Invest Like the Best with Patrick O'Shaughnessy
· Patrick O'Shaughnessy, Alan Waxman
[00:00:00] S0: Not your friend Grok? [00:00:00] S1: I actually play with them all, because I like to ask them the same question to see how they answer it differently and just try to get a feel for it. But big believer on the productivity opportunity. There's a lot of good with it, but there's definitely risk on the transition. You mentioned software. That was one of the catalysts that got us into the current moment, but everyone's so focused on software. I think having lived in Silicon Valley – I know you spent a lot of time there – this is not just software. This is every industry. Because once one company in any industry figures out how to actually use it as a tool and really figures out how to use their agentic capabilities and drive higher margins, if you're one of the companies that's a slow adopter and you're not active, you're going to have some of the same problems that people perceive the overall software industry to have today. So it's not just software, it's across everything. But look, one of the best things about the American project is creative destruction, because it allows for prudent allocation of capital to the right places that are going to drive the right outcomes.
· Patrick O'Shaughnessy, Alan Waxman
[00:00:00] S0: If you think about the unfolding set of opportunities that it creates, one of the categories that you and I always talk about that I'm so interested in is one's own development. And the highly adaptable people seem like they're going to be set up for lots of success in this environment. How do you think about your team? And I know you have a team that's very long-tenured, that tends to be at Sixth Street for a career. How do you think about their development and new things that you can do as the leader, to make sure that they are all dynamic as things change really fast? I know you're playing with the LLMs all the time, but this is an important part of your job, your team. How are you thinking about it? [00:00:00] S1: When we hire someone, we're looking for a lot of things, but two of the things that we're looking for, are they an open architecture person? Can they play tennis – what we call playing tennis – balance different ideas, even when you disagree with someone? And the second thing is, are they a learner? Surprisingly, we track all the AI usage on the LLM models. Our usage across our entire firm is off the charts. One, because of the types of people we hire. But I just think in general, and stepping away from Sixth Street, it's that if you're not adaptive in this environment and you're not a learner – literally committed to learning every day and improving yourself every day, you have the risk of getting lost in what's happening and about to happen in a more accentuated way.
· Alan Waxman, Patrick O'Shaughnessy
[00:00:00] S1: When we hire someone, we're looking for a lot of things, but two of the things that we're looking for, are they an open architecture person? Can they play tennis – what we call playing tennis – balance different ideas, even when you disagree with someone? And the second thing is, are they a learner? Surprisingly, we track all the AI usage on the LLM models. Our usage across our entire firm is off the charts. One, because of the types of people we hire. But I just think in general, and stepping away from Sixth Street, it's that if you're not adaptive in this environment and you're not a learner – literally committed to learning every day and improving yourself every day, you have the risk of getting lost in what's happening and about to happen in a more accentuated way. [00:00:00] S0: I have an off-the-wall one for you. It's been deeply impactful on me. Can you explain this paper one-sheet system for how you get everything done and track what you do?
· Alan Waxman
[00:00:00] S1: I actually did a presentation to our entire firm on personal organization systems, because I think as an investor, as a business person, the scarcest thing you have is time. And one of the most important skill sets is your dynamic prioritization of that time on the highest impact things. So we always talk about return on time. And what my personal organization system does – I call it the brain – is I literally try to get the way my brain is structured on one sheet of paper. So all my important priorities, people, businesses, investment themes. I made changes over time based on what's needed for me, because my job changes every year, because I have to evolve. I try to get my brain on paper and it allows me to dynamically prioritize where the highest return on my time is. That's number one. And the second thing it allows me to do is I capture, so that I never have loose ends. I try to always follow up on everything, be proactive about things. I just think proactive is a key thing. It's very clear what my top five strategic priorities, all the tactical stuff, and I'm constantly looking at it, updating it. And I do it all by hand. because for me, I have to actually put pen on paper. Once my sheet fills up of all my tactical stuff, the small stuff I have to do, I start a new sheet and then I write, literally, it all again. It takes me like an hour. I generally do it on a Sunday and there's never a time I actually go through that process on a Sunday where I don't connect two or three dots or think of a new idea. That's my left brain. And that's why on the second sheet, which I can't remember if I should...
· Patrick O'Shaughnessy, Alan Waxman
[00:00:00] S0: Yeah, we get the right brain, right? [00:00:00] S1: And then on my right brain sheet, which is the second page, which is all my creative ideas, themes, business building ideas, people, better leadership, just whatever comes to mind, thinking about the current moment. I literally start thinking about why are we here, how did we get here? That's kind of how I started to really dive into history and I just write stuff down and I track it and I've done that for 25 years. So I have all my right brain thoughts over 25 years, and what happens is I'll go back and I'll look at them every year. At the end of the year, I go back and read all my right brain thoughts and sometimes there are ideas that I have from 10 years ago, from 15 years ago that surface today and become relevant today. So I try to get my left brain on the first page, my right brain on the second and then I try to get them working together. And again, it just helps me see things. I wanted just to clear my thinking, so I can try to see the world not only for what it looks like today, what it's been, but also where it might go, and how can Sixth Street be part of that.
· Patrick O'Shaughnessy, Alan Waxman
[00:00:00] S0: One of the things that stuck out to me seeing the actual sheet – I'm thinking about the left brain sheet where there's different boxes. I'm curious what the different boxes are. And one of the things that I found very powerful was that one of the segments is a list of people to call. It was a crazy list, it was a shitload of people and then tons of strikeouts. And when you run out of space, you then copy it to another page. But you also copy over all the stuff that is lower turnover, I guess I would call it. And that act is a big part of just embedding it in your brain. [00:00:00] S1: The process of that. So looking is part of it, but the best ideas come out of actually the process when I'm writing it all down. [00:00:00] S0: Physically writing. So what are the other segments of that first page? So there's a list of people to call. There's like five or six boxes, I can't remember what they are. What are those boxes?