Bitcoin, Macro Trading, Ayahuasca, Redemption, and More | Mike Novogratz on The Tim Ferriss Show

Tim Ferriss is not associated or affiliated with PodcastNotes in any way. All notes are independently created by PodcastNotes and do not imply any sponsorship or endorsement by, or affiliation with, Mr. Ferriss.

Check out the Tim Ferriss Show Episode Page & Show Notes

Key Takeaways

  • At Princeton, Mike Novogratz rubbed shoulders with students from rich and successful families but realized people, no matter their status, are fundamentally the same:
    • “I quickly realized that rich guys, middle-class guys, they all use the same toilet to shit, and that part gave me a lot of confidence in life. That I could compete in essence…that I could compete with anybody.” – Mike Novogratz
  •  “One of my insights was sometimes the little trauma, 10 years, 20 years, 30 years later, can have just as much psychological distress as big trauma” – Mike Novogratz
  • Having siblings keeps you in balance. They care for you when things are bad and keep you in check when things are good:
    •  “It’s safety on the downside, it’s humbling on the upside” – Mike Novogratz
  • “Bitcoin is really becoming a store of value. They only become a store of value when people believe they are so it’s a belief system. Bitcoin is not just the code, it’s really the social construct.”Mike Novogratz
  • “One of the things we need to do as a society is to accept that people have mental health issues. Depression is real and that people have shit to work through and we should help them”Mike Novogratz
    • Ayahuasca and psilocybin should be destigmatized because they’re powerful tools that can help people deal with mental health   
  • “The prison system is just absolutely unfair and it preys on communities that are already in duress” Mike Novogratz
    • “95% of women in prison have been raped. So we’re taking people that have been traumatized and putting them into a trauma machine.” 
      • “We need a complete overhaul”

Intro

  • Michael Edward Novogratz (@novogratz) is an ex-hedge fund manager, formerly of the investment firm Fortress Investment Group
  • Host: Tim Ferriss (@tferriss)

Books Mentioned

Lessons From Princeton

  • At Princeton, Mike rubbed shoulders with students from rich and successful families but he realized people, no matter their status, are fundamentally the same:
    • “I quickly realized that rich guys, middle-class guys, they all use the same toilet to shit, and that part gave me a lot of confidence in life. That I could compete in essence…that I could compete with anybody.” – Mike Novogratz
  • Mike joined the wrestling team at Princeton 
    •  It taught him to work harder and to be more resilient
      • “The trait it builds in people is grit or resilience” – Mike Novogratz 

From No Job To Billionaire

  • At 33, Mike resigned from Goldman Sachs as a partner
    • Soon after, he checked into rehab to deal with his trauma
      • “One of my insights was sometimes the little trauma, 10 years, 20 years, 30 years later, can have just as much psychological distress as big trauma” – Mike Novogratz
        • By understanding the trauma of others and forgiving them, slowly Mike was able to understand his own trauma and forgive himself
  • Mike later went to go work for Fortress Investment Group. When the company went public, Mike became a billionaire. 
  • A few changes Mike made to improve his life:
    • He gave up alcohol and recreational drugs
    • He started to push himself past his comfort zone by running marathons
  • Mike may not consider himself the smartest guy in the room, but his intuition might make him one of the luckiest
    • “My hedge fund went from $300 million to $2 billion in six months” – Mike Novogratz
  • The world’s best macro traders have 3 things in common: Pattern-recognition intuition, discipline, and an unbelievable competitive spirit
    • It’s hard to trust your intuition because it takes a long time to believe in yourself and it’s difficult to explain your decisions
      • “You invest, you invest, you invest, at one point, your track record, your wins versus losses are going to tell you if you’re good at this” – Mike Novogratz
        • If your intuition has been right most of the time, take the time to understand your mental algorithm to find out how you make decisions
    • Not all investment areas are based on intuition, usually the more intuition-based it is, the more anxiety you’ll have from it

Thoughts on Bitcoin

  • Back when Bitcoin was $100, Mike was at a conference and made a witty comment about Bitcoin that the press took and printed on the front cover of the Financial Times 
    • Mike then got sucked into Bitcoin because people were constantly calling him asking about his views on cryptocurrency
      • Mike was also asked to speak about crypto at conferences so he started studying it a lot more 
        • “I became kind of an unofficial spokesperson, or one of the unofficial spokespersons for it” – Mike Novogratz
  • “Bitcoin is really becoming a store of value. They only become a store of value when people believe they are so it’s a belief system. Bitcoin is not just the code, it’s really the social construct.”Mike Novogratz
  • Mike believes that by the end of 2020, Bitcoin will be worth around $20,000 per coin.
    • Bitcoin is being bought by more financial institutions and even individuals like Jack Dorsey (the CEO of Twitter)
      • “The stories finally catching broader adoption and it’s not just hedge funds that are going to buy it, you’re going to see wealth managers start selling it to their clients” Mike Novogratz
        • “I’m really bullish”

Mike’s Siblings & Parents

  • Mike grew up in a suburban middle-class all-American family. He went to a public school. His dad was an army officer and his mother didn’t go to college. 
    • “My dad was tough, he was a military guy” – Mike Novogratz
    • His parents instilled in him a sense of excellence and service
  • Having siblings keeps you in balance. They care for you when things are bad and keep you in check when things are good:
    •  “It’s safety on the downside, it’s humbling on the upside” – Mike Novogratz
  • Mike’s sister is Jacqueline Novogratz, the founder, and CEO of Acumen, a non-profit global venture capital fund whose goal is to use entrepreneurial approaches to address global poverty

Value of Ayahuasca & Psilocybin

  • Mike has a black puma tattoo because he transformed into a puma on his ayahuasca experience
    • “I was so moved by the beauty of that experience I decided I’m going to get a small tattoo” – Mike Novogratz
  • “One of the things we need to do as a society is to accept that people have mental health issues. Depression is real and that people have shit to work through and we should help them”Mike Novogratz
    • Ayahuasca and psilocybin should be destigmatized because they’re powerful tools that can help people deal with mental health   

Prison Reform Is Needed

  • The average bail payment is $1,800 but most people in America don’t have $500 to spend
    • “Most people getting arrested don’t have access to $500 so they stay in jail. They’re seven times more likely to plead guilty if they’re in jail than if they’re not in jail.” – Mike Novogratz
      • 40% of all prison death and rape happens in the first 14 days you’re in jail
        • Mike saw the amount of injustice that was going on and donated a large sum of money to the Bail Project
  • There’s a lot of things that are wrong with the US jail system
    • “The whole system is just bizarre and it doesn’t have to be that way” – Mike Novogratz
      • Prisons in Germany and Norway are incredibly different than ones in the US and much better
  • “The prison system is just absolutely unfair and it preys on communities that are already in duress” Mike Novogratz
    • “95% of women in prison have been raped. So we’re taking people that have been traumatized and putting them into a trauma machine.” 
      • “We need a complete overhaul”
  • To learn more, Mike recommends watching Bryan Stevenson’s TED talk: We Need to Talk About an Injustice
  • The US has 2.3 million people in jail or prison. About 5 million people go into prison every year for an average of 45 days.

Additional Notes

  • Get a piece of paper and write down who you think will be at your funeral when you’re 80. Those are the only people’s opinions you should care about, don’t worry about what anyone else thinks.
  • Mike’s advice to his younger self:
    • Be kind to your younger self, things are going to be okay
    • “It’s just to accept yourself” – Mike Novogratz
  • Mike has given away 40+ copies of the book Reminiscences of a Stock Operator by Edwin Lefevre
    • Mike recommends this book for anyone who wants to be a trader
  • Learning how to say No is hard but it will make your life better
Tim Ferriss Show : , , , ,
Notes By Alex Wiec

More Notes on these topics

Top Insights and Tactics From

31 Best Podcasts of All Time

FREE when you join over 12,000 subscribers to the
Podcast Notes newsletter

No Thanks