DeepSummary
The transcript begins with an introduction to this episode as a "super combo" celebrating the podcast's 10th anniversary and 1 billion downloads, featuring excerpts from previous episodes with Brené Brown and Edward O. Thorp. The first segment with Brené Brown covers topics such as self-acceptance, lasting behavioral change, the armor of pathology, and finding curiosity as a superpower in midlife.
The second segment features Edward O. Thorp, who shares his background in applying mathematics to beat gambling games like blackjack and roulette. He discusses meeting Claude Shannon at MIT to develop the first wearable computer for predicting roulette spins. Thorp then explains how he transitioned into finance and investing, meeting figures like Warren Buffett along the way.
Thorp provides insights on long-term thinking, mental models for investing, identifying the Madoff fraud early on, and the importance of independence and knowing when you have enough wealth. He emphasizes teaching people to think for themselves rather than blindly following the crowd.
Key Episodes Takeaways
- Developing self-awareness and the ability to think critically for oneself is crucial for personal growth and making wise decisions.
- Lasting, meaningful change requires self-acceptance rather than self-criticism or rejection.
- In midlife, cultivating curiosity can serve as a powerful tool for continued learning and avoiding complacency.
- Taking a long-term, quantitative approach to investing by buying and holding equities tends to outperform more active, short-term trading strategies.
- Assessing risk through mathematical analysis can inform decision-making across various domains, from gambling to investing to personal health.
- Knowing when you have accumulated "enough" wealth allows you to pursue independence and spend time on activities you truly enjoy.
- Looking beyond short-term gains and crowd mentality to think for oneself is key to identifying opportunities or fraudulent schemes early.
- Developing applicable mental models from different disciplines can enhance one's thinking and problem-solving abilities across many areas of life.
Top Episodes Quotes
- “I don't think there's much an individual can do on a grand scale unless he happens to be in a position of great importance or manages to get himself in a position of great importance. But I think there's a lot that an individual can do on a small scale.“ by Edward O. Thorp
- “So I applied that, for example, to Covid. I thought about what to do and how to deal with it, and I said, you know, at my age, the stats from China, which came over in early 2020, showed that people 85 and up were dying at the rate of, if they were male, 18% of those who got it.“ by Edward O. Thorp
- “The answer is if you're a long term investor, you should just buy and hold equities. And the best place to have bought and hold equities has been the US for the last couple of hundred years.“ by Edward O. Thorp
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Episode Information
The Tim Ferriss Show
Tim Ferriss: Bestselling Author, Human Guinea Pig
5/21/24
This episode is a two-for-one, and that’s because the podcast recently hit its 10-year anniversary and passed one billion downloads. To celebrate, I’ve curated some of the best of the best—some of my favorites—from more than 700 episodes over the last decade. I could not be more excited. The episode features segments from episode #409 "Brené Brown — Striving versus Self-Acceptance, Saving Marriages, and More" and episode #596 "Edward O. Thorp, A Man for All Markets — Beating Blackjack and Roulette, Beating the Stock Market, Spotting Bernie Madoff Early, and Knowing When Enough Is Enough."
Please enjoy!
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Timestamps:
[06:06] Notes about this supercombo format.
[07:09] Enter Brené Brown.
[07:30] Changing in a lasting, meaningful way.
[08:03] Is self-accepted complacency possible?
[10:53] My woo confession about a crux skill.
[13:06] Narcissism: the shame-based fear of being ordinary.
[14:06] Efficacy isn’t always efficient.
[15:48] Pathology as armor that can’t be discarded.
[16:28] What are you unwilling to feel?
[17:04] Discarding armor that no longer serves us.
[21:26] Curiosity as midlife’s superpower.
[22:53] There’s trauma for all of us.
[23:33] An 80/20 marriage hack.
[25:18] Decisions in a family-focused family.
[27:04] Parenting from compliance to commitment.
[29:31] Enter Edward O. Thorp.
[29:54] Edward’s background, and what drew him to apply mathematics to gambling.
[37:04] Edward’s first blackjack trip to Vegas, reference materials used, and his meeting with Claude Shannon at MIT.
[40:13] Edward and Claude devised a method to beat roulette using the first wearable computer, according to MIT.
[42:16] Despite being 89, Edward looks great for his age; he discusses his approach to staying in shape over the years.
[50:22] Edward explains how he got into finance and investing, and the people he met along the way.
[59:25] Edward shares what convinced him that Warren Buffett would one day be the richest man in the world after their first meeting.
[1:03:58] Edward discusses the frameworks he would teach in an investing seminar for modern students, including those without a strong math aptitude.
[1:08:52] Edward shares lessons learned from investing that are transferable to other areas of life.
[1:11:02] Edward, a long-term thinker at 89, offers advice for those who struggle to think beyond the short-term.
[1:15:40] Edward explains how he discovered something suspicious about the Madoff brothers’ business practices 17 years before others caught on.
[1:24:17] Exploring mental models of externalities, the tragedy of the commons, and fundamental attribution errors.
[1:33:32] Edward recommends reading and listening material for those who want to enact positive change in the world, politically or evolutionarily.
[1:38:51] Edward shares which investors, besides Warren Buffett, impress him and why.
[1:42:52] Edward discusses how he balanced growing a business with personal life and what led him to wind things down.
[1:47:56] Edward defines independence and shares how he spent his time after winding down the investment side of his life.
[1:49:30] Edward shares what he’s particularly curious about learning at the moment.
[1:51:40] Reflecting on a conversation between Joseph Heller and Kurt Vonnegut, and other parting thoughts.
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