Listen to the full episode on iTunes (and please leave a rating to help the podcast reach more people): E41: Q&A Part II, investment scaling, struggles, motivation, knowledge integration
1) How to draw the distinction between perseverance and bullheadedness?
Demand increasingly stronger evidence for the thing you’re pursuing.
Mikael had short positions on the market for Tesla but he eventually stopped the positions because he couldn’t find increasingly stronger evidence to continue.
2) Websites you visit often?
3) Biggest decision ever made?
LUDVIG: Didn’t get a safe job at IKEA after university.
MIKAEL: Giving up his biggest market shorting position that he was losing money on.
4) What did you give up to get to where you are today?
MIKAEL: Enormous amount of time spent working in the finance industry.
5) What motivates you?
Being curious about how the world works.
6) What was the biggest factor that helped you succeed other than yourself?
MIKAEL: Colleagues that helped him get headhunted from one position to another.
7) How do you distinguish between surface knowledge and actual knowledge?
Actual knowledge: You understand it and you can apply it where it’s relevant.
Example of applying knowledge: You know gravity works by dropping something to the ground.
Surface knowledge: You cannot understand it and you cannot apply it where it’s relevant.
Napoleon: The base of the triangle must equal the height. This means you need a base-line of actual knowledge before you can benefit from reading a lot of deep material about that topic.
The ratio between intellectual learning and doing should be a factor of 2.
4 factors that decide the level of real knowledge you can acquire around a certain topic:
- You are motivated by a goal: E.g. your goal is to make 10 millions dollars in the finance industry so you can retire early.
- Solving a problem: If you have a life threatening disease you will not have a problem reading up on all the boring information about it.
- Curiosity: If you’re curious about a topic, it’s easier to commit the time needed to learn about it.
- Talent for synthesis: You are able to combine different ideas into one theory or system.
The better you rank on each the more information you can take in.
8) Should I pay off a mortgage loan or set up a savings plan for my daughter? (Sweden)
MIKAEL: It depends on how much of a nest-egg you already have, however it’s always a good idea to set up a savings account.
At this level of managing finances in Sweden, we recommend you look up the Swedish book: Investeringsguiden.
9) What financial trends are most overrated at the moment?
Dividend investing: Buying companies that have a high dividend ratio. This completely disregards analysis of what the company is about and doing.
Investing in stocks in general. Most people lose money on this. What special information, talent or knowledge do you have that makes you think you can beat the market over the long term?
Small research based biotech companies.
Remember, in order to get an optimal long-term return on your investments, you can use gut-feeling or a trend to start the analysis of a good investment option, however you must take this investment option through your own, rigorous analysis before you commit to it.
Relying on trends and gut-feeling will make you lose money over the long-term.
10) How to avoid falling for overrated trends?
Have a broad network of successful people in different fields.
Read a variety of information.
If something seems self evident, it most likely is.
If many of your friends start talking about it: you’re at the tail end of the trend and should avoid it.
11) In times of a bear market, does it still make sense to park some money in short term corporate bonds?
Some corporate bonds will default and some will pay half.
It’s high risk but if you do good research you can find good ones.
In general, you can’t just say yes or no because this question is extremely multi-factoral.
12) How about Neurolinguistic Programming (NLP)?
NLP: By using the correct words, you can change the way you think.
This is correct, however it’s quite self-evident and no silver bullet. You should apply NLP to your daily life and that’s about it.
13) How has podcasting changed your lives?
LUDVIG: You have a creative medium and meet a lot of smart people whose books you read.
MIKAEL: Daily habits had to improve to help sharpen his thinking. Met interesting people.
14) How to build self discipline?
MIKAEL: Just trying to get things done. Haven’t worked consciously on it. Just has a list of processes that are on going.
It’s a good idea to commit to processes that you know will enhance your life (e.g. writing 1 blog post per week in your industry). When you know about the positive impact taking this action on a regular basis has, it’s much easier to commit to doing it regularly.
Also, a big part of self discipline is mental. It’s about mentally fighting your urge to do the thing that has to be done to improve your life (e.g. writing that industry blog post) instead of doing the thing that feels good in the moment (e.g. playing video games).
Everyone has to find their own way to delay gratification. It can mean changing your work environment, uninstalling games, taking up a hard fitness training program to build up more self-discipline and so on.
15) Greatest weakness?
MIKAEL: Always cares about other people’s feelings more than his own.
LUDVIG: It’s very hard to know your own greatest weakness. That’s why it’s your weakness in the first place.
16) Mikael, what were the hardest parts of your job at Futuris?
During the start up process not knowing if the company will survive.
During the scale up process they had to sell to a lot of clients but Mikael is not comfortable with selling and initially he failed badly.
During the actual work with clients, the hard part was dealing with market specific events. You can never be certain that your decision is right. Always one decision away from mental breakdown. It’s a psychological nightmare.
17) Mikael, what did you learn from having a dog?
It’s way more hassle than he expected.
The upside is that it forces him to walk his dogs 3 times per day for 1 hour.
This provides sunshine which is great for optimising your circadian rhythm and exercise.
We are right now creating the Future Skills Program which will be an online video course covering decision-making and risk management with weekly homework and evaluations.
* Why decision making and risk management? Because better decisions equal better finances, better relationships and an overall better life.
* Decisions are the foundation of everything you do and the outcome you eventually get.