supplements. That's the one thing I didn't do because to do his supplements, you need like 65 things that I couldn't even source online. I was like, how the hell do you do this?

• 58:48Sam Parr?

  And did you feel good?

• 58:50Shaan Puri?

  I mean, definitely felt light, uh, lighter, like lighter weight. Like you can literally feel your body has like less baggage on it, you know, when you're doing it. However, I, um,

• 59:02Shaan Puri?

  I really detested that, like the main meal, the like kind of lentils and green stuff. And the one I had, the one I, when I followed the recipe did not taste like the one he had at his house. So I think he's got like new versions of the recipe that are better tasting.

• 59:16Sam Parr?

  That's so fascinating. I'm seeing a lot of people. There's a whole subreddit of people saying they're living his life.

• 59:20Shaan Puri?

  Well, there's a group of people like living his life that are doing this. So they hold what's called tea parties, which is a testosterone party. So you, it's a bunch of guys. They get together. They have a tea party where you get tested and you get your testosterone levels and you find out, you know, do you need to be taking testosterone or what? And then that same guy has created a meal delivery service called the Blueprint Delivery Service, which is takes Brian Johnson's meal plan and makes it easy to do. Cause again, that's the, that's honestly the hardest part of the whole thing. It's like, it's not easy to just do it. And there's like, it's hard enough to stick to something. It's, if you add a bunch of friction of making it hard to even do, that's, that's pretty tough. So I think it's great that somebody's doing that. I think that's honestly a good business idea. Cause

• 1:00:00Shaan Puri?

  when I met with this guy, I was like, oh, between the first time we talked to you and now he is way more famous. And then between now and where he's going to be in like sort of three years, you could tell this guy is just going to become one of the most well-known people in this world. Like I think that his story is going to be one of the most well-known people in this world because he is essentially donating his body to science while he's still alive, which is like, this is a crazy thought. And he said this during the interview. He goes, "A bet against me is a bet against AI." And I probably wouldn't bet against AI. And I go, what AI? What do you mean? He goes, "Well, I've basically handed over my body and the decisions I make for my health

• 1:00:42Shaan Puri?

  to whatever the technology tells me is optimal." And so if you think this is not going to work, you're basically saying that science and technology is not going to make better decisions than the average human. Like no way. Of course it's going to make better decisions. And I'm just going to do what the data tells me, what the algorithm will tell me to do. And he's like, long-term, that's AI. And he goes, "A bet against me is a bet against AI." And then he, the crazy thing, by the way, and this is in the interview, and I don't know how people are going to receive this because it's like kind of intense. The interview's a bit intense. He's like, um, he's basically like, I'm competing with Jesus. And he doesn't say that, but he keeps comparing himself to Jesus. And I'm like, that's kind of blasphemous. So what, what do you mean?

• 1:01:26Shaan Puri?

  And he's like, well, here's the thing. He's like, uh, I was told, cause he grew up pretty like a very religious like upbringing. He goes, I was told, do X, Y, Z, and then you'll die. And then after you die, to go to heaven. I have a different offer for you. Do X, Y, Z, and don't die.

• 1:01:48Shaan Puri?

  He's like, that's my whole thing. Don't die. If you're against me, you're on team death. If, if you're with me, it's team, don't die. It's like, that's how simple he's boiled it down to. And I'm like, well, you're still gonna die. Like the current thing is you're aging slower, but you're still aging. And that's where he was like, correct. That's currently what's happened.

• 1:02:11Sam Parr?

  Yeah, for now.

• 1:02:12Shaan Puri?

  The better the tech gets, the better the AI gets, the more I'm able to experiment, the closer I get to just slowing down the point, the, the speed of aging to the point where I'm not gonna die.

• 1:02:23Sam Parr?

  One of the takeaways I have is what he has done, it's significant. But you can do a version of this where you dedicate your life, or it's just six months to something. And like some crazy experiment and talking about it, and you could build a career. Like another example of this, this is, that's way more attainable is, you know, the carnivore diet is a thing right now. Only, you know, be one of these guys that only eats meat for six months. That's challenging, but it's not that challenging. And you could build a career out of that. And that is like really interesting. So he's, he's, he's spent a lot of money. I think he says he spends two million or a million dollars a year. That's out of, out of this world for just about everyone. But there are other experiments that you can do and it becomes your identity and you can build a career about, around that.

• 1:03:08Sam Parr?

  Tim Ferriss did that a little bit with the four hour body, where he tried things that weren't crazy. But he did a really good job of explaining it and making that part of his identity. And he built a really great career around it. And I think that's really fascinating. That's a takeaway I have, which is, can you dedicate six months to something and talk about it? And will that actually change your life for, like, for the purpose of actually talking about it? You know what I mean?

• 1:03:31Shaan Puri?

  Yeah, I think that's totally true. And one of the one of the cynical ways to look at Brian Johnson is he just did one of the greatest pre-launch marketing campaigns of all time because now he's rolling out his olive oil. And he's launching his like, you know, blueprint, like supplement pack or whatever ability for anybody to follow his protocol simply.

• 1:03:48Sam Parr?

  I don't think that's cynical.

• 1:03:49Shaan Puri?

  I don't think that's that's I don't think that's true at all. The guy's way too rich to like become an olive oil salesman, you know, like I doubt that he's got 800 million dollars or whatever. Like, you know, he sold his last company for 800 million dollars. I don't think that he's doing this to launch a new supplement brand. I don't think that was his attention at all. I genuinely believe that he needed some purpose in his life. And he decided he found purpose and meaning in doing this. And now he's trying to like, just do it at level 12. So he's like, cool. And for most people, they can they can find some purpose and feel good in exercise or taking care of themselves. He just turned that dial up to level 12. And that's what I see out of him.

• 1:04:30Sam Parr?

  Well, that's awesome.

• 1:04:31Shaan Puri?

  And you know, you don't necessarily want to also be at level 12 because the wheels start to come off when you're at level 12 and it's pretty intense. But it's cool. It's very cool that there are people who live at level 12. There's I'm glad that Michael Phelps exists. I am glad that Elon Musk exists. I am glad that Brian Johnson exists so that you can see what level 12 looks like. And then you dial that down to whatever makes sense for you, but you can take inspiration. You at least know what level 12 is.

• 1:04:55Sam Parr?

  What I'd say about those people is I say, I know two things are two things for sure. I'm I love that they exist. And I'm not them.

• 1:05:02Shaan Puri?

  Right.

• 1:05:02Sam Parr?

  Uh, that's what I know. Um, well, that's sick. Um, I'm excited to see the episode and I guess we'll end there. That's the pod.