The Intersection: Dan Morehead's Most Controversial Opinion (w/ Raoul Pal)
RAOUL PAL: What I'm going to do now if you've just got a few minutes, I'm going to ask you some fixed questions that we asked a few people and they're just standard questions that people get to know you with. If there's one person living or dead, who would you want to interview more than anybody? If so, who and why? DAN MOREHEAD: I'm actually taking an online course on Beethoven right now. It's through Stanford. It's like adult ed type class, it was supposed to be physical. When this whole thing started, and everyone's starting to get in shelter in place, the professor was way ahead of everybody and sending out a note saying, hey, these are super trying times, but if the composer could suffer the most devastating loss any musician could ever have in deafness and still created best works, we can at least do a Zoom class. I'm studying Beethoven, it is a super-fast thing so I'd love to interview him if I could. RAOUL PAL: What is the book or books that have changed how you view the world, and how so? Also, what are you reading right now? DAN MOREHEAD: I decided with this, hopefully rare opportunity to have months of a different lifestyle. I'm rereading War and Peace, which is about a scourge that swept over the world called Napoleon. It seemed apropos to our war that we're at with this little virus that we're battling. RAOUL PAL: Are you struggling through it, or you find it relatively easy? Because it's notoriously difficult to read things so long. DAN MOREHEAD: Yeah, I have learned from past attempts and I have a printout of all the principal characters and all the patronymics and nicknames and everything. I refer to that like, every 10 seconds, and it's still super confusing to remember who everybody is, but I'm endeavoring to just get some momentum and make sure I just plow through it. RAOUL PAL: As an individual and a leader in your field, how do you stay engaged and relevant in a world that's moving so quickly? DAN MOREHEAD: Well, so these days, actually, there is potential for like over stimulus, like there's so much information and it's also important, and a lot of it's hugely distressing. The one thing I am actually trying to do is essentially limit my intake of just general news like normal news to only a couple periods per day. One of the things I did to get some space to actually think without all this white noise just like reverberating is I did just block out like three days to write our investor letter a week or two ago, where I essentially tried to not read or talk to or get involved with anybody else, and just actually be able to think. That'd be my only advice for everyone these days, is there's so much stimulation. A lot of it's really distressing. Obviously, we're all worried about our own physical and mental health, our kids, our community is to try and block out time, big chunks of time, four hours, six hours or whatever, where you can just think and not like-- basically stop the input of stimulus and potentially just create a space for your brain to stop throbbing from all this input of data, and to see if you can process what you already have in your head. RAOUL PAL: Yeah, I found that really hard for the first week of shelter in place because my wife's not here, so I'm on my own at the moment. She comes this weekend because she, I think she had COIVD and she's in Grand Cayman. I'm here, and just spend everything on my Bloomberg, Twitter, email, new sites, and after a while, I'm like to stop. You have to carve up your day differently and change because it's just overwhelming. DAN MOREHEAD: Yeah, the other thing I'm trying to do is put some structure you know back into life because in the normal world, our lives are probably overly structured. In this new world where, like everything that you had plans being canceled, you can easily have it drift. I'm trying to have a very structured day where I do the same things at the same times to try and get that rhythm back. I think humans and all animals have their own circadian rhythms that need to stay in tune. RAOUL PAL: Some of our guests can tie their success to one key breakthrough. Did you experience a tipping point in your career? DAN MOREHEAD: I'd say my experience at Tiger management was just a huge transformative thing for me because I came in having run a hedge fund before Tiger, which I think was unique at the time. I learned a few things on my own experiment with successes and failures but getting to work with Julian Robertson and 40 other really smart nice people is such a boost to my career. I've learned a ton from the lessons that all these peers of mine gave me. RAOUL PAL: By the way, did Julian ever get involved in Bitcoin? DAN MOREHEAD: He has. He's a very forward thinking man. Many years ago, four or five years ago, he invested in our funds and then, coincidentally, my son actually goes to the school Julian went to in the '50s and so I've seen him there and he's up on stuff. RAOUL PAL: Good man. Can you identify a failure that had the most significant impacts on your career, and what did you do to overcome it? DAN MOREHEAD: Oh actually, it's a good story. It's quite germane to our current environment. I started out as an asset-backed securities trader at Goldman in the '80s. The Wall Street stock market crash happened and like Solomon cut their entire mini department and everyone's cutting, and cutting, and cutting. They said they had to cut the department by like 20% or some and they were going to thinking about laying me off and I was like, what? That's outrageous, because I've just been sitting there, but I really hadn't been learning. I was just sitting around playing liars poker with the other guys on the desk and new channel. I really wasn't stressed I might-- I wasn't stretching myself, I wasn't really doing anything, so I quickly grabbed the phone, and I was looking for that headliners number for the job that offered me like six times or whatever I was making. I went and switched, I went to Bankers Trust and it was awesome because having gotten thrown out of a really comfy situation and it just kicked me into gear. I realized I should just like put myself out there, just go for it. Since then, I've been just like put my whole heart and soul into everything I'm doing. Especially with blockchain, it's the same. I think we're going to make a lot of money in this business but like I'm passionate, we're actually changing the world. 20 years from now, we're going to look back and blockchain is going to have improved a ton of people's lives. It was basically getting kicked out of my comfy gig forced me to actually get engaged and get going. That'd be my advice for graduates that are potentially going to have their jobs pulled from now, is dislocation might be the best thing that ever happened to you, and just embrace it and be open to it. My son showed me this great clip from The Rock about him getting cut from the NFL and that was the best thing that ever happened to him. That would be the spirit I would be looking at this. RAOUL PAL: Absolutely. Last two questions, who's a person you admire and why? DAN MOREHEAD: Oh, there's a lot of people, but the one that's relevant to this conversation is, and I know it sounds trite, but it's actually super earnest thought, Satoshi Nakamoto. The reason I say it is, I'm just not aware of anyone else has ever contributed something of such incredible value to the world, blockchain's 200 billion, as you say, and not taking anything for themselves. It's amazing that the open source code was just contributed to the world, it wasn't patented, and even the million bitcoins that Satoshi owns, he or she or whatever, hasn't sold or done anything with them in many, many years. I think that's inspirational. Again, if it's true the blockchain actually improves people's lives and I think it's going to have a huge impact on people. It's just really cool that Satoshi essentially gifted that to humanity and I think it's great. RAOUL PAL: Final question. What view do you hold that's most controversial in your professional life? DAN MOREHEAD: I would say my views right now are not like eight sigma outside consensus, but the views that I expressed earlier that it's actually a great time to invest in venture might sound self-serving or might sound like a knee jerk reaction, but I hold it very sincerely. That's when I think most people probably wouldn't vote with their checkbooks to agree with me on. That would be the one I would say is the most controversial, relative to the professional community. RAOUL PAL: Dan, listen, thank you ever so much. It was really good, thoroughly enjoyable, and lots of people to get their teeth into as well. I think it was really great to tie up your macro experience and your understanding now, you've let back into macro world just try and make sense of what this all means because you have the intuition that this is going to mean a lot for your current life in terms of the assets that you look at, and I think that's fascinating. DAN MOREHEAD: Well, Raoul, thanks so much. It's been a pleasure being with you in these trying times.