Master Investor Ed Thorp on How to Think for Yourself, Mental Models for the Second Half of Life, How to Be Inner-Directed, How Basic Numeracy Is a Superpower, and The Dangers of Investing Fads | Brought to you by Wealthfront automated investing (http://wealthfront.com/tim), Vuori comfortable and durable performance apparel (https://vuoriclothing.com/tim), and Eight Sleep’s Pod Pro Cover sleeping solution for dynamic cooling and heating (http://eightsleep.com/Tim). More on all three below.
Edward O. Thorp is the author of the bestseller Beat the Dealer, which transformed the game of blackjack. His subsequent book, Beat the Market, coauthored with Sheen T. Kassouf, influenced securities markets around the globe. He is also the author of A Man for All Markets: From Las Vegas to Wall Street, How I Beat the Dealer and the Market.
Edward was one of the world’s best blackjack players and investors, and his hedge funds were profitable every year for 29 years. He lives in Newport Beach, California.
Show notes: https://tim.blog/2022/06/28/edward-o-thorp-2/
00:00:15 The value of long-term thinking and the price of short-term thinking
00:01:33 What is a common stock warrant?
00:03:33 Why are people generally poor at taking longer-term (or alternative) perspectives?
00:04:53 Conversing about numeracy and common misunderstandings
00:08:56 How to become more numeracy literate
00:14:42 It’s Raining Man
00:17:03 The Rule of 72
00:21:03 Making the best financial decisions with unknown variables
00:29:14 How to have fun learning about probability and statistics
00:31:05 How to get an edge in hedge fund investing (with book recommendations)
00:40:18 Ed’s methods for losing (or maintaining) weight and looking 60 in spite of being almost 90 years old
00:48:06 Favorite beer
00:49:30 Music as stress reduction
00:50:24 Avoiding unnecessary risks
00:59:41 The age-guessing experiment
01:01:53 Other-directed vs. inner-directed and takeaways from The Lonely Crowd by David Riesman
01:10:44 How an 89-year-old maintains hair growth
01:13:47 Using scrap time
01:16:26 A big change in Ed’s later life that increased its quality
01:19:13 New reflections, future hopes, and parting thoughts
About Tim Ferriss:
Tim Ferriss is one of Fast Company’s “Most Innovative Business People” and an early-stage tech investor/advisor in Uber, Facebook, Twitter, Shopify, Duolingo, Alibaba, and 50+ other companies. He is also the author of five #1 New York Times and Wall Street Journal bestsellers: The 4-Hour Workweek, The 4-Hour Body, The 4-Hour Chef, Tools of Titans and Tribe of Mentors. The Observer and other media have named him “the Oprah of audio” due to the influence of his podcast, The Tim Ferriss Show, which has exceeded 500 million downloads and been selected for “Best of Apple Podcasts” three years running.
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