“Everyone’s genius is right next to their dysfunction.” — Graham Duncan
Graham Duncan (@GrahamDuncanNYC) is the co-founder of East Rock Capital, a multi-family office investment firm that manages $2 billion for a small number of families and their charitable foundations.
Before starting East Rock 14 years ago, Graham worked at two other investment firms and started his career by co-founding an independent Wall Street research firm. Graham graduated from Yale with a B.A. in ethics, politics, and economics. He is a member of the Council on Foreign Relations and serves as co-chair of the SOHN Conference Foundation, which funds pediatric cancer research.
Josh Waitzkin, the chess prodigy who served as the basis for the book and movie Searching for Bobby Fischer, calls Graham “the tip of the spear in the realms of talent tracking and judgment of human potential in high stakes mental arenas.”
Listen to the episode on Apple Podcasts, Spotify, Stitcher, Overcast, or on your favorite podcast platform. You can find the transcript of this episode here. Transcripts of all episodes can be found here.
Would you like to hear another episode with an investor who understands the value of quality time? Check out my conversation with Peter Mallouk, in which we discuss illiquidity as a feature rather than a bug, when the risk of being out of the market is greater than the risk of being in, and much more. (Stream below or right-click here to download.):
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QUESTION(S) OF THE DAY: What was your favorite quote or lesson from this episode? Please let me know in the comments.
Scroll below for links and show notes…
SELECTED LINKS FROM THE EPISODE
- Connect with Graham Duncan:
Website | Twitter | East Rock Capital
- Yale University
- Overcoming Imposter Syndrome by Gill Corkindale, Harvard Business Review
- Mental Model: Feedback Loops, My Investing Life
- Goldman Sachs
- 6 Reasons Why Your Baby Might Be Admitted to the Neonatal Intensive Care Unit (NICU), UnityPoint Health
- Memento
- The Science of Success by David Dobbs, The Atlantic
- The Highly Sensitive Person: How to Thrive When the World Overwhelms You by Elaine N. Aron
- Looking Back: Creative Genius in Classical Music by Dean Keith Simonton, The British Psychological Society
- Tribe of Mentors: Short Life Advice from the Best in the World by Tim Ferriss
- The Further Reaches of Adult Development by Robert Kegan, The RSA
- The Work of Byron Katie
- A Mind at Home with Itself: How Asking Four Questions Can Free Your Mind, Open Your Heart, and Turn Your World Around by Byron Katie and Stephen Mitchell
- Sweetgreen
- Tesla
- Portfolio Manager (PM), Investopedia
- Chief Investment Officer (CIO), Investopedia
- Citadel
- Why Investors Should Have Known Tesla’s SolarCity Acquisition Was a Bad Business Decision by Travis Hoium, The Motley Fool
- The Aspirational Investor: Taming the Markets to Achieve Your Life’s Goals by Ashvin Chhabra
- Renaissance Technologies
- The Quants Run Wall Street Now by Gregory Zuckerman and Bradley Hope, The Wall Street Journal
- Jim Simons, the Numbers King by D.T. Max, The New Yorker
- Institute for Advanced Study
- Tribal Leadership: Leveraging Natural Groups to Build a Thriving Organization by Dave Logan, John King, and Halee Fischer-Wright
- Chicago Bulls
- The Culture Code: The Secrets of Highly Successful Groups by Daniel Coyle
- Pixar
- Navy SEALs
- The Tools: 5 Tools to Help You Find Courage, Creativity, and Willpower — and Inspire You to Live Life in Forward Motion by Phil Stutz and Barry Michels
- Hollywood Shadows by Dana Goodyear, The New Yorker
- The Wim Hof Method
- Finite and Infinite Games: A Vision of Life as Play and Possibility by James Carse
- Breakfast at the Victory: The Mysticism of Ordinary Experience by James Carse
- The Play’s the Thing: A Nashville Theologian Considers the Genius of James P. Carse by David Dark, Chapter 16
- Jocko Podcast
- Y Combinator
- The Playing Field by Graham Duncan, Medium
- This is Water by David Foster Wallace
- Greg McKeown — How to Master Essentialism, The Tim Ferriss Show
- The Whole-Brain Child: 12 Revolutionary Strategies to Nurture Your Child’s Developing Mind by Daniel J. Siegel and Tina Payne Bryson
- River of Well-Being by Bill Bray
- Who Really Said “Learn the Rules Like a Pro so You Can Break Them Like an Artist?” Y Combinator
- The Big Short
- Zen and the Art of Motorcycle Maintenance: An Inquiry into Values by Robert M. Pirsig
- The Entropic Brain: A Theory of Conscious States Informed by Neuroimaging Research with Psychedelic Drugs by Robin L. Carhart-Harris, Robert Leech, Peter J. Hellyer, and Murray Shanahan, Frontiers in Human Neuroscience
- Marginal Revolution
- Discover Your Inner Economist: Use Incentives to Fall in Love, Survive Your Next Meeting, and Motivate Your Dentist by Tyler Cowen
- Managing Procrastination, Predicting the Future, and Finding Happiness — Tim Urban, The Tim Ferriss Show
- The Tail End by Tim Urban, Wait But Why
- The 90-Year Life Calendar
- 10% Happier by Dan Harris
- Waking Up by Sam Harris
- The Roots of Mindfulness: How a Group of Jews Turned a Buddhist Spiritual Practice into a Distinctly American Phenomenon — and a Multi-Billion-Dollar Industry by Michelle Goldberg, Tablet
- The Waking Up Course: A Lesson on Gratitude by Sam Harris, Waking Up
- Welcome to the Party by Jeff Warren, 10% Happier (For free access to a dozen of Jeff Warren’s guided meditations, including “Welcome to the Party,” visit the special link 10percenthappier.com/welcome to download the 10% Happier app and unlock the content.))
- “There Isn’t Time — so Brief Is Life — for Bickerings, Apologies, Heartburnings, Callings to Account. There Is Only Time for Loving — and but an Instant, so to Speak, for That.” by Mark Twain, Letter to Clara Spaulding, 20 August 1886
- The Sohn Conference Foundation
SHOW NOTES
- I think of Graham as far more than an investor. How does he describe what he does? [05:35]
- Absent the systems and frameworks he’s honed over time, what made Graham a good talent hunter at the tender age of 24? [10:12]
- What constitutes taste when Graham is scouting for talent these days? [13:05]
- Upon meeting someone, how does Graham stress-test whether or not someone is “commercial” in the way they balance aggression and integrity? [15:57]
- One high-signal question Graham has found particularly useful when trying to determine the quality of anyone from a trader to an OB/GYN. [19:12]
- When interviewing a potential candidate, how does Graham vet their given references? [22:00]
- On approaching the reference process with curiosity rather than an attempt to catch anyone with a “gotcha.” [25:32]
- Why does mutual friend Josh Waitzkin call Graham The Wild Gardener? [29:41]
- How does Graham deal with contradictory perspectives — when the data is telling him one thing and his gut is telling him another? [31:30]
- What does Graham do to familiarize himself with the way people underwrite their mental models (besides nearly beheading them)? [33:52]
- Graham talks about his role as an investment coach, of sorts, and how he picks the best “players” for the game at hand. [35:17]
- What other patterns has Graham noticed in the successful talent he’s ended up selecting? [36:47]
- In what way have others helped Graham surface his hidden assumptions, and how might a coach do the same for others? [41:34]
- An example of when Graham’s “grip” has been a bit too tight around his own beliefs. [44:38]
- What Byron Katie has taught us about articulating the opposite of such beliefs — and having a mindful lunch. [46:14]
- 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? [50:45]
- How might someone train to more clearly see disconfirming evidence — and roll with the punches when their instincts lead them toward regrettable decisions? [54:04]
- What books does Graham gift to others most often? [58:56]
- An aside about Wim Hof and Josh Waitzkin embracing “the other side of pain” to get the most out of life. [1:02:31]
- 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? [1:06:12]
- How likely would it be for Graham to invest in a Jocko Willink project? [1:10:45]
- Different people have different ways of sniffing around direct questions. Here are a few examples. [1:11:43]
- 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.” [1:13:42]
- Going by David Foster Wallace’s famous commencement speech, what’s your water? Podcasting helps me see mine. [1:16:17]
- Graham’s take on Greg McKeown’s Essentialism. [1:17:50]
- 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). [1:18:57]
- 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? [1:21:54]
- The differences between millionaires, billionaires, cultural billionaires, and time billionaires. [1:26:25]
- An idea for how Tim Urban might allow for personalization of his 90-year-life calendar. [1:28:55]
- Are you more concerned about the length of your life or its width? [1:30:10]
- Life changes Graham and I have both made as a direct result of reading Tim Urban’s “The Long Tail” piece at Wait But Why. [1:31:05]
- How does Graham try to appreciate the width of his life? [1:32:43]
- Aside from the aforementioned Kwame Appiah quote, what might Graham put on his billboard? [1:36:12]
- The power to be found in treating negative feelings like welcome party guests. [1:37:07]
- Parting thoughts from Mark Twain and Graham. [1:39:09]
PEOPLE MENTIONED
- Josh Waitzkin
- David Tepper
- Chris Fussell
- Stan McChrystal
- Tobias L¸tke
- Kyle Maynard
- Susan Cain
- Elaine Aron
- Dean Simonton
- Johann Sebastian Bach
- Warren Buffett
- William Shakespeare
- Wayne Gretzky
- John Arnold
- Richard Feynman
- Carolyn Coughlin
- Bob Kegan
- Byron Katie
- Charlie Munger
- Elon Musk
- Ashvin Chhabra
- Jim Simons
- Dave Logan
- Phil Jackson
- Daniel Coyle
- Phil Stutz
- Barry Michels
- Dana Goodyear
- Wim Hof
- Laird Hamilton
- James Carse
- Jocko Willink
- Paul Graham
- Sam Altman
- Ray Dalio
- Kwame Appiah
- David Foster Wallace
- Greg McKeown
- Dan Siegel
- Steve Jobs
- Pablo Picasso
- Mike Burry
- Christian Bale
- Robert M. Pirsig
- Rachel Cusk
- Karl Ove KnausgÂrd
- Robin Carhart-Harris
- Tyler Cowen
- Rupert Murdoch
- Tim Urban
- Matt Mullenweg
- Dan Harris
- Sam Harris
- Jack Kornfield
- Joseph Goldstein
- Sharon Salzberg
- Gretchen Rubin
- Muneeb Ali
- Pierre Chardin
- Mark Twain
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Love this quote: “Everyone’s genius is right next to their dysfunction.” — Graham Duncan
You didn’t say anything within the first two minutes that made me want to continue to listen sorry
Excellent conversation! I’m an investor and really appreciate the importance of style and innovation as the key ingredient for positive outcomes. It was great to learn about all the other resources you shared. Thank you Tim and Graham!
Although I quite like the entrepreneur spirit of Tim’s podcasts and his willingness to think our of the box and try new things, this definitely does not extend to women nowhere nearly as much as to men. Most quotes, most recommended books, most podcasts guests, etc are almost exclusively referred to men. For some one who considered himself visionary it’s a surprisingly limited world of view that Tim represents.
Difficult to articulate exactly why but after reading The Power of One and Tandia by Bryce Courtenay I feel you would enjoy and/or resonate with them perhaps even more than I did. Set in pre-WWII South Africa following a young English boy named Peekay growing up in a world that despises the English and is enveloped in apartheid. I’m really interested on your thoughts on the two novels; even if I can’t get a response I’d simply enjoy knowing someone else shared my enjoyment of reading them.
Tim! Dude. Man… guy… that 5 bullet bullet Friday with the Columbian ensemble was amazing! It made my Saturday morning. I hope your friends do not hesitate and continue to send you these amazing findings from the interwebs. Thank you for doing what you do. Cheers.
I really enjoyed this episode and the focus on the tactics of recruitment and selection. If you’re interested in doing more in this area, I’d love you to get Geoff Smart and/or Alan Foster of ghSMART on the podcast. They help some of the biggest finance companies in the world make better hiring decisions, and literally wrote the book(s) on how to take the voodoo methods out of interviewing. In a very Tim way, they are obsessive about the micro tactics of which questions you ask and how you word them, and while they would agree with some of Graham’s advice (especially around reference checks) there’s quite a lot they wouldn’t. Finally, their signature interview methodology (the Who or Topgrading interview) lasts hours and ends up feeling a lot like a Tim podcast because of the breadth and depth you get into. I have no affiliation with those guys but have loved their work and found it immensely powerful.
Thanks for the excellent episode (again…).
Tim, you said that you read a lot about the Jesuits.
Any Books you can recommend?
I can recommend a very good german article about a meditation technique for decission making (which has a Jesuit root,)
Thanks a lot,
Dirk from Munich.
Please list
Next up on the podcast, yet another person famous for money-related reasons, because it’s not like we have enough of them here, is it?
I liked this tactic a lot – “Rate the person from 1-10 but you can’t choose a 7.” I’m going to try that the next time I have to check references. Also, I want you to talk to Brian Hamilton, the entrepreneur who sold his company and founded Inmates to Entrepreneurs to help people with criminal records start their own businesses. [Moderator: website removed.] Let me know if I can connect you.
Hey Tim, I’ve always wondered if you can code? 🙂 If so, which languages?
Would love to bring you to Burning Man. Let me know..
Hello Tim. My name is M [Moderator: name withheld from public forum but preserved in admin pane.]. I am a psychotherapist with a niche. I’m a follower of you and your podcasts; I have been listening to you for over a year or so now. I like some of them. I find some of them very informative and compelling so I stay with it. Some of them are above me, and I can’t– I don’t always get them so, you know, I take from them what I can. That’s how it goes.
But I wanted to let you know that I was thinking about something you said in your first book, I think – to try to get in contact with someone who you, you’d never think you’d be able to get in contact with. I didn’t– I sort of pushed that aside, I didn’t really put much value to that at the time.
I came back to it, as it kept creeping into my mind – “…who would I feel driven to wanna meet?” And I thought to myself, well, you know, I’ve been listening to your podcasts and there’s these moments where you have guests where it’s like some huge light bulb has gone off. Like the guy that you had who was telling you about The Inner Game of Tennis, and I thought to myself emphatically, “I read that!” I read that ages ago. No offense, but that’s old good news to me! It’s a great book but it’s old news. What I mean by that is that I realized over time that I have something to offer – something I’ve been enacting for awhile, something I want to share, something I think has tremendous value and I want you to know about it, and it incorporates some of the principles and message from that book, and others.
I want to reach for what many would think would be unreachable, which is I want you to be in touch with the little people, the common people, people like me. You have Esther Perel on there. Fantastic. You have Tony Robbins. Fantastic. You have Jack Kornfield on there. Amazing. I ask myself – “but what about me?” I have a niche which is awesome, and I think more people should know about it.
I’m just a common psychotherapist but I want to remind you that the little people are still down here, and they have things to say, you know, and I’m one of them. I want to have you come and have an experience how I work and see how that affects you. We could talk about that on your podcast, and the idea of experiential transformation OUTSIDE of the controlled and contained environment. I just want to keep pushing the envelope. I want to be on your podcast. I think you might be compelled and interested. Perhaps we could help each other for whatever that means. What I do can be transformational, and especially with males who struggle and suffer with depression, so I know that speaks to you.
That’s what I have to say and maybe I’ll– maybe I’ll see you in my future. Thank you for your time Tim! Take care.
Hi Tim, I really would love to listen to a podcast with you and Jonny Kim, his a navy seal/Harvard educated doctor) and a recent NASA austronaut class of 2017. It would be amazing to have him on your podcast!
very nice
Tim! Dude. Man… guy… that 5 bullet bullet Friday with the Columbian ensemble was amazing! It made my Saturday morning. I hope your friends do not hesitate and continue to send you these amazing findings from the interwebs. Thank you for doing what you do. Cheers.
Comment: Terrific insight, coupled with a beautiful deliverance. Question: When can we hear more from this man?
I agree with you at all.
Yes!
Enjoyed it, even more, the second time I heard it.
Graham talks a bit like Waitzkin.
You ask him, he listens, pauses and then answers.
What a delight to hear such a conversation.
Very. Thanks Tim Ferriss for bringing all these individuals who exhibit such brilliance.
I am a retired HR exec and spent 10 years in post-retirement coaching execs in transition to find new opportunities. I always put an emphasis on the job candidate asking good questions in an interview and wonder how Graham would have reacted to a question that I asked every candidate to ask. “If you hired me and we were sitting here a year later doing my annual review and you are thinking this guy is one of the best hires I’ve ever made, what have I accomplished?”.
Liked this episode too and going to listen again.
“Everyone’s genius is right next to their dysfunction.”
Always loved this quote… “learn the rules like a pro, so you can break them like an artist.” Can do better putting into practice the process of learning the rules… getting better.