How to Stand on the Shoulders of Giants
Habits Equal Competency
He was a former King of the Cage Champion.
Today he trains a handful of UFC fighters, and a bunch of white-collar wannabes, like myself.
The best workouts I've ever had were at Diaz Combat Sports in East Vancouver where I trained with the founder, Ryan Diaz.
I was always his first client in the mornings. It would still be dark, I would park right out front.
When I have it my way, I am in the gym six days a week - I don’t need a trainer to push me.
But when the tsunami of business and family obligations take over, fitness can fall by the wayside. In these moments, my standing twice weekly appointment with Ryan was like my insurance policy - it wasn’t perfect, but it was better than nothing.
Ryan would do all of my thinking - my brain could be elsewhere.
All I had to do was show up, lace up my gloves, and he would push me around the gym, beating me up along the way. I would leave a little bit better than when I arrived.
It was like automated progress - “Set it and forget it fitness.”
I apply this automation fail-safe to as many aspects of my life as I can.
I want to excel everywhere, but I can’t give everything my full attention. So I develop systems to protect areas of my life that end up hitting the back-burner.
I find a version of Diaz Combat Sports for everything - business, family, personal and finance.
It's Pareto's Law - 20% of your effort generates 80% of the result. So, in order to protect the result, I need to find and protect that 20%.
Neil deGrasse Tyson has a great quote:
“There is no balance. My life is completely out of balance, and that forces innovations of time management and solution finding.”
The Names You Need to Know – From Financiers to Founders
Business usually gets my core focus - so on my daily checklist I have every other important task - example: Cook dinner for the family.
If business is crazy and I am locked in my office from 5am to 9pm, my kids won’t see much of me. Cooking and eating dinner with my family is a 90 minute commitment, and one that I will not give up. 90 minutes does not make me the world’s best father, but it keeps a family routine, even when I am running an 11/10 in the office.
It ensures that when a project calms down and I can block off some time, I can take my boys on an adventure, knowing we’ve still got a strong connection.
Investing is no different. People often assume that because I run the largest investment conferences in Canada, that I must be in every deal on the street.
The truth is, I wish I could be in more - but before I can focus on my portfolio, I am an entrepreneur and Father.
That's two full time jobs.
So similar to my program with Ryan Diaz, I have shortcuts to stay on top of the market, even when I don't have any time.
It’s not a complicated secret - but the magic is in the details. I have a small crew of names that never leave my radar. No matter how busy I get I make sure I always know what these individuals are doing.
The Stock Pickers
Rick Rule told me in a recent interview - “I would have made far more money, and worked far less, if I had just stuck with 4 or 5 names.”
On my list there are two entrepreneurs, two stock pickers and two macroeconomists.
The entrepreneurs and stock pickers have been on my list for 7-8 years. At this point, I am no longer betting on their current or newest deal, I am betting on their career.
When they are launching a new venture or idea, I don’t have to think, I just show up. And I leave a little bit better than when I arrived.
The entrepreneurs have long track records proving they are responsible stewards of capital, and they aggressively pursue opportunities. And when their plans blow-up, they keep swinging.
The stock pickers put up their own capital prior to telling anybody else what to do. They are both obsessed with their respective industries, they stick to their areas of expertise and exercise mind numbing discipline.
Both economists present thoroughly challenged ideas, and gather perspectives from dozens of the best thinkers in the world prior to forming a thesis. I leverage their work.
If I do nothing but invest in these entrepreneurs, follow the portfolio moves of my stock pickers and consume no other content than that created by my economists, then I know I will make money, stay ahead of the curve and remain versed in global developments - I can carry the conversation and pick up the cheque. That, is leverage.
No doubt, when I can focus on my portfolio full time, the likelihood of a home run increases. But in my life that is rarely feasible.
The below names might not be for you, but I encourage you to find your own team, put them to the test, and if they pass, stick with them.
When they say the venture market is all about “betting the jockey”, this is what they are talking about - betting on the career of a proven winner.
I’ll start with the stock pickers.
Nick Waddell - Technology
Nick is an OG investor in the Canadian Tech sector, and has made a career of bridging disciplined Toronto capital and high risk Vancouver companies.
I met Nick in 2013. We partnered and built Canada’s largest tech investment conference - the Cantech Conference. We’ve featured keynote speakers such as Commander Chris Hadfield, International whistleblower Edward Snowden and most of the stars from CBC’s Dragons Den.
Every year Nick’s portfolio is a highlight reel of acquisitions and break out’s. The historic wins in the Canadian tech sector often have one similarity - a year before anyone was talking about it, Nick Waddell wrote a cheque.
He told me to invest in QHR Technologies - two years before they were acquired by Loblaws for $170 Million.
He told me to invest in Tio Networks - two years before they were acquired by PayPal for $302 Million.
The 2020 Venture market has belonged to WELL Health, up 121% YTD (Up 581% since Nick told me to buy in 2018).
If you ask him what his secret is, he’ll say something like “I get lucky”.
He is the antithesis of a “market guy”. He lives a quiet life in the suburbs, reads, writes and makes smart decisions.
He publishes at www.CantechLetter.com. Every investor should have this page bookmarked.
Marin Katusa - Resources and Mining
Similar to Nick Waddell - Marin Katusa is more tapped in to the undercurrents of his industry than anyone I know.
When it comes to natural resources, geopolitics can make or break a project - and obsessing over the relationships of supply and demand nations is what sets Marin apart.
Right now his “U.S. Dollar SWAP Line Thesis” is spreading like wildfire, putting a spotlight on an entirely new risk factor in the mining sector. It's one that will disrupt some of the world's most profitable mines.
His discipline can be mind numbing at times. Early this year he advised putting a bid on a precious metals producer at $10.00 USD. In the March crash the price came down to $10.61, from a high of $25.
I couldn’t believe he didn’t pull the trigger - if he had, he would be up 100% on that position today. But that is what makes Marin great - discipline. If you play by his rules, you will make money. Simple as that. He doesn't bet unless the odds are extremely stacked in his favour. He'll wait.
In his last letter he called himself out for one of his picks being a “laggard”, because it was only up 36%. So I am making money here too.
Hamed Shahbazi - Technology
I met Hamed through the above mentioned Nick Waddell. I’ve interviewed Hamed a couple of times on our stage - usually following a significant win he accomplished for his shareholders.
First, after he built Tio Networks from a start-up, to a $302 Million sale to PayPal.
Second, after launching WELL Health Technologies from a dinner table conversation in Vancouver to the country's largest health-tech player following Telus Health and Loblaws Companies Ltd.
See Hamed and I in our most recent conversation here.
Right now Hamed is the CEO of WELL Health Technologies and a director and large shareholder of HIRE Technologies. I am a shareholder of both.
Dr. Mark O’Dea - Natural Resources and Mining
Rick Rule described Mark as a “wet behind the ears geologist” when he financed Mark’s Fronteer Gold in 2000. Today he describes Mark as “remarkably similar to Ross Beaty” in his career path and growth.
Last week Mark sat down with Rick Rule and Georgia Tucker to talk about his current ambitions. See the interview here
I could write a flowery review about Mark O'Dea, but instead I will list some career highlights:
Co-founder and CEO of Fronteer Gold - sold to Newmont for $2.3 Billion in 2011
Co-founder and CEO of Aurora Energy - sold to Paladin Energy in 2011
Co-founder and Chairman of True North Nickel - sold to RNC Minerals in 2014
Co-founder and served as executive chairman of True Gold - sold to Endeavour Mining for $226 Million in 2016
Today Mark sits as the Founder of Oxygen Capital Corp., a merchant bank focused on discovery stage mining projects. He is also Chairman of Liberty Gold, director of Pure Gold Mining, Discovery Metals, and Sun Metals.
I am a shareholder of two companies in the Oxygen Capital portfolio.
My Macroeconomics Team
There is a theme here - I met Hamed Shahbazi through Nick Waddell, and I met Brent Johnson through Marin Katusa. The right relationships pay dividends.
Brent manages the Santiago Gold Fund - of which Marin is an investor. If part of my game is following the “smart money” of the stock pickers above, then Brent needs to be on my radar.
In 2017, Brent was on our stage talking about an obscure idea he titled the “Dollar Milkshake Theory”.
This was inspired by the final scene in “There will be Blood”, where the ruthless Oil Baron, Daniel Plainview, informs his antagonist that he has “drank up” his oil by drilling the adjoining properties. Brent’s Milkshake Theory forecasted the global Dollar shortage playing out before us today.
The Dollar Milkshake Theory has become a household term and a hotly debated topic in global finance and macroeconomics.
For my beat on the macro picture - I stay in regular contact with Brent. He is scheduled to be on my show next week. Subscribe to our video channel to get a notification.
Raoul Pal is the co-founder of Real Vision TV, a financial media company offering in-depth interviews with world renowned names like Stanley Druckenmiller and Nouriel Roubini.
He has run a successful global macro hedge fund, co-managed Goldman Sachs’ hedge fund in Equities and Equity Derivatives in Europe, and helped design the BBC TV program Million Dollar Traders, training participants in investment and risk management strategy.
Raoul now lives in the Cayman Islands, where he manages Real Vision TV and writes for The Global Macro Investor, a highly respected research service for hedge funds, family offices, sovereign wealth funds, and other HNW investors.
I have been trying to convince Raoul to keynote at my events for two years - as luck would have it, I am having Raoul on the show this Friday. Don’t miss it - Join 100,000 investors and subscribe to our Youtube Channel - Subscribe here.