A Conversaation With Ed Thorp

doubling-down

Tim
Alright, let’s get started here. We’re on today with Edward Thorpe, who’s got a brand new book out, “A Man for All Markets.” That’ll be out in January. And as I went through the book, you’re really considered to be one of the fathers of quantitative investing, which brings up a certain picture of a guy with a bunch of computers trading wildly. But as I go through the book, you really have a tremendous Warren Buffet kind of Ben Graham influence on your approach to investing. Can you talk a little bit about that? Because that really surprised me.

ET: Sure. I came at the securities markets without basically any prior knowledge and I educated myself by sitting down and reading for all of two summers, anything I could lay my hands on and began to get oriented and then I discovered how to evaluate warrants, at least in an elementary way, and I decided that was a way that I could apply mathematics and logical thinking and maybe get an edge in the market. So then I focused on it and it turned out to be correct. I was able to use the analysis of warrants to get an edge on other people.

T: Okay, and then, so you weren’t trading like a mad man, like what we think of quants today. You were setting the trades and letting them run, right?

ET: Yes, initially it was slow trading, we’d put on warrant hedges and watch them and every so often, if there was a big move in the underlying stock, we’d change the ratio of warrants to stock. And then that evolved into revertible bond trading and we did pretty much the same thing there. We means my co-author, Sheen Kassouf and I, we wrote a book about it called, “Beat The Market” that came out in 1967, in fact. So, then we both went on to careers managing money. I started a hedge fund in 1969, after meeting and talking with Warren Buffet for a while in 1968. He’d been running a hedge fund for about a dozen years, and he was just shutting down. And turned out that stocks were at manic highs then. Which is why he was shutting down, and for me, it didn’t matter because I was putting on market neutral hedges. Something people hadn’t been doing before.

T: Yes, by the way, please do not ever authorize a re-issue of that book.

ET: Because?

T: I have supplemented my income for the last, I’m gonna say 15 years, by finding copies of that book and Seth Klarman’s book at book sales and used bookstores, buying them for a buck or two and selling them for 50 or 100 times what I paid for them. I’m usually able to pull that off once a year.

ET: I’ve seen prices as high as $2,000 or $3,000.

S1: Yeah, I just saw it on Amazon for like $1,900, which is remarkable. The only other one I’ve seen higher is Seth Klarman’s “Value Investing” book, which is now I think trading at around $4,000 for a copy.

ET: Oh, I probably got one around here, I’d better take good care of it.

T: I had a copy for years, saw what it was selling for, then about $1,200, downloaded a PDF and sold the book.

ET: That’s funny.

T: Speaking of PDFs, I’ve got one around here of the “Mathematics of Gambling.” And every time one of my friends, ’cause a lot of my friends are traders, and they have a propensity to gamble, every time they tell me about their new system I just run off a copy and give it to them.

ET: Oh, that’s nice.

T: I think I’ve saved them some money over the years.

ET: You probably saw in my new book there’s a section about the Blackjack Ball in Las Vegas?

T: Yes, yes.

ET: So the kind of people that you’re talking about gather there once a year and have a really grand time.

T: I can only imagine.

ET: There’s about a hundred people who come, and I think the average net worth in the room is about $10 million.

T: Wow. Every trader I’ve ever known has a thing for gambling, even the most statistically oriented guys will end up at the race track betting the long shot of the day at impossible odds. It’s the craziest thing I’ve ever seen.

ET: Well, that’s kind of how I got into the stock market, because I first got interested in gambling as you know, and there are a lot of things that are similar about the two. The way you manage money for example, and the way you sit down and if you find a system that you’re sure is right, you stick to it. People have trouble learning that, but if you have a training at the blackjack tables to start with, it’s an amazing education to get you ready for the markets.

T: Now, I had this question slated for later, but you brought it up, so I’m going to slip it in here. When you’re sizing trades and managing money, you talk a lot about using the Kelly criteria. Now, in the Kelly criteria, and this is something I’ve always wondered because I don’t have the deep math background of a lot of guys, but in the market, it’s really hard to define the percentage of the edge, but that’s a necessary component of calculating the proper size bet with the Kelly criteria.

ET: That’s correct.

T: How do you do that?

ET: What you have to do is, you have to make your assumptions more conservative to give yourself a margin of safety. And one of the things about the Kelly criteria, if you take the case where you can in fact calculate the odds exactly. In that case, if you were to back off and only bet half as much, you’d grow at about three quarters the rate you’d grow at if you had the full Kelly bet down. So you can give yourself a pretty good margin of safety, by just backing off to let’s say, half the Kelly bet. So, that kind of thinking, if you apply it to uncertain estimations of the odds, you can say to yourself, “Well, if I’m off in calculating the odds by a fair margin, if I back off in the amount that I bet under the Kelly system, one of two things will happen. If I were right in calculating the odds, I’d maybe grow at three quarters of the rate that I would if I put the full Kelly bet down. But if I were wrong, then I might end up having a full Kelly bet down, but the odds would only be half as good, let’s say, or two thirds as good as I thought they were.” So, by backing off to a half Kelly you give yourself a big range of protection, and of course, this isn’t an exact rule, if the uncertainty is very large you might want to back off even further. So you give yourself a margin of safety on top of everything else.

T: Okay, now I’m going to go back and try to recalculate using some of my bank stocks later where I can come within a range on the edge. I’ll shoot you an email, let you know how it comes out. Because that’s always been a huge question for me was, okay, I know I’ve got an edge, but in order to use Kelly to size it, how do I… It’s not a definable edge that much, but okay. In the book you talk a lot…

ET: As far as Kelly itself, for people who are really quantitatively oriented, I edited a book called “The Kelly Capital Growth Criterion” with two other people, Leonard McLean and William Ziemba. That came out in 2010. And it’s 700 pages of academic papers about the Kelly criterion and commentary and explanation that we put in the text. It’s put out by World Scientific, so anybody who really wants to dig, can go get that book.

T: You don’t have to dig, it’s available on Amazon right now.

ET: Yes.

S1: So no digging required.

ET: Do you have it?

S1: I do not have it, but I checked before we started this call to check prices of “Beat the Market” to see where it was today and I did happen to notice the book.

Now, in the book you talk a lot about statistical arbitrage, I know you stopped doing it in about 2002, according to an interview I read.

ET: Yes

T: But it’s a term that’s used a lot. I don’t think anybody really knows what it means that’s not in the business. Could you kind of describe that a little bit?

ET: Sure. As you actually will have seen by reading my new book, “A Man for all Markets”, the idea was discovered by us back at either December 1979 or January 1980. The reason why I’m not sure is because I was on vacation while it was being discovered, I’m not sure whether it was the end of the month or the beginning of the next month. But in any case, the root idea was a researcher discovered that if you took the stocks that had been the worst performers over the last two or three weeks and bet on them, they would tend to outperform over the next two or three weeks and the reverse was true too. The stocks that were the best performers over the last two or three week would underperform over the next two or three weeks. The stocks acted as though they had some unobservable true value that wandered along some unknown curve, and they set a range back and forth around this curve, and followed it. Sometimes demand would push them up too high, for a while. And sometimes supply would push them too low for a while.

ET: And so he ran a simulation where he bet on the 10% that were the most up for the last couple of weeks, and sold them short. And then bought the ones that were the most down for the last couple of weeks, and set up a hedge portfolio. Now you might say, “Where’s the hedge?” Well, if you have a diversified pool of stocks that are kind of randomly chosen, they’ll tend to track the market. So the ones that were up the most, we would short, and that group tended to track the opposite of the market. That is, it would tend to move as though you would short the market. On the other side, we had a pool that were long and they tended to track the market. So when you put them together, the long and the short sides, the market effect was pretty much cancelled out. Now, of course, there were a lot of other effects, all these stocks were traveling around their own random way around their market factor or market component. Well, we got rid of the market part. So we said, “Gee, this is an interesting new source of profit.” And it’s a statistical play, but it’s kind of… It’s really hedging. Arbitrage and hedging tended to become synonymous even though arbitrage originated for situations where you really have a locked-in profit. Whereas hedging describes situations where you had a pretty good expectation of getting rid of a large part of the risk, but it wasn’t certain that you were going to make a profit.

ET: So in any case, we looked at this and found out that it was somewhat riskier than the other things that we had in our portfolio. Even though it was making about 20% annual life. So we put it aside. And then as I tell in, “A Man for All Markets,” somebody at Morgan Stanley came across the same idea about two or three years later. And Morgan Stanley turned it into a very profitable product. And then that person was disaffected by his treatment at Morgan Stanley, he happened to answer an ad that we had put in the newspaper looking for people with good quantitative ideas. I interviewed him. I saw that what he had done was very much like what we had done, only he had improved it a notch because he used groups of stocks in a single industry separately, to set up these long short hedges. So the upshot was we went into business with him, it worked very well. And it did find… Through the crash of 1987, for example, made money during that terrible down day. Then it began to lose some of its power as Morgan Stanley and others spread the idea and also put more money into it. So, we devised a new method that got rid of not only the market factor, but lots of other things, oil factor, interest rate factor, that sort of thing. And that ran just fine.

ET: And then, as I describe in my book, Princeton-Newport partners shut down at the end of 1988, the beginning of 1989. And I took a time off. Then I heard that people who were continuing with the idea of statistical arbitrage, were doing quite well. So, I set up shop here with just two or three people helping me in 1992 and we had 10 good years running it. Then I decided I didn’t need to work that much anymore. So, I retired again. But anyhow, that’s the root idea and it had a huge impact on the markets, because it’s a natural seque into the idea of high frequency trading. The reason it’s a natural seque is because you have computer fees of the stock ticker. So, prices are pouring into the computer continuously, all day long for statistical arbitrage. Then the machines are recalculating what to bet on, and how to modify the portfolio. So, once you have a high speed data feed that you’re processing all day long. You begin to think, “Well, are there other ways to trade to this data feed, besides putting on trades that are on for an average of ten days or so. And you begin to look for patterns that are shorter. So there’s a natural segue then into high frequency trading, you’ve got all the equipment, all the background and so forth. And I think that’s probably how people got into high frequency trading.

T: That makes a lot of sense. Now, you did a lot, as you went past just the warrants. You found a lot of things that you found and revealed and beat the market also worked in the listed options market. Buying an undervalued stock and selling an overvalued option against it. Would that still work today?

ET: I would say yes, but probably the barriers to entry are very high. Probably the spreads are mostly very small, and so you got to have low cost, you’ve got to have computers, you got to have data feeds and so forth. So just seeing what I’m seeing at home looking at things isn’t going to be able to make much headway I don’t think. But somebody in a big hedge fund that could well be a profit center.

T: Now speaking of the guy sitting at home. Is it, and you addressed this in the book, but I think what you had to say was pretty important, so I’ll bring it out, is it worth the extra effort to try to beat the market today?

ET: That depends on the person. That’s an interesting question. I think to myself, “Gee, if I were 25 and I got interested in this, what would I do?” And I’m not sure, but for what I know now, I’d say the Warren Buffett way is a good way if you want to put your whole life into it. I’d probably decide not to want to put my whole life into it. Now Warren loves it so much, that’s all he’s ever done since he was a little kid. And it’s day in day out. So I would say if you wanted to get really rich and you wanted to spend your whole life, trade your whole life for getting really rich, a trade I don’t necessarily recommend, then I’d say that’s the way to go. But if you just want to make lesser amounts of money, I don’t know what to tell a person at this point because you can do so well knowing nothing in the market.

T: Just by indexing.

ET: Yes. Just sitting there passive index investing. Or like I’ve done, buy a big chunk of Berkshire Hathaway and sit and just watch it.

T: I tell people that. I have a column that I write, it’s daily on RealMoney.com and I’ll often say, “I want you to buy this, put it in a drawer and don’t look at the quote again.” And people say, “You’re crazy.” I’m just say “No, I’m not. Reinvest the dividends. Come back in five years. Let’s talk.”

ET: And people say, “Gee, what if your Berkshire goes down?” I say, “Oh, that’s good because now I can buy more.” They say, “But what if it goes up?” I say, “Well, that’s good too because I feel good because I feel suddenly richer.”

ET: So let it go up or let it go down. I don’t care.

T: In the book, you talk about a way to beat the market that you used at Princeton-Newport and that I still use today and that’s buying deeply discounted closed-end funds and allowing the discount to narrow. Have you considered that much in recent years?

ET: I’ve thought about that and I think you can probably make,I don’t know if you’re doing it better than I, but my experience was long ago when there weren’t people tuned into this as much, you could maybe make 15 or 20% a year pretty safely. Well, later it got down to about 10% a year and then I kinda lost interest.

T: Our research shows that if you track an activist right in behind the first 13 day, let him do the activist work. You’re still up at 15% plus mark so. You say it’s widespread and while that’s true among those of us that follow the market more people know about it then back when you were doing it at Princeton, the average guy has no idea. Now, another one of my favorites and I know that as recently as 2014 you were still doing it, but are you still doing the thrift conversions?

ET: Yes. We’ll be doing one in a few days actually.

T: Now you actually do the deposits, don’t you?

ET: Yes.

T: We buy the aftermarket and you still you do a little bit better than us but…

ET: But you have less work. You just wait.

T: I just wait for like the third day trading. There’s still liquidity and I’m still buying it at 75% a book. And then again at the end of the three year period, which is the change of control period. We come back and revisit them again and we look at price to book and as with closed-end funds at that point, we want to know who else owns it.

ET: And what allows you to buy in the after-market and make an excess return are the flippers.

T: Yes.

ET: They sell too soon and they keep the price down for a while.

: I’ve never understood why a guy would go to all the trouble of depositing all that money all over the country and then flip it in three days for 25% when if you hold another three years you’re probably going to double your money.

T: Yes.

T: It’s always been a puzzle, but I love those guys. They make things so easy for me.

ET: That’s true.

T: Alright, just a couple of other things, and these are, by the way, not just market related questions they’re just,If we were having coffee together and had unlimited amount of time these are things that I would probably ask you.

ET: That’d be a lot of fun.

T: The part about, in the book, in the early part of the book, you were such an intellectually, inquisitive child and pulled remarkable stunts. I love the one with the flare in the balloon. That just cracked me up. But as a parent and as an educator over the years, is there a way to bring out that natural intellectual curiosity in a child?

ET: Well, I can tell you what we did with our kids and it seemed to work. We made dinner time a special time, when everybody got together, nobody had any devices, or other activity or distractions. We all sat down, we talked about whatever was on anybody’s mind. So the mean teacher at school, the bully, whether or not there’s a God, whatever came up. The logic behind climate change, or the arguments against it, and so the kids learned to think for themselves. And this power of thinking for yourself is really formidable because it enables you to do many things. Whereas people who don’t do their own thinking kind of have to key off other people to try to figure out what it is that they should be doing. They basically follow the crowd. So that was one thing. The second thing is that we try to give our kids opportunity, so they had choices, but we tried not to steer those choices. So just because I’m a science, math, gambling stock market type guy, doesn’t mean that I try to steer my kids that way. So one kid became a hedge fund manager eventually, one kid became an architect, and one became a district attorney. So they went their separate ways, they’re all smart. So they inherited that outlook, and they treated their kids that way. So their kids have turned out to be amazing. One girl has triplets, they’re all sophomores at MIT.

T: Okay, that’s impressive and also a very large bill.

ET: A very large bill, yes. Luckily, my activities could cover it.

T: Okay, I was kind of curious about that, because I know that, as a parent myself, that’s been one of the challenges, is to get them to be as intellectually active as you know they can be. So I just wanted to hear your thoughts on that.

ET: I was having an email correspondence about this with Paul Wilmott. Do you know who he is?

T: Yes, I do. I read his publications and understand about 25%

ET: Okay, great. Anyhow, he’s a very smart guy, he lives over in a priory in rural England, but he was a PhD in mathematics, and then started this magazine, Wilmott, a finance magazine, for which I occasionally write a piece. We were discussing raising up children because he raised the same question you did. He said, “Well, I and my wife Andrea were left on our own, and we turned out fine. We just explored and taught ourselves like you did. But our kids are pretty busy, and there’s various things that one can schedule them for and they can do them, so I’m wondering whether that is a good thing or a bad thing.” And so I told him, “It works either way.” I was like him, left on my own to explore and figure things out, just because my parents had no time. They were busy working in war industries then. They were sleeping all the time, or working and that was it.

ET: On the other hand, with our kids, we didn’t exactly schedule them, but we gave them opportunity and encouraged them. And then they had a lot more scheduled activities for their kids: Soccer, Chinese, music that sort of thing. So their kids were a lot busier. But it works either way. The important thing I think is not to try to live again through your children, not to try to make them be like you, but let them just be whatever they want to be, and do what they enjoy doing. My experience was if you do what you love and you just follow that, it will work out.

T: You talked about that several times in the book. In fact, I have passages underlined. You attribute a lot of your success as an investor because you did it not just for the money, but for the love of the mathematics behind it. And at one point, you say that you… Hold on, it’s right here. Your discoveries fit in with your life path as a mathematician had seemed much easier. Leaving me largely free to enjoy my family and pursue my career in the academic world. So you weren’t 18 hours a day bent over a screen. You were enjoying your life, because you enjoyed the work. Not because it was finance, because it was math.

ET: That’s exactly right.

T: I love that quote, because that’s something I tell people all the time, and again I get that crossed eye funny look. And I just tell them I say, “I’ll put my returns up against you every day, but I work a fraction of what you work.” And they don’t think that’s possible, and you are a living proof that it is in fact possible. Now 1948, you apparently spent the entire summer sitting on a beach reading 60 novels that you considered to be classics. Did that make a big impact on the way you thought, the way you approached the rest of your life, because it sounds really cool, it’d be a great thing to do .

ET: I would say yes. It gave me… I’d call it maybe more of a philosophical and humanitarian perspective on life. And it made me think about the big world of society, politics, history, geography and so on. And it gave me a framework for putting things in their place.

T: You talk a lot also about the importance of education, and your concerns about the future of education. Can you talk about that a little bit? Because that’s a huge area of concern of mine as well.

29:58 ET: Yes. I think of education as a lot like the seed corn for society. And if people are willing to pay for it, if they’re willing to be taxed and if they’re willing to build a good educational system, then I see that the minds that are generated out of that will apply tremendous leverage to society and society will grow and advance much more rapidly. And many good things will happen and get done. If you had a society that was devoid of education, it would just sit in place and do nothing. It would be the same thing decade after decade, perhaps century after century. It would be like the perhaps inaccurate image that we have of the dark ages where nothing much happens.

ET: So in a place like California, for example, they made a terrible mistake back in 1978. They passed something called Proposition 13, and I mentioned that briefly in my book. What that did was bust the state budget. So the biggest component of the state budget is education. So that of course was going to suffer. And so education has gotten squeezed ever after in California. At both the elementary, the secondary, and the college level. And tuition has gone up enormously. When I went to the University of California, my tuition was $35 a semester. Of course, that was back in 1949, 1950 and you might say, “Well, inflations changed the number quite a bit.” It has maybe 10, 12 times but just add a zero to $35, $350 a semester, but we’re looking at instead of $700 a year, we’re looking at maybe in today’s dollars, we’re looking at maybe $12,000 a year. Something like that for in state, maybe $30,000 for out of state. So what happens is people can’t afford to get as good an education.

ET: They go to school and even if they can pay the tuition, they have to work in large part to supplement to get the money to pay it because it just isn’t available in so many of the families. If you work while you’re going to school, which I did, you don’t do as well in school as you might. You don’t learn as much. I can think back at the courses I took because I was working, I didn’t learn the courses as well. And the rest of my life, I could feel the impact of that lack of knowledge, that I would have had if only I had been able to focus properly on the course I was taking. So anyhow, to make a long story longer, I’ve seen charts of how much is invested in science, engineering, and education in a society, as a fraction of their GMP versus the rate of change of GMP. And it’s quite dramatic. Societies that have a higher investment of education advance the growth in their GMP much more rapidly in societies that don’t. And the obvious example is something like Silicon Valley. If we didn’t have a Silicon Valley or the equivalent, or Redmond, Washington or the equivalent, we wouldn’t have all the computer advancement that we have. Apple would be a giant company in some other place, Japan, Russia, China, something of that sort as opposed to being a giant company in the United States. So anyhow to not spend money in education is a terrible mistake.

ET: And another consequence of that mistake is gambling. There are lottery systems all over, and one of the ways of getting people to accept them is we’re willing to fund education with lottery proceeds. But that’s actually been in California bait and switch. What happens is they have signed a certain fraction of the lottery profits to education, but then they take away money from education with the other hand. So education doesn’t end up getting any more money. California ends up getting more money in the general fund, and ends up with a major gambling problem on top of it.

T: I think that’s the case in every other state that has a lottery that I’ve run across. They all set the lottery intake by pulling back money.

T: If the money actually did go to school, that’d be a fantastic thing. But there’s, I don’t see any real evidence that that’s happening anywhere in the United States.

T: You do talk in the book and I’ve, this intrigued me, I was surprised to see that we agreed on this, but you think a flat tax might be the answer to solve some of the funding problems at all levels of government.

ET: Yes, I do and there’s an obstacle to getting it in, which is that the complicated tax system is one that’s been made that way by politicians who are busy paying off special interests who in return make campaign contributions to elect or re-elect the politicians. So that’s why the tax code degenerates into horrible complexity over and over. Now flat tax would eliminate most of the power of the politicians to extract benefits from the tax code. So they would oppose it. But, you could probably get support from large parts of society if you made the flat, the change to a flat tax neutral. So for instance, suppose you take away the carried interest benefit for hedge funds. Just to explain what that is, carried interest is a scheme which has been disguised by an obscure phrase, carried interest, a scheme to tax money made by hedge fund operators at the capital gains rate rather than at the ordinary income rate. And so they pay far less tax.

ET: They can also defer the payment of the tax for many years, 10 years or more. Let’s say you took that away. You might get another $20 billion in tax collections that way. What to do with it? Well, go to the politically unconnected rich, the ones who don’t have benefits built into the tax code from bribing politicians. Take the top tax rate down. Apply that $15 or $20 billion tax savings that you capture from the changing the carried interest toward their income, apply that to the top rate. So it comes down from 39.6% to maybe 39% or 38.5% or whatever that comes down to. My idea would be that you keep making changes that are revenue neutral and if you brought a flat tax in all at once, that would be a massive change that if were done in a revenue neutral way, would have as many winners as losers, so you’d have a lot of people rooting for it.

T: Yeah. I agree. I’ve always said to the first part of your statement, that taxes are not just about raising income. It’s also a very complex reward and punishment system. And that’s been the biggest reason it’s developed into the nightmare that it is. I was surprised to see you comment on it in bringing it out in the book, happily so, but we’re in complete agreement on that.

ET: Well, one of the reasons I have some, I’ll call them public policy commentary in the book, is that if you have a math and science background like I do and you believe yourself to be a rational thinker, you end up applying it to as many things as you can. And with a large part of my life spent in finance and economics, I naturally ended up applying a lot of this thinking to public policy and other things that I see in society that have a broad impact. That’s where a fair amount of this is coming from. I believe that if people just learned how to think instead of letting other people do the thinking for them, that we could work our way to a considerably better society.

T: Yes, you address a lot of that in the last part of the book, the chapter called “Thoughts” and it’s one of my favorite chapters in the book. Your comparison between the Roman Empire after they defeated Carthage and the United States today given the fall of the Soviet Union, I thought were absolutely spot on. And I love the way that you say one thing to the optimist and one thing to the pessimist. I think that’s fantastic.

T: Alright, I’ve got one last question for you and this is the big one. It’s one that I try to ask everybody I run across. What books are you reading now?

ET: Right now, I’m reading a book called “The Accidental Superpower” by a guy named Peter Zeihan. And the reason I’m reading it is because one of my friends who I mentioned in the book, Gary Basil, who was a professor of economics and finance over at UCI when I first met him, sent it to me thinking it was going to be interesting, good to read. We had been talking about the election of Donald Trump, what we thought that meant for the country. This book looks at things much differently than I do and I find that if I read things that may not agree with the way I look at the world, than I’m more likely to learn something than if I just read things that keep telling me, “Yes, you’re right” over and over and over. This is a for geopolitics type book, which basically thinks that geography is a major determinant, geography in demographics are major determinants of how things evolve for societies. It’s an interesting historical perspective and it has predictions of how the future’s going to go. I’m enjoying working my way through that and seeing where I agree and where I don’t agree with it and what I’ve learned from it or haven’t. That’s one interesting book that I’ve been reading.

T: Anything else in recent history that stands out as something that folks should consider reading?

ET: No. One I read not too long ago, parts of it, is “Thinking Fast, Thinking Slow” by Daniel Kahneman. But everybody’s “read” that but they really haven’t. They did a study of people who read books, I guess it’s on Kindle or iBooks I’m not sure which, and they can tell from feedback which pages people have been on and what they found was that only about 5% of his book was read by the typical buyer. So anyhow, I read about 20% or 30% of it because a lot of the rest of it I knew. And a lot of the rest of it I wasn’t fascinated by at the time, but the parts that I read, I really liked.

T: Yeah, I think that’s a lot like the book that was out a few years ago that was real popular, “Influence,” and everybody heard of it and knew a couple of quotes, but I don’t think anybody actually read it.

42:08 ET: Yeah. There’s another book like that I read a moderate part of, again, that nobody else read very much of or hardly anybody did. It’s “Capital in the 21st Century” by Thomas Piketty.

T: Oh, yeah. Again, everybody had cherry pick quotes, and I’m with you, I read about 10% and threw it aside. I thought it was a horrible book but…

ET: That, and, “Thinking Fast, Thinking Slow” were the two least read best sellers according to elaborate studies.