jose wofle

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

Books Mentioned

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
      • In 2010, Josh gathered the best scientists in tech to create a company to tackle this problem. A year later, the Fukushima disaster took place, causing the company to go from $1 million in revenue to $160 million in just a few years.
        • (The company was later sold for $350 million)
  • 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
  • Josh’s best investment decision ever: marrying his wife
  • Avoid boring people and avoid being boring to people
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Notes By Alex Wiec

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