How To Measure Hard Work In Investing

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In their recent episode of the VALUE: After Hours Podcast, Taylor, Brewster, and Carlisle discuss How To Measure Hard Work In Investing. Here’s an excerpt from the episode:

Jake: [laughs] Woke perfect. This is kind of inspired by, I regularly have dreams where I am working in the supermarket again, like I did back in high school and college. And they used to really bother me because I would think like, “God, I thought I had moved on from this. But I’m still here, bagging groceries and checking out groceries.” The last time I had this dream, I had the realization upon waking up that I actually love this dream because it reminds me of what hard work actually looked like, and that I was capable of hard work at one point in my life, and that I was willing to do it. So, I think, maybe I’m going to rewind a little bit and give a little bit more backstory that I’ve normally haven’t really talked about myself in for this.

It actually goes back to basketball as a fourth and fifth grader, and into middle school, and I remember going to a middle school dance, and all of my friends and I bailing on the dance to go to the teachers’ lounge where there was like a little black and white TV, and watching Michael Jordan during the finals pouring in–. I don’t know if you guys remember, but like when he was playing against the Blazers that one year, and he was on fire from three-point range in the first half especially. And that was where he did like shrug thing like, I don’t know, it’s just all going in right now. It was a great moment. So, I played basketball in middle school, and then in high school, but here’s the thing.

I was at my sophomore year, so playing JV, I was 5’2″ and probably under hundred pounds. So, I remember going to away games and coming out of the locker room into the layup line, and just like you couldn’t help but feel like everyone was looking at you and laughing and pointing. But it wasn’t like, I was like a 5’2″ like Muggsy Bogues, who was super athletic. It’s just like, I just wasn’t developed.

Tobias: You weren’t a dunking 5’2″.

Jake: No.

Bill: Yes, you are Caucasian.

Jake: I was slow footed 5’2″. But what I did have was like, no one worked harder than I did. I’d be the first one on the ground for a loose ball. I think it did play a whole lot in the games. But practicing, I gave it my all every single practice. I viewed my job is like, “I’m going to make everyone else on the team work hard during practice, at least to try to keep up with me, even though, they’re going to be the ones playing in the game. It’s not going to be me.”

Bill: Did you have a decent wingspan, at least?

Jake: No.

Bill: Yeah, you had nothing.

Jake: Nothing. I had nothing.

Bill: No, you didn’t.

Jake: Other than just like I look like being able to play smart and getting into the right position ahead of time, which can hide a lot of lack of athleticism, if you’re positionally smart. All right, so then I got cut my junior year, and I was still undersized. I was a little bit taller at that point like, I’d grown a few inches, but I started working then. I worked in a grocery store from 16 and all the way through college until I graduated at 22. That whole time, I did every single job that was basically in a grocery store. It was a pretty sweet gig in a way in that like, I got paid reasonably well that, I paid for all of my college with the money that I made, my wages, and even saved some money all the way through college, and room and board. I never took a student loan the whole time.

I went to like a little state school. I kind of had a sense of an inferiority complex because of that. Because later in life, I’d meet people who went to Harvard or Yale, and for a lot of time in my 20s, I felt a lot of inferiority to those people like, “Oh, they must be so much smarter than me, they went to this great school.” A lot of people had a lot more of a typical experience of partying, and having fun, and like, I worked like, literally working night shift, I would go in at 11 PM, I get off at seven or eight in the morning, and then drive to school, go to school till 2 PM, and then come home and do some homework, and sleep for a few hours, and then, get up and do it all over again. That was hard work. It was over every day grinding, trying not to fall asleep in class, sleeping in between classes when I could in the hallway, I mean, stuff like that.

I still have dreams about this working in the grocery store. Even then, after I graduated, and I got a job running the power grid, there was one year, 2008, where I was in business school. I was working full time running the power grid. My wife was finishing her PhD thesis and we had a kid. I look back at that time, and I go, “How the hell did we even get through all of that?” There’s too many things happening there to even make one year haven’t make any sense. It was like, it was a lot of hard work. So, now, I think about like, “All right, what as someone who’s professionally investing now, like what does hard work look like? How would you know? Is it returns?” Well, it reminds me of Bezos, when they would tell him like, “Oh, hey, great quarter.” He would say, “Well, actually, that quarter was baked three years ago by all the things and the decisions that we did and the moves that we made three years ago.”

So, I’m working on the quarter that’s three years from now or you can also think about like Jim Grant’s quote that, “Successful investing is having everyone agree with you later.” So, any given one year, I feel like, returns is not an indication of how hard did you work this year. So, I went through and I looked at all of my numbers, which the software project that I’m working on has really helped in keeping track of this stuff, which is what has me really excited about it. So, here’s what my year looked like for what I consider hard work for this year. So, just on the investment side, I did 500– Then, most of this is towards the second half of the year, because the software took a big leap in the last six months. But I did 518 journal entries, I looked at 144 different potential investment ideas, I did 27, what I called deep dives, which is any idea that had more than 10 journal entries on that idea? I did measuring like 30 different sources of potential ideas. So, I track, where did an idea come from? Am I doing things to like broaden the network to hopefully find more good ideas?

I had 119 day, which is still going journaling streak. So, 119 days in a row, I’ve created a journal entry to really try to build good habits. I made 122 total decisions, which would include whether to buy something, or sell it or not buy it, or not sell it, and recording it then. Let’s see. I think, this is our 48th episode. So, this would be 48 vegetable servings that I came up with over the year. I read 42 books, you know, year to date which is a little bit under my normal average but that’s okay. Let’s see. I went through my calendar and looked and I had 215 calls, Zooms, meetings that were investment related over the year. So, nurturing your network, building relationships. What else? On the personal side, and I didn’t figure this out, but one of the coaches sent it to us just kind of he was messing around and looking at how much hard work we’ve put in as coaches, but just on my oldest son’s team, we had 72 practices and 74 games in the last– for 2021 calendar year, which is, it’s quite a bit of showing up.

Then, going forward, I think, some things that I want to start tracking that will be good will be, I recently got an Oura ring, which helps you track sleep and all that stuff. Actually, my wife got a new one and I took her old one. [chuckles] But I would like to know like, I’m aiming for a certain percentage of days that I wake up with a high readiness score. So, did I show up ready to play the game in a physically good state? I think, that’s important. So, doing all the little things like getting enough sleep, and exercising, and eating well that will hopefully keep my readiness score high enough to do good work. And then, I think, mental health wise, tracking the number of meditations that you do or yoga classes. I also tried hearing support supplement like Cortexi which helps support healthy hearing, strengthens memory and boosts mental sharpness. I think for me will be a good thing to try to bump up. I also got to kind of thinking like, “What would be some anti-goals? What could I try to actually avoid using Charlie’s inverting?” I was like, “Okay, probably, number of emails sent should probably be tried to minimize because I can definitely waste a lot of time in email.” And then obviously, number of tweets read if I could keep track of that and probably the lower that number was probably the better off my entire life would be but–

Yeah. So, I don’t know. It just kind of got me thinking into the year reflection of like, “Well, what would a year of hard work look like in the investment context?” I think, if I focus on those things and really try to do a good job with all those, and work hard, and knows contexts, and measure it that way, I know, am I getting better or am I putting in more work or less, where am I in a tracking sense? I think that all of those things combined will create the end result that I’m looking for eventually.

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