Premeditated Success, with Jim O’Shaughnessy – [Invest Like the Best, EP.29]
My guest this week is my father, Jim O’Shaughnessy. He was a pioneer in quantitative equity research, part of an early group of explorers who combed through data to find factors which predicted future stock returns. While we’ve both written extensively on factor investing, we chose to mostly avoid that topic for this conversation. Instead, we discuss what has been a fascinating and colorful career on Wall Street. We talk about the power of premeditation, formative books, and his crazy experience during the dot-com boom when he ran a robo-advisor 15-years ahead of its time.
Links Referenced
Factors are not Commodities (Chris Meredith)
Fired Managers Outperform Hired Managers (Josh Brown)
Books Referenced
Dao De Jing: The Book of the Way
Surely You’re Joking, Mr. Feynman!
Zen and the Art of Motorcycle Maintenance: An Inquiry Into Values
The Complete Poems and Plays: 1909-1950 (T.S. Eliot)
The Misbehavior of Markets: A Fractal View of Financial Turbulence
The Wealthy Barber: Everyone’s Common-Sense Guide to Becoming Financially Independent
The Snowball: Warren Buffett and the Business of Life
How to Win Friends and Influence People
Show Notes
2:50 – (first question) – How Jim got interested in investing and spent a lot of time at the James J. Hill research library in St. Paul, Minnesota.
6:03 – Going in depth on IA (Jim’s grandfather and Patrick’s great grandfather) and how character is fate
10:24 – Exploring the idea of pre-meditation and how it works
11:47 – Why you need to be bold
13:29 – What works on Wall Street
13:44 – Why you must be able to remove the emotion from investing
16:01 – How factor based investing can be derailed very easily if you don’t have discipline to follow it
17:49 – Factors are not Commodities (Chris Meredith)
18:57 – Looking at the mentoring relationship between Jim and Patrick, highlighted by an important mantra “look it up.”
20:09 – 5 Books Jim would subscribe
20:32 – Dao De Jing: The Book of the Way
21:07 – Adventures of a Bystander
21:46 – Surely You’re Joking, Mr. Feynman!
22:24 – Zen and the Art of Motorcycle Maintenance: An Inquiry Into Values
23:06 – The Complete Poems and Plays: 1909-1950 (T.S. Eliot)
23:31 – Cloud Atlas
23:52 – The Misbehavior of Markets: A Fractal View of Financial Turbulence
24:33 – When Breath Becomes Air
24:57 – Looking at the stage of his career that Jim felt most alive
26:08 – The Wealthy Barber: Everyone’s Common-Sense Guide to Becoming Financially Independent
28:04 – Looking at the first robo advisor like portfolio that Jim launched, Netfolio
31:45 – Burning Up (Barron’s)
35:13 – The evolution of emotional response and the four horsemen of the investment apocalypse
37:10 – Pogo
38:17 – Fired Managers Outperform Hired Managers (Josh Brown)
39:50 – Biggest lessons learned from running businesses
45:24 – The Snowball: Warren Buffett and the Business of Life
45:32– Something Jim is most proud of in his career.
47:38 – Back to pre-meditation and wondering what roles in plays in luck and success
52:55 – Most memorable day of Jim’s career
54:03 – What does Jim that looks hard to outsiders, but is really easy for Jim
57:02 – What are some skills that Jim believes you can get better at with hard work
58:14 – How to Win Friends and Influence People
1:02:53 – Kindest thing anyone has done for Jim
Learn More
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
Follow Patrick on twitter at @patrick_oshag
FOR ITUNES
For comprehensive show notes on this episode go to http://investorfieldguide.com/jim
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
Follow Patrick on twitter at @patrick_oshag
