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

“But it's also powerful for us as we're thinking about looking at the simulation, if you will, like who's making good decisions on what kind of decisions. Are you demonstrating more skill on the buy decision, the sell decision? Are you doubling down when something's working against you? Are you making better decisions opining on stocks that you've researched yourself versus stocks that somebody else has written up? Like those are all dimensions that are in there that giving you feedback, which is, you know, really powerful way to like help the improvement algorithm. One of the things that we did a couple years ago, which has been really interesting, is we created this, what we call decision analytics initiative, right? So we have a standalone team for individuals. We went out and got third party software. And we run”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“One of the themes is like, how do you accelerate learning and accelerate feedback loops? And so one of the things that we do is all of our analysts run paper portfolios or model portfolios. And this is something we've done for decades. When you go through the investment process, you write up your various research reports, when you want to buy it, you put forward something to investment committee. You debate it. And then you buy it in your paper portfolio. And what you're for any decision a buyer or sell, you're writing down your reasoning, you're putting down why you're buying, what the thesis is. I like it when you show the things that I want to be looking for and holding accountable to. Just writing things down like helps you crystallize the why and putting it down and then tracking, you know, show your work and then track it. One of the things that we do every six months is we consolidate that. We look at the performance and then we share that with the team members. It's really powerful feedback mechanism for the analyst.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“Into a meeting with management team and they do something that sparks you and you're like particularly turned off, you're like, I'm selling this. If you just give yourself a little bit of space to step back from that, go back, look at what you wrote originally, pair that up with what you saw that can be really helpful in like putting you in a better mindset to make a more objective decision. The data would say I'm better at cutting a loss earlier, knowing something's off in the decision. There's some situations where like I hang with it. It's continued to not work. And then I have this sort of endowment effect of like I want to see it play out over time and I stay with it for whatever reason. So it's an interesting question for me of like what causes it to flip from one to the other.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“Write it down. Show your work, track it, measure it. As that thesis is evolving and events occur, measuring it relative to that and trying to be as accountable and objective as you can. That's always hard. It's nice to have people also around you that will push you to do that. I think having your own investment journal. And so it's different than the specific decision, but just understanding what emotions are at play for you. There's studies that show that those people that are better at describing what emotions they're feeling end up demonstrating better investment performance. And it's just the simple concept of like having a better read of what you're feeling. I used to have a framework for myself that when I came to a decision, I wouldn't sell the same day. And it turns out like that's a really good kind of level setter because you go.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“And I think as a young investor, that's an important concept to internalize because you see young kids come through and it pretty much been successful at everything that they've done. And then you're investing in like if you're right, 55% of the time, like you're doing pretty darn well. And so being wrong a lot is an important concept to internalize. And then the last one, he talks about he had six categories for his stock, slow growers, fast growers, stalwarts, turnarounds, cyclicals. And it was just, it was a categorization framework, almost like a mental model for each type of stock. I don't use those exact frameworks today, but when I was starting having a clear framework and thinking about them kind of in mental models for each was, you know, was insightful.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“Focus on the things that you know that are accessible. Buffett might call it circle of competence. He didn't call it that, but it was focus on the things that you touch, see, know, understand, like make a difference for you. Just look at your bank statement and what are the things that you spend money on and what are the things that you really like in that experience now. It's not just that, like you have to understand the valuation and other elements of the business, but like a guiding principle was right there. He talked a lot about win ratio. Like you're not going to be right a lot.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“First blueprint for me in investing goes back. I don't remember if I was in high school or in college, but was Peter Lynch. His book went up on Wall Street. I think it's one of the best, like incredibly accessible. I remember that reading that and just totally. Connected for me, right? And a lot of people cite security analysis, Ben Graham. Like, I've read it. Like, it didn't. To put you to sleep. Not exactly a page turner, right? Opposite with Peter Lynch, one up on Wall Street. I was like, you just really resonate and connected. And I think one of the big themes was”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“It might work for them, but it may not be so good for you, which ties back to knowing yourself and listening to that tell, I think, is important.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“Start, you just want to emulate it, right? And that, and then that gives you something to scaffold up over time. But as you're scaffolding it, then you're also questioning not just what they did, but why they did it. So lots of things will probably change, but what's not going to change, like the concept of having a membership club hasn't changed, like powerful concept of being low cost hasn't changed. There are other elements of that in the delivery that have changed. And so those are the parts that you will adapt as you scaffold it out.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“Original blueprint is I want to be Mr. Austria. And then he did that. And it's like, I want to be Mr. Universe. He followed Reg Park. And then he decided he wanted to be a big movie star. And he did that. Then he decided he wanted to go into politics, became governor of California. Three different domains, completely different. Each one he had a blueprint. And so it just can be really, really powerful.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“I mean, there's so many examples when you start thinking about it, like Jay-Z think his best album, 2001, called The Blueprint. I think it was paying respect and homage to those that he studied, right? And when he was growing up, you know, he used to always carry a notebook with him and he would write lyrics or ideas that he had and he would take it with him everywhere. And that was his thing. I mean, to this day, like, I still carry a notebook every day. Like, this is with me every day. And when I have an idea, like I'm on it. And that comes from the blueprint, right? And it works for me. So then you go to people like, you know, Saul Price, like the Price Club, I mean, the people that he laid the blueprint for from Jem Senegal with Costco to Bernie Marcus with Home Depot to Sam Walton, who's laid a bigger blueprint than Saul Price or Arnold Schwarzenegger? Like, I mean, it's a fascinating story if you think, I mean, he grew up in Austria.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“Everybody's accessible to you. You'd use it the same way that you would with any mentor, right? And so I'm going to go see my mentor. What questions do I want to ask my mentor? You can do that virtually, right? And so you study somebody. You can pose those questions to yourself socratically. And you could answer the way that they would answer it for you, right? Yeah. And I don't understand why more people don't do that and take it really seriously. But the most important thing is for whatever your domain is and the way that you want to do it, like have a clear blueprint for you. In the beginning, you're just, you know, you're imitating it. And then you're going to find there's certain things that don't totally resonate with you and they're not completely authentic. And you change those things. And there's going to be some new things that you draw in that you kind of adapt from whatever that blueprint was. And then that's going to become you. And over time, it becomes you and it's something completely different.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“Step know yourself. Second, I'll be clear on the game you're playing. And then third, like, have a blueprint. So what do I mean? Like this is invoking Charlie. Like one of my favorite Charlie quotes is take a simple idea and take it seriously. Everybody as they're coming up should have a clear blueprint of somebody that does what they want to do has done it really well. A lot of times people talk about mentors. And one of the things that always frustrates me with young people when they ask me like, oh, it's difficult to find a mentor. And I'm like, what? You can have any mentor in the world that you want. There's so much out there like pick somebody that you really respect and just be a sponge, get obsessive, learn everything you can about them. How did they do it? What did they do? Like you can really, you can watch videos. You can read. And you really develop a mosaic, a blueprint of what they did and why they did it. And pretty much.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“In the turnaround situations where I'm betting on the management team making some kind of dramatic change, like the base rates suck. It's very difficult to do and the public vise. I mean, it's almost like I would sit down and advise them, like, you'd be better off going private and kind of doing this outside of the lens of the public world because you're going to be able to do it in a better way. When you have those conversations, it can be very telling in terms of how they respond, how they're going to approach it, what their scoreboard is, and just asking like, what are the KPIs that you're going to hold that are really important to you?”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“Before I was doing public market investing at Or was my current firm, I did distress turnaround investing, private equity. We were often going into situations where you're buying it based on asset value, buying a deep margin of safety. You have contractual value, hard asset value, and very often you are changing the management team. We're just buying the assets. We're going to bring the team in that is going to make a difference. When I made the pivot and I came to the public market side, I very much had that mindset. And it turns out in the public market side, that's pretty difficult. Like public market turnarounds are tough and have very low base rates for all the reasons that you were just drawing out. The market's tolerance for doing the hard work is very short. One can take a lot of shortcuts in doing that. And it's probably the way that I've changed the most as public market investor over the past 20 plus years is very leery to go.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“Good question can often be just very simply sitting down with the CEO and saying, What's important to you? How they answer that can be very telling. Like, I want to build something special versus they go into like hitting their quarterly guidance very different lens, right? So I think the average S&P tenures somewhere between three and four years. So to your point, it is relatively short. We very much approach it as owners and we're thinking about what you would as an owner, like capital allocation and defensibility of the business and what they're able to create over time and show up in that way asking questions around that. And in the midst of that conversation, you can typically glean pretty quickly like the way in which they're thinking about the business. And that's an important talent.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“And do you see that kind of that passion come out? And then you just follow that thread, not always, but it can often be very telling.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“It's just doing the work. It's looking at their track record, demonstrated action. One of the things that I spent a lot of time on is thinking about the questions. You know, we do a lot of work before we initiate a position. We tend to take reasonably sizable positions going and sit down with the team, you know, you've done a ton of work in advance, really looking at their demonstrated track record. But then you want to have that conversation.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“The other side of that is just the concept of alignment, right? And so you might say, I'm a long-term investor, but you're only going to be able to be as long-term as your clients allow you to be, right? If you're in a position that's offsides to kind of the market sentiment at that time and you have in your mind that this is something that'll play out over four to five years, but your clients are knocking on the door and want to redeem. You're not going to be able to play your game, right? And so you have to think going in, how am I going to communicate in a way that I'm looking at this kind of time horizon? How am I going to attract and retain the types of clients that have genuinely have that same kind of time horizon? Because that will empower you to actually be in that environment that serves you the best.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“To think about your obsessions, you never want to compete with somebody who's obsessed, Kobe Bryant. He would say, Which are 4 a.m. He's at the gym. four a.m. shooting baskets are you at the gym at 4 a.m. Because if you're not like you're competing against that guy who is you know he took up tap dancing because he wanted to strengthen his ankles so he could be a better basketball player are you obsessed to that degree that you're going to undertake those kind of actions the elements that you're so you're so drawn to that you're willing to do those kind of things whatever the kind of it chosen aspect is is really powerful and if you consistently do that over time and that compounds set yourself up to play to your obsessions i was just i mentioned to you last night that i just back from japan and um the author marikami is one of my favorites you know he's like set your life up for your obsessions because if you do that like you're you're you're all in like you're just you're grinding at that in a way that very few other people will do and so it's to the setting up your environment that plays to all of the ways that you do your best”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“How are you going to adapt your game to something that's authentic to you in a way that can play to your strengths? Market change. Even I've seen that from the time that I started the mid-90s to today, right? And so if you're playing cigar butts, which can be very profitable, but it's difficult to scale that. And so as his capital grew over time, you know, you have to think about how you show up and how you approach it. And we know that Munger was also a key part of like that conversation and framing and helping Warren think about what he focused on underneath that is thinking about how he needed to adapt based on his own size and the amount of capital he was trying to deploy.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“Important question. And I see it over and over even today. People in the business for years of like, well, what game are you playing? And being really clear and thoughtful about that and then really leaning into them playing to that, I think makes”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“Using the investing landscape, it surprises me all the time that people don't think about that more deeply. You see this over and over again in markets and there's a whole continuum from one end of the continuum, the algos that are scraping to the millisecond, right? That's their game. And if that's your game, you have to do certain things. You have to invest in certain infrastructure, certain capacity to a day trader. the hedge funds and pod shops that are trading on a catalyst and around a quarter to call it stand Druckamiller who likes to talk about, you know, I want to look 18 months out to us. So we consider ourselves long-term investors. We're trying to take a four to five year view to be infinite investors, right? A buffet who is trying to own things forever, right? That's a huge continuum. But depending on what game you're playing, you're going to approach it quite differently. And so really important.”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT
“About what game is it that you're playing? And so just using the investing landscape, it surprises me all the time that people don't think about that more deeply. You see this over and over again in markets, and there's a whole continuum. You know, one end of the continuum, the algos that are scraping to the millisecond, to a day trader, to the hedge funds and pod shops that are trading on a catalyst to call it Stan Druckamiller who likes to talk about, you know, I want to look 18 months out to us. we consider ourselves long-term investors. We're trying to take a four to five year view to be infinite investors, right? Depending on what game you're playing, you're going to approach it quite differently. And so a really important question, and I see it over and over even today, people in the business for years of like, well, what game are you playing? And being really clear and thoughtful about that and then really leaning into that and playing to that, I think makes”
2024-11-12 · The Knowledge Project with Shane Parrish · Adam Karr: The Investing Blueprint · IDENTIFIED FROM THE TRANSCRIPT