Season 2, Episode 9

Host: Matt Hall

Guest: Dan Villalon

Dan Villalon (00:00): Richard Feynman, he's an American physicist. He died maybe 30 years ago or so. And on his chalkboard, the last thing that he had left there was, "What I cannot create, I do not understand." And I find the appreciation, the understanding, the ability to convey an excitement or an understanding to others is so well facilitated by actually having to have done it.

Matt Hall (00:31): Welcome to Take the Long View with Matt Hall. This is a podcast to reframe the way you think about your money, emotion and time. The goal, helping you put the odds of long-term success on your side. Dan, that's my whistle. Dan Villalon is our guest. And he's a Managing Director and Co-Head of Portfolio Solutions Group at AQR Capital Management. I think really, what you're going to like about him is he like me is obsessed with distilling complex information down into simple palatable bits that we can all grab and use for ourselves.

Matt Hall (01:05): But in his role, he oversees the team responsible for advising clients on portfolio challenges, developing custom analysis and writing white papers and other research. Dan is also a member of AQR's Multi-fund Investment Committee, which oversees the design construction and implementation of multi-asset multi-strategy portfolios.

Matt Hall (01:23): And additionally, Dan co-writes, produces and hosts AQR's podcast, The Curious Investor. I love that title. And Dan earned his BA in physics from Pomona College and an MBA with a concentration analytical finance from the University of Chicago Booth School of Business. Dan Villalon, what a great last name. Trying to say that listener. Dan Villalon, welcome to take the long view.

Dan Villalon (01:48): Thanks Matt. It's great to be here. I love the whistle too.

Matt Hall (01:51): Oh, thank you. Well, I do too. We all need a signature in and out. And I whistled that on my way into the office and the days doesn't start unless that happens for me, so. Anyhow, I wanted to start in an interesting place. You weren't always in the investment business, you one point were in the wine world. How'd you get in the wine world?

Dan Villalon (02:13): It's a bit of a twisted path that took me there, which we get into. But I was a physics major in college and there's a bunch of reasons I chose that subject to focus on. But by the end of college, I realized that it wasn't something that I wanted to continue doing as a graduate student or in my professional life. And I had my quarter-life crisis. Hopefully, that means I'm not due for a midlife crisis if I got it out of the way early. So, the morning after graduation, I just drove up to Napa Valley and interviewed at any winery that would be willing to speak with me.

Matt Hall (02:50): You just got in the car and drove to Napa Valley and thought, "Someone will want to chat with me."

Dan Villalon (02:57): It's funny. I wish that there were more thought or preparation that had gone into it but that's literally what happened. And there were a few people who were willing to chat with me. I wasn't looking for some fancy job. I had never taken a biology class or an agriculture class or anything my whole life. So, I was really going into this completely ignorant.

Dan Villalon (03:19): And one of the jobs I was interviewing for was a barrel roller. And so, wine is stored in barrels and it's aged there for a little while. Those barrels don't stay perfectly stationary through the years, someone needs to rotate them every once in a while. And it looked like that's what I was going to be.

Matt Hall (03:37): So, you come to this position humble and ready to do almost anything, including roll barrels of wine. How did you find your place in that world? And actually, just for the audience has benefit, I've always wanted to have someone from the wine industry on the podcast because I think it takes a really long view or patience and discipline to create a special wine. It's a really, I guess, agriculture in general requires patience and discipline and some luck and some art. So, how did you get in and what did you do?

Dan Villalon (04:13): So, I echo completely, if you ever want to know what long-term, what waiting feels like, wine is it. Because you could have a bottle in glass for 20 years before you have any idea what it's going to be like. And if you open it too early, you'll never know what it was like when it was ready to be opened. Well, so, I got this offer for barrel roller and I was going to have to get my forklift license and start in a couple months. But then something really lucky happened.

Dan Villalon (04:42): And I've never discounted the role of luck in life. The assistant winemaker of the winery that offered me the job quit and she was going to be the head winemaker at a different winery. So, I got a call from the head winemaker asking if I could start the next day, doing something a little more complicated, a little more involved. And I couldn't have asked for something more interesting. One, it was something that I really didn't know anything about. I was enthusiastic and curious but I'd never grown grapes before.

Dan Villalon (05:14): My objective, my mission, my job was to figure out the best way to grow the grapes throughout a season. And this was neat because I think a lot of people when they think of wine, it's this romantic ideal, it's something that's been going on for thousands of years. But in some sense, the methods are also thousands of years old. You have these rules of thumb for making decisions. If it's a really hot week, then maybe you give the plants a gallon of water. I mean, if it's a cool week, maybe only half a gallon of water.

Dan Villalon (05:50): But it wasn't really precise. It wasn't really scientific. And I'm coming at this with my physics background. And what I want to figure out is what are the underlying mechanics? How does this work? Can we do better? Can we do better than these rules that have been handed down generations upon generations? And of course, whenever you get into anything that has both a science and an art component, you encounter some hesitation, some critics, are you destroying the romance of winemaking by bringing formulas to it? And that's what I was supposed to do. What I've come to realize, is the problems that I was trying to solve there are actually the very same I've encountered ever since.

Dan Villalon (06:31): Even after leaving the winery, you start to recognize that certain challenges just come up again and again, just wearing it the different face through your life. So, maybe I'll describe what I was trying to do at the winery, because talk about taking the long view, it was two years before I did what I was supposed to do, which I think for many people is two years is too long. We wanted to produce really just great wines. And the winery I was working for... It's called Pine Ridge winery, the year before I got there, they had just won the number four wine in the world from Wine Spectator magazine. And so, it can only go down from there, right?

Matt Hall (07:13): Yeah.

Dan Villalon (07:14): So, what they wanted to figure out was, "Is there any way that we can grow smaller grapes?" Now, the reason you'd want to grow a smaller grape is if you visualize a sphere... And let's say that's the grape, if you were to shrink that sphere, what happens is the ratio, the amount of surface area or for the grape skin to the volume or for the grape juice, increases. So, smaller grapes have a higher ratio of skin to juice and that's a really good thing when it comes to wine critics.

Dan Villalon (07:47): Because wine critics are looking for tannins and deep colors and all of these characteristics that really come from the skin of the grape as opposed to the juice. So, all else equal if we get more skins relative to juice, we should have even better wines. Okay. So, that was the theory. So, how do you do it in practice? Well, the best way to grow smaller grapes is you just don't water the grapes that much. If you overwater a plant, you would get just giant grapes. You'd have too much juice, not enough skin.

Dan Villalon (08:19): So, what we had to do was figure out, "Okay. How much can I torture these poor things? How little water can I give the grapes so that they continue to live but they don't get it too big? We want to keep these things small and concentrated." Okay. Well, lesson one... In retrospect, this seems like such an idiotic thing for me to list as a discovery, grapes can turn into raisins, raisins do not turn back into grapes.

Dan Villalon (08:49): And so, if you don't water the grape enough, you end up with something that can never get back to. You end up with a raisin, you're not coming back. And I think throughout life up to that point, everything I had done was a process that you could go back on. In physics, a spring, you could stress the spring by pushing it down and it comes back to its original form or in school, if you do poorly on a test, there's a chance that you can do well in the next one and make up the grade.

Dan Villalon (09:20): In nature and a lot of real world processes, there are dead end streets. Once you push something harder than it can go, you might not be able to get back to what you were hoping to get to. And that's the first professional failure, frankly, I ever faced. The first year, I built this model and the model told me exactly precisely, to a decimal point, how much water should I give all of these different grapes in order for them just to eat by and survive.

Dan Villalon (09:53): I didn't leave any room for error. I had a sense of what the weather forecast was going to be for the next week. So, I knew how much to water them. Forecasts always have errors and I was just too aggressive. The winery had about 300 acres of vineyards throughout Napa Valley. We ended up with several tens of tons of very high-end raisins after that first year. And it was nearly fatal to the program that I was trying to start up.

Matt Hall (10:24): But the big takeaway, it sounds like I find this really interesting because it could be a perfect metaphor for the time we're in now is like we could become a raisin. We all have a breaking point. There isn't enough self-care or watering. We all may reach some breaking point. And we have had a guest on a psychotherapist who has said that, "Toughness is less about how sturdy you are and more about how soft your knees are.”

Matt Hall (10:53): "How much you can bend and flex and move." And I think what I hear you saying is in the grape lesson, they didn't flex and move always. They could break. And the breaking point equals raisins. And even though the spreadsheet made it crystal clear what to do in reality, it didn't bend back.

Dan Villalon (11:12): That's exactly right. And that was the lesson I carried into the second year. You'd have to have bending knees. You have to have a little bit of extra water in the ground in case you have a day that's just hotter and drier and windier than you had expected. Because it's very often, you just can't get back to the program when you're forced and you can't handle the stress. So, in the second year, what we did was we figured out, "Okay. Well, there's this an optimal, there's a perfect amount of just a little bit of water to give these plants. But we should probably give them a little bit more. We're willing to do something less than optimal in order to realize the long-term result."

Dan Villalon (11:58): And there's other things that we learned along the way, different grapes have different tolerances for stress. Cabernet Sauvignon, that's what the winery was best known for. That is a grape that can take a lot and it can take just brutal, dry heat and be okay the next day. Chardonnay, not so much. You have to be more gentle and figuring out... I don't want to personify the grapes too much but figuring out their preferences or better their tolerances is the key to figuring how do we endure this difficult program that's going to take us through an entire year, an entire growing season so that we're successful in the end when it comes time to harvest these things?

Matt Hall (12:39): What did you learn about yourself in that experience?

Dan Villalon (12:42): I think one of the things that I learned was I love new challenges. I love new problems. Like I said, I had no background in viticulture. I actually started taking courses at the same time at UC Davis. They've got this fantastic viticulture and enology program just to try to play catch up with what was going on. What I liked about it was you might be able to succeed at something if you're patient with the process of learning.

Dan Villalon (13:16): If there's some new discipline, a new set of problems that you haven't thought of before, you got to be gentle with yourself. This is advice I give to all folks starting out at AQR. We get new analysts and they're ambitious people and they just can't wait to hit the ground running. And they always ask for my advice. I'm the old timer there and what would I suggest they do to succeed?

Dan Villalon (13:37): The first thing I always tell them is to be patient with themselves. The first six months are really about just figuring out what the problem is. You've got plenty of time after that to actually go about solving it. And I think that is a huge predictor of success. Often if you dive in too early, you end up with knees that are too stiff for when the problem actually comes and gets you.

Matt Hall (13:59): Yeah. You have I would say the confidence to show up at a winery and you may say it's humility or just intellectual curiosity but you have the confidence to show up and say, "I could be valuable here. I could do something without any prior experience." You also had the nerve to say, "I'm going to be a physics major." I don't have any friends who are physics majors. How'd you make that decision?

Dan Villalon (14:27): You were very nice in describing my mindset there. I think for physics, I have to admit, I think it was some combination of curiosity, which is always great but also arrogance. I wanted to know how the universe worked. And I thought physics was going to be the clearest and most powerful way to learn that. To me, the universe in high school was a bunch of atoms that just moved around and bounced off each other. And I want to know why was that.

Dan Villalon (14:56): And so, physics seemed like, okay, this would be the place where I go for all of the answers. And with that knowledge, I should be able to apply it to all different contexts. The thing that I liked about physics was it was the first place where I just got my butt handed to me over and over. You had these problem sets that were just so brutal and would take multiple days. And it was a great introduction to taking the long view academically.

Dan Villalon (15:23): I would go into courses, get crushed early on and then just try to hack my way through, find buddies that I could work with, lab partners, study buddies, just to get these problem sets done. In fact, my lab partner throughout my time in undergrad remains one of my best friends today because we had this shared intellectual torture for so long. It's a great thing for building resiliency and I think relationships.

Matt Hall (15:50): So, I know there are theoretical and practical components to physics. And you turn out to be a maker of things. I know this about you now. You make stuff. How did you get inspired or find the audacity to believe you could make more than just like a father's day mug?

Dan Villalon (16:12): I bet my dad doesn't have that anymore. Yeah. I think up until then, whenever I was supposed to make something, it was because I was told, "Make this mug. Make this bench." And it was never really anything that was useful. They were just holiday-appropriate I guess. It was physics, it was the first time I ever made something functional or something that I would need. And I caught that bug and it has never gone.

Dan Villalon (16:42): I remember one of the first times that had to build something. We were in lab and we had this device, it was a laser or something and a screw was missing. And it's like, "What?" At first, where did the screw go? Second, these are weird components. This is a custom built screw for a very specific tool, for a laser. You can't find these on Amazon or at the hardware store. And we couldn't do the experiment.

Dan Villalon (17:08): So, my professor said, "Well, Dan, go down to the basement." We had a machine shop in the physics building and there's this machinist there, [Glen Flo 00:17:17]. And he said, "Well, what's the problem?" I said, "Well, I'm missing a screw." He said, "Well, let's build one." I had no idea that was even an option. And I had no idea how to build it. And Glen was a maker. He said, "Well, let's take a look at the threads. Let's measure them. Here's the metal. Let's turn this piece of metal into a screw."

Dan Villalon (17:37): And from that day on, whenever I was in the physics building, I would always go down to the basement, see what Glen was working on. He coached me through building numerous things through college. And in fact, he was instrumental to my senior thesis. I was really interested in what physicists call nonlinear systems or what most people just refer to as chaos, unusual or crazy outcomes.

Dan Villalon (18:02): And I had to build a machine that would have a chaotic process. And then every second or every two seconds snap back to starting conditions. It was called controlled craziness. And to actually make controlled craziness, I needed Glen. I needed to actually build something to prove a point. And that was just something that I took away after college. And I think that itch to make stuff drives a lot of what I do today.

Matt Hall (18:31): So, someone told me you make surfboards, you yourself by yourself. You don't have a surfboard company. You make a surfboard. What makes you think you can do that?

Dan Villalon (18:46): Before I started at AQR, I had a little bit of time off. In fact, I had a week off and I'd heard of these boat builders up in Maine. And they were wooden boat builders. So, real traditionalists. And they had just started getting into surfing and they were building these hollow wooden surfboards. And I just thought that was so neat. How could you actually construct something where you need to bend wood in order to fit some form?

Dan Villalon (19:14): That I went up there, spent a week with them before work started. And I think it was 10 hours a day just learning that craft. I don't claim to be expert at it. But by actually making it something, by the process of creation, you develop an understanding or appreciation for all forms of that thing. You never look at say a surfboard the same way if you've built one before. And you never taste a wine the same way as if you've made one before.

Dan Villalon (19:46): My favorite physicist, Richard Feynman, he was an American physicist and he died maybe 30 years ago or so. And on his chalkboard, the last thing that he had left there was, "What I cannot create, I do not understand." And I just thought, "God, I was looking for a motto." He took care of it for me. And I find the appreciation, the understanding, the ability to convey an excitement or an understanding to others is so well facilitated by actually having to have done it yourself. Podcasts are another thing. The appreciation I get for hearing a podcast is double. At least for someone who's actually tried to do one, he just learns so much about not just the surface but everything that goes into it.

Matt Hall (20:32): [inaudible] made a ukulele?

Dan Villalon (20:34): Oh, yeah. So, I made maybe three different surfboards and then I realized I had a problem. Well, one was, all the time I was spending on these things. But the more practical problem was I can't use three surfboards. What good are these for if no one is able to enjoy them? So, that's when I switched over to instruments. So, I started the ukuleles. The first one I ever made, I gave to my father-in-law. He does not play music. So, I figured he'd have no idea if it was good or bad. From then, I started making it for people who actually knew what they were doing.

Dan Villalon (21:08): And I find that to me, I get such a charge when a project is done and I've handed it off and someone else is using it. I try to be as rigorous as I can when building something so that when it is done, I have no doubts about the thing. I think a lot of people who torture themselves thinking like, "Oh, I could have done it this way or maybe I should have done it this way," when they're done, it's a sense of anxiety because they're always wondering how they could have improved something. For me, I try to torture myself throughout the process so that by the time I'm at the finish line, I'm ready for the next thing and not having to look back anymore.

Matt Hall (21:46): How nice. Okay. Well, let's shift from your interesting background to more of current life. So, you created a podcast. You have a cohost. But you have a podcast called The Curious Investor. I like it. I think we're trying to do similar things though we take a slightly different path there. I want you to tell our listeners a little bit about The Curious Investor, the aim of it, the inspiration for it.

Dan Villalon (22:16): Great. Okay. Well, The Curious Investor, I'll start with the title. The ambition that my cohost has had was not to sound smart. All we want to do is uncover some important ideas. And so, when we were coming up with the title, we were thinking, "Okay. Well, the most widely read book on investing ever is The Intelligent Investor. Let's not make any claims as to our intelligence. Let's make this The Curious Investor."

Dan Villalon (22:43): What should people be curious about? What information should they be excited to learn about? And that was the driving force in terms of the content. In terms of the tone though, this was fun. So, my office mate is the cohost, Gabe Feghali, and we were just sort of chatting one evening at work about this old NPR show called Car Talk. He was saying, "Hey, my parents used to listen to this show. I don't know if you've ever heard of the Car Talk?"

Dan Villalon (23:10): Man, my jaw just dropped. I grew up with that show. It was just so funny. The hosts, Tom and Ray Magliozzi, they were total authorities on the topic but they were having fun the whole time. You almost got fooled into learning or being interested in their area of expertise. And it was just so easy to listen to. That was the precipitating Genesis of the podcast was, can we do something like Car Talk?

Dan Villalon (23:40): So, we had to make a whole bunch of decisions along the way, that thought for our podcast compared to most of the ones that we'd heard in the investment community was it was going to be content-centered. So, we take an idea and then the host would be speaking about the idea rather than the guest being the central figure. When we were doing research, we came up with a list of the files called podcast do's and don'ts. And these were going to be our 10 commandments when we were recording these things.

Dan Villalon (24:06): And I remember the most important one was never treat any fact or idea in a vacuum. Everything needs context. So, what does the number mean? In finance and investing, we talk a lot about risk-adjusted returns. And we say, "Oh, this thing has a risk-adjusted return," or the more fancier, "sharp ratio of 0.3." What does that mean? Is that good? Is that bad? Anything we had to provide some comparison, a comparison to something that the audience knows about.

Dan Villalon (24:36): And if it's a new idea, how does that relate to old ideas? For me, the driving force that underlied how we actually wrote and ends scripted the episodes. The guests, they could just talk about when or whatever they wanted but we would always have to take a cut and say, "Okay. This is how it relates to something you know about. This is what it means. This is if that number is higher or low." And we hoped that that thread carried through all of the episodes.

Matt Hall (25:02): Yeah. Car Talk. Yeah. I remember Click and Clack. I think they were from Boston, right?

Dan Villalon (25:08): Yeah.

Matt Hall (25:08): And they're brothers?

Dan Villalon (25:09): Yes. Yeah.

Matt Hall (25:10): And I think you nailed it. They would make talking about cars so funny and interesting that even if you didn't know anything about cars and didn't desire to do your own repairs, they had fun banter. They were fun people to listen to. And they had good sense of humor.

Dan Villalon (25:29): It's tricky because when it comes to investing, it's okay to have a sense of humor. I think it's actually a good thing. But you want to be a little more careful with that when it comes to investing than maybe with car repair. But we still tried to have a little bit of fun. And so, at the end of all of our episodes, this is the Easter egg for the serious listeners. After we did the disclaimer... “Past performance is not indicative of future performance,” we'd always include a couple of our favorite outtakes from the interviews.

Dan Villalon (26:00): And a lot of times, it was just great material from folks that you would have never expected based on what you know about them from the outside or what you heard in the episode, this humanizing moment or if like, "Ah, you know what? Not only did I learn something from this person, I think I could get along with this person too." And I think that's one of the neat things with the podcast medium, it's inherently more of a relationship with the folks that you're listening to than say writing a paper. And so, I think highlighting some of the humanity is vital to differentiating this medium versus others.

Matt Hall (26:37): So, you've had two seasons of the podcast. What have you learned in this process? I know what the idea was and the inspiration. You've had some big time investment people on your podcast. You've also had some food people even. There was an episode where you had a lot of big time food people on the podcast. I've had a Danny Meyer on my podcast and I know you've had one of his colleagues on the one that had a connection with food. What have you learned from two seasons of doing it?

Dan Villalon (27:11): I'd say the most surprising thing at the risk of sounding like a sentimentalist, it gives me great hope for humanity. The thing that surprised me most is that the episodes that I thought were going to generate listens and the ones that I thought were going to be less listened to, I wasn't able to predict. And the way I was thinking about it was, "Okay. Well, if I get some famous chef, I'm going to get just a ton of listens." Or, "If I get some famous hedge fund manager, I'm going to get a ton of lessons."

Dan Villalon (27:39): And maybe the episodes where I have just someone that might be good but isn't famous, maybe I won't get too many people clicking on it. And actually similarly, we were thinking, "Okay. Well, we made episodes that were as short as 14 minutes and ones that were maybe as long as 23 minutes." And it was a little bit of a span there. And another one of my thoughts was, "Okay. Well, the longer episodes, people probably won't click on or listen all the way through and the shorter episodes will be more popular."

Dan Villalon (28:06): We found the opposite result. And this just went against everything that I had been told in terms of how people consume content. Typically, I'm a paper writer. When I write papers, I say, "Okay. Well, I got to keep it short. I got to be mindful of the audience because the audience doesn't want to spend all day reading a paper." With a podcast, I found that the audience is content-driven. They actually don't really care that much about the length. And they also don't really care that much about if it's a famous guest.

Dan Villalon (28:38): And this was not at all what I expected. And I've spoken to a few podcast hosts and producers subsequent to this realization. And they're like, "Yeah. No. Dan, of course. It's because people listen to a podcast for the content. If one episode is twice as long as the other, the listener assumes it's because you have twice as much content. And they are more than willing to listen to the whole thing.

Dan Villalon (29:02): "The only reason it's long is because the host who they trust has determined that it's worth going this long." And I just found that so refreshing that there is this medium where people are actually hungry for content and they're willing to give you an extra 10 minutes, 30 minutes, whatever it is. And they're willing to listen to someone that maybe they hadn't heard of before because they're still likely to learn something.

Matt Hall (29:24): Yeah. I can relate to that experience. It's hard to predict what people will be most interested in. It's really tricky. It's not the famous name.

Dan Villalon (29:33): It's one of these things, every thought I had going into it, I thought famous name. We need to have a famous name to kick off this part of the season in order to generate interest. Not how it works.

Matt Hall (29:43): Yeah. You work with very bright people. You work at a firm who's highly technical. How did you become the distiller of complicated information? How did you become the person capable of simplifying the messaging out of a place like applied quantitative research?

Dan Villalon (30:10): Yeah. The name itself connotes an impossibility in terms of comprehension. I think for me, the number one thing that's been helpful is realizing that the goal is not to sound smart. The goal is to be understood. And with that simple guiding principle, it becomes easy. It helps you answer certain questions. Like one, one extension is dropped the jargon. I think a lot of people who want to be perceived as smart like to use fancy language so that they sound smart. That's one of the worst things people can do to be understood.

Dan Villalon (30:46): And so, figuring out, "How can I describe some concept in terms that don't have any jargon?" You can write it down, cut out all of the scientific sounding words and come up with a synonym. Does it hold? If it doesn't, this could be painful. If it doesn't make sense, you probably don't understand it well enough in the first place. It can be tough at first but this is definitely a case of practice making perfect. I'm a visual learner. I find pictures always make things easier, especially if I can draw it live. It's so much easier for someone to follow.

Dan Villalon (31:21): My favorite physics professor in college, the advice he always gave was, "If you can't solve a problem, draw a picture. And if you still can't solve it, draw a bigger picture." And to me, this process of refining what's the visual representation of this thing that I'm trying to understand, it's really helpful. For audio, I find that analogies are great. I think all too often people shy away from analogies because you lose something in coming up with an example that isn't exactly the topic.

Dan Villalon (31:51): But I think that's wrong. Analogies give some reference point for people to understand what it is that you're trying to teach them or convince them of. People are pretty good at paying attention to stuff that they understand. And if you can give it a twist, an analogy something they don't expect to hear, I find that those are great tricks for the process of distillation because it sticks and focuses minds.

Matt Hall (32:14): Yeah. Okay. So, what do you wish more of the listeners of this podcast understood about successful investing? You work with some of the smartest people in the world. You even have awards for the best new ideas around investing or papers around investing. You have The Inside Awards. You have I think the ability to hire some of the most talented people. You are truth seekers. What do you think knowing what you know that you wish more people understood about what it takes to be a successful investor?

Dan Villalon (32:52): It's funny that you gave so much context for the question because my answer is going to seem diametrically opposed to all of this reaching for perfection and excellence. I think the single thing people need to better understand about successful investing... I'm going to steal this from Cliff. Cliff Asness is the CIO of AQR. I'm sure he stole it from somebody else. But that is a decent process that you can stick with is probably better than a perfect, a great process that you have to abandon at the wrong time.

Dan Villalon (33:27): Because this is something I learned in Napa, pushing the grapes for perfection. You get raisins when just a little perturbation occurs. With investing too, it's such a competitive field. People take it very personally because it's their wealth. They want it to be as good as possible. And so, they over-engineer certain decisions. They are overly precise in terms of their expectations.

Dan Villalon (33:51): Markets are about the noisiest process. I think I've ever... and this is coming from a guy who studied chaos in physics. Coming up with some process that is robust - So, many people are focused on rigor - it's really robustness that you need to worry about. Coming up with something, it might not be perfect but as long as you can survive doing it for a long-term, you're more likely to do better than the one who was so precise in creating something that ultimately they had to sell as soon as they saw their first loss.

Matt Hall (34:22): Well said. Well, Dan, I appreciate that you are making things to help us understand them better. I like the way your brain works. I mean this as a compliment. I think it's handsome. And I'm thanking you for letting us in for a minute to examine your journey and what you do. If people were to study you more or learn more about you, where do you want them to go or what do you want him to do?

Dan Villalon (34:48): There's an easy way to do it and then a slightly harder way to do it. The easy way would be just to give The Curious Investor a listen. I'm not going to ask for any ratings or reviews here but even though it was definitely a team effort, my cohost, my office mate and I wrote produced the whole deal. The way it was structured is very reflective of how it is that I think, how it is I try to explain and describe a problem.

Dan Villalon (35:15): And so, if you ever wanted to get in my head, listening to that show would be pretty good start. The way that would take a little bit more effort. If you want to know who it is I want to be and when it comes to... Wow, explaining stuff, Dan really likes to do it. What is my beacon? What is my North Star? It's that physicist, Richard Feynman. He's written a ton of books. One is called Six Easy Pieces.

Dan Villalon (35:38): And what he does is he takes six concepts from physics and describes them arguably at the eighth grade level. And these aren't simple concepts. One is quantum mechanics. But when you read that, you actually understand the intuition for what's going on. And to me, that's the greatest moment when you encounter an idea that you'd never thought of before, when you see a picture that you could've never visualized before, that moment of discovery is something that gives me such a charge. That's who I try to emulate when it comes to what I do, what I create, what I build.

Matt Hall (36:15): Wonderful. Well, I can't wait to be with you sometime in person again. Until that time comes, I look forward to sharing this episode with the listeners. And I really appreciate your time that you spent here with us.

Dan Villalon (36:26): Thanks so much, Matt. This was a blast.

Matt Hall (36:28): All right, thanks. Dan. Dan said he makes surfboards and ukuleles. What's the last thing you've made? Maybe something that took a long time. Please note, the information shared in this podcast is not intended as advice. The intent is to share meaningful experiences. I am likely not your advisor nor wealth manager nor financial planner and my opinions are my own and not necessarily shared by Hill Investment Group. Investing involves risk, consult a professional before implementing an investment strategy. Thank you.