
February 17, 2020
Can We Learn to Invest in the Future? – Josh Wolfe on the Hidden Forces Podcast, Hosted By Demetri Kofinas
Check out the Hidden Forces Episode Page & Show Notes
Key Takeaways
- As an investor:
- It’s important to expose yourself to as many ideas and people as possible
- Sharing your ideas with others is also critical—you never know what or who someone may know
- Reading a wide variety of books is also essential
- The best entrepreneurs (and athletes) are those with a chip on their shoulder
- The best investments are in areas where no one’s looking
- You can’t be a curious person without having information anxiety
Intro
- Josh Wolfe (@wolfejosh) is the co-founder of Lux Capital, a venture capital firm that backs entrepreneurs and scientists tackling real problems in unconventional ways
- For more Josh, check out the following Podcast Notes:
- Josh Wolfe: The Tech Imperative – Invest Like the Best
- Josh Wolfe: This is Who You Are Up Against – Invest Like the Best
- Inventing the Future with Josh Wolfe – The Knowledge Project
- Josh Wolfe on The Future of Technology – Real Vision Classics
- For more Josh, check out the following Podcast Notes:
- Host: Demetri Kofinas (HiddenForcesPod)
Books Mentioned
- Josh is currently reading:
- Skin in the Game: Hidden Asymmetries in Daily Life by Nassim Taleb
- Enlightenment Now: The Case for Reason, Science, Humanism, and Progress by Steven Pinker
- Two books that helped Josh reframe this thinking about death:
- A Guide to the Good Life: The Ancient Art of Stoic Joy by William Irvine
- Immortality: The Quest to Live Forever and How It Drives Civilization by Stephen Kane
- To learn about how dying feels, Demetri recommends Mortality by Christopher Hitchens
- Demetri also recommends Vladimir Nabokov’s autobiography Speak, Memory
The Seeds Were Planted Early
- Josh grew up in Coney Island, Brooklyn
- Josh’s parents split up when he was a child; his mom pushed him to be a nerd
- Josh was highly competitive as a kid—this led him to read as much as he possible
- “I was psychotically competitive … I wanted to know more than the next guy.” – Josh Wolfe
- At just 13, Josh wanted to find a way to cure AIDs
- This interest led him to work with a Ph.D. researcher at SUNY Downstate who killed time while waiting for blood results by trading futures—this sparked Josh’s interest in finance
- Josh went on to study finance at Cornell where he became fascinated with venture capital—the ultimate combination of finance and science
Lux Capital
- Josh’s venture capital firm, Lux Capital, focuses on the hard sciences: chemistry, physics, material sciences, etc.
- Lux was funded by an early investment from William Conway, the co-founder of The Carlyle Group
- Lux Capital has three entities that give them a competitive edge:
- One of their offices is close to Capital Hill—this allows them to influence legislature and stay up to date with government agencies
- Their media business with Forbes grants them access to key individuals
- Lastly, there’s Lux Research, a team of scientists that outside companies can hire to examine and verify technology claims
- Lux Capital has $1.5 billion under management. To date, they’ve invested in over 100 companies.
Lux’s ‘100-0-100’ Investment Strategy
- Josh explains his well-known ‘100-0-100’ investing philosophy, which is equal parts ambition, humility, and arrogance:
- He’s 100% certain that Lux will be investing in the most cutting-edge technology
- He’s 0% certain what those things will be
- He’s 100% certain that Lux will find those companies at the cutting-edge of the cutting-edge
- As an investor:
- It’s important to expose yourself to as many ideas and people as possible
- Sharing your ideas with others is also critical—you never know what or who someone may know
- Reading a wide variety of books is also essential
Josh’s Bold Claims
- Steve Jobs stole a lot of his ideas from the sci-fi world
- The idea for the iPad, for instance, came from Star Trek: Next Generation
- The best entrepreneurs (and athletes) are those with a chip on their shoulder
- Take like Michael Jordan, for instance, who was cut from his high school basketball team
- There’s just something special about these people—no matter how much they succeed, they want to keep growing
- The best investments are in areas where no one’s looking
- You’re better off investing in 1/5 companies in a cutting-edge market than investing in 10/100 companies in an emerging market
- Further, in less examined markets, competition is reduced
- To help stay on top of the cutting-edge, Josh reads several obscure papers/journals
- Josh also reads ‘USA today,’ but not for the same purpose—doing so allows him to know what the masses are reading
The World Needs Contrarian Thinkers
- Josh looks for investments that go against the mainstream consensus
- For example, when everyone was investing in solar during the early 2000s, Josh was looking at nuclear energy
- When no one’s investing in a certain field, ask yourself, “What sucks [about this field]?”
- With nuclear energy, for instance, the thing that sucked: people didn’t know what to do with the waste—it was a real technological problem
- The world needs contrarian thinkers
- The best returns come from high-risk investments that pay off
- The brightest scientific minds discover things once thought impossible
- The greatest protagonists in movies are the ones the masses don’t believe
Additional Notes
- Startups are like insects: small organisms with high mutation rates, high reproductive rates, and a short-lifespan
- According to Josh, technology is currently advancing so rapidly that humans are becoming like a species which cannot adapt quick enough to its environment
- Josh doesn’t believe in God
- All technology (social media, fire, nuclear power, etc.) can be used for both good and bad
- An easy example: you can use fire to cook food, but fire can also be used to burn down houses
- An idea to ponder: If there’s no free will in the world, is it fair to punish criminals?
- You can’t be a curious person without having information anxiety
- When Josh reads magazines, for instance, he gets anxiety if he skips a page—that page could have the gold nugget he was searching for
- Josh’s favorite movie is Point Break
- He also loved Danny Darko
- Josh’s best investment decision ever: marrying his wife
- Avoid boring people and avoid being boring to people