Good interviewing requires preparation. But if you want to be great, you need to feel confident enough to move beyond your preparation and just go at it.
For the final episode of my pilot season, I return to the fascinating world of investing. During his more than 25 years in finance, Ted Seides has built unique expertise in the area of manager selection - picking investment funds that he believes can beat the market. He’s the author of “So You Want to Start a Hedge Fund”, and host of the Capital Allocators podcast, on which he interviews investors and others about the investment challenge and how to approach it.
This episode provides inspiration for professionals who regularly find themselves assessing people and teams. You’ll learn why meetings are crucial in manager selection, how Ted prepares for these interviews and how his experience as a podcast host helps him as an investor.
“What I found is the more I get stuck in the questions that I want to ask, the less I’m able to effectively listen.” – Ted Seides
We also discuss Ted’s famous bet with Warren Buffett. How did he manage to draw Buffett’s attention, what was it like to meet him for the first time and what can the Oracle of Omaha teach us about communication?
As said, this is the last episode of my pilot season. Please subscribe on iTunes or to my newsletter at the bottom of this page to get notified as soon as this series continues. If there are any topics you want me to cover in future episodes, please let me know via marcel@meetingstrategist.org
Show Notes:
2:08 – From the horse races to Yale: how Ted got interested in investing
4:19 – The system he used to identify his sweet spot in investing
6:17 – The importance of making your own mistakes
8:00 – The charitable wager with Warren Buffett
9:35 – How Ted got in touch with Warren
10:48 – Striking the right tone: “This is me, so here you have it”
13:20 – Reflecting on why his approach worked
14:25 – What it was like to meet Warren for the first time
17:00 – Communication lessons from the Oracle of Omaha: authenticity and consistency
19:38 – The personal characteristics of successful active investors
22:22 – The process of selecting managers and how meetings fit in
24:08 – Relative comparison: how experience helps you ask better questions
26:33 – What you can’t get from a piece of paper: the crucial importance of face-to-face meetings
29:27 – How to address inconsistencies between the general description of the process and specific investment examples
30:34 – What to look and listen for when assessing an investment team’s culture
34:20 – Why ‘we gotcha’ doesn’t work when you find out unfavorable information about someone
37:26 – What investment managers can learn from hostage negotiators and relationship counselors
41:36 – Lessons from Ted’s mentor David Swensen about creating buy-in with the board
43:44 – How his work as an investor or the lack thereof prepared him for life as a podcast host
45:55 – “I was shocked at how much better I am now at interviewing investment managers because of the podcast”
47:18 – How Ted prepares for a podcast interview
49:43 – The trust that you’re able to figure out in the moment what the next question will be
53:30 – Ted’s number one communication lesson from his life as an investor and podcaster
55:11 – What’s next for Ted and his podcast
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Links to people, books, podcasts and other resources relevant to this episode:
- Ted’s profile on LinkedIn and Twitter and the website of his Capital Allocators podcast
- Ted’s reflections on the Big Bet with Warren Buffett, his blog about the start of his podcast and here’s a link to more information about his first book “So You Want to Start a Hedge Fund”. His letter to Buffett can be found on page 16-18
- Ted’s podcast interview with investor Brent Beshore and his episode with Paul Black, who’s mentioned when we talk about assessing culture around the 30-minute mark
- Bios of David Swensen and Dean Takahashi at the Yale Investments Office, where Ted started his career. What Ted said about how David Swensen creates buy-in from his board reminded me of this Harvard Business Review article: ‘Plan a Better Meeting with Design Thinking’
- Books mentioned: What Color Is Your Parachute, the book that helped Ted find his sweet spot in investing, and Fred Schwed’s Where Are the Customers’ Yachts? via Amazon
- Conversation techniques mentioned: To dive deeply into specific investments, Ted often uses the 5Whys questioning framework. This Forbes article discusses the process of mirroring, validating and showing empathy
- Here’s a link to my review of ‘Never Split the Difference’ by former FBI hostage negotiator Chris Voss
- And here are a few articles I read in preparation of this interview:
Ted’s article for Institutional Investor about passive versus active management
Article about Warren Buffett as a communicator
Interesting article about the importance of culture in assessing investment teams
NY Times article about the popularity of self-improvement methods among investors
- If you liked this conversation, you might also enjoy my very first episode with Joost de Graaf, which approaches the topic from the perspective of investment teams. Episode #6 with US attorney David Rudolf focuses on preparation and confidence – topics I also discussed with Ted