How Chamath Palihapitiya Makes Investment Decisions

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The Knowledge Project

Chamath and his team have made a plethora of investment decisions. In this video, Chamath shares his philosophy on investing including how his team works together, what he looks for in market research, and how he actually allocates the capital. ---- ABOUT THE KNOWLEDGE PROJECT Like the mentor you’ve always dreamed of having, The Knowledge Project shares timely yet timeless lessons for work and life. Past guests include Naval Ravikant, Daniel Kahneman, Jim Collins, Angela Duckworth, Seth Godin, Melanie Mitchell, & Esther Perel. SUBSCRIBE for full episodes and clips highlighting actionable lessons and profound wisdom from guests ranging from Nobel Prize winners to CEOs of the largest companies in the world and everything in between. Get early access and episode transcripts: https://fs.blog/membership/ Subscribe to the podcast: Apple Podcasts: https://apple.co/3fz6u4X​ | Spotify: https://spoti.fi/2SSgCvT​ | Google Podcasts: https://bit.ly/2Wjw7iy ---- FOLLOW Instagram: https://www.instagram.com/farnamstreet/​ Twitter: https://twitter.com/farnamstreet​ Shane Parrish: https://twitter.com/ShaneAParrish Newsletter: https://fs.blog/newsletter/ Facebook: https://www.facebook.com/FarnamStreet/

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Video Transcript:

What is your decision process for when you're making a capital allocation decision i know you made a few recently like without any specific names so i don't want to get anybody in trouble but what's that process in your head like like how are you actually what what's what are you talking to yourself about mentally to make sure because it's all on you Yeah i uh i i really love it like you know we do a lot of work like i mean i have great partners i have a team that i work with who are just exceptional people um they are the most high integrity people i've ever worked with um and they give me enormous energy um you know i have i have uh uh some some you know folks that i've partnered up with who have their own organizations as well Those folks are super high integrity and so all these people that i spend my day with every day are just kind good earnest people each of us i don't think are the smartest ones but when we put ourselves together we are really really smart collectively and that's that's awesome and so we all do Different things and everybody's bringing different things to the table and then what happens it allows me to kind of synthesize all kinds of different inputs and learnings and you know variations on a model regulatory research market research you know consumer marketing research all of this stuff and learn about it which is super fun And in my mind what's happening is basically like here's how this can go right here's how this can go wrong here's how this can go right here's how this can go wrong and i'm bouncing back and forth and all of these things are just um oscillating and if i have to characterize it this is going to sound nuts but it's like a and then that oscillation goes faster and faster and faster and then i find a Point of equilibrium is that like the matrix moment for you or like all of this data all of a sudden just yeah yeah yeah no yeah it is like that it's like you know i i know that uh leading into something i become a little detached i am a little all over the place my mind's racing my you know so sometimes i'll be Seeing non-sequiturs on calls and uh my partners are very patient with me in those processes you've made like public calls you did bitcoin in 2012 you did amazon in 2014 you did tesla in 2015. like you've nailed fairly i would say controversial things at the moment i mean in hindsight they've all worked out exceptionally well but at the moment they Everybody thought you were crazy yeah they really really did and that's awesome because it's like advantageous divergence right you're diverging from the crowd and you're right yeah and uh and and what it does is it it has given me confidence in my process it's random you know it's about ingesting a lot of stuff it's allowing yourself to be influenced but then come Back home right that's another thing i love meaning if i'm having a conversation or in a sort of a teaching kind of a situation where i'm learning about something i allow myself to be seduced i allow myself to sort of fall for the narrative i allow myself to believe the totality of what that other person believes fully and completely because i want to Really start to understand the nooks and crannies now that process doesn't work if you want to be intellectually lazy um or if you find yourself being intellectually lazy and you stop when you get you know confirmatory that first confirmatory meeting or that first confirmatory article or you know you could joke but like that first conformatory google link ah i'm Done you know uh it doesn't work that way but if you're willing to bounce around and you know fundamentally be unoffensive in your opinions upfront you find that people who have extreme opinions will talk to you in a very unguarded way and i i think i've trained myself to let myself be seduced by those folks so that i can learn from them Uh but i always come back home i come back to the center i come back to no opinion what's the trick for that right like there's this quote from ender's game that i was thinking have you ever watched that movie or read the book where he says there's this moment where i understand my enemy better than they understand themselves and in that moment i sort of love them And defeat them and it sounds like you're allowing yourself to understand somebody else's opinion like so fully but you don't get caught up in it how do you avoid no i do in the moment but i know to slow it down and then i also know to come back home so i think i think maybe the maybe the clarifying question shane would be like what is your process of coming back home okay so what i have to do is i have to go and Then be again it takes it none of this is possible without an incredible team that has super high integrity the anchoring principle of which is kindness so i will come back to my partners i'll be like guys and they're like okay uh-huh okay okay okay good uh and they they de-escalated right right so you know or i'll go to nap sit look she's like okay i got you okay Okay got it you know or or rob or you know like all these and so it's it's wonderful um and so then i go okay i was getting a little excited there or i'll come back can you believe this i can't believe this this sucks they're like uh-huh okay yeah gotcha good okay uh and you know i i've learned that i do that uh and so i can i get back home faster um And it helps me but uh but i do that a lot i allow myself to live in the persona of that person and that opinion because it allows me to understand where they're coming from

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