During their recent episode of the VALUE: After Hours Podcast, Taylor, Brewster, and Carlisle discussed Solitude & Leadership. Here’s an excerpt from the episode:
Jake: Yeah. All right. So, this veggie segment is called Solitude and Leadership, and that’s the name of a paper and a talk actually, that William Deresiewicz, I believe is how he says it. I don’t know. It’s one of those tough Czech-looking names. But he gave in 2009 a speech to the class at West Point, and turned this into an article on the American scholar, I think it’s called– Anyway, so this guy, William, he’s an essayist and an author and he teaches English at Yale, or he did. He has all these students who come in at Yale, and they’re like world-class hoop jumpers. They know how to play the game. He calls them Excellent Sheep in another book later. But they know how to ace all the tests and jump through all the hoops, all the extracurriculars, to get into Harvard Business School or Johns Hopkins Medical, or get the job at Goldman or McKinsey. They just know how to climb in a hierarchy.
He then brings it back to Heart of Darkness, which is a book by Joseph Conrad that you might be more familiar with as the movie, Apocalypse Now. And in the book, the main character meets this central station boss, and this guy is just a pure bureaucrat. He says that he’s unremarkable, commonplace, ordinary, he’s obeyed, but he’s not respected or admired, or even feared. He originates nothing, all he does is keep a process going. He’s able to keep a routine going. He can thrive in a bureaucracy. He doesn’t take any stupid risks to question authority, it’s always just about keeping– like, the environment totally rewards conformity.
He’s talking about how there’s a crisis of leadership in America, even in 2009 due to the fact that no one wants to really like go against the grain that way. We’re training all of our kids to be these hoop jumpers, and not really to think for themselves. A lot of that has to do with complacency and just keeping the little wheel turning that that keeps you from getting crushed as a member of this giant bureaucracy. Whether it was the military or corporate America, or the government, wherever, any level of leadership has been bureaucratized to a way that it attracts sort of the wrong element.
So then, he pivots to talking about multitasking and shows how terrible we are at it. The opposite of multitasking, he says, is concentration, and really thinking about something and only that one thing for a long period of time. He talks about how his first thoughts when he approaches a subject are always someone else’s thoughts. They’re there. It’s their common sense, like common conventional wisdom about it. It takes a long time to sit there, you can’t be in a hurry to let everyone else’s conventional wisdom thoughts wash away, and then you can actually hear your own voice about it. You’re talking about not being in a hurry, and apparently James Joyce wrote Ulysses, which was arguably the best book of a century. He wrote it an average of 100–
Tobias: Oof. I don’t know about that. [chuckles]
Jake: Well, I know, I’ve tried to read it before.
Tobias: It’s impossible.
Jake: Totally impenetrable. But he wrote it 100 words a day on average, that’s how long it took him to write.
Tobias: It’s taken a long time. That’s about how fast I can read it.
Jake: Yeah, exactly. Under a 100. Then, he talks about how media, especially social media, but also even newspapers, TV, radio, whatever it is, those are all other people’s thoughts. It’s all an elaborate excuse to really run away from yourself and run away from your own voice inside your head. We’re continuously bombarding ourselves with other people’s thoughts. You could spend five minutes on Twitter, and it is just an absolute cacophony of other people’s thoughts just jammed right into your neocortex. It can be rough. I know I said last week that I was thankful for it, and I do think that it’s true from a meeting-other-people standpoint and learning some new good ideas, but you really do have to sift through a lot to get to it.
Anyway, he does say that books are a better version of this media, in that they represent someone else’s solitude, them sitting with their own thoughts. At least you’re getting a little bit of a touch of the solitude. And then, he also makes that common Lindy argument about books that they’re– if they’ve been around for a long time, they must be decent.
He says solitude is really three different things. It’s introspection, it’s concentration on focused work, and it’s also sustained reading of books typically. And then, there’s one other element to it, it’s paradoxical, but he says it’s deep friendship and an intimate conversation is actually a form of solitude. You’re almost thinking out loud often when you’re talking to somebody in a very intimate setting. That rings true for me.
Tobias: Yeah, all that rings true for me. I love those four. Those are great.
Jake: He’s talking about how the position of a leader is a very solitary place to be, because you’re often having to make the tough decision by yourself, like the buck stops with you. So, you have to be able to block out a lot of the noise and really focus on your own inner voice really. He’s telling them that they need to prepare now, similar to how you’d have to learn– you need to learn how to shoot your gun before you get into the first firefight if you’re a cadet. People don’t spend enough time sort of finding themselves– finding yourself has become this a cliche of liberal arts, like Eat Pray Love or something a trip. But the finding yourself in solitude and what are your deep core values that are important to you, people just don’t do that work and they hide from it via social media and TV or Netflix streaming or whatever.
Tobias: Could you even do it in college now? College, when I was there was– not that there was so much work, but there’s a lot of work that you got to get through. There’s no possibility for trying to figure out what you’re doing. That’s what I thought anyway. I didn’t have any thoughts until I got out, until I started working.
Jake: Yeah, I don’t know. I think it probably depends on what kind of– I could imagine if you were doing– St. John’s has the classic literature track. I don’t know if you’ve heard about this.
Jake: What’s all the best books, and you read the original sources, and it builds upon itself over history.
Tobias: That’s a good one.
Jake: Rather than taking someone else’s interpretation of it, you get back to the source material. Like you read Beowulf, all of these classics, I think there’s something to that maybe–
Jake: Yeah. [chuckles] Ulysses in your junior year, I think. I don’t know.
Tobias: The Odyssey is great, but Ulysses is just impenetrable.
Jake: I have one more thing on here, and this is someone recommended to read. Montaigne has a section on solitude, I think it’s called “Of Solitude”. I read that this morning, and I pulled out this one really good quote that I’ll read you guys.
“Who is it that does not voluntarily exchange his health, his repose, and his very life for reputation and glory, the most useless, frivolous, and false coin that passes current among us?”
Tobias: Well, I love Montaigne. I had a firm named after Montaigne for a little while there. You’re talking about my man there.
Jake: I knew that, was lobbing you on there.
Tobias: [chuckles] Yeah, I love Montaigne. I don’t know how much of a philosophy– he just quotes everybody else, and then puts it all together and sort of– In some ways, he’s like a 500-year-old version of the guy who wrote The 48 Laws of Power. It’s like just quoting–
Jake: Oh, Robert Greene.
Tobias: Robert Greene. It’s going back through a lot of us older– just seeing what other people said. He’s got some hilarious– He’s an interesting thinker. Yeah.
Jake: Yeah, he’s almost like doing book reports from 400 years ago–
Tobias: He just quote after quote after quote. And then, he compares them and then he discusses them, and he says, here’s what he thinks about each. When you’re defending a fort, should you go out to parlay? No, because sometimes they’ll just run around you and going into your fort. So, you’ll be outside to talk and the enemy’s in your fort. Good advice. You can use that any day of the week.
Bill: I’m not sure how, but I like it.[crosstalk]
Jake: The investment implications of all this are hopefully relatively obvious. Being able to just sit and think for yourself, not having to worry about what the crowd is thinking as much. All these things that we’ve heard in other contexts, I thought this was a nice way of saying the same story, but in a different way.
Bill: I more meant Toby guarding– Toby’s anecdote about guarding the fort. That’s what I don’t know, how to utilize. The only thing that I would push back on that about is, I have never actually had success on my own, and all of my success is usually due to the people that I’ve surrounded myself with. So, I actually think that for me dealing with a group, usually it’s three people just seems to be the right amount that works for me, that are truly there to debate issues. I really came into this in law school, where it was about not being right, but the debate to get to the answer, that has been a very helpful exercise to me. Now, whether or not– I don’t always walk away with the same takeaway that the person that I was talking to had, and a lot of the world is very gray. But I think sometimes if I sit and I think, I can get myself locked in a thought pattern that’s not true. Sometimes talking to others will help jog me out of my own brain because I’m pretty flawed, as I said now twice.[laughter]
Jake: We have the self-flagellation box checked for this episode.
Bill: It’s good. That’s good. That’s what you need. But you know what I mean, I just think there’s a way to do it. It’s not about proving somebody wrong or right or whatever. But truly interested conversation with other people that are interested in similar topics has usually turned me into a smarter individual. So, I agree with you and then I would maybe add that as an addendum. Unlike when you were thankful for free trading in which I just disagree with you.[laughter]
Jake: Full stop.
Bill: Yes, that is not an addendum. We just have a difference of opinion.
Tobias: Yeah. I had the same experience at law school. For most decisions, there’s so much– it’s been argued so many different ways to get to that point. And it’s just hard to do all the research to get yourself to know all of it by the time you come to have the way that you discuss through an issue, to work out how you should be deciding one way or the other. It’s good to have–
Bill: I’m sorry to cut you off. I know that people hate it when I do that. I don’t even like that about myself. I’m sorry, folks.[chuckles]
Bill: But [chuckles] dude, my Twitter followers, shoutout to you guys. I floated a question about bitcoin, which I don’t know shit about, I don’t know why any of you want me to opine on it. I’m another idiot that has no opinion that’s worth listening to. But I guess I want to learn. But I got directed in the right way right now. Or like, I floated something about semiconductors and people shot me a couple of things. It’s amazing today if you use the tool the right way, how quickly your acceleration– you don’t have to be on an island anymore. Now, you’ve got to figure out who’s got a motivation to pitch you something or send you something or whatever like that, you sort of have to be smart about. But it really is an incredible tool, despite not leading to solitude, which is why I have moved close to the beach, and I go sit there and read.
Tobias: You could do both. You just need to limit the firehose from Twitter. Just control the firehose.
Bill: Dude, this weekend, my brain because I reinstalled it on the phone for marketing purposes, I could feel on, Sunday night, I was like, “My brain needs to just like relax.”
Tobias: Yeah, I switch it off over the weekend.
Bill: [crosstalk] –how it’ll do that.
Tobias: Take it off the home screen.
Bill: It’s on the back, but I had a lot of stuff going on. I can’t imagine. I know we try not to talk about it that much. Trump must be crazy. Trump must go to bed and just have all these sensors just firing on him. I don’t know how anyone could be that aggressive on a social media platform and ever go to bed, which he doesn’t if you look at the times that he tweets. But it’s wild, what it does to my brain sometimes. I’d be like, “Man, I got to get off this thing.”
Writing Like Hemingway
Tobias: It’s hard to get into that deep strategic thought if you’re on Twitter, you have to get off and go and do something for a period of time, like 15 minutes to an hour, so you can get back into that. I’ve got a new book that I’m working on at the moment, about 40% of the way through the first draft of it. And so, I just can’t be on Twitter. If I’m on Twitter, it just blows my brains for trying to write because you’ve got to put all this stuff in, then write the 100 or so– squeeze the 100 or so words.
Jake: Hundred words. Yeah. [chuckles]
Tobias: It’s an hour to get everything loaded up so you know what you’re going to say, squeeze in 100 words and then realize that it’s garbage and go and do something else. But that process is like– Hemingway used to do this. Hemingway first thing in the morning, and this is a pretty good process, I got little kids, so it doesn’t work that well. First thing I get to the computer, just start writing then. So, you read through what you’ve previously written, realize that it’s total shit, edit it while you’re going through what you’ve previously written. And then, you’ve got a little bit that you can write, so you got, like, 20% of the time is creative, 80% of the time, it’s like editing what you’ve previously written. So, that’s quite a useful process.
And then, the stuff that you wrote previously gets slightly better, and then you have something new on the page for tomorrow, so you can go back and edit it again. Writing is not about writing. Writing is about editing. It’s really, really hard to write the first draft. It’s really easy to edit something and make it good. But you’ve got to start with something.
Jake: Do you leave midsentence hanging off like Hemingway did? That way you have that thread to pick up on the next day?
Tobias: I didn’t know that he did that. I like that, that’s smart.
Bill: Or your brain works on, and you go to bed.
Tobias: 100% that happens. I can’t figure out how to write something and it just comes to me in the middle of the night all the time. That’s the only way to do it. You just sit there–
Bill: Or you end up leaving the room and then you’ll just be like, “I’ve got to go write this down.”
Tobias: Yeah, [crosstalk] if I don’t, I may go back to sleep. I got a pad beside my bed.
Bill: Oh, do you?
Jake: Scratch it out.
Bill: I tell my wife, like mid-conversation, I’ll be like, “I’ve got to go. I’ve got to leave. I’ve got to write this down.” And then she’d be like, “Were you listening to anything that I was saying?” “Honestly, probably not. I don’t even know what you just ask me.”
Tobias: Throw your questions in, guys. Sorry, we went a little bit, we got 10 minutes.
Bill: Oh, somebody was asking about ROE. Sorry, Jake.
Jake: Go ahead.
Bill: Somebody was just saying regarding ROE, can you correct for debt and look at some ROIC, whatever. When they have negative equity, how do you measure it? I normally try– if I get into ROE stuff, I try to adjust for buybacks or I just go to return on assets. You have the same problem with cigarette companies. If you look at the equity, the return on equity gets crazy. So, I think Greenwald would probably say, do a theoretical replacement cost and try to embed a cost to capital on that, figure out what you’re– I mean, figure that out that way. Most of those businesses are what he would deem franchise businesses. So, you just need to get yourself comfortable with the DCF and roll with it, I think.
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