YouSaid · the spoken record

Adam Karr

lines on the record: 74
first: 2024-11-12
most recent: 2024-11-12
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“It's a COVID being dream builder that's in my firm, but it's outside of the firm too. And success to me is like having something that's meaningful to you that you're really going after and helping other people. I know what it feels like to be in that position where you don't know how to do it, but it's in you. It's a hunger that you have. And when I see that in others and I'm able to help them do that, like there's just tremendous satisfaction enough for me. Like that success.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“What's interesting to me about this question is how it's changed for me over time. When I was in high school, if you would have asked me that, I would have said, it's just a change. And I was in my 20s, it was a number. And then as I got into my 30s, it was more about certain career aspirations and relationships, you know, my wife, my kids. But today, I get a lot of meaning in using kind of my Strengths and skills to help other people.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“Just prioritizing first and foremost always like what do I think is the right answer regardless of kind of whether or not somebody else says it”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“First principles thinking. And having an independent view, not filtering. I first met Eleanor Founder. The mid 90s, that very first meeting. He said to me, he was like, you know, if you want to get a 10 alpha, you got to come at the problem completely differently. You got to turn it on its head. When I was young, and I was very new in my besting journey, I don't think I fully appreciate it. But 30 years later, like I've been internalized it and just kind of that first principles, independent thinking and really just trying to get to the truth of an answer and then being rigorous around pulling on the threads that are opposing to it. grinding on that to get to the right answer and being okay being different from everyone else is like that's the thing like if you're with the crowd and with everyone else like you're going to look just like”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“That when they're in that situation, that's something that they actually do. By the way, maybe you put a fee structure around it. So we, all of our fees are performance-based, but they're refundable. So when we go through these periods that were underperforming, we refunding fees back to them in the same ratio. And we do that because it tends to be when you're in that period a way to For the client being in that period which elongates their time frame. But that reinforces us to be in a position to take long-term decisions. So, it's one idea, simple idea, alignment, and kind of having a long term, but it permeates everything that you do from type of people that you hire to the culture you have to having paper portfolios that allow them to express themselves to the clients that you have, to the fee structures you have. It's everywhere.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“You profess to be a long term investor and that's really part of you and you have the temperament to do it. Need to manifest that in every way. So that starts with the kind of people that you hire. When I'm hiring and interviewing people, everybody likes to say they're conturning, but are you really contrary? Let's talk through some examples when you've done something that's different to the crowd in a way that had consequences and was difficult to do. Create an environment. Turns out if you hire people that are really independent-minded, they like to be given a lot of space. So you have to create an environment that gives them the space to do that. And you have to create a culture in the way that you interact, the way that you talk, the way you structure your meetings that focus around independent thinking and taking a longer term time horizon. On the other side, it means that you need clients that are actually willing to absorb the volatility that might come from taking a long-term position that are not going to be the first to redeem when you're out of sync with the market. And they don't just profess.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“Take these simple idea, take it seriously, and really lean into it. Focus on a few things where you can really make a difference that place to you. But the discipline to actually do it, do it consistently, like really lean into it. I'm really a believer that the magic and the sauce is in the extremes. And so just keep, like, if you think it's worthwhile, like push on it, really push on it. Like, really go deep in the company in terms of how you size positions when the ones that you really see. Like you see the matrix clearly, like just take that and really lean into it.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“We don't have infinite time, right? And so what you choose to allocate it to is really a critical decision. It's really underestimated how important that is over and over and over again. And it's part of the journey, right? Because you're going to be in the rabbit hole. But that's part of like seeing the algo improve over time. And it's an area that you can help, you know, as a coach kind of give some feedback on that. just asking your question like when you're spending the time to what we were just saying like is this a question that i can answer Very simple, but like, you know, take a simple idea, take it seriously.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“Generally not. I mean, it's. It's a part of the mosaic of what will be the driver. I mean, it's an interesting thing with CEOs of like what are the characteristics that allow one to be in that seat and they're not always correlated with the skills that are best to allocate capital to make certain strategic decisions to make decisions that are independent of what might be popular.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“That worked for you, but if you break any one of those kind of components of the flywheel, if you will, then you really got grit in the flywheel. And it could be dangerous in its worst case.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“This is much less discussed, but I think is squarely in your positioning frame, is how you run your personal life. Very much impacts your ability to make good decisions, particularly if they go sideways, right? And so you see people in the industry who then adopt a certain lifestyle, a certain fixed cost base, and then you need the investment to work as opposed to making, you know, what you think are good risk adjusted decisions. And I think once you kind of cross over into needing to work, you've changed the dimensions of your temperament and your emotions. And once you do that, put yourself in a bad position to make great decisions. Companies do that. I mean, that's something to be very mindful of. It's something to think about as a firm and investment teams. Like it's you're looking for a certain type of individual, but you're trying to create a certain culture within the team. You're trying to have a certain relationship with your clients. Like those are all part of enabling you to try to make the best decisions in the way.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“Pretty devastating. It's part of the concept of kind of going back to this journey that you're on, of like knowing yourself, thinking about game selection, accelerating your learning feedback. Know that you're on this hero's journey and there's going to be these setbacks. And I think one of the things that really was helpful for me was kind of inverting it and just thinking like this is part of it. Like this is part of the struggle. Like you know you're going to be in these moments and how you handle it. Part of it is a positioning going in, but part of it is also how you embrace it when you're in the moment. Right. So it's another form of positioning, right? It's sort of, do you have the balance sheet when you go into things that are unexpected, but do you also have the mindset for how you embrace things like that when you're in the moment? Because you could sort of just suffer woe is me, or you could say, okay, this is the hand that I have now. How am I going to play that? If you embrace it in that way, I find that it puts you in a very different position. I didn't get there immediately. It took me a little bit while...”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“Yeah. So we went into it after they had had their wildfires, thinking that legislation had passed, but there was this little loophole if anything happened before the end of the year. We were already through the main part of the heavy wildfire season, but then another fire hit. We're in San Francisco. I'm literally in my office looking out to Moraine County, and I see the flames and the smoke billowing and I'm thinking that's my position billowing. That's my portfolio, you know, that's my investing track record. kind of devastating and I sized it at a level that I could take an impairment. I thought it was lower probability than the actual probability, but I wanted to try to position for that to weather it. And then a month later, the story I told you about XPO and the short report hit. So three hits.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“Wrote a book on I mean, positioning is everything, right? In the sense of You can think about it in the portfolio Do you have the resilience to absorb what may come? You know, we have these situations where you wouldn't have anticipated it and then it can be quite devastating. If I go back to, I mentioned Symantec, but 2018, really one of the most difficult. Years of my professional life. So the Symantec hit about a month later, it was in November and I'll never forget because it was on my birthday. We had a position in a company called PG&E, which is a California utility”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“I think it's an area to keep reminding yourself and have a discipline. I was recently in Australia seeing a number of clients on a big topic is the election, the US election in their mind. And obviously for us it's a big deal. But the best answer is like it's kind of 50-50. And I'm not going to position and tilt the portfolio for a particular outcome. One, because I wouldn't be well served to do that. But two, to this point, like it's unknowable. And so I just want to be resilient as opposed to spend all this time obsessing on Is there going to be a particular candidate that wins and position the portfolio in that way? Much better to just focus on it like from a position of resilience.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“I can fall in the trap of like. Is this useful right now? That's a horrible question to ask with your kids, right? And so just to give yourself the space for play to just be in that moment with them or whatever it may be, you know, on Fridays and Saturdays, we have family dinners together and it'll start, call it at six o'clock and everybody's got a role in doing something and everybody's in the kitchen and you're just mixing it up and you're just totally in that moment. The next thing you know, it's 10 or 10 30 and like it's the end of dinner. Like that's been a four, four and a half hour journey and like just totally lost in the moment of it. Those are some of the times that I value the most. And there was nothing intentional in that except that you were going to be in that space.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“On the other side, it might be something like TSMC, the semiconductor company, one of the best companies in the world. The big question there is a geopolitical question. I could spend three months on that, and I'm not sure that that would move my probabilities in terms of making a better decision on that thing that is the big driver. Every time I'm making a decision about where I want to focus and where I want to spend my time, it's like, will doing that result in the highest return on time as opposed to capital and just being really rigorous with yourself and your team about that question, I think is something that is often overlooked or not really challenged to the degree that it should be.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“As investors, we allocate capital. And you could argue that's our most important job. You say that a lot of CEOs, ironically, the most important job is allocate capital. I think there's something on top of that, which is more important, is how you allocate your time. People just don't think about it enough. And they fall into these patterns without really thinking about the most important question because you can get more capital, you can't get more time. And so just, you know, as an investor, one of the things that comes up a lot is, okay, we're going to spend, we're going to go deep on this company. We're going to spend the next three months really grinding on it to understand it. But if we do that for three months, will we be in a better position to move the odds on a better outcome? That's the question. And there's some situations where absolutely you would be able to do that. Like a big question is how they might adapt or modify their distribution networkers.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“But it just Setting the example is the first layer, I think, and the craftsmanship of it, no matter what you're doing from a janitor to a soccer player to whatever. And then the second dimension, I try to think more about with my kids is just trying to help them get in the way of the things that they really love. I have three kids from age 21 to 12, and they're so different, right? But for each one of them, like to help them get in the space of, it goes back like, what can you be obsessed about? It doesn't matter what it is. What is that for you? And be deliberate about it, be intentional about the concept of deliberate practice of like really having that blueprint, grinding on it, leaning into it, measuring yourself relative to it. Like that's the thing. What have you?”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“I mean, if I just draw my own example and I go back with my grandfather. Was just the example that he set. I think kind of just the first layer of that with my own kids is just them seeing me grind every day. They make fun of me like, you know, I want to do what you do. I want to be an investor. You don't really have to do anything. You just sit around and read all the time. Don't necessarily see those difficult moments or getting up at 4 o'clock in the morning. I don't think you're going to go.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“Every day, or the uncertainty of a situation, but not taking that for granted and like really practicing that day after day, essentially inoculate yourself to prepare yourself for that.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“It's nice to have that goal, that aspiration. It's very different to have the will to practice, to grind, to make the cookies every day, and to write it out, and then look back at yourself and look at the steps and measure yourself and showing up in that. And that's why I also tie it just to the concept of it is the journey that gets you to that place. You know, one of the questions that I really love, I think about it, I'm still kind of like evolving on is, you know, music, like if you're a concert pianist, even though you're one of the best musicians in the world, you practice your skills every day. For us as investors, like what's the equivalent of practicing skills every day? It's an interesting question. I mean, I think there's some parts of it are temperament related, like just practicing deferred gratification. There's elements of it that are, you know, thinking about the world probabilistically, everything, just continuing to practice.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“I want to put some chocolate chips in this, and then you try that, and the first time you do it, it may not work that well. But I still really like chocolate chips. That's authentic to me. And so you adapt it a little bit. And then in the end, you end up with something that's uniquely you and really special”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“I love that. Two thoughts on that. One is if they were making the cookies and following the recipe, if they wrote it down at each step, what they were actually doing. That gives you something to look back. Like, let's say that cookies didn't turn out well, right? It gives you something to look back at and go on track and see kind of where they might have been off. And then the second part of that, just to the point of the Having a blueprint, the importance of that is you start with the recipe and you do it exactly, but then you adapt it. You're like, well, maybe if I put, I really like walnuts or whatever.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“And it's probably more contemporary in its view. You know, I was reading earlier this year, I was reading the biography on Andy Grove, and it talked about you rise to the level in the company that you're a manager, a more senior engineer, like you lose your connection to the cutting-edge engineering. And so, you know, it was a very clear part of their culture. It was non-hierarchical, quite flat. They would interact directly and they're like, why do you do this? And he was like, it's survival. I need to be close to the source of the people that know the problem the closest. And when I read that, I was like, wow, that's the same thing that Alan did in a different way, a different industry, different business, but it's the same concept. Never call it survival, but I know that that was underneath it of like.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“So many of them, and he's a special person. I mean, the first thing that comes to mind is just his enthusiasm, his love of the game, right? Like it's just infectious. He used to say there's nothing more perishable than a great idea. He was always turning rocks. Like the secret to a good idea is a lot of ideas, like always turning rocks. But then when he saw something he thought was really interesting, like it was just was all in. There was this dissonance, right? He was incredibly convicted, but at the same time he was always actively seeking the opposite side of the view to your Darwin reference, like it's survival and adaptability, right? You want to be looking for the things that don't conform to the construct. He always liked to talk to folks that were younger. And I think for a couple reasons, one was it's less filtered that it's closer to the source.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“Whatever they were putting forward was good in that. Then he was off. That ability to go both ways, I think, is really, you know, really powerful.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“Meaningful blueprint for me is the founder of my firm, Alan Gray. You know, genius is dissonance. I mean, you know, the ability to kind of hold to competing. And so on the one hand, like he was super long term, but he was always obsessing also in the short term. The long term is just building up those short-term things. He was a person that was very convicted about things, like tremendous conviction, but it was always loosely held. And so if he heard anything that was counter or, you know, threat, he would really grab that. And he was never ashamed, embarrassed, shy to then grab onto that and then totally flip his view. And so that ability to like be very convicted, but then constantly in search of like he never wanted to talk to somebody that agreed with him about a position. Who's got the opposite view on that? That's the person that I want to wrestle with intellectually and hear about that because he was like seeking it. And if he thought that.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“It puts it in a position where they kind of have to respond. Because to your point, a lot of times when you will frame something in the negative or as a threat or challenging, you know, CEOs are very skilled. They'll shift it to something else. But if you frame it in a way that they have to respond, so that's one, I think two is to your point of when I use the semantic example, like it was disconfirming, not to the big point, but in terms of the broader narrative of what I was thinking about the company. And anytime that comes up, like you got to really focus on it. Like that's the most valuable information in the situation. And that can be really valuable also when you're working with an analyst and they're filtering. You're not getting it directly when you hear that kind of stuff. That's what you want to go to and really pull on it because they may not be that excited to put that first and foremost because they want to persuade. But when you hear it, you got to really pull on that. And then the third way, going back to the blueprint, we didn't talk about, but probably the most.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“Three ways. One is we were talking about questions and it can be a really valuable way when you sit down with a CEO is to frame a question in a way that they have to respond. So you might sit down and say, we've been hearing that you're having a lot of turnover in your sales department.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“Covered somewhere, but not fully, right? And so there was a layer there and part of what goes in the mosaic of two things. One is if you're over myopically focused on one thing that you think is the important thing, you need to keep your mind open that there may be other things in the mosaic that are critical and that when you do see those threads and we started to get a little bit of the flags, like you got to go after that and go after it really aggressively. Time back to your question is you're writing it down, you're showing your work. What are the things that you think are important? But then you're measuring yourself back to that and seeing the degree to which you've been demonstrating a good success ratio of zeroing in on the thing that is the thing.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“Who was a real technologist? And so I spent a lot of time on him as a technologist because they needed to infuse that in the business in order to be able to grow and adapt. Most of my work was around that. I thought that was the important question. In the very later stages of the work, we started to get some reads that, yeah, he was genuinely a very savvy technologist, but had a reputation for playing fast and loose, a little aggressive, very aggressive sales culture. And just as we started to get that read, the company came out, the board came out and announced the audit committee was going to undertake. A review of the financial statements stock gap down 35%.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“Learning from the feedback, right? We took it in 2018, we took a position in Symantec. So Symantec did do software, like antivirus software, like on the retail side to protect your laptop and desktop. You know, it was a mature business, very high free cash flow for a software business. They had hired a new”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“Say, well, it's about this, and let's check in in five years. No, like there are many incremental steps between now and then that you want to track to and hold yourself accountable to. It doesn't mean you're trading every day or every quarter, but you want to be really thoughtful on. This is why I bought it. These are the things I'm going to be looking for. And then holding yourself accountable during those interim steps and identifying those situations where it's worked well when it hasn't and then adapting for that, right? And just being really obsessive about that.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“So now it's about accelerating that learning curve and those feedback loops. Try to put yourself in a place that's good game selection for you based on who you are and what your strengths are. You got a clear blueprint about how to go after that. And now you just want to turn the rocks and you want to accelerate the learning curve. And a big part of that, creating those case studies of writing it down. Like, why am I doing this? showing your work. Part of showing your work is distilling for you why you're doing it, tracking that over time and measuring yourself to it and improving your algorithm, you know, how strong is the learning machine? Like, are you seeing them take in new inputs based on the feedback that they're getting, adapt that and employ that as they go forward into how they're thinking about stocks, how they're making decisions. And it's really hard for us the way in our game selection because we're making these four or five year decisions. So it's very easy to”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“And fought back huge. It was a gut check. But on the back of like extremely, extremely deep, rigorous, like conviction building, you know, the easy thing would be to go the other way. Like, oh, this is messy, this is noisy. The common trope is roll-ups never work. It's true. Like the base rate on roll-ups is not good. It doesn't mean all roll-ups don't work. What are the factors and common hallmarks of roll-ups that are successful? Are those conditions precedent here? And those are the things that we found as we went deeper and deeper and peeled back the young in. That's what it takes. And again, kind of turned it like the bear case actually, the bull case. And you think about what's happening here”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“Into that. Like we hired a forensic accountant to go through. Of the statements, every one of the claims that were in there hired a private investigator. We knew what cars they drove, whether they had loans or not, whether there were any disputes. The people on the short side? No, in the company. To understand Brad, his CFO, chief operating officer. There were certain aspects in there that were claimed to kind of On dealing really to go into that last 5%, maybe the last 1% is how I spent my Christmas and New Year's is going down this route. But the beauty of it on the other side is it built a deep conviction, right? And we probably put a billion dollars into it on the back of that. And the stock was extremely dislocated. I think Brad and the company bought back $2 billion, like unprecedented magnitude of company buyback at the world.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“Went to Seabrad in December, in the midst of the conversation, his assistant came in and said, a short report has been filed. And she had printed it out and she set it on the table, and I can still distinctly remember the thud of this report. It was like a 75-page report. And so we continued to chat about 15 minutes later. As assistant came back in to the office and said, you know, I think at that point the stock was down more than 20%. And he said, you know, sorry guys, I think we need to cut this short. I need to attend to this. My colleague and I, when we got in the car and we're trying to read this short report, I'll never forget like the feeling of anxiety in my stomach. And we had done a lot of work on it. It was intimidating to kind of, you know, hear these claims on the surface in the next three weeks.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“Brad, as a CEO, as a capital allocator. He's a serial entrepreneur, and one of the things that's very clear in his track record is he's a capital allocator and he's opportunistic. When we pushed on this in the strategic logic of it, he framed it from the perspective of an opportunistic situation to create something special that wasn't in the original plan, but was uniquely attractive. And if you understood him and his history and you'd seen that in his demonstrated track record, it reframed how you thought about that capital allocation decision. And so building up kind of that prior track record of understanding how he makes decisions, trader mentality. And by the way, one of his first businesses that he started was an oil trading business, right? So that DNA is in him and that track record was demonstrated. And then the second time was, and I'll never forget, I mean, we were actually sitting.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“You've had Brad, Jacob's on your podcast. We first invested with Brad in 2013. There have been more than a few occasions through that journey where the kind of being able to get into that last five to understand in a way that wasn't commonly appreciated, I think, allowed us to be a holder and an owner in a way that would have been difficult for a lot of folks that were only approaching that on the surface. So the first one, 2015, you made a big acquisition was a big pivot. Probably one of the best capital allocation decisions I've seen in my investment career. At a company called Conway. It was a complete pivot from a stated strategy at the time. His frame was, you know, we're asset light, brokerage, truck brokerage business. He pivoted to go into the LTL industry, which was capital intensive. And even when the deal was announced, even I was taken back like, but when we made the initial investment, we spent a lot of time on.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“And if you don't kind of do it on your own, your own work, if I were bringing up this name and I was talking to someone, they would have told me all of the reasons why I was going to get disintermediated. And I would have sound really sensible and I was like, yeah, I'm not touching that on you spending any time on it. But if you build it up yourself and you really spend enough time to get into that last five to understand it, it's like not only is that wrong, but actually this is the ball case for why this is going to be a great company because they've got a very formidable mode in a way that you don't understand.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“Install base out there to the redundancy is way higher. Like they can go several days, which we saw during 9-11. Like the networks went out, but the first responder LMR networks were still operable. The common narrative out there, and when you talk to most people, they would quickly riff of like, oh, you know, they're going to be disintermediated as broadband networks or more.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“Going back, this is probably a decade we had built a position in a company called Motorola Solutions. You'd think of like the Motorola flip phone. And that was the original business, but they ended up splitting it to the handset business. And then what was their public safety business? They make devices and they manage networks for first responders, so police officers and firemen and whatnot. They run these networks over what's called a proprietary network. In the US, it's called LMR. The big bear thesis at the time is fiber rolls out and you have broadband networks like these proprietary networks are not going to be necessary in the way that they were. I'm not a technologist, but we spend a lot of time understanding LMR networks for first responders. And it turns out that the really, really strong reasons why having standalone proprietary LMR networks are really important. One, they're backward compatible. That's a big deal because you have really big infrastructure.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“One of the things we talk about in the team is what's the essence statement for this company, meaning what's the thing that really drives it? It can take you a long time to get to that. When you've grinded on it enough and you get to that point, if you've really been able to dial into that thing that is the driver, that can be a real balance to help you through as an owner and a holder of it.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“And you may not as equally kind of pull out the potential risks or other factors to weigh against that. Creating that objectivity and that honesty in it, I think, is an important part in a process. And sometimes people over time will develop a skill at doing that, but sometimes not. And so you really want to remove the filter so that you can get to that kind of direct read. And then the other aspect of that is just, you know, really doing it on a primary basis. I like to say the magics in the last five percent, you know, all of the standard stuff you know you got to do and looking at the balance sheet and understand the core strategies and the key drivers of P&L, et cetera, et cetera. But really like getting to that last 5% where you understand the business in a way that you do make that breakthrough, that synthesis, that's where the magic's at. Don't stop short of that. Like keep pushing until you get to that point that you can distill it. Like what is the essence of this?”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“There's a couple really good threads in there to pull on. One is the filter, right? Like it's a really important thing to think about when you get that distillation back of like, what's not in there? You really do want to source it. So a lot of times for me, you know, I will, I'll see something. It's like, well, I want to either talk to the management team or listen to them directly. I just want to hear it for myself because I'm going to process it differently and I'm going to pick up on different threads. You know, you got to be authentic to that. There's a tendency to want to convince somebody or persuade somebody to buy a stock. And so when you're persuading”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“Haven't studied the data. specifically support that, but I believe so. When you're able to clarify your thinking and writing is a very strong representation that you've clarified the thinking, right? And that's just one of the reasons why writing is so important is helping to distill it to what's really key. We do a lot of work. We're really fundamental. We can spend months working an idea and then you get this 50-page report. I don't want a 50-page report. I want a few pages that really distill like that's the hard part is to do all the work, but then distill it down to like the few things that two or three really key points. And in particular, where we see this differently than others, capturing that and knowing kind of those fulcrum issues, like that's the sauce. Coaching to how do you go through that process of do that really fundamental bottoms up work and then be able to like really distill it, it's also a manifestation, I think what you're pulling on that you”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“That's repeatable that really leans on the factors that can really help reinforce making the best decisions in a way that can be most constructive to you as an individual.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“Turns out that's wrong. The bias that I'm demonstrating, the reversion is a regret aversion is if it's reached the hurdle that I want to buy it, buy it. And so it's interesting to get that feedback objectively because I have this kind of like working hereistic, but it turns out it's not right. And the data tells you that really clearly. One of the things that we've done with that is then we create these nudges, what we call nudges. And so this is coded into our system. It's watching your behavior real time. And then if you're demonstrating one of these, it'll send you an email. And I'm never that excited when I get them, to be clear. And it'll say, you know, remember the data. You're demonstrating this right now in this position. It doesn't dictate that you do it, but just encourages you to think about it. And so all of that, that whole mosaic is kind of like, how do you create a rigorous process?”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“All these decisions from our portfolio managers and our analysts through, and we're looking at to pick up strengths, weaknesses, and biases. It's meant to be kind of like, you know, internal coach. And what's fascinating about it is it's showing you these patterns, right? Like I have specific patterns that I've demonstrated over time. I talked about one of them already with regard to the endowment effect. Another one is regrett aversion. The riskiest position in the portfolio is my newest position. So when I'm initiating a position, I tend to scale into it. So let's say I want to take it to 3% of capital. I'll buy 50 basis points and then another 50 and I'll scale into it.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT