Stuart Miller
speaker
308 appearances
1 recordings
1 series
first heard Feb 2025
last heard Feb 2025
Stuart Miller’s voice in public audio — every appearance, attributed to the second.
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Appearances
Yeah, I think it was downstream of an understanding I felt that Stuart and I had of the goal is to make money. And not lose too much. And it sounds so simple, but it's actually, of course, because of principal agent dynamics, like super complicated. And I didn't feel like I had comparative advantage in picking stocks or doing any number of other styles of investment.
And so for me, that was my comparative advantage. I think now that Adam is running the platform, he has a different comparative advantage and it'll morph over time.
On the seeding, I feel like the process is, can we set the table in a way on terms that the market will agree with, but it's unclear whether the manager would have gotten those terms without us. So that could be lock up a capital, that could be fee, that could be something else. I always tried to hold myself to the standard of I would invest in this manager even if I didn't have seed economics.
I would just do it smaller. I would just take less risk and I wouldn't wear any reputational risk. I feel like that's one key distinction between just looking for seed deals, but holding yourself to the same bar of like, I just size it smaller and I wouldn't shape it. And so that kept us, I think, out of a fair amount of trouble.
Yeah. So Dan Sondheim was leaving Viking. I interviewed over the years all these people that worked for Dan. And they were always in such awe of him as a portfolio manager. And I felt like it was them at the expert or professional level relating to him as a master is how I interpreted it at the time. I remember one guy saying Dan would be planning how to get in and get out of a stock business.
six months in advance of buying it. He was planning out the whole arc of, he was very focused on liquidity. And it was this mix of fundamentals and understanding market structure. We had a number of friends in common. And when he left, I feel like there's often within a hedge fund container, there's this dynamic where the founder of the hedge fund is pricing the up-and-comers each year.
And it partly is expressed in terms of how much carry are they going to have the subsequent year. And there've been a number of cases where I'm kind of tracking, did the founder of the thing hit the bid correctly this year or not? And if they didn't,
And so there was this moment where Dan was ready to go do his own thing. He had enough of his own money. And I aspired to earn the right to a dialogue with him and help him in his hiring. Because we were in touch with so many analysts at any one time, I felt like I was able to calibrate on his taste in analysts and who would be at the right seniority and then help him with that hiring process.
And I think, forget of his initial, I don't know, I'm going to say I could get these numbers wrong. Of his initial 12, maybe four of them were from Patrick and me. And I got to know him very well during that process and saw how he had this very optimal grip. Like he has no defensiveness whatsoever.
If you tell him a new piece of information about him or a process or a person, there's like no ego in it. He'll just drop it with no hesitation. So there were a couple of cases where I gave him feedback on things and the way he took the view, I was like, oh my God, he was such a quiet ego. So focused on being commercial first and ego second. So we ended up being a day one investor in there.
It's had its ups and downs, but I continue to really believe in him as a commercial actor and as a leader of his firm as well.
So the term originates, Adam used it at Goldman, other people at Goldman, I'd heard it from And it connotes all the cliches, moneymaker. I think what's in there is one way I've ended up defining it is it's the ability and the intent to create more value than you capture. So that would be a kind of abundant version of it.
I feel like there are people who are signaling that they're in a repeat iteration game and they're not going to grab every penny on this transaction because they know that there's a sense of proportion about it somehow. You know, Goldman has that phrase, long-term greedy. It's like, I want to make money, but I'm going to do it with the knowledge that we're going to see each other again.
And that sense of, I'd rather make money than be right is another core tenet of it, where there are people who seem to me to be in the game in order to experience the satisfaction of being right. And that's the primary goal.
And that works some high percentage of the time, but then it can be disastrous, of course, because your ego and your portfolio can get caught up with that goal instead of just making money.
There's a great story that Tina Fey has about the only thing she learned from Lorne Michaels. Not the only thing. One important thing she learned at Saturday Night Live that she brought to 30 Rock. was that you need in the writing room, you need the optimal mix of Harvard nerds and Chicago improv.
And I thought that was so profound when applied to investment managers, because I had experienced a lot of both types. And I would say the Chicago improv is pure plasticity, pure flexibility. They will do anything for a laugh to a fault. And the Harvard nerds, in her language, were planning everything out, very high order, very high stability, but not able to improv as much.
Over time, my taste evolved to accommodate more Chicago improv. I was at first attracted to Harvard nerds. Over time, I came to appreciate, Charlie Munger calls it the knack or called it the knack. I remember early on in working with Ted Seides, we were in a meeting with a former Milken credit trader of some sort. And we were sitting in a restaurant in Santa Monica.
And he turned to me at one point, he put his hand on my arm and said, Money's like water. All you have to do is learn to turn on the faucet, see? And I thought I was like in some sort of David Mamet movie or something, but he's right.
There is this Wu Wei not forcing it, working with, there's a coach I like who I follow online named Joe Hudson, and he had this line, where does the water want to flow downhill? Working with, not forcing it, like working with what already wants to happen that I feel like is in there, lack of stuckness. It's like a pragmatism that at the end of the day rules out over other facets of investing.
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