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)

Burning Up (Barron’s)

Pogo

Fired Managers Outperform Hired Managers (Josh Brown)

Books Referenced

Invest Like the Best: Using Your Computer to Unlock the Secrets of the Top Money Managers/Book and Idks

What works on Wall Street

Dao De Jing: The Book of the Way

Adventures of a Bystander

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)

Cloud Atlas

The Misbehavior of Markets: A Fractal View of Financial Turbulence

When Breath Becomes Air

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

13:03 – Invest Like the Best: Using Your Computer to Unlock the Secrets of the Top Money Managers/Book and Idks

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