Adam Robinson: Positioning Yourself For Success

What can the strategies of the chessboard teach us about how to succeed in life? Author, educator, entrepreneur, hedge fund advisor and US Chess Federation life master Adam Robinson makes a return appearance to The Knowledge Project to discuss some of the best ways to position yourself for success, including how to steer outcomes in your favor and what it takes to become a learning machine. He also weighs in on the potential uses of ChatGPT, investment strategies, and what it means to truly trust your instincts. Robinson is the co-founder of The Princeton Review and the author of the only SAT test preparation book to become a New York Times bestseller. He is also a rated chess master with a Life Title who was actually personally mentored by Bobby Fischer, and, as the President of Robinson Global Strategies, a trusted advisor to some of the world's largest hedge funds. Robinson previously appeared on episodes 47 and 48 of The Knowledge Project. -- Want even more? Members get early access, hand-edited transcripts, member-only episodes, and so much more. Learn more here: https://fs.blog/membership/ Every Sunday our Brain Food newsletter shares timeless insights and ideas that you can use at work and home. Add it to your inbox: https://fs.blog/newsletter/ Follow Shane on Twitter at: https://twitter.com/ShaneAParrish Our Sponsors: MetaLab: Helping the world’s top companies design, build, and ship amazing products and services. https://www.metalab.com Aeropress: Press your perfect cup, every time. https://aeropress.com Learn more about your ad choices. Visit megaphone.fm/adchoices

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

• 0:00Speaker 00

  Chess is an amazing game that I love. One thing is to be aware of positions that you excel in. I'll steer the game as much as I can from the very opening to positions that are of my liking. So it's important that each of us has an awareness of his or her, the situations that they excel in and to steer the game or to steer their life to those situations.

• 0:46Shane Parrish?

  Welcome to The Knowledge Project, a podcast about mastering the best of what other people have already figured out so you can apply their insights into your life. I'm your host, Shane Parrish. If you're listening to this, you're missing out. If you'd like access to the podcast before public release, special episodes that don't appear anywhere else, hand-edited transcripts, or you just want to support the show you love, you can join at fs.blog/membership. Check out the show notes for a link. Today, my guest is Adam Robinson. Adam is an American educator, freelance author, and US Chess Federation life master. He's the co-founder of The Princeton Review, which you've probably heard of.

• 1:30Shane Parrish?

  And he currently works as a global macro advisor to the heads of some of the world's largest hedge funds through his company, Robinson Global Strategies. Adam is a previous guest on the show, but we have the most fascinating conversations, so I always really enjoy talking to him again. In this episode, we discuss learning, AI, ChatGPT, positional advantage, and what most people get wrong about the real him, and a little bit about investing. It's time to listen and learn.

• 2:05Shane Parrish?

  I wanted to start with a bit of a personal question, which is, what do most people get wrong about the real you?

• 2:12Speaker 00

  I think they think that I'm in my head, but I'm actually not. I'm in my body most of the time. And I process information in my body, even when I'm reading, even when I'm thinking, even when I'm calculating. I kind of feel my way to answers. And I'm able to reason, I mean, I mean that literally, reason with my body.

• 2:35Shane Parrish?

  Can you tell me more about that? Like, where do you feel it? How do you feel?

• 2:39Speaker 00

  So George Soros famously said that when his back is acting up, that he knows something is wrong in markets. And even Einstein wrote about having a, he said his, talked about a kinesthetic awareness. If you think about human beings as animals, which we are, we learned to process information in our environment way before the Greeks invented logic. And human beings to survive had to, well, heck, animals to survive, process information in their bodies.

• 3:21Speaker 00

  And we've lost that. We've lost the ability to process information in our body. When I read an idea, say, in, in one of your podcasts, right? I read a transcript, I'm reading something, or, or reading a quote, or reading anything, I'll pause and I'll process it in my body. So what do I mean by processing? I'll just stop for a moment and see how it feels in my body. When I encounter a new idea, I'll say, oh, this feels like, I mean, it's not a conscious thought, but this feels like another thought that's related to it. And so I, I navigate the world.

• 4:05Speaker 00

  Even of ideas through my felt sense in my body.

• 4:10Shane Parrish?

  I like that. It's almost like your subconscious is processing the environment and giving you

• 4:15Speaker 00

  Exactly right.

• 4:16Shane Parrish?

  That you're not even aware of because your rational brain hasn't quite kicked in yet.

• 4:20Speaker 00

  Exactly right. And you think about it, our species had many eons of evolution before we ever came up with logic. You know, there's that great book by Julian Jaynes, The Origins of Consciousness in the Breakdown of the Bicameral Mind. And his thesis was that consciousness, such as you and I experience it, like right now, you and I are conscious that we are on a podcast, talking to each other. But if I'm walking down the street and I have a bag in my hand, I'm not conscious of the bag. And yet, at no point do I ever let the

• 5:02Speaker 00

  bag go. I am unconscious of that. People who commute to work every day and anyone who's driven for more than about a half hour, you experience this jolt frequently where you're driving along and all of a sudden you go, whoa, like out of nowhere, you realize I've been totally oblivious to everything around me for the last who knows how many minutes. And you know that you've stopped at lights, you've avoided, you know, bumping into other cars, you've done a lot of things, but you weren't aware of it. So clearly, we can function

• 5:44Speaker 00

  when we are not conscious. And Julian Jaynes' thesis in his book is that consciousness is pretty darn recent in human history, in the human species. So only about 2, 3,000 years ago, and he said, I realize what I am saying.

• 6:04Speaker 00

  I am saying that the pyramids were constructed by people who were not conscious, who were functioning, who developed mathematics and were able to put, you know, multi-ton stone blocks into place, and they weren't conscious, which is a wild thesis.

• 6:23Shane Parrish?

  Is consciousness like sort of how we reason with words in our head? What, I guess I'm.

• 6:29Speaker 00

  That was his thesis, Smartad nets, that was exactly his thesis. In a sense, a conversation arose in our brain. At the time, we weren't aware of it. Again, he calls it the breakdown of the bicameral mind. Bicameral is two chambers.

• 6:46Shane Parrish?

  Yeah.

• 6:47Speaker 00

  And so the left and the right brain, the breakdown, he said, conversation arose and we didn't know where it was coming from. And we attributed it to the gods. That there must be something outside of us, this voice.

• 7:05Shane Parrish?

  Sending us the message.

• 7:06Speaker 00

  Right, sending a message, exactly. That's something that people should really learn to get in touch with in a practical way. And, you know, one of the things I wanted to say at the beginning, Shane, one of the things I, well, one of the many things I love about you is that you are on a constant hunt, a safari, for usable information, really usable. Everything here, the goal is to provide practical, useful information, not, oh, that's an interesting idea. This is the, uh, the upgrade hour with Shane and Adam, right? How to upgrade yourself.

• 7:48Shane Parrish?

  How do we use it? Yeah, that's a key question for me. You know, one thing I've been dying to talk to you specifically about, given your knowledge of chess and decision making, is sort of the concept of positioning. And I've been noodling on this idea, I think, since we last spoke, actually. It's been a number of years. And it seems to me that the best decision makers in the world almost always operate from a position of strength. And that sort of strikes me because when you operate from a solid position or foundation, nearly every move you make is good. It's all accumulative. Whereas when you operate from a poor position, things almost always go from bad to worse. To what extent do you feel that's important?

• 8:33Shane Parrish?

  And maybe you could explore that with me.

• 8:36Speaker 00

  Like you, Shane, I try to reduce the world, the complexities of the world to usable little rules, maxims, algorithms, heuristics, so that in the real time flux of life, I remember to do something and not, you know, some other time. So one of my principles is never make a decision when I'm confused. That doesn't sound like such a big deal, but I have made decisions when I was confused or tired or stressed. You and I would call it in the stupid zone. And it's important to remember those things in real time. Again, a feeling state. Actually, there's a great book on feeling states,

• 9:20Speaker 00

  The Gift of Fear. And it's written by a guy named Gavin de Becker. It was a book on how to be street smart. So you're walking down the street. Say it's at night in a city you don't really know. You have a vague sense something is off. And that's your intuition tapping you on the shoulder saying, get out of here.

• 9:46Shane Parrish?

  Yeah.

• 9:47Speaker 00

  And yet we look around, our conscious mind looks around for, why am I feeling like this?

• 9:56Speaker 00

  And we don't act in the moment. And it's really key.

• 10:03Speaker 02

  At Edward Jones, we believe rich means opening yourself to new possibilities. That's why your dedicated financial advisor meets you where you are, helping you move forward with confidence. Let's find your rich. Edward Jones. Member SIPC.

• 10:18Speaker 03

  Bonjour, compadre. It's the

• 10:22Speaker 03

  How do I negotiate so many great travel deals? My greatest gadget, the Priceline app. It's got hotel deals, flight deals, rental car deals, all of those deals in a bundle. Deals, game day deals, concert trip deals. No one deals more deals than Priceline. Hold your horses, there's more. The app lets you filter hotels by neighborhood, vibe, star level, and amenities like pools and spas and beachfronts. And, wait, I'm not done. Stop cutting me off.

• 10:49Speaker 00

  Here's another maxim that I've sort of riffing on. His point, whenever things are a little strange, they're very strange. If something seems a little bit off, it's really off. And I don't wait to figure out, to assess the situation. I remove myself from it immediately. So here we're talking about street smart. The same principle can be applied to an investment or a hiring decision, getting married, whatever it is. The key decisions in life, we make them rationally. And yet, our body is giving us information all the time that we ignore.

• 11:34Speaker 00

  But we haven't trained ourselves, each of us, as individuals. So you, the listener, listening to Shannon Adam riff on this stuff, the way your body processes information and your intuitive insights about the world, about others.

• 11:52Speaker 00

  It's going to have a different vocabulary from Shane's or Adam's. And you have to learn that. One of the most extraordinary experiences I ever had in my entire life. So this occurred about 30 years ago. I'm in New York City, 7 o'clock in the morning on a Sunday, and I'm out jogging in Central Park. There are a few people out, but not that many. I'm running near the Museum of the Metropolitan. Near the Metropolitan on the east side, I'm running. And all of a sudden, I go, whoa! I jump and I leap laterally about 10 feet. Out of nowhere, and my heart is pounding. I'm going, what the heck?

• 12:34Speaker 00

  I'm kind of embarrassed, like, does anyone see me do that? And I'm trying to catch my breath, and my eye scans up the embankment. So the embankment is about 15 feet. And then there's a lot of shrubbery. Central Park, full of dense shrubbery and stuff. There's a crouching mountain lion. A crouching mountain lion. Now, it's a statue. But you can look this up. It's like it's hunched like this, about to leave. It's meant to be hidden.

• 13:11Speaker 00

  Now, most people, when they see it, they look at it, they spot it, but it's directly. But I didn't spot it directly. It came in through my peripheral vision. So my caveman brain said, get out of here! And it was my first... Well, I had another experience, kind of like that, but of what it must have been like to live with no thoughts or words.

• 13:39Shane Parrish?

  Self-preservation is a powerful instinct.

• 13:43Speaker 00

  Yeah, but see, let's get away from the word instinct, because it was a clear... I mean, it was an instinct, of course. But that I was acting and that I was programmed to act before I thought. Because obviously, if you were an analytic type and said, huh, why am I dealing with that? You're that crouching mountain lion's lunch.

• 14:08Shane Parrish?

  It's like we have defaults.

• 14:11Speaker 00

  Yeah, there wasn't even a millisecond. I just left. Even though the book Gavin's book, De Becker's book, The Gift of Fear, is about being street smart. Well, that that same intuition is speaking to you all the time about various dangers in your environment. Whether they're investing dangers or relationship dangers or contractual dangers, whatever it is. And to not not ignore that, and in fact, the opposite, really

• 14:48Speaker 00

  refine that that the instrument of your body as an early warning system.

• 14:54Shane Parrish?

  I want to come back to sort of chess and positioning and how that affects our ability to make decisions that accumulate or multiply by zero almost.

• 15:04Speaker 00

  Chess is an amazing game that I love, so I'm going to contrast chess with poker. And we'll talk about positions. If you if Shane and Adam are playing a game of chess,

• 15:16Speaker 00

  we see all the pieces. It's not like you've got a piece behind your back that you're hiding.

• 15:23Shane Parrish?

  You have complete information.

• 15:25Speaker 00

  Complete information. In my calculus, I'm taking into account the fact that I could be mistaken. I can make a mistake and I wouldn't know it. In other words, if you make a mistake in your reasoning or you overlook something, by definition, you're not aware of it.

• 15:46Speaker 00

  But in the game of poker, I don't see your full hand. I don't even know the cards that I'm gonna get. And so I'm assessing all kinds of probabilities, right? And then on top of that, even if I had all of all of the cards, I could also make an error in my judgment. One thing is to be aware of positions that you excel in. And so when you talk about good positions, let's talk about that notion.

• 16:20Speaker 00

  So even without knowing anything about chess, or not much about chess, if you's a listener, the chessboard is, some pieces are on the board, and they're placed in an arrangement which is known as the position. Think of it as, as like on the football field with your players arranged, or the basketball court, like where's your center, where's your, you know, all of this. And I know, I, Adam, know that there are certain kinds of positions I do very well in. I like kind of getting my pieces all arranged just so, before the battle starts, right?

• 17:02Speaker 00

  And so, there are certain openings, like, anyone who's watched The Queen's Gambit, The Queen's Gambit is an opening. So the positions that arise from The Queen's Gambit, you Shane might like those positions, and I, Adam, just, just because of my, nah, aesthetically, I just, I don't like those positions, or I tend not to do well in those positions. I'll steer the game as much as I can from the very opening to positions that are of my liking.

• 17:35Speaker 04

  Mm-hmm.

• 17:37Speaker 00

  And, and that also is a really important skill for, for anyone to develop, is in what kinds of, of positions, in real life you could call them situations, right? Do you tend to excel? And in which ones do you not? A trader, for example, might know that there's certain kind of, I don't do well the, the opening hour, I'm always messed up, and, or I don't like dealing with Fed report days, like, you know, when the FOMC is about to make an announcement. I'm just, I'm not gonna look at the markets during those days. And so we learn the kinds of positions in which we excel. And I don't think that there's any hard and fast rule,

• 18:22Speaker 00

  because the ones that I like, Shane, you might go, Adam, I, I don't like any of those positions. These are the positions I like. So it's important that each of us, you're, you're exactly right Shane, each of us has an awareness of his or her, the situations that they excel in, and to steer the game. Or to steer their life to those situations.

• 18:45Shane Parrish?

  And then with poker, I guess there's a lot more uncertainty. But then how you bet and how you place those bets leads you to a better or worse position. So you might have the best hand in the world, but if you have no chips left, you're in a bad position to take advantage of it.

• 19:02Speaker 00

  There's two ways to live your life. One of them is avoiding pain and the other is seeking pleasure. And you know better than anyone Buffett's first rule of investing, never lose money, right? And rule number two, never forget rule number one. Someone asked me, but Adam, you said in chess, Fischer always played to win and didn't mind losing. Versus investing, you say, don't lose money. And here's why. In a chess game, if I lose it, the next round tomorrow, I'm the same chess player.

• 19:44Shane Parrish?

  Right.

• 19:45Speaker 00

  But investing, if I've lost money today, I have less money tomorrow to invest with. And the problem with a lot of people in investing is that they're look, to become a decent investor, I mean, just decent, is a year or two. That's just decent. You're not even on the JV team yet. And if you've made too many costly mistakes, by the time you become proficient and now you're really good, you got no capital left.

• 20:20Shane Parrish?

  Yeah.

• 20:21Speaker 00

  But poker is a game of many rounds. And each round, I'm learning about Shane, you know, and your tells and you're learning about me. I'm learning about the hand and it's a game of, again, always playing the odds. And the great players learn to, um, the size of your bets. That's really important, which comes up with another investing concept that can be applied broadly in life, which is the notion of your conviction level. A high conviction level, make a big bet. So highest conviction, high conviction, leaning high conviction. I'm not quite there yet.

• 21:05Speaker 00

  I still need a little more and to adjust your bet size to your conviction level.

• 21:11Shane Parrish?

  Let's, let's talk about AI and ChatGPT. I'd love to hear your thoughts on all of these developments recently and, and where you see them going and maybe what scares you and what excites you.

• 21:23Speaker 00

  Well, I love ChatGPT, uh, but maybe not for the reasons people think. So, um, so I use it as a thought partner to help me ask better questions. The key thing is not that it can answer questions. It's that it gives me a tool to ask even better questions in the same way that YoYoMa can coax more beautiful music out of a cello than you or I could. And in the hands of a master, what you can do with ChatGPT? Simple example, I'm a used car salesman.

• 22:06Speaker 00

  I could describe the car and say, what kinds of questions will people ask about that car? And, and it might, might say something and go, whoa, whoa, I, I would have forgotten to, to deal with that. I have to have an answer to that question.

• 22:23Shane Parrish?

  So it can train you.

• 22:24Speaker 00

  Exactly right. Forget training ChatGPT, it's training Adam. Like, oh yeah, it's training that, but I, I'm getting better and better at asking questions going, oh, that's right. The way to think about it, it's a super smart, uh, lightning fast research assistant.

• 22:46Speaker 00

  It doesn't come up with insights. It's a really good deductive analytic machine, but it's not yet capable of making logical leaps that aren't evident from the domain.

• 23:02Shane Parrish?

  In areas where you're an expert, it's probably not that useful and it's often wrong.

• 23:08Speaker 00

  Well, but I don't care. Even when it's wrong, it tells me, why would it have thought that?

• 23:14Shane Parrish?

  Right, exactly.

• 23:15Speaker 00

  Right? And so, all right, here, I'll give you a funny example from back in the day. I was arguing with my then-business partner, John Katzman. We had just started the Princeton Review. We were debating, the two of us, whether we should include definitions in the vocabulary list. John was of the opinion that we should just list the words and they should look them up and write the definitions down. I said, no, we should provide the words. Sorry, the definitions. So we were debating this, but he and I always tested everything. And a girl walked up, I still remember the day. So one of the words on the word list was autonomy.

• 24:00Speaker 00

  So I pointed to the word on the list and I said, do you know what that word means? And she said, yes, I do. I said, what does it mean? She said, it's the study of the human body. She misread autonomy with anatomy.

• 24:18Shane Parrish?

  Yeah.

• 24:19Speaker 00

  But that told me something. Even there, even though she was wrong, suppose that was ChatGPT.

• 24:25Shane Parrish?

  Right.

• 24:26Speaker 00

  I'd go, oh, okay, it confuses words that look the same. Right? Now that's a silly example. The key thing in school right now, this is really important. It's the key to the future. It's the key for everything, not just school, is when you've got machines that can answer anything, the edge is...

• 24:50Speaker 00

  Who asks the best questions? That's key.

• 24:54Shane Parrish?

  So how do we learn how to ask better questions?

• 24:57Speaker 00

  Right, well, let's come back to that in a sec. An exercise I used to do with students is I'd give them a statement like this. Peru exports copper. So that's a factoid, right? And I'd say, you've got three minutes to come up with as many questions as you can based on that fact. So who imports copper? What else does Peru export? What does Peru import? And I gave it to ChatGPT and boom, it came up with some really impressive questions. Like, what's the trend of Peru's exports?

• 25:41Speaker 00

  All of these things were conventional insights. At no point did it say, come up with a question or an answer that I went, oh, my gosh, I don't see how it did that. So what ChatGPT, I said, it's a smart research assistant that's going to go out to the web or the library, as it were, and do the research and give you the conventional wisdom.

• 26:13Shane Parrish?

  Yes.

• 26:14Speaker 00

  Right, that's what it does. It boils down the conventional wisdom. It's not going to think unconventional. I know its limitations and it still prompts me to think, oh, right, I forgot to ask that. Or I better refine that question. Even your question itself, how to ask better questions. I can get all self referential. What do we mean by better? Right? What's a better question? A good question is one that prompts other questions.

• 26:48Speaker 00

  Or a good question is one, here's another way to come at it. A good question is one that increases the choices that I have.

• 26:58Shane Parrish?

  That goes back to positioning, right? Because if you're in a good position, you have more choices than if you're in a bad position.

• 27:03Speaker 00

  Exactly right. You want to maximize the number of choices that you've got always. Now, at a certain point, you've got to rein that in and come to a decision and rule out all the choices. But you want to see the choices, at least initially, as long as you're not overwhelmed by them. Whenever you find yourself asking, "How do I X?" "How do I get to London quickly?" Or "How do I increase marketing's..." "How do I increase sales and also increase the sales price of the item I'm selling? How do I do that?"

• 27:46Speaker 00

  Instead of asking, "How do I?", ask the following question. "Who knows how to do whatever that is?" So, all of a sudden, instead of my trying to figure out how I, Adam, ought to do it, I've got lots of choices. Now, it's, "Okay, I've got to find someone who knows that." So, that's an example.

• 28:09Speaker 02

  At Edward Jones, we believe rich means opening yourself to new possibilities. That's why your dedicated financial advisor meets you where you are, helping you move forward with confidence. Let's find your rich. Edward Jones. Member SIPC.

• 28:24Speaker 03

  Bonjour, compadre. It's the Priceline Negotiator. How do I negotiate so many great travel deals? My greatest gadget, the Priceline app. It's got hotel deals, flight deals, rental car deals, all of those deals in a bundle. Deals, game day deals, concert trip deals. No one deals more deals than Priceline. Hold your horses, there's more. The app lets you filter hotels by neighborhood, vibe, star level, and amenities like pools and spas and beachfronts. And, wait, I'm not done. Stop cutting me off.

• 28:53Speaker 00

  I often go to Google.

• 28:57Speaker 00

  And run what I call Google experiments. So I will type in the beginning of a question and see what it auto suggests, right? It auto completes, right? If you type in, how can I learn to? You'll see the number one question people ask on the internet is, how can I learn to love myself? Here's a better question, because we're talking about making questions better. Here's a better question than how can I learn to love myself? Is how can I learn to love? Let's remove yourself and all that judgment around it. Okay, how can I learn? What does loving mean? What does that mean to love? Let's take it away from myself for the moment. By the way, that's not my question.

• 29:42Speaker 00

  It's what Google pulls up, right? So to see the kinds of questions that people come up with, it's a really important exercise that, you know, the problem with the Socratic method is that Socrates, the teacher's doing all the work.

• 29:59Shane Parrish?

  Yes.

• 30:00Speaker 00

  Right?

• 30:00Shane Parrish?

  You have to do the work to get the...

• 30:03Speaker 00

  To know the questions to ask, right?

• 30:05Shane Parrish?

  Yeah.

• 30:05Speaker 00

  And it's, think about school. The teacher asks the questions and the students, you know, raise their hand and give the answer. That's, machines are gonna do that. You gotta know what questions to ask. It was a general patent who said, never tell your men how to do anything. Tell them what to do and let them surprise you with their ingenuity. Obviously, when you're executing in a battle, you just gotta execute the command, right? But as managers, as bosses, as teachers, as parents in relationships, the more choice we can give the other person,

• 30:47Speaker 00

  which is to say the context, which is to say, to go back to your word, the position.

• 30:53Shane Parrish?

  Hmm, I like it. I wanna, I wanna switch gears a little bit and talk about how we become a learning machine.

• 31:01Speaker 00

  To excel at anything, to do well in life, describe actually life as...

• 31:07Speaker 00

  Learning as human beings, we learn and we should be learning every day. We should be learning every day.

• 31:16Shane Parrish?

  Yeah, you want to go to bed smarter than when you woke up.

• 31:19Speaker 00

  Yes, in concrete ways. Okay, I'm going to make an outrageous statement. I, Adam, know more about financial markets than any other living person. So that's an outrageous statement. How can I make that? I created software to test ideas about markets.

• 31:36Shane Parrish?

  Mm hmm.

• 31:37Speaker 00

  Back in the day, if you had a question, pre-internet days, you'd sit there going, is it worth my while to make a one hour trip to the public library? Maybe find a book on the topic, maybe.

• 31:52Shane Parrish?

  Yeah.

• 31:53Speaker 00

  Maybe that relevant book will have an answer. And maybe the answer will be something that I can actually use. So you're looking at a two or three hour investment. And most of the time you wind up going nah.

• 32:09Shane Parrish?

  Yeah.

• 32:09Speaker 00

  Okay, now on the internet, you can do that in milliseconds. You go, huh, let's just check that out.

• 32:16Shane Parrish?

  Well, what you've really accelerated is sort of like the learning cycles.

• 32:21Speaker 00

  Exactly.

• 32:22Shane Parrish?

  As you remove the friction, like instead of taking three or four hours to learn something, now it takes milliseconds perhaps.

• 32:29Speaker 00

  I'll bring it back to my old Princeton Review days. So back in the day, I co-founded the Princeton Review with John Katzman. And when I started off, I was a tutor. I was tutoring 10 to 12 hours a day, seven days a week. Do the math.

• 32:48Shane Parrish?

  Yeah.

• 32:49Speaker 00

  That meant I was seeing 60 to 90 kids a week.

• 32:55Shane Parrish?

  That's crazy.

• 32:56Speaker 00

  I know, I was seeing kids every hour on the hour from seven in the morning till seven or eight at night. 60 to, and I taught each kid each week, the same test, which meant I had 60 to 90 learning cycles.

• 33:16Shane Parrish?

  Yes.

• 33:16Speaker 00

  On every single question in the test. So I would try out different explanations as I went through the week. By the time it was Wednesday.

• 33:30Shane Parrish?

  You had it nailed.

• 33:31Speaker 00

  I basically knew every error that a kid was gonna make.

• 33:34Shane Parrish?

  Yeah.

• 33:34Speaker 00

  On that test. I would know on question thirteen, the kid probably chose C.

• 33:40Shane Parrish?

  Is that the key to learning then? Accelerating the number of learning cycles and getting feedback and then reflecting on that feedback.

• 33:48Speaker 00

  Exactly right. So, so with markets, so to go back to markets. So if I wanna test an idea, JP Morgan, an exemplar of the notion of too big to fail. Suppose I wanted to test the idea. If JP Morgan is outperforming other banks, is that good or bad for the banking sector? For banking stocks in general and over what timeframe? Before I created my software, if I wanted to test that question, I'd have to download the data. I'd have to get JP Morgan closing stock data for the last, you know, forty odd years.

• 34:30Speaker 00

  Then I'd have to think of all the things I wanted to test it against. Banks, maybe ten-year yields, maybe, maybe the broad market. Put all of that in to a spreadsheet, set up conditions, like define outperforming, right? And then set up all these conditions. I'm saying all this for a reason, even if you're not interested in finance. It'd take me about an hour to set all that up. And at the end of the day, I might go, oh, it doesn't tell me anything and I've just spent an hour. I paid some programmers to hard code what I normally do using Excel. So I can answer that question in about five seconds now. I can answer a question like that on financial markets.

• 35:14Speaker 00

  And by the way, I will tell you JP Morgan's outperforming does tell you something about those who wanna look it up. It does tell you something.

• 35:22Shane Parrish?

  Interesting.

• 35:23Speaker 00

  Sorry, it's slightly bearish, not hugely so. And when it's underperforming, it's slightly good. Now, again, you have to define, just like with ChatGPT or anything, you have to define outperforming. Like, so what do I mean by that? Over what timeframe is it outperforming? By how much? But I can put all of that in.

• 35:43Shane Parrish?

  What you really did was sort of like take away the time to get the learning cycle complete, right? Like, you're inputting a question, there's almost no friction between the question and the response.

• 35:55Speaker 00

  Exactly. And I get then to modify the question.

• 35:58Shane Parrish?

  Now you can spend an hour modifying the question.

• 36:01Speaker 00

  Or I can spend even 10 minutes, and I keep getting to iterate. And each time I learn something new, which suggests further questions, right? So I'll give you an example. So how does someone apply that in their lives? You want to increase the learning cycles. So there's a great book, The Talent Code.

• 36:20Shane Parrish?

  Yep.

• 36:21Speaker 00

  Brilliant book, great, great book. And they talk about how Brazilians play soccer really well.

• 36:28Shane Parrish?

  I remember that, yeah.

• 36:29Speaker 00

  And one of the ways they play, instead of playing on a field that's like a football size.

• 36:36Shane Parrish?

  Yeah.

• 36:36Speaker 00

  They shrink it down, so it's like 30 feet, which means that the learning cycles are much faster. They have to take more shots, they have to pass more often. It's accelerated. If you're an organization, you want to find ways to increase the number of learning cycles that every one of your employees goes through. A few summers ago, I was walking down Fifth Avenue, and I, there were three young kids, college kids, they were clearly like, you know, late teens, early twenties. And they were raising money for savethchild.org. And I watched them for a while, and each one of them approached passersby.

• 37:23Speaker 00

  On a beautiful Saturday, the sun was out, people going about their business. And they would stop passersby and say, excuse me, sir. And New Yorkers are just trained, sorry, I'm in a rush right now. I gave it the office, whatever it is, right? So I watched them for about five minutes with my friend. And I said, can I just want to do something? So I called all three of the kids together. And I said, I'll give you $500 if you'll listen to me for five minutes. Is that a deal? They said, yes, it is. Because I made probably their weekly quota, yes.

• 38:00Shane Parrish?

  Yeah.

• 38:01Speaker 00

  I've been watching you for the last five minutes. And each one of you approaches passersby with basically the same thing. Excuse me, sir. Excuse me, sir, or ma'am, or whatever. And I said, has that been working for you guys? No, it hasn't. Well, then why don't you try different things? Walk into some go, I have the funniest joke for you, sir. Try different things and see what works. I don't know whether they did. And I gave them, you know, I signed up and I gave them actually more than 500. And I even wrote to the head of savethethechild.org and say,

• 38:42Speaker 00

  you have a network of thousands of devoted experimenters who are out there, who could be doing learning. So let's find out what's the best phrase to get people to stop. Maybe approaching a couple. This is the phrase to use when it's a couple. Always approach the woman. Or if it's a single person, or maybe you approach men and women differently, or groups, how do you do that? And I said-

• 39:10Shane Parrish?

  People running these experiments. And there's, there's sort of like no intentional iteration. And then there's no learning after something is successful. It's not passed on and you-

• 39:20Speaker 00

  Not passed on at all. There's a kind of business that does that very well. Franchises.

• 39:28Shane Parrish?

  Hmm.

• 39:29Speaker 00

  Franchises, there could be a franchisee, say, of McDonald's in Buffalo, New York, who goes, oh, on rainy days-

• 39:40Speaker 00

  Use this phrase, because everybody buys milkshakes. Mm hmm. So when you go into a McDonald's, pretty much doesn't matter what you you order, they will say, would you like fries with that? Mm hmm. Now, that phrase was discovered by a girl. I believe it was a teenage girl, I forget what town, but she discovered that a lot of people said, sure, why don't you throw in some fries? And they discovered seven percent of the people say yes to that. That's one person in fourteen. That's a mega kick in french fry sales. Now, probably not too good for the health of the nation,

• 40:24Speaker 00

  but again, maximize the number of of experiments that you do, your learning cycles, and each one, you have a clear objective. So right now, you see me with my top hat on, and I've taken to wearing this. I bought it, I was walking by a a a hatter in New York, and I see this hat in the window, and it just, I just smiled when I saw it. And I walked in, and and I got one. So this is made to me, my head. Shane, if you were in New York, and next time you are, we will do an experiment. You and I will walk down a street, say, in Soho,

• 41:07Speaker 00

  and I promise you that at least once a block, I will get compliments. And if I'm seated in a restaurant, I'll get approached at least once a meal. I say at least once. And often when people are leaving, and they always have a big smile on their face. I I got such good response with this. Why am I saying that? Because I have a hat, a top hat just like this, with with with a little bit bigger, that gets no responses, none whatsoever. I have no idea why, but I don't wear that one too much, because it's fun for me when people say, hey, nice hat, and it's always with a smile. If I go to a a a a a social gathering.

• 41:51Speaker 00

  Then anyone I approach, I'm actually running a little mini experiment in that moment. Like, I'll go, huh, should I tell a joke? Or should I, whatever it is. And I'm continually upgrading my knowledge about the world. Everything I do is an experiment. And, and, and this is the beauty thing also about experiments. Now, you said this, Shane, it's super important. You need to have an iterative way to stockpile the results of those experiments. Right? Like, okay, so an organization would have to have some formal means of, of gathering what it's learned and, and implementing that somehow.

• 42:34Speaker 00

  And the beauty thing about an experiment is you can't fail. You gotta learn something. By the way, I didn't wear this in order to get comments. I didn't, I just got it because it made me smile, but it makes everybody smile.

• 42:49Shane Parrish?

  I think that, that, that's key in terms of like, you're just opening yourself to serendipity. You didn't do it for a reason, but then when you got feedback that it made people smile, it makes you almost want to wear it more.

• 43:00Speaker 00

  It does, absolutely. Who doesn't like

• 43:03Shane Parrish?

  Yeah, exactly.

• 43:04Speaker 00

  Seeing people smile when you, when they see you. Organizations can do this, teachers can do this. You yourself as a podcaster, right? Like, let's experiment with the opening or the ending or, or maybe let's try rapid fire, maybe that works or, or whatever it is. But life is an experiment, is a mindful experiment. And you said this, Shane, treat them as learning cycles and accelerating that as fast as you can.

• 43:35Shane Parrish?

  One thing we talked about last time, I want to get to you before we wrap up here is, uh, we talked about sort of ways to avoid stupidity. And you had written a book on how not to be stupid and you haven't published that yet. And I'm wondering why and when that's going to be available for everybody.

• 43:52Speaker 00

  So Shane, I have to thank you for prodding me to, to getting it out, but I, so I, I haven't released it. So, um, so I, I wrote the book not intending it for publication, not initially. Every year on his birthday and at Christmas, I send Buffett a present. So his birthday is, uh, is the end of August and Christmas is Christmas.

• 44:18Speaker 00

  So every year, about a month before that day, I'm like, oh, man, what am I gonna do this year? Because it's not an easy person to get a present for. It's not like he needs another tie, right? One year, I sent him a nickel. So, but it was a special nickel. To amuse myself, over the years, I've adopted the practice, if I have any coins in my pockets, I spill them out on a table, and I search through them to see if I can find any old coin. And I define an old coin as anything before 1960. So the oldest coin I have so far is a 1907 penny. It's worth 300 bucks. Not like I'm gonna sell it, but just, wow, I found an old coin.

• 45:03Speaker 00

  It's a little adventure. When I pull the coins out, I was like, do I find any old coins? So I happen to have a nickel from 1936. So one year, that was his birthday present. Buffett was six years old in 1936. So I sent him, I wrapped the nickel up like it was a coin collector nickel. And with a birthday card, it said, Dear Warren, happy birthday. This is your allowance. Spend it wisely.

• 45:36Speaker 00

  And that was his allowance. Yeah. It was his allowance. He was also earning money, of course, as you know. And he shot me back something that very few people in the world have ever gotten. Do you know what I got? No. An email. Oh, awesome. Those of you who don't know, Buffett religiously does not do email. He said, Dear Adam, thanks so much. I'm thinking hard about how to spend my allowance. So that book, How Not to Be Stupid, and he endorsed it, was his Christmas present one year. And so the endorsement is, this book is loaded with good ideas and appropriate warnings. And it gave you a copy and also gave Tim a copy, Tim Ferricks.

• 46:20Speaker 00

  And he said, oh, wow. Adam, this is a good book, but could you shorten some of the examples? And provide more non-obvious advice. And that rankled a bit. I went, ee, what do you mean, non-obvious? And Tim's a great, a great friend, right? So you have Buffett, who said, Adam, get this out into the world. Yeah. I'm giving you an endorsement. I don't give anybody endorsements. Here, get this out in the world. And Tim, who said, um, that seems kind of obvious. I sat with that and I realized, I say this affectionately, uh, Tim was being stupid about stupidity.

• 47:01Speaker 00

  So I define stupidity as overlooking or dismissing conspicuously crucial information. And Tim was dismissing it. He was dismissing it as kind of obvious, what I was saying. If he had thought a little more, he would, by the way, I'm not critiquing Tim on this. I'm not whatsoever, because it sent me down a rabbit hole and I learned a ton. Tim could have said, Adam, Buffett said, get this book out there. I'm going to give you an endorsement. And yet it seems obvious to me. So what am I missing? He didn't say that. He assumed he knew it already.

• 47:43Speaker 00

  So I realized that the, the key insight was that all, Buffett said this book is loaded with good ideas and appropriate warnings. Warnings. And I know something that Buffett maybe didn't think about. Human beings always ignore warnings. They always do. And so they dismiss it. I go, yeah, whatever. So I sat with that question. Why do human beings ignore warnings? And it's a really key one. And it's key, especially for you, Shane, is that all advice is a warning. All wisdom is a warning.

• 48:23Speaker 00

  If I say the best way to boil an egg is this, there's an implicit warning. If you don't boil it like that, the egg is not going to be as good as it could have been. Right? If I say the best way to negotiate a contract is to always let them make the first offer, there's a warning. If you make the first offer, you're not going to get as good a result. People always learn the wrong lesson because they think either about themselves or about other people. They read something in the newspaper about somebody doing something outrageous. They go, "Oh, I would never do that." That's why people don't learn, is

• 49:04Speaker 00

  they can't imagine themselves in that situation. So you'll remember at the beginning of the book, I talked about musicians who had lost their instruments. Yo-Yo Ma. Exactly right. So those of you who don't know, in 1999, Yo-Yo Ma, the great cellist, left his cello in the back of a cab. And this was front page New York Times, $3 million Stradivarius. About nine months later, another musician, in exactly the same circumstances, forgets his violin in the back of a car, exactly the same situation. And he had read

• 49:43Speaker 00

  about Yo-Yo Ma. And I did research. There are like, a dozen famous musicians who all lost their instruments, almost exactly the same situation. Always after a performance, always when traveling. And after Yo-Yo Ma lost his instrument, Shane, I'm asking you, let's say you're a world famous violinist, and you read about Yo-Yo Ma has lost his instrument. And then you read another cellist, you read about another virtuoso who's lost his Stradivarius. What lesson would you, Shane, conclude? I'm just asking you. Don't overthink it. Like, what do you think most people would conclude? It's not going to apply to me.

• 50:27Speaker 00

  Oh, that's interesting. Most people would say, "Oh, I better be careful with my instrument."

• 50:33Speaker 00

  Oh, see, you're very smart. Well, you're, okay, well, you're very wise. Most people would go, "Oh, I better be more careful with my instrument," in that situation. But one of the musicians, Philippe Quint.

• 50:46Speaker 00

  Lost his, and he knew about all the other musicians who had lost theirs. Do you know what he concluded Shane?

• 50:54Shane Parrish?

  What?

• 50:54Speaker 00

  He concluded that none of them had lost their instruments. He concluded they were publicity stunts.

• 51:00Shane Parrish?

  Huh.

• 51:01Speaker 00

  He so could not imagine.

• 51:03Shane Parrish?

  That somebody, yeah.

• 51:04Speaker 00

  There was no way, oh my, because that would crush him. It would devastate him for years.

• 51:09Shane Parrish?

  That's crazy.

• 51:09Speaker 00

  But notice, but it's not so crazy. He, he, he himself dismissed it, goes, they didn't really lose their instruments. He should, the question he should have said is, if they lost theirs, under what circumstances might I lose mine? That's not the lesson he drew. So I have to write in a chapter into the book that, that warns people of that. So this is something I'm gonna, I'm gonna offer Shane, because I know you're a big fan of the book and, and I'm, I'm, I'm publicly declaring to you and offering to you, we'll have to think of some cause, but I'm, I'm, I'm prepared to donate all the, the proceeds from the book to some charity.

• 51:55Speaker 00

  The book is written, I have to write a, a introductory chapter that warns people not to dismiss what you read and then raise some money for some worthy cause.

• 52:05Shane Parrish?

  Amazing.

• 52:06Speaker 00

  And so, so let's, let's, let's talk.

• 52:09Shane Parrish?

  Make that happen.

• 52:10Speaker 00

  Yeah.

• 52:10Shane Parrish?

  That's a great way.

• 52:11Speaker 00

  And because it's, it should be out in the world. So let's get it out and let's save some lives and make people more effective.

• 52:32Shane Parrish?

  That, that is a great place to end this conversation, Adam. I'm so pleased again to talk to you and your generosity with your time and, and your commitment now publicly to getting this book out is, is wonderful gift. Thank you.

• 52:47Speaker 00

  You're so welcome. Had a blast Shane.

• 52:54Shane Parrish?

  Thanks for listening and learning with us. For a complete list of episodes, show notes, transcripts, and more, go to fs.blog/podcast, or just Google The Knowledge Project. Until next time.