Cameron Khajavi (MIK Capital) "From Scratch to Stardom"

It's never too early or too late to question your thesis and be humble about what the market is telling you. The only reason I'm in the seat that I am is because I left myself open to experiences, things that I was uncomfortable with. I think the best leadership comes from just doing what you're expecting of others yourself. We're not in a job where being right is the most important thing. Welcome to Novos Successful Investors. I'm Andrei Gentilini, CEO of Novos, and your host. In this episode, I'm speaking with Cameron Kajavi, founder and CEO at MIK Capital, a long short hedge fund specializing consumer adjacent businesses based in New York. One of an Iranian engineer with a PhD from Wisconsin, Cameron's family flees Iran at the onset of the Iranian Revolution. While too young to comprehend at the time, Cameron later realizes the magnitude of the loss. His father must start from scratch. Seeing his father moaned lawns for a living in Texas ignites in Cameron the motivation to succeed. One day, while going with his mother to the local bank, Cameron is struck by the magic of mutual funds, where hard earned dollars compound into more dollars. After a traditional career starting investment banking, Cameron lands at a young Citadel, where he's mentored into understanding the nuances of consumer adjacent businesses. After a few years, Cameron strikes on his own and names his firm after his parents' initials. Cameron knows that you can lose it all at any time, and it's this very same propensity to look for risk everywhere which makes him a successful investor. In this episode, Cameron offers unique insights on what it takes to win in the increasingly competitive consumer and hedge fund business. Before we begin, here's a quick word from our team at Novos. Hey, this is Arya, an associate on the client analytics team at Novos, the platform allocators and managers use to enrich their data, extract insight and engage stakeholders. When it comes to planning future cash flows, many investors find themselves relying on a combination of Excel and other varying sources to get a view of the deployable capital. Our clients are using the Novos platform not only for complete portfolio analytics across multiple asset classes, but also for managing their changing liquidity needs in an automated manner. The Novos liquidity calendar, investors maintain an overview of redemption terms across funds, keep track of the notice dates for redemptions, and can even combine their redemption schedules with other Novos tools like cash flow projections and what of scenarios, creating more meaningful estimates around your liquidity. Novos is the operating system for both your illiquid and liquid book. For more information, contact us on Novos.com. And now, Cameron Kajave. Cameron, welcome to the podcast, great pleasure to have you with us. Thank you, pleasure to be here. So Cameron, let's rewind the clock and go back maybe to where you come from. What's your story? I grew up in Houston, Texas. My parents are Iranians, born in Tehran. And we ended up leaving Iran in 1980 when the Iran-Iraq was started and ended up immigrating to Houston, Texas. My father was a chemical engineer had actually received his master's degree at the University of Michigan. So my parents already had a bit of a foothold here in the States, but I don't think they could have predicted just how volatile the situation in Iran became after the revolution and then obviously the Iran-Iraq war. So they felt like it made the most sense to come to the States and like a lot of Iranian Americans ended up in Texas and that was where I grew up, went to high school and kind of were my formative years here in the States before, expanding kind of my geographic footprint when I went to college at Duke and North Carolina and then moving to New York City to start my finance career. How old were you when you immigrated to the US? So I was two years old. Do you have any memories of the time before the US? I don't have much in terms of memories of my time in Iran. Obviously it was a traumatic time for my family having to leave the country and we actually ended up going to Turkey and from Turkey we were able to come to the States, but it definitely was very shaping in terms of kind of the energy within my family and I think a lot of my ultimate motivation came from kind of our family having to start from scratch, having left Iran and then coming to the States. I was going to ask you what of that history in the family has translated into a drive of a force or a specific aspect of your persona, human and as investor. My father had a master's degree in engineering and a PhD and when we came to Houston we kind of had to start from scratch. I recall my dad mowing lawns at the time and I think just that dynamic of kind of losing a lot and I was so young I don't think I truly understood all the nuances of it and as I've grown and had time to analyze on or reflect back on that period. I think some of the learnings have kind of strengthened in terms of what that meant and how that's impacted me on a go-forward basis, but I think a lot of my motivation and a lot of the hard work elements of kind of how I've managed my life definitely have come from kind of a sense of wanting to honor my parents and especially my parents sacrifice my father specifically. I've named the firm M.I.K. it stands for my parents names Mayor State Eredge and then my last name Kajabi so I think that's created kind of an underpinning of a foundational view of realizing where my roots are and remaining humble and not taking things for granted. Understood. Just spoke about college and your geographical expansion. At what point along that path do you realize that finance was something for you? Pretty early on my parents were fairly conservative with their income and would invest in at that time mutual funds there were no ETFs and I just found that concept interesting. I would actually go to the local fidelity branch with my mom and I remember looking through the pamphlets and thinking how interesting it was looking at the managers who were managing the fidelity Magellan fund or someone like a Peter Lynch it just seemed like a cool job to me. So I always had an interest from that point on just in terms of thinking through the stock market and the nuances of money management not in a sophisticated fashion at all but just the whole concept kind of was interesting to me. Like a lot of immigrants I think there was a tendency to want to pursue a more traditional professional route and so there's a lot of doctors in my family so when I went to Duke I was actually pre-med in addition to an econ major. The econ vertical was much more interesting to me than the medicine dynamic and so I ended up deciding that medicine was not something I was particularly interested in and then obviously from there kind of immersed myself more specifically in econ and finance and I think that period of time was really solidifying the fact that it was an area and a vertical of the world that I was super interested in. And after you realized that how did you shift your academic path? Duke being more of a liberal arts school didn't have a ton of super specific kind of finance courses but it was more econ and historical based economic analysis which I found really interesting so that was really the area within school that I excelled and probably had the most interest in and I think that just broadly became self-fulfilling and from there thinking through kind of what the most logical route was to kind of start my career in finance and like a lot of my peers I ended up going into investment banking because that seemed like kind of what you do to get your leg in the door and so I worked at Lazard for a couple of years in the M&A division right after school but I don't think at the time I really had a lot of sophistication in terms of what specifically I was going to do at the time the notion of a hedge fund was not really front and center in my mind I just knew I was interested in finance and the financial markets and markets in general were interesting to me. What were your main takeaways from the couple of years at Lazard? I think the takeaways were twofold working in investment banking is very much a client-oriented business and you're at the behest of what the clients need you to produce and the analysis needs to be done kind of on a more regimented schedule. I found the analysis interesting but I thought it was a bit more regimented and inflexible I think than kind of what I was hoping to solve for which is why I eventually moved into a biceye role moving into private equity then ultimately going to Citadel to work in public securities but very fond memories of Lazard it was a great time to work in the M&A business it was quite busy originally when I first started unfortunately that was around the time of 9/11 and the economy contracted pretty materially and things began pretty slowly after kind of the first year of more deal work and I think broadly I look back upon that experience fondly but it's not something that I miss per se. Got it. I mentioned you had the private equity as the next step after Lazard by the way which year was it when you made the move away from Lazard. So I worked at Lazard from 2000 to 2003 and then worked in private equity from 2003 to 2005 before going to warden for business school. And how did that step in your career shape you're thinking the private equity one? I think what was interesting about that next step is it really kind of brought me back to what originally excited me about finance and economics which was problem solving and looking through businesses and really dissecting them and making an assessment around what the value of the business was. I think obviously in a banking role you're spending your time more in an advisory basis trying to facilitate a potential transaction and assessing what the value of a business is but you're not doing it as a potential owner you're doing it more on a consulting basis and so I think doing it with one's capital again obviously it wasn't my own personal capital the time but it just felt more tangible and real and to me that was more exciting. Understood. Then worked and came along and after that Citadel? Yeah so I ended up going to warden and then interning at Citadel between my first and second years and then from there joined Citadel permanently after school was done. Got it. What year was that 2007-2008? Exactly. Understood. What happened at Citadel? How was your experience there? So Citadel was an amazing experience I think partly do especially to the team that I work with when I first started there so gentlemen by the name of Brandon Haley who at the time ran the consumer franchise was my boss. Brandon ultimately became the head of the equities division and has gone on to start his own fund Holocene which is a New York based fund and has been quite successful and has scaled quite nicely. The team that we had at the time this was based in Chicago. This was when Citadel was a little bit more of a smaller organization obviously the firm has had enormous success and grown and expanded the number of analysts and portfolio managers and has kind of duplicative equity businesses relative to at the time there really was the nexus of the equities business in the Chicago office. So I think the level and caliber of the people that I was able to work with not only within my core group but also within the other verticals in the equities division was really a shaping experience. I think a lot of those peers have gone on to great success either starting their own funds or working at other funds. I think a lot of the nuances of that model I.e. thinking through kind of a low net market neutral type structure oftentimes requires a little bit more of a unique lens than I think a lot of individuals who may be more experienced who try to come into that framework later on who oftentimes don't have a ton of success. I think a lot of Citadel success is a function of the fact that a lot of the individual more junior members of the business were able to get trained and grow into their roles and ultimately become portfolio managers and manage teams. I think that was really the beauty of the business and I think that was the beauty of the training model at the firm and so I look back at Citadel is kind of the underpinning of kind of where I really developed my tool set obviously Brandon at the time being my boss was super influential in terms of me being able to glean some of the mental models that he utilized some of the processes that we used to generate ideas and think about portfolio instruction and I just tried to kind of observe and be a sponge at the time and then quickly I was able to evolve into a role of actually being a decision maker and that expanded during my tenure at the firm and we ended up moving to New York around 2009 Brandon and I when the decision was made to break the equities division into a couple of different geographies. You mentioned Brandon's mental models that were a source of inspiration. What were some of the models and to what extent are they alive today in the way you operate? Brandon had more of an engineering background and I think he was excellent at weaving a more qualitative information set into something more quantitatively rigorous to be able to take some of the emotion out and really have a tangible kind of output around what we defined as a probabilistic based expected value and so I'll describe basically what that means and I don't know if you've read the book by any do kind of thinking in bets but the system was basically thinking through individual positions on a probabilistic basis running different scenarios modeling out those scenarios quite vigorously and thinking through what the upside down side scenarios were and then ranking them from a probability perspective and then coming up with what would be known as an expected value and so I think that concept was new to me at the time but I think that mindset of thinking through problems and stocks in a very probabilistic fashion was a key kind of elements of process that we've continued to utilize at MITK and I think is a key tenant of thinking through how we think on position sizing how we think about opportunity set because I think a lot of times if you took the average portfolio manager and you had them rank kind of what their favorite positions were unless they've actually tangibly gone in and done the analytics to make sure that that fits with what their emotions are suggesting if one individual has a certain emotional perclivity chances are that's not something particularly unique within kind of the market participants so I think taking the emotion out and viewing things with an instinctual lens but also a very important quantitative overlay to make sure your feelings and kind of what the actual math suggests are consistent with one another another model is just thinking through kind of a long-term box and a short-term box and a firm like Citadel or MITK we're looking for positions to hopefully generate alpha over a short-term basis or a medium term basis these aren't necessarily multi-year investments that we're making so we have a bit more of a higher turnover type strategy so with that said we're definitely trying to take into consideration kind of a catalyst roadmap and also make sure that we've done the most thoughtful analysis one can do thinking through the long-term box but making sure that the short-term overlay in terms of whether that company actually has a tangible catalyst that is going to accrue some spotlight on what that long-term attractiveness looks like is important and so I think thinking through kind of short-term and long-term and making sure in situations where we're going to be more excited about positions that those two line up. What makes you get into a position today? I think it's important to think through kind of how we operate our fund so we have a more regimented wheelhouse of securities around 300, 350 that we've tracked as a team that we've known the management teams we've spoken to the companies we've followed them in many cases for over a decade so we have a lot of institutional knowledge around the individual companies that we are tracking. I think oftentimes what attracts us to a position is twofold number one can we really generate a variant perception in terms of what our modeling suggests relative to what the consensus is and I think it's important as a first order to say what actually is the stock reflecting and so in that scenario we may do a DCF analysis or something with a longer-term lens to say these are the assumptions that kind of make up what the underlying value of the businesses. This is what the market is assuming in terms of growth trajectory. This is what the market is assuming in terms of margin opportunity and there's a lot of work and skill that goes into kind of creating something like that by thinking through what the TAM is thinking through what market share can potentially accrue to the business. All of the kind of thoughtful narrative around what I define is the attractiveness of the business on a long-term basis and so we're constantly analyzing and studying these businesses and thinking through that long-term box. When we see certain phenomena occur in the shorter run that potentially could serve as a catalyst to take the market's attention away from what is currently baked into what we may view as a more robust upside scenario that we think is potentially likely attracts us because number one, we have a variant view on the attractiveness of the business on a longer-term lens and then number two, we feel like there potentially could be something in the shorter term that is indicative of that longer-term box skew that we view coming into the lens of what the market is kind of viewing that business through at the time and that potentially could be an earnings release that could be a management presentation. There's a whole host of different events that may unlock or move the market's mood toward kind of our current view but we're not necessarily going to be totally anticipatory because I think oftentimes these type of phenomena take time to work themselves through the market. Our market has different moods at different times based upon different macro factors or just generally kind of what's in vogue at the time and so, as I mentioned, we tend to not necessarily be running a marathon, we're running a succession of sprints and so we're looking for kind of what that next leg of catalyst is and so that's an important part of our process. So if I understood you correctly, the first is the long-term box. Here, first step is understand what is the market pricing and then you need to have a varying perception of that as a start likely to the upside for you to get attracted to the name. And then that's where the short-term box comes into play. There must be a catalyst that brings you closer to the long-term box playing out as you are thinking and that catalyst can be of a varied nature. That's your set of criteria for entering if I understood you correctly. Yeah, I think that's a fair summary. Understood. I know the team and the team dynamics play a huge role in the way you run the firm and the portfolio. Could you talk us through that? My view on team is evolved over time. I think the business in general has become a bit more what have you done for me lately and I think unfortunately that's permeated into the outcome set that a lot of people that are going into the industry are trying to solve for. So from my perspective, I think despite the fact that we are looking to generate alpha on shorter periods of time, I want people that are thinking about working for a business that's a longer term commitment on their part. I think this business requires enormous stamina. You start every year basically from scratch and I think that's not something that a lot of people are used to because in a lot of other industries there tend to be a little bit more continuity from year to year. You may win the championship the year before but you need to be just as motivated if not more to win it the next year and there's very few people I think that have that level of dedication and stamina to keep trying to win year in and year out. So what we try to solve for what I try to solve for is genuine interest and almost obsession with investing, finance and thoughtfulness not just around the nuances of what those specific knowledge sets are but viewing kind of their informational pull in all facets of their life is having relevance to what they do professionally. So asking people they come in contact with house business. I mean, I think it's a mindset that one needs to really have to really thrive in the business and I think it requires a real number one enjoyment for the grind and number two, a real excitement around the ability to procure information and have a tangible outcome that might not have been seen by other market participants but a stamina that I want to continue to do that over and over again. And then for the firm, we're trying to solve for team members that view the business as a long-term commitment. We don't compensate just based upon the specific performance of every individual within the firm. There's a main component in terms of that being an element of how we think through the arrangement financially, but we want everyone to be incentivized by kind of the firm growing and being successful. Camer, you mentioned that you are view about team dynamics has evolved. You spoke about the way you're solving it for today. How was it before or the beginning of your career? I think some of the cultural elements that I've realized the importance of over time, just in terms of making sure everyone has a general empathy for their other team members and realizes that this is a business that has its ups and downs and there's a tendency to not want to isolate yourself when things go bad and there's a tendency to want to help the other team members when maybe they're not performing at the level you know they can. I think early on in my career maybe I was trying to solve for kind of more acute horse power and not thinking through maybe some of the more left-brained dynamics around kind of emotional intelligence and a willingness and emotional complexity to really understand some of the cross currents that ultimately kind of bubble up at any time within a fund, especially one where you're going to have some ups and some downs and you definitely don't want completely isolationist individual based personalities you want, people that view their role as something they take exceptionally seriously and want to do as well as they can but also are viewing kind of a broader lens of the overall team and the organization and I think that's not an easy thing to solve for. Was there a specific event that made you change your mind in that respect? I don't think there was a specific event I think it was just an observation after having been in kind of a larger organization for some time around some of the different personalities and viewing different teams and identifying kind of which teams were the most successful and why they were more successful than others and intellectual horse power in this business goes a long way but it's not the end all be all by any means and I think some of my observations around some of the softer skills being just as important and being a key contributor to success and then actually seeing that in the results when you really observe kind of different teams at play I think was kind of the epiphany and how I've tried to think through team building as I've grown my own business. Let's go back to the Citadel days so you moved to New York with Brandon your mentor at the time. How long did you stay with Citadel and what happened then after that period? I had always wanted to eventually start my own firm and Brandon and I joined the New York office in 2009 had the process of building out a new team and had a successful period together and I ended up making the decision in 2014 to branch out and start my own firm M.I.K. which came to fruition in 2015 with initial backing from Blackstone. So there was about a six year period in New York where the team grew and during that time the firm changed a lot with a lot of expansion and I think some of the cultural elements of the firm evolved and so from that perspective it seemed like a good time for me to kind of go off and do my own thing. What was the key moment where you felt that's it that's the time? I don't think it was one specific epiphany light bulb go off where I said this is not what I want to be doing. I think it was just more of the process of knowing that I had gotten to the point where I felt like I had a ability to build something on my own that could be nuanced and have some duration to it and so at the time I really felt like I had gotten to that point it seemed like around then it was time for me to kind of branch off and do my own thing. What was the hardest part in the first years? I think the hardest part in the first years was when you work at a large organization you obviously benefit from a lot of the organizational structure, the back office, the support that you're receiving from HR and obviously doing a lot of that on your own takes away some of the time that you're able to spend on the pure investing side of the business. So I think it was a challenging juggling act to try to split my time effectively. I got into the business because I love investing, I love the problem solving dynamic of it. Not to say that I don't like the other elements of the business I do but it just is a tough balance sometimes if you don't have necessarily the right people helping you. So I think hiring the right people, bringing in the right team, having like minded folks with the same kind of passion and dedication I think solving for that and creating that is not something that happens overnight takes a little bit of time. You mentioned Brennan as one of your investment mentors. Who else if there was anybody else or what else could be a book or something else shaped your investment persona? So I'm a pretty avid reader and I love reading biographies and I've read a lot of biographies by different great investors, Peter Lynch, George Soros. I think Soros specifically just given the nature of kind of melding psychology with financial markets I always found fascinating. I think if I were to look at the skill set and tools that emerge from a firm like Citadel and then thinking through someone like Soros who had more of a macro lens and thought through reflexivity and how bubbles emerged during my time at Citadel we went through the financial crisis, obviously what you've seen more recently with a lot of different asset classes potentially getting to levels that no one would have expected like Bitcoin etc. I think a lot of the mental models that Soros has talked about have definitely been a part of kind of how I've thought about creating a framework to think through how these situations emerge, thinking through equilibrium and disequilibrium and then how to take advantage of those situations in the financial markets and what signposts one can look at to see kind of where we are in a particular trend. I definitely find his work as being amongst the most impactful and interesting to me. Quick digression since you spoke about Soros and the Alchemy of Finance and reflexivity mood of the moment, how would you classify and label where we are right now in the cycle? I think it really depends on asset class. We definitely are reaching a point of disequilibrium as it relates to certain more classical manufacturing and old world type businesses such as commodity producers. I don't think anyone really could have envisioned the level of fiscal stimulus and obviously financial monetary stimulus that's come into the system over the last year, year and a half post the emergence of COVID. If you look at certain assets such as Bitcoin and more tech oriented digitization type themes within the financial markets, I think obviously those have gotten priced at very expensive levels and you could argue some of them are bubbles, oftentimes the bubbles are hard to ascertain internal, it actually busts to make that determination but I think you've seen a lot of new phenomenon emerged, the emergence of retail last year, many of whom were participating in the market through the use of derivatives like options. Obviously with QE having taken place and real rates being negative, the impetus has been toward higher valuations in the markets specifically within the tech verticals that have been kind of more acutely appealing to the retail crowd and obviously more sophisticated financial active participants as well given the digitization of kind of our economy and what occurred with work from home and tools like Zoom, post-COVID so I think it was a logical outcome so I think the question from here is what's next and from our vantage point we really think we're in a new period of consumer power and wealth specifically if you look at kind of the balance sheet of the consumer given all the transfer payments that have happened from the government there's about two trillion dollars of excess savings in this last stimulus bill there was a child tax credit which from our calculation at the lower end of the socio-economic ladder could potentially be upwards of a 10 to 12% benefit to disposable income and that's potentially a phenomenon that's not likely to be temporary it sounds like in this next level of reconciliation bill that's potentially something that's going to be made permanent I think we are potentially transitioning from what was clearly a trend of capital flowing into digital new world assets and I think what we're struggling with now is what are the implications of an economy where the consumer has so much disposable income and especially consumers at the lower end of the socio-economic sphere that potentially have a much higher propensity to actually purchase goods and services and what does that mean for inflation I think the prevailing view now is that some of the phenomenon that we're seeing are transitory we could have a very long conversation around debating that but I think our view from my case perspective is there's a lot of interesting companies that consider themselves or fall within kind of an old world complex that the market is assumed were dinosaurs because the world moved in a more technologically advanced fashion but we think technology is not a monopoly for technology companies we're finding a specialty retail companies that sell a peril that are using big data AI doing much more sophisticated customer acquisition analytics thinking through LTVs using machine learning so if we can look and find companies that fall within more of a cheaper valuation construct that are utilizing technology to better their businesses and procure data and use it effectively we think there's a lot more interesting opportunities in that sphere of the market than there is simply buying kind of more digital pure plays where at this point there doesn't seem to be a lot of mystery and obviously they're priced accordingly we went back and we did an analysis where we looked at some of the digital companies that have been the winners over the last decade or so Microsoft and Google etc and rarely did those companies trade for more than called eight nine times sales it's not uncommon now to have a SaaS business trading at 30 35 times sales now if the company can continue to grow at 35% for the next X number of years then potentially that is justified but there's not a lot of base cases that you can point to historically that's just that's a common occurrence and that's kind of what you need just to justify the current stock price so I think broadly potentially and again I don't want to make a firm macro prognostication but the likelihood that we are in a real regime change where we've moved from just simply loose money to actual fiscal impulse which is going to have material implications for the health of the consumer and their willingness to spend seems like we're potentially at the beginning of kind of a new paradigm and potentially a new cycle now this is not to say that with rates as low as they are and obviously technology companies having enormous tams in many cases that those stocks can't continue to work as well but I just think one is going to need to be a little bit more careful around the specifics and make sure specifically in the tech ecosystem that there really is continued growth because if there's not I think a lot of the valuations are fairly aggressive if not you spoke about high turnover the implication of which is that you're also going out of positions relatively frequently we spoke about the criteria for you to enter a position what would be the set of criteria for you to exit out of a position whenever we enter a position we have a very concise thesis that we are playing for and we have signposts that we look to track to make an estimation whether or not our thesis is being confirmed or if not denied if the information is emerging that's inconsistent with our signposts and our thesis then we'll immediately call the position because the reason that we entered the position no longer seems like it's quote-unquote right we've done a lot of analysis to look and see specific positions that have gone against us and if the stock price potentially moves away from us by 10 15 percent but the signposts are still tracking accordingly then we're not going to necessarily call the position in our estimation a lot of the time certain theses take a little bit of time to play out so it's not going to necessarily play according to the schedule that we would necessarily predict or know or would like it could take a couple of months or potentially longer so as long as the data that we're seeing from the company what's emerging fundamentally is consistent with what we originally thought and is suggestive that our upside case and a position that we own on the long side is relevant then we're going to stay with the position camera just a quick thing you spoke about signposts what are the metrics that you're associated with the signposts and how far in time if that's even a concept you put them take a fashion oriented business let's say a company that sells handbags if our view is that the company is reaching a point of saturation and the brand is no longer cool some of the signposts that we may be looking for is as we track the pricing on their website are the prices for like for like items on a euro for your basis starting to decline as we're looking on social media is there less interest and enthusiasm for that specific brand as we're tracking some of the data that we're able to procure are we seeing higher levels of discounting just broadly on the part of the company that it's going to obviously have negative impacts for the gross margins that they're able to procure are we seeing certain signs with respect to how the management team is maybe changing the story to try to obfuscate kind of where the focus was previously to something that maybe a bit of a smoke screen relative to the fact that the brand is starting to degrade obviously when the companies give you quarterly earnings we're able to go through with a lot of specificity and say well in this case they're having to spend a lot more money to acquire new customers because it's getting harder and more expensive to acquire new customers because the brand may not have the same brand heat that it had a couple of months ago so I think in every situation the signposts are different but I think the key is to make sure you identify where the signposts and what they are beforehand and so you know in a situation what you're tracking what you're looking for and it gives you a clear path to making determination around whether you should exit the position because the signposts are not working according to how you would have expected or hoped or in the situation where they are tracking to where you thought they might actually be attracting more attractively and so that would be a situation where you'd want to increase the position size so I think the notion of signposts the specifics of it are different for each scenario that you're in but the notion I think is important in terms of constantly checking to see whether your thesis is correct because from our perspective you definitely want to have a very keen focus almost a maniacal one thinking through what the downside is so you can call those positions out of your portfolio and let the companies that are kind of the quote-unquote winners do their thing where and how do you write those signposts so we have a checklist that we think through on all of our positions when we first put it on will basically lay out where we think earnings revisions are going to track where we think broadly the business from a fundamental perspective on certain variables should move and if those are not moving in the direction we think we kind of cross them off the list and then quickly we can make an estimation that our thesis probably has less likelihood of being right than we previously would have hoped for and so that makes a determination around whether or not we want to still be in the position again our strategy tends to be fairly fluid and so when we run these probabilities on each of our securities obviously the market is moving in directions that may be confirmatory or potentially contradictory that could just be noise but price is obviously very important so if we buy a position at x price as it's moved up call it 10 20 percent on a relative basis the stock most likely has become less attractive all else being equal relative to when we first put the position on so in that situation we're likely to have a smaller position size because the skew on that position is not as attractive as when we first enter the position there could be situations where we enter a position the stock moves up 10 percent but actually the data is confirmatory of the trade and the idea being even better than we originally would have hoped for so in that situation we may actually be larger in the position despite the fact that it moved higher so there's no specific kind of robotic way that this plays out it's not stock goes up we sell it or stock goes down we sell it or buy more it's really a function of being super thoughtful around what those potential probable holistic outcomes look like what the probabilities are and making sure that we're being very attuned to what information we're cleaning from the market to make sure we're updating that analysis thoughtfully Cameron you were mentioning one of Brennan's key capabilities earlier on which is to quantify stuff that is inherently qualitative or emotional how do you apply techniques like that today to take perhaps the emotions out of the game or behavioral biases away from the investment process sure I think it just goes back to a really heavy focus on thoughtfully modeling out each individual company and again a model is only as good as kind of the inputs and you can make some slight modifications to a discounted cash flow analysis and it's going to give you a wildly different analysis in terms of what the value of that particular security is I think from our business and specifically our strategy which tends to be a little bit more of a relative game given that we run a low net structure with longs and shorts it's really crucial to have consistency in terms of the lens that you're observing each one of these different companies in because I think that consistency in terms of process allows you to more elegantly make relative assessments between the different securities and the nature of a long short model is to know when you have real skew between your longs and your shorts potentially take your gross up in that scenario play offense and know when you want to take your gross down because the skew and potentially embedded P&L in your portfolio is not as attractive but I think without having a quantifiable way of determining what that spread looks like in your longs and your shorts then you're kind of flying blind there's one pair of concepts you just introduced and a specific interplay between them that would love to hear more about which is the skew and gross you sort of mentioned but I would love to for you to confirm if we heard correctly the bigger the skew between the long and the short side the more you would gross up the ticket advantage of that could you unpack that a bit for us sure so I think in periods where you're not finding a lot of interesting ideas it behooves you to potentially be in a situation where you're running lower gross because there may not be as attractive of an opportunity set broadly I think if one has done this long enough realizes that great ideas don't come along that often good ideas come along but they're not super common and a lot of very mediocre ideas come along all the time I think the key is not to fool yourself to confuse mediocre ideas with good ideas and potentially even great ideas and so when you have a situation where you've really thoughtfully thought through what the opportunity set is on each individual security there comes a time where there potentially might be an opportunity to really have a variant view that's nuanced on your long book and your short book and that's a time where you probably want to play a little bit more offense and obviously one means of playing offense is taking gross up but I think everyone obviously has their different framework in terms of thinking through kind of what their risk in the book is we tend to run a lower net we're not taking big directional risk so we've had good success during down months in the market obviously the leverage in a directional fashion can be quite dangerous whereas if one is running a very diversified portfolio and managing to some of the factors that we look at and thinking through idiosyncratic volatility not all gross in terms of risk profiles the same one book may have a higher gross than another but actually be generally in the most simplistic terms less risky per se so I think there's a lot of variables that go into play you mentioned a set of criteria for you to enter a position do these criteria apply equally for the long or the short book or is there something specific about the shorts that you would pay attention to in a different way than what we've been discussing thus far yeah I think in the shorts it's becoming that much more crucial especially as shorting is become more difficult given looser money and broadly new participants like retail in the market to be very cognizant of short interest in the security crowding I think is something that I've spent a lot of time thinking through not only on the shorts but on the longs but I think it's becoming that much more crucial to make sure in a short position if you're going to enter something that has a crowding dynamic to it you have a very high level of conviction and you size the position accordingly because shorting is difficult it tends not to work in a linear fashion most positions will test you irrespective of whether the fundamentals and the signposts are working in your direction so I think not thinking through position sizing and short interest exposure over the construct of your overall portfolio is often a big mistake that's made and so I think from our perspective we've created different models to think through especially in where we are now in the cycle is this a name where retail potentially has a bit more gravitational pull toward if that's the case then that's not necessarily a variable that we want to try to have a strong view on so maybe it's just a game that's not worth playing other securities maybe a larger cap and have diminished short interest that doesn't mean it's a short but that potentially could be an added benefit at being in a particular security so I think there are definitely some nuances on the short side relative to the long side but for me I think one of my learnings over the last five six years is the industry has changed quite a bit you've got a lot more participants than you had when I first started factor volatility has gone up by a factor potentially a five the crowdedness dynamic when the hedge fund industry was more nascent I think was a benefit because there were fun flows coming into the overall ecosystem and I think there was a lot of hubris that developed in terms of people thinking they were brilliant stockpickers when there was kind of a tailwind when there's a headwind in your face as the industry potentially is running into kind of shrinking capital and more crowdedness just like any other business that margins shrink you're seeing a bit of that phenomena in terms of degree of difficulty emerged and so I think it's becoming that much more important to think through kind of who's on the same side of the boat as you why are they there with you and if you happen to be wrong in this position are you really thinking through kind of what the potential downside looks like because there's a whole host of participants these days they really don't have a lot of bandwidth for loss there's a quick trigger to kind of exit the position and I had actually read an academic paper before I started my K was part of the underlying theory of kind of what made me think we could do something a bit unique at my K which was that oftentimes the worst positions one could be in were a crowded stock that had a crowded hedge fund ownership dynamic to them during events where the event didn't play out to the degree that people had hoped for and oftentimes the best risk reward trades were buying dislocations in those securities post people being disappointed in the position being crowded so then the question is how do you get yourself in a situation where you can play offense when there's dislocations occur but not put yourself on your back foot where you're in those scenarios where you're in a crowded trade that goes amiss and you have to deal with all host of participants who have little to no appetite for any losses whatsoever to exit the position so we spend a lot of time thinking through crowding we spend a lot of time thinking through what metrics and variables we can look at they give us a lens into what a position may look like from a crowding position perspective and then if there is an event we want to be very thoughtful around running the risk reward and making sure that we have a real variant view on that specific event especially in a crowded name or else we'd rather just sit back and observe and take advantage potentially of a dislocation that's not super fundamentally based just a quick novice infomercial hit are you using novice crowdedness behind securities on your portfolio to us test that yeah so we have looked at the novice system in the crowdedness metric we have our own metrics obviously 13Fs or one means of observing crowdedness but that has a bit of staleness to it obviously we look at the data and know that there's a whole host of participants that are trading based upon the data specifically and obviously if the data is directionally suggesting one particular outcome there are participants in the market that are trading just based upon those variables and we know by definition potentially could be the situation that's most expected which by definition the company is going to have to do something different than what that expectation set is relative to historically I think with less informational ubiquity there was much more of a focus kind of on what the sell side numbers are now the expectation set I think has gotten more complicated and everyone has to make their own determination of kind of what really is expected and that's become a little bit more of a kind of multi variable analysis than simply saying the consensus is suggesting X but there's no perfect tool on the crowdedness dynamic but obviously if you're in this business and you're speaking to folks and you're speaking to members of the sell side and you can generally get a sense for kind of where the crowd is picking their battles at any specific time and you want to be very thoughtful around whether or not you want to be on the same side or in the rare circumstance where the crowd is wrong you want to be on the other side but that requires real nuance creativity and a lot of aggressive digging to come up with a contrarian thesis you mentioned that there's about 300 to 400 securities in your investible universe what's the focus whether from a sector or market cap perspective so we call ourselves a consumer and consumer adjacent focus fund I think if you were to take kind of where I first started in the business with respect to the names that I focused on most specifically it fell within the more traditional retail bucket I think obviously from 2007 2008 to where we are now it's a whole new lens with which a retail business has to be situated to really be relevant in this more digital forward world obviously Amazon has been a behemoth within the retail complex taking enormous amounts of share so we have built up our coverage universe over time or at least I have thinking through where we could find the most synergy between kind of where I started what the epicenter was thinking through consumer specific and kind of the most traditional oriented examples of that like a mall base retail or a company like a home depot or a best buy and which companies that may fall within under industry verticals that are very much still consumer oriented companies but just may fall under a different gix sector so if you take building product companies that sell into home depot and lows obviously if you know home depot and lows well you can glean more information around potentially analyzing a company like a masco or fortune brands that may fall more into an industrial classification so you take a company like Wayfarer that sells furniture that's often traded by tech folks who is an online only business but obviously they sell furniture so I think if you've covered a company like Williams and Oma for over a decade you know a lot more nuance around kind of the supply chain within furniture what's invoked potentially from a customer appetite perspective so I think from our perspective it really was trying to thoughtfully build out the coverage universe to build on our strengths and where our level of expertise was kind of most acute and have a situation where we could cover broader securities where we really felt like our lens was unique so we could have a very view on those securities at any one time understood you've been in this sector for two decades yeah it's been a while yeah what change since you started I think a lot of things have changed obviously initially the means with which a consumer would interact with the company was through a physical interface you'd walk into a store you may not know exactly what you wanted to buy there was a lot of impulse buying I think a company like bedbath was a perfect example of that that was a great business model when you'd walk into the company's stores that were kind of similar to amazing you just got stuck in there for a couple of hours you end up buying a bunch of stuff that you didn't think you were gonna buy when you first walked in the door you maybe needed one thing and you walk out with four others I think the consumer now is obviously equipped with so much more information and has so much more ability to research think through pricing compare contrast so the ability for a retailer to quote unquote take advantage of a consumer is no longer really there you have to be winning based upon something differentiated and structural as opposed to thinking you're just going to compete on sheer laziness which is a function of your physical locations which used to be a huge competitive advantage now I think the new table stakes are not only that you need a true online business but you need a real ecosystem that integrates your physical footprint with your digital business and I think a company like target is probably one of the best examples of someone doing that in a very elegant and sophisticated fashion and obviously the value that they've been able to accrue to shareholders has been amazing I mean this was a company in a stock that people had kind of written off and said it was Amazon Roadkill I think it's been clear that they've done an effective job of integrating a digital business with their stores where a lot of their digital business actually has a footprint where the consumer is still touching the store base it provides you leverage on your existing assets and I think something slowly that is emerging that not sure people fully understand but the scaled players within the retail ecosystem have been able to spend billions of dollars on really integrating technology and sophisticated mobile interfaces and omnichannel that's required a lot of investment and so the businesses that have kind of crossed the river to the other side I'd put target or a home depot as an example in that bucket it's going to be very difficult for a regional chain smaller players that aren't as scaled to really compete with them so I think as people have understood over the last couple of years that tech has become the Lanham monopoly digital advertising being one of the most acute examples I don't think it's unreasonable to think we're under a similar evolution within the retail ecosystem just in the very early innings of it whereas you can argue in the tech space we're at the later innings or at the point where the government is actually getting involved to try to potentially break up some of these monopolies so I could go on and on about what's changed them in the changes are so severe that really it's just a whole new ballpark a whole new business model a whole new way of thinking we used to simplistically kind of think through gross profit return on investment which is a key metric in retail how many gross profit dollars could you generate from each unit of inventory well now we look at a metric called omroy which is operating profit return on investment which takes into consideration a lot of the costs like shipping and facility distribution logistics that are a function of a real omnichannel business and for retail specifically as the companies have had to invest over the last couple of years that metric has been moving down now you're actually seeing for the companies that have kind of crossed that divide you're getting to the point where the return on invested capital the margins are moving in a positive direction and you can argue some of these companies like target are actually taking share back from a company like Amazon so I think what's interesting is you had a real sea change Amazon has forced everyone to up their game but I think you've seen a lot of improvement and seen a lot of kind of companies that were considered a roadkill get to a point where they're actually likely to continue to do quite well for many years so that's definitely been a trend for the past two decades what do you see ahead of us for the sector I think it's going to become more competitive I think once you have a business model that has more ability on the part of the consumer to compare and contrast which is the key utility dynamic of online in addition to the fact that you can procure a product and have it shipped to your home within a couple of hours potentially leads to a situation that the winners are going to have to continue to iterate are going to have to continue to invest I think a company like Amazon obviously has taken the majority of their profits and plowed it back into distribution facilities to move from two day delivery to one day delivery I think every individual company in the space is going to need to really realize this is where my mode emerges from maybe it's my brand integrity maybe it's my mode is a function of how quickly I can get the product to the consumer maybe my mode is the fact that I have stores in close proximity to the consumer but my ability to take the profits that I generate and reinvest them to continue to expand the lead versus my competitors I think it becomes that much more important in an environment that's much more competitive and much more fluid so I think you're going to see a lot of companies not be able to keep up and I think you're going to see a lot of the companies that have made the investments and are willing to continue to invest widen their lead versus their competitive set and so I think you could see a situation where the broader more scaled players continue to win out in a larger and larger degree which has a lot of societal impacts if you think through what the implications of that are for more smaller mom and pop type businesses or what that ultimately means for wages but I think these are things that we're going to have to think through from a societal perspective big picture but I think competition price transparency and having the consumer be kind of the central point of your business model or kind of the new normals going forward one curiosity that I have is I lived in New York for six years and there was this concept of the Fed you literally walked down the streets of New York and you could see what was coming on Vogue and then all of a sudden in this space of a few months that thing was completely out of fashion and then you think him up now is that still the case i.e. can you still spot what's coming on Vogue by walking down the streets of New York City or do you need to go on Instagram and Twitter? Well I think it's a little bit of both to be honest with you. I think New York has obviously been at the forefront of a lot of fashion trends and living in New York sometimes you think a fashion trend is dead but it's just starting to emerge in the broader market and so it may still be early innings in terms of a company being able to monetize that trend. I think obviously social media has become super important the companies are spending a lot more money trying to acquire customers getting in front of them because that's where the consumer spending more of his or her time but fashion is still something that has ebbs and flows and fashion often times emerges either on the ground it may emerge internationally and find its way here obviously a city like New York being an international hub tends to just through osmosis kind of evolve and trends emerge and I think that phenomenon hasn't necessarily changed I think what has changed though is the means with which it's spread outside of New York City it would potentially take a lot of time and effort for kind of that spread to occur now things become viral and move much more quickly than they have in the past right now we have some new silhouettes with respect to jeans as an example there tends to be a little bit more of a focus on relaxation and baggier fits post-COVID and I know Levi's on their last call I mentioned a couple of baggier versions of jeans that they were looking to discontinue and now those versions of their silhouettes are growing 50 some odd percent so it's hard to call fashion trends but usually when they start it's the tendency on the part of New Yorkers to call them over before they really have even gotten to the point of critical mass so I think it's a mixed bag but the accelerants I think have changed with social media but I don't think necessarily the core impetus of where the fashion starts and how it develops has changed as much making money is a game of numbers losers winners betting averages and we lost ratios contribution attribution what are your favorite metrics when you look at your portfolio so from our perspective I think the humility angle of realizing in this business that even with almost perfect information that a private equity investor may have oftentimes they're making mistakes 45% of the time if you're hitting within a batting average of 50 to 55% that's quite good if you're monitoring and effectively calling your losses appropriately so I think slugging ratio for me is a super important metric I think it goes back to what we discussed earlier which is traditionally it's going to be a smaller sub segment of your portfolio that typically in any one year is going to generate the majority of your P&L because great ideas again are not super common they happen and you need to be able to actively and aggressively capitalize on them when they come across so I think really being able to size effectively when the skew is in your direction is super important so I think thinking through what your sizing delta and your alpha generation and how consistent those two metrics are is super important so that's something they were highly focused on we tend to not be shy about putting a position on and trying to be quick with respect to our thesis but then continuing to study and analyze and potentially growing the position or taking it off quickly so that may depress the batting average at times but I think it gives a skin in the game and it also allows us to kind of more tangibly grow positions that we really feel like the level of diligence that we're doing is confirmatory of a positive thesis and along as an example and scale the position accordingly so we look at batting average we look at slugging ratio we look at what alpha generation looks like on different sizing metrics on different duration basis sees one of the analysis that I mentioned earlier which is looking at kind of how would a stop loss potentially benefit and oftentimes one of the epiphanies that we've had from the data that we've crunched is that certain positions even if they're a good thesis it may take a little bit of time to kind of play out doesn't mean that you should necessarily call the position with such a tight loss something may go against you for 15 percent but actually end up being one of your best positions at the end of the year that's why you need to maniacally kind of track whether or not your fundamental thesis is playing out as opposed to getting headfaked by the actual movement in the stock price so for us we monitor assess look at the data on an analyst by analyst basis as well sector by sector think about what the alpha generation is relative to each sector how does the alpha generation look relative to if we were to use the SPY as the benchmark we beta adjust so there's a lot of analytics that go into kind of how we think about assessing a period of strong performance or bad performance and thinking through our factorial contributions obviously in a month like January where the short interest factor was a headwind to most long short portfolios is there any interesting learnings that we can capitalize on as we move into the next month and for us we spend a lot of time dissecting the factors from a sector and subsector perspective thinking through how expensive or how cheap they are to know whether or not maybe there's an opportunity for us to leg into a situation like January where obviously you had the short interest factor reaching kind of five senior deviations expensive and I think there was an opportunity in a month like that and broadly short interest I think is not been lower than it is currently for well over a decade shorting is kind of come out of Vogue broadly and that's usually the time where you really want to be dusting off kind of where you think your best short opportunities are because the crowd is kind of moved on to a different fat yeah different fat potentially or just kind of a different lens interesting you also spoke about how this industry the head running industry the investment industry has changed over the past two decade what were the most significant trends affecting it and what's your view what's going to change in the next decade from when I first started to now obviously it's gotten much more crowded I think the growth of the multi managers and the sheer number of teams that they brought on has changed the ecosystem and led to a greater risk in terms of individual positions on the crowding metric that I described earlier and what the implications are for getting something wrong the down draft at least in the short term is tends to be a bit more severe than it would have been in the past given the market structure and the fact that a lot of folks are dealing with short leashes and there's a lot of young emerging portfolio managers that have a lot of career risk if they have a short period of bad performance leads to kind of non fundamental based decisions that lead to excess volatility that's potentially something that you can take advantage of but obviously in a levered model want to make sure that you're not having to kind of de-risk at the same time everyone else is de-risking for whatever reasons I think the factors and thinking through factor volatility again those were important metrics previously but the wall has definitely kicked up quite a bit given there's a whole host of new participants that are trading on variables that were not necessarily common market participants 10 12 years ago that are becoming more influential in the markets as well obviously you have quants you have much more macro capital etc so I think having a more sophisticated view through portfolio construction and where potentially you are in terms of positioning is becoming much much more important I think as I mentioned earlier being a great stock picker is just table stakes at this point the more important potentially elements of what's going to provide one with real duration and longevity you can look at a firm like Citadel it's obviously done quite well and been super successful for a long period of time I don't think it's purely a function of the fact that they have the greatest stock pickers in the world although the people that are there obviously great stock pickers I think a lot of it has to do with the process of portfolio construction thinking through risk and thinking through kind of cross correlations between different securities in the portfolio and having a real sophistication on those variables I think the traditional model of just saying hey I'm a hedge fund manager and I pick stocks is likely to become something that's a bit I don't want to say outdated but not the only variables necessary to be successful in kind of what I view is the new world order so it's definitely more competitive I think it just requires like the narrative that I espoused on kind of how retailers need to evolve to proceed and be successful I think hedge fund managers are going to have to do the same look what's happened just over the last 12 months you had a new emerging retail phenomenon many of whom were utilizing margin and options I mean that was a difficult thing to predict and obviously one needs to be fluid and skew and change and make sure that they're watchful and identifying kind of what potentially could get them in trouble given new phenomena that are emerging and I think obviously the folks that didn't do that got quite impacted in the January month where you saw names like GameStop etc really cause a lot of distress in portfolio so I think it's really like any other successful business one that requires constant observation constant evolution and it's a business that requires a lot of kind of mental stamina and I think that's something that suggests that one needs to really have a passion for it to be able to sustain because it is a day to day requires a lot of energy what stress do the most Cameron I think the mindset of always thinking where one can get in trouble is super crucial I think during periods of good performance there's a tendency for one to potentially get a bit overconfident and in my experience in the markets it tends to be those periods where you get humbled and humility is super important and so I think there's not one particular variable that keeps me up at night it's just more of a general anxiety around what could go wrong and I think that's kind of required if one's a steward of capital on the behalf of investors to really have a little bit of anxiety around thinking even when one is doing well what could kind of go in the other direction and cause some pain so I think it's just kind of a general mindset of thinking through what are the real risks what is the composition of my portfolio how much industry tilt do I have what is the idiosyncratic volatility of my book what factor exposures do I have what data points am I seeing that are potentially suggestive that I'm wrong which companies are at the top of my book where I'm seeing information that's suggestive that maybe this is not working out in the way I would have hoped do I have the conviction and ability to move my feet in the other direction I think from my perspective that's probably one of the most important criteria for success is especially in an environment a world that's moving so fluidly in different directions and is much more volatile in the past to have the ability to change one's mind and not be wedded to any potential outcome and not be so predictive and have kind of a bit of a reactive dynamic within one's process because I think prediction in general obviously is what we do but it becomes more difficult when systems and things are much more complex than they have been in the past I think someone said predictions that are really hard especially about the future I think that was Boltzmann I'll check this before I go on air with that one the German physicist and how do you get rid of stress Cameron well I don't know if I get rid of it but I think a little bit of stress at times is a healthy phenomena I think it's less a function of getting rid of it more a function of just realizing that it's a common phenomenon in this job and how can you leverage it to get yourself to a point where you don't let it spiral you into a negative mindset that might create suboptimal decision-making obviously if you have cortisol running through your system scientifically they've shown that that clouds your judgment I think you want to level yourself try to be as unemotional as possible in situations and I think the process with which we've set up the firm is an effort to do that so like I mentioned earlier quantifying thinking through specific analyses that's tangible and letting that run decision-making in addition to obviously some of the more instinctual decisions that one has to make in any job but having a real tangible scalable process I think takes a lot of the inherent stress out because I think if one is confident in their process they don't get blown away by bad outcomes you can be obviously a very thoughtful investor and make very thoughtful investments and sometimes they don't work out the way you would have hoped or what you would have expected doesn't mean that your process was wrong you just need to keep kind of doing what you're doing if it's an effective and alpha producing strategy over a long period of time and so I think if one is constantly evolving their strategy constantly looking at the analytics to see whether or not what they're doing is generating real alpha determining whether or not there's modifications that they can make in terms of their process to do things better I think a lot of that takes the stress out and I think a lot of stress comes from inactivity so when something is bothering you just letting it fester and maybe a position that you're starting to think or seeing some underlying emerging signposts that are suggestive that your initial thesis was wrong my tendency is to want to act early and then dig further there's a very little opportunity cost for calling something and then having a more unemotional lens with which one can assess the situation so I think everyone has to deal with stress in their own way but I think it's almost impossible in this job to completely separate yourself and think that you're not going to have stress that's just part of what you signed up for on that topic like of all the portfolio managers that have interacted with you definitely are on the side of the very very thoughtful very grounded extremely quantitative and laser focused on keeping your emotions in check are you paying attention to those though as a signal I mean I recall that Soros used to refer to his back back pain yeah as a signal is there a place for things like that in your investment persona yes there is to a degree so I think if you look at the latest science on gut health and thinking with what traditionally people viewed as your gut and there being some wisdom in terms of connection between your stomach and your brain and kind of your ability to acutely soak up more information than maybe your rational mind is suggesting at any one point definitely has some wisdom in it but I think that goes both ways I think there's been periods of time where I've had a lot of success and I've attributed that to being in more of a completely zen not zen but being in a very stable place and then there's been other times where I've been in a very stable place and the outcome has not been what I would have hoped for so I think one can run the risk of reading too much into any one signal I think there's value in all the signals but maybe Soros's back was the tell that was all telling I'd probably think that that was one cue that he would use not the only cue so I think there's wisdom in collecting a lot of information but I think there's a lot of potential danger in thinking there's one particular signal that's the end all be all that's going to give you the conviction to do X, Y and Z action if you were to have a conversation with your younger self the one that started at Citadel about 20 years ago or slightly less than that which advice would you give you I think I'd probably just tell myself to relax and enjoy the process and not take myself so seriously I think having grown up without a lot of money and having gotten to the point where potentially I got to a level of accumulation that I thought was going to catapult me into some better mental state was just kind of a false view and I think a lot of young folks somehow think if I get to X state all my anxieties and stresses are going to dissipate it doesn't work like that clearly one has to really enjoy and have passion for what they're doing and enjoy the day-to-day process it's easier said than done I think there's always going to be periods of time regardless of what you do where it's going to be difficult where you're going to want to quit where it's going to be emotionally taxing and potentially have deleterious impact on your family life those are human emotions and sometimes regardless of how grounded and why you are you don't necessarily behave in the most rational way at all times but I think knowing when you kind of potentially deviate a little bit and putting yourself back on the right mental footing and not necessarily taking every potential negative outcome so personally I think one needs to have a real competitiveness in this business and hate to lose so I don't mean to suggest one is comfortable or happy losing I just think one needs to know if they're doing their best our process oriented our thoughtful or doing everything they can do to create a successful outcome there's no guarantee that you're going to get the outcome that you want and that doesn't mean you're a bad person and doesn't mean you're stupid it just means that's kind of the way things played out in that particular situation no one has a monopoly on reality it is what it is and you just kind of got to move on and as Charlie Munger says the worst emotional tendency on the part of humans is self-pity doesn't really serve you any purpose whatsoever so I think those would be kind of some of the lessons or comments that I'd make to my younger self we mentioned you're an avid reader what would you suggest us to be cop well I have a pretty eclectic reading interest I like spirituality books I didn't grow up really with a fairly religious structure around me but there always was kind of an underlying level of spirituality that was discussed in the home and so from my perspective that's been a tool that's kind of helped me think through some of these more emotional situations that we discussed and how to maintain some level of tangible grounding and so for me authors like Alan Watts is someone that I've read over and over again wisdom of insecurities one of my favorite books but I also am kind of a finance junkie I love reading kind of the classical soros books the one with Byron Wien interviewing him I like biographies so there's not one vertical that I'm most attracted to but I rarely read fiction it's mostly nonfiction works what about music what's your favorite genre band or song so I grew up listening to a lot of classic rock so classic rock is definitely my preferred genre of music let's define that is it lead zapping or well I don't know if I have a favorite but if I had to say kind of who is my top one or two definitely leds up one would be up there I grew up listening to a lot of rush which was a Canadian band at the time when I was growing up in Houston in the 80s rush was very very popular but if I'm going to jump in the car and listen to some music it's definitely going to be the classic rock station awesome Cameron it's been a pleasure that I enjoyed our discussion yeah I really enjoyed it as well it's really nice to meet you over squad cast I was going to say Michael spoke very highly of you so I appreciate you guys taking the time to do this and I hope it was an informative conversation very I must say that the little emotional intelligence that I have according to my wife by the way who is superior on that dimension you definitely have a lot of grounding I've rarely found it in portfolio managers there's always an angle of ultra competitiveness and there are those things that are there with you it's they're just wrapped around this solid human being which has just been a pleasure I don't know if we're going to have this piece on the podcast but I just wanted to share how I felt I appreciate that it's very kind of you it was great to have it with us feel free to subscribe and join me next time for more conversations with successful investors as a reminder successful investors by Novus reflects the opinions and views of the speakers alone and is provided for informational purposes only without representation as to accuracy or completeness this podcast does not constitute a recommendation to buy or sell securities or make investments nor is it intended to promote or endorse any specific investment strategy or product for more information about this podcast check out novice.com/podcast