AI Summary #
The host shares an insightful conversation with Robert Weinberg, a renowned cancer researcher who has worked at MIT for 51 years. The discussion revolves around the importance of “staying put” and letting things compound, which is often underappreciated in various aspects of life. Key takeaways from this episode include:
- Compounding is a powerful force that can lead to extraordinary results, especially when it comes to investing and career longevity.
- Warren Buffett’s net worth, estimated at over $100 billion, can be directly attributed to his 80-year investment journey, with the majority of his wealth accumulated after age 60 due to compounding.
- The most important investing question is not “what are the highest returns?” but rather “what are the best returns I can sustain for the longest period of time?”
- Professional athletes and investors often spend more time in a low-intensity zone, where they recover and repeat, rather than pushing themselves to maximum intensity.
The host also shares personal anecdotes and insights from various experts, including Steven Siler, an exercise physiologist, who emphasizes that “for the highest levels to be attainable over time, the process has to be sustainable.” Additionally, Carl Richard highlights that housing can be a great investment because it allows for long-term holding periods, giving compounding a fighting chance.
The host concludes by sharing advice on staying put and letting things compound, particularly when it comes to careers. Key takeaways include:
- Staying in the same job or field for an extended period can lead to better networking opportunities, trust, and skill-building.
- Trust has to be earned over time, rather than expecting it immediately upon arrival at a new company or job.
- Quiet time and alone work are essential for making good decisions, which require trust from colleagues.
- Compounding is more important than seeking immediate gains or returns; it’s about sustaining effort over time.
Overall, the episode highlights the importance of patience, persistence, and long-term thinking in various aspects of life, including investing, careers, and personal growth.
AI Transcription #
Welcome back to the podcast.
This is Episode 11.
Thank you again for being here and listening.
Many years ago I came across this Cancer researcher named Robert Weinberg.
I am by no means an expert in cancer research in the slightest, but I came across Robert Weinberg because of his ability to communicate really advanced, complicated cancer topics to a lay audience that I could understand.
So I became a Robert Weinberg fan and I watched this interview with him recently and somebody asked him about the fact that he has worked at MIT in the same office for 51 years.
And here’s what he had to say about that.
People say to me sometimes, how could you stay at one place for so long?
We all know the lives of academic gypsies who spend three years here, 14 years there, five years there.
In each time, each place they settle down, they make friends, social friends, colleagues, and then after a period of time, they and their families are rooted, uprooted and moved to some other place.
And there’s never any constancy in their lives, never any social, let robust social network, never any life won’t long friend friends who one can associate with.
And so I have no regret having been a stick in the mud, having never really moved very far and working now only a couple hundred yards from where I was an undergraduate in the dorm at MIT.
Now he went on to say that look, if he had been doing the same thing for 51 years, that might be kind of boring.
That might be a waste of time, but he’s at a very dynamic career in the world of cancer.
He’s doing new things.
But I think his point about staying put and letting things compound is so underappreciated.
This is not just true in academia or in his profession.
It’s true for so many things in life.
Virtually everything good in life that you gain a lot of value from became great because of compounding whether it’s a career or a relationship or a technology or wealth.
Compounding is where a lot of the good in life comes from.
One of my favorite points that I made in the book, the psychology of money that I think resonated with readers as well is that if you look at Warren Buffett’s net worth, which is over a hundred billion dollars.
In fact, if you factor in how much he’s given away to charity, it’s something close to two hundred billion dollars is what he would be worth.
Virtually all of it, more than 98% of it can be directly tied to just the fact that he has been an investor for 80 years.
And more than 98% of his net worth was accumulated after his 60th birthday because that’s how compounding works just for longer you’ve been doing it for the crazier of the numbers get.
And to me, the biggest takeaway from that was actually that look, there are so many books written about Warren Buffett and they all try to explain how he did it.
And they go into all this grand detail about how he thinks about notes and business models and management teams and valuation and market conditions, all these topics, very good important topics.
But you can directly attribute like 99% of his net worth to just the fact that he’s been an investor for a very long time.
And you can come up with these hypothetical examples of let’s say Warren Buffett actually started investing in his 30s like a normal person might and let’s say that he retired in his 60s like a normal person might.
And let’s assume that he was just as good at investing at earning the highest annual returns.
During that shorter lifetime, what would his net worth be today in that hypothetical situation?
It’s 99% less than it actually is.
All of his net worth is just the fact that he is stuck with what he’s been doing for so long.
It’s just like Buffett’s partner Charlie Munger once said.
The first rule of compounding is to never interrupt it unnecessarily.
Let me share a quick story with you about athletes and investors.
A big difference between professional and amateur athletes is the intensity of training.
The intuition of an amateur athlete is to push as hard as they can, testing the limits of their potential, maximizing what they’re capable of and just grinding to your broken, the no pain, no gain mentality.
The training schedule of a professional athlete on the other hand once a good coach enters the picture tends to be much calmer.
A group of researchers in Norway a couple years ago, they looked at the training schedule of a dozen Olympic level cross country skiers.
Now, if you’re not familiar with cross country skiers, they are some of the most insane athletes you will ever witness.
The endurance that they have is unmatched in any other sport.
They are amazing.
And so these researchers looked at the one year training schedules and over the course of a year these athletes train for an average of 861 hours.
That comes out to a couple hours per day of training.
And the researchers broke up each hour into three different buckets, which they called high intensity, medium intensity or low intensity.
Those buckets were based off of the heart rate that the athletes reached during these training hours.
And after a year, the full training schedule broke out like this.
89% of training hours were light intensity.
6% were medium intensity and only 4% were high intensity.
Which is interesting, right?
The huge majority of the time that these Olympic level athletes were spent was barely pushing themselves.
It was almost cruising along at a leisurely pace.
And if you dig into it with other athletes and other sports, you see the same thing among professional runners, professional cyclists, professional rowers, professional swimmers.
It’s all the same thing that they spend not just part of the time, but more than 90% of the time of their training is in a low intensity zone.
Which is astounding, isn’t it?
Some of the best athletes in the world spend almost all of their time working way below their potential.
They purposely not pushing themselves to the limits.
They don’t race at that leisurely pace, of course.
They might be at the highest levels of intensity for an hour or more during their competition.
But in training, you tend to build the best athletic machine when longevity is favored over intensity.
When your body gets a signal to adapt versus thinking that it’s been temporarily tortured.
And when you’re less subject to an injury and mental burnout.
Steven Siler, who is an exercise physiologist, he once explained, he wrote quote, professional endurance athletes go for a long time at a low intensity where they can recover and repeat it day after day.
And that is what really brings success.
For the highest levels to be attainable over time, the training process has to be sustainable.
At higher levels of intensity, chronic levels of stress leads to burnout and stagnation.
Let me repeat one of those lines that is so important here.
He says, for the highest levels to be attainable over time, the process has to be sustainable.
Which is also how it works with money, isn’t it?
The most important investing question is not, what are the highest returns I can earn?
The intuition is that’s the most important question to investing, but it’s not.
By far the most important question is, what are the best returns that I can sustain for the longest period of time?
What can I keep going for the longest time?
Compounding is just returns to the power of time.
Time is the exponent that does all of the heavy lifting.
And the common denominator of almost all big fortunes isn’t returns.
It’s endurance and longevity.
Earning excellent returns for a few years is not nearly as powerful as earning pretty good returns for a long time.
And there are few things in this industry that can beat earning average returns for a very long time.
That’s the biggest and most obvious secret in investing that average returns earn for an above average period of time leads to extraordinary performance.
And I think what we’ve seen in the last couple years and markets is actually the flip side of that.
So many investors over the last five years went out of their way to maximize annual returns, squeezing every potential penny out of every opportunity that they could find in high growth stocks and tech stocks.
They wanted the highest risk investments often fueled with leverage.
They did that because the opportunities were everywhere.
Everything seemed to go up every asset month after month and that felt great.
It always does.
But I think what we’ve seen over the last year is that a lot of even the best investors were the equivalent of an athlete who push themselves to 110% in every training session.
And now they’re burnt out.
And for a period of time they felt like champions, but over time they will be lapped by the investor who just casually jogs along each day way below their potential.
Who can sustain their training and build a body so to speak that can adapt and recover for the next day just like the athlete.
It’s counterintuitive, but you will likely maximize your investing games over your lifetime if you go out of your way to not maximize your annual returns.
Instead focusing on merely good returns that you can sustain for as long as possible.
Carl Richard is a financial advisor.
He once made this point that I loved it always stuck with me.
He said for the average American, their house, their home might be the best investment that they will ever make.
And that is not because housing provides great returns.
It does not.
It’s not even the leverage that’s part of this equation.
The reason it will probably be the best investment that people will ever make is because it is the only asset that people will buy and are willing to hold it for 10, 20, maybe 30 years.
They will sit on it without interruption for decades more so than any other asset that they’re going to flip after a couple months or maybe a couple years.
Housing tends to be a great investment for people because it is a one asset that people give compounding a fighting chance to work.
Back to Robert Weinberg.
There are a lot of good ideas in life that get ignored because they are only occasionally useful.
Nobody wants to bring them up because there are so many counter examples of times when they were wrong.
One of them that I think about a lot is the value of staying put.
So here’s my general advice with lots of asterisk in it.
Don’t switch careers.
Don’t find a new job.
Don’t move on.
Even when it’s tempting.
Even especially when it’s tempting.
There is a decent chance that your motivations are driven by two things.
One is the grass’s greener fallacy of wrongly assuming that the alternative is better.
Or the second is denying the fact that great opportunities occasionally require discomfort and sacrifice.
Of course, that is not universal advice.
Some careers and jobs are dreadful and the economy only works when people are willing and able to find better opportunities.
But staying put is good advice maybe a third of the time if you’re young and maybe half the time when you’re older.
But when it is good advice, it is staggeringly good advice.
It’s so easy to overlook that networks and trust compound just like any other asset.
In every time you switch jobs or switch careers, you reset the clock to some degree.
Most people would never considering marrying a partner until they’ve dated for at least a year or maybe five years because it takes that long to grasp what a person is or is not capable of beyond their surface level resume.
But those same people expect their employers and their coworkers to give them full respect, and autonomy, and confidence from day one of their job.
And that just rarely happens.
Trust has to be earned, and it is mostly earned through first-hand observation over time when people watch you under a variety of circumstances.
Even when you have a track record, at other companies on your resume, trust is dulled out in small doses when you are a new face.
The key is that you’ll probably do your best work when your colleagues trust you, which is a hidden value of staying put and favoring tenure over moving over to a new place.
This is especially true if your job involves making good decisions, versus doing something physical with your body.
Good decisions require lots of quiet time, alone in your head, maybe sitting on the couch or going for a walk.
It rarely looks like work, which means your coworkers have to trust you when you’re doing it.
Then there’s the skill side of the equation.
Most of the time you see someone doing something incredible, with what seems like little effort, and you ask them, how did you do that?
The honest answer, most of the time, is, I’ve been doing this every day for ten or more years.
Noticing patterns and connecting the subtle dots is something that’s hard to teach in a classroom, but it becomes obvious when you’ve lived and breathed the field for years or decades.
All of that breaks down when you move into a new field, or a new company.
The shiny allure of new, overrides the quiet compounding in a way that is so easy to overlook.
In investing, selling after a bad stretch feels like the right thing to do.
You feel like you learned your lesson in your seeking greener pastures, but everything we know about investing shows that it’s the wrong decision.
The big money comes from compounding, uninterrupted over years and decades, when what you’ve done is not as important as how long you have been doing it for.
Nassim Taleb says, if you’re going to panic and investing, panic early.
I think the same goes for your career.
If you’re going to quit, quit early.
So whatever’s next has a shot at compounding.
That’s it for this episode.
Thank you again for listening.
We’ll see you next time.