#872: Graham Duncan — Talent Is the Best Asset Class (Repost) · The Tim Ferriss Show summary

Key takeaways

Developing systems and frameworks helps in effectively judging and nurturing talent, but cultivating a genuine 'taste' for people remains critical.
Surfacing and challenging your hidden assumptions through conversations and mindfulness can significantly improve decision-making and self-awareness.
Aligning your game with intrinsic passion and engaging in infinite games focusing on long-term growth fosters resilience and fulfillment.
Appreciating the present moment and understanding the finite nature of life can lead to richer, more intentional living.
Treat emotions as transient guests rather than enemies, and develop habits that expose you to discomfort to build resilience.
Language and narrative shape our mastery; creating our own language helps in thinking clearly and avoiding industry clichés.
Balancing chaos and order, embracing originality, and continuously adapting are essential for mastery in any field, especially in investment management.

Summary

The Art of Talent Hunting and Decision-Making Frameworks

Graham Duncan emphasizes that his primary role is to create positive feedback loops for people, aligning their talents with tasks they find compulsive and excellent at. At 24, his talent for judging potential was rooted in a keen 'taste' for people and their undercurrents, rather than formalized systems. Over the years, he developed frameworks focusing on traits like intensity and integrity, as well as language cues that signal mastery and originality, such as the ability to generate ideas and the skill to triage those ideas effectively. Duncan's approach to talent assessment involves a deep curiosity about a person's mental models, their stress responses, and their references, especially during crises like 2008, which reveal a lot about their integrity and resilience.

The Role of Self-Understanding and Cultivating Better Thinking

Duncan discusses the importance of surfacing hidden assumptions through conversations with coaches or mentors who act as mirrors, helping to objectify personal beliefs. He references Byron Katie’s method of questioning beliefs by asking whether they are true, what their opposites are, and how one would behave without them. Duncan continually refines his thinking by practicing mindfulness, meditation, and seeking feedback—especially from trusted sources—allowing him to recognize and loosen grips on rigid beliefs. He advocates for awareness of water—the environments and mental states we swim in—and suggests that podcasting and reading serve as tools to understand and navigate one's own water.

Identity, Motivation, and the Long Game in Career and Life

The conversation explores how top performers think about their purpose and their game, referencing Kwame Appiah’s quote: 'It’s not how well you play the game, but what game you choose.' Duncan emphasizes that many individuals play games based on external pressures or avoidant goals rather than intrinsic passion, which impacts their longevity and fulfillment. He distinguishes between finite and infinite games, advocating for engaging in pursuits where the motivation is to keep playing and improving for its own sake. The importance of a long-term time horizon, as opposed to short-term gains, is tied to a love of the game, humility, originality, and the ability to seek disconfirming evidence, which sustains high performance over time.

Understanding Time and Presence for a Fulfilled Life

The episode highlights the significance of appreciating the 'width' or depth of life — the present moment — through tools like Tim Urban’s life calendar, mindfulness practices, and reflecting on personal mortality. Duncan discusses how shifting perspective to value the current moment, rather than just its duration, can lead to richer experiences. He shares personal actions inspired by the awareness of time, such as prioritizing family and practicing gratitude. Quotes from authors like Mark Twain and insights from various thinkers anchor the idea that life is best lived by focusing on love, connection, and embracing the unpredictable flow of existence.

Thoughts on Cultivating Resilience and Acceptance of Emotions

Duncan advocates treating negative feelings as 'welcome party guests,' encouraging acceptance and mindfulness rather than suppression. Inspired by Byron Katie and others, he practices viewing emotions as objects to be observed objectively, which reduces their power and facilitates better emotional management. He stresses the importance of developing habits to face discomfort intentionally, such as Wim Hof's cold exposure practices, which build mental toughness. Duncan also reflects on the significance of understanding that water — or the environment and internal states — often influences behavior, and learning to navigate or embrace these conditions leads to growth.

Philosophy, Language, and Mastery in Investment and Life

Throughout the conversation, Duncan underscores the importance of language as a window into understanding mastery and thinking patterns. He points out that effective investors and performers craft their own language to describe nuance and avoid being trapped in industry jargon. Duncan's reading list includes books like *The Aspirational Investor*, *Tribal Leadership*, and *Culture Code*, which emphasize the value of culture, original thinking, and understanding human dynamics. He also discusses the challenge of balancing original, boundary-pushing ideas with the risk of losing touch with reality, highlighting the need for continuous feedback and oscillation between chaos and order.

Show notes

Graham Duncan(@GrahamDuncanNYC) is the co-founder of East Rock Capital, a multibillion-dollar multi-family investment office he launched in 2006. He is also Chairman of the Sohn Conference Foundation, which funds pediatric cancer research.

This episode was originally published in February 2019. Show notes: https://tim.blog/2019/02/28/graham-duncan/

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Timestamps:

[00:00:00] Start.
[00:02:29] I think of Graham as far more than an investor. How does he describe what he does?
[00:06:13] Absent the systems and frameworks he's honed over time, what made Graham a good talent hunter at the tender age of 24?
[00:08:42] What constitutes taste when Graham is scouting for talent these days?
[00:11:14] Upon meeting someone, how does Graham stress-test whether or not someone is "commercial" in the way they balance aggression and integrity?
[00:16:49] One high-signal question Graham has found particularly useful when trying to determine the quality of anyone from a trader to an OB/GYN.
[00:19:17] When interviewing a potential candidate, how does Graham vet their given references?
[00:22:21] On approaching the reference process with curiosity rather than an attempt to catch anyone with a "gotcha."
[00:25:34] Why does mutual friend Josh Waitzkin call Graham The Wild Gardener?
[00:27:04] How does Graham deal with contradictory perspectives — when the data is telling him one thing and his gut is telling him another?
[00:29:09] What does Graham do to familiarize himself with the way people underwrite their mental models (besides nearly beheading them)?
[00:30:29] Graham talks about his role as an investment coach, of sorts, and how he picks the best "players" for the game at hand.
[00:31:53] What other patterns has Graham noticed in the successful talent he's ended up selecting?
[00:36:06] In what way have others helped Graham surface his hidden assumptions, and how might a coach do the same for others?
[00:39:17] An example of when Graham's "grip" has been a bit too tight around his own beliefs.
[00:40:09] What Byron Katie has taught us about articulating the opposite of such beliefs — and having a mindful lunch.
[00:46:18] When evaluating a team, how does Graham think about each person developing the ability to look at the opposite versus hiring to end up at that optimal mixture?
[00:49:12] How might someone train to more clearly see disconfirming evidence — and roll with the punches when their instincts lead them toward regrettable decisions?
[00:42:21] What books does Graham gift to others most often?
[00:56:11] An aside about Wim Hof and Josh Waitzkin embracing "the other side of pain" to get the most out of life.
[00:59:31] How does James Carse's distinction of finite and infinite games apply to finance, and how would Graham test a potential teammate for compatible sensibility?
[01:02:41] How likely would it be for Graham to invest in a Jocko Willink project?
[01:04:16] Different people have different ways of sniffing around direct questions. Here are a few examples.
[01:05:54] Graham explains what this Kwame Appiah quote means to him: "In life the challenge is not so much to figure out how best to play the game; the challenge is to figure out what game you're playing."
[01:08:13] Going by David Foster Wallace's famous commencement speech, what's your water? Podcasting helps me see mine.
[01:09:32] Graham's take on Greg McKeown's Essentialism.
[01:10:31] How Graham sees careers as a river (with a nod of thanks to neuroscientists Dan Siegel and Tina Payne Bryson's model of well-being).
[01:12:53] Toward which bank do the top one percent in any given field swim? What if that field is financial markets? What if that field is writing fiction novels?
[01:16:39] The differences between millionaires, billionaires, cultural billionaires, and time billionaires.
[01:18:47] An idea for how Tim Urban might allow for personalization of his 90-year-life calendar.
[01:20:00] Are you more concerned about the length of your life or its width?
[01:20:38] Life changes Graham and I have both made as a direct result of reading Tim Urban's "The Tail End" piece at Wait But Why.
[01:22:05] How does Graham try to appreciate the width of his life?
[01:25:05] Aside from the aforementioned Kwame Appiah quote, what might Graham put on his billboard?
[01:25:52] The power to be found in treating negative feelings like welcome party guests.
[01:27:43] Parting thoughts from Mark Twain and Graham.