Jim O’Shaughnessy is a Wall Street legend and the founder, chairman, and chief investment officer of O’Shaughnessy Asset Management, which has $6.2 billion in assets under management.

O'Shaughnessy is also my friend. We've gotten to know each other since he subscribed to my newsletter, The Profile, and I had a wide-ranging conversation with him on his podcast, Infinite Loops.

In March, O'Shaughnessy participated in an hour-long, live "Ask Me Anything" with readers who are part of The Profile's members-only Telegram chat. (To join, consider becoming a premium member here.)

We discussed the stimulus package, digital assets, intellectual curiosity, and why O'Shaughnessy believes we're living through "the golden age of the individual investor."

Below are the highlights of his Q&A with the readers. (Read the full Q&A here.)

Q: Loved your interview with [your son] Patrick O'Shaughnessy. Can you describe the process of premeditated success?

O'SHAUGHNESSY: Thank you! I’m glad you like the interview with Patrick. So, premeditated success was something I learned from my grandfather. He told me that when you really think things through, you need it to premeditate all of the possible outcomes of what you were trying to achieve and the way you were trying to achieve it. When you go through this process, you sometimes find holes in your knowledge that the process uncovers. You may also find that maybe you really don’t want to do this activity at all. I recommend doing this as a writing with a pen and paper exercise.

Q: You mean it should be a conscious stream of writings on a specific project I have in mind (more like the Morning Pages of The Artist's Way) or using my intellect to brainstorm all possible scenarios and outcomes?

Ideally, both. It’s a bit like a pen and paper Monte Carlo simulation. It’s worked very well for me and I have used it since I was in my early 20s. Writing about something often shows you how well you understand it or don’t understand it! It’s a great exercise end it unlocks a creative stream.

Q: What have you seen are the best ways for investors to control their psychology and emotions during bull and bear markets?

I’ve long said that the Four Horsemen of the Investment Apocalypse are fear, greed, hope and ignorance. Only ignorance is not an emotion.

We unfortunately are optimized for an environment that no longer exists. When our fight or flight instinct kicks in, it literally takes over the decision-making in your brain. That’s why I often say there’s a big difference between understanding something intellectually and emotionally. My solution was to become a quantitative investor whereby all of our models and algorithms that we have built buy and sell securities based on our research. This has allowed me to in essence gate my very human emotional responses using the models.

If quant isn’t your thing, there are several ways to deal with these emotional take-overs. One would be to have a friend or significant other that you can discuss the emotional reaction with, kind of like a co-pilot. I have a friend in Vienna who is not a quant at all, but notices when his emotions are rising, and then he immediately gets up from his computer, puts on some running gear and takes a run, which allows him to break the emotional cycle that he was spinning into.

Q: If you could wave a magic wand and help young people truly understand one thing about investing, what would it be?

I guess if I had a magic wand and could help young people understand one thing it would be that successful investing is much less about financial acumen and much more about emotional control.

Q: What's an effective way to communicate and make an investor understand what risk is?

I like Jason Zweig‘s example of how to teach people about risk. He jokes that what we do currently is show people a picture of a snake and ask them how frightened that makes them. His suggestion, which of course is in jest, is that we would get a much better reading by throwing a live snake in their lap and seeing how that affects them. Now I know this is a joke, but it underlines a profound truth: the real time experience of both gains and losses is very, very different than looking at such things on paper.

I think it’s very helpful for the asset manager to point out all of the flaws in him or herself, what I call human operating system, and then try to make the client understand that we all have the same human OS.

Q: Since The Profile is all about improving our content diet, what are your go-to sources for quality information or education?

So you begin with an excellent resource, Polina's Profile. There are lots of great blogs like Alex Danco, Tim Urban, and really almost too many to mention. The good news is that most of them are also active on Twitter, so you can curate a kick-ass information resource that was impossible prior to social media.

Read the Rest of the Q&A Here

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PROFILES.

— Hollywood's most relentless agent [**HIGHLY RECOMMEND**]
— The secretive trader who built a $12 billion fortune
— The ambassador for the rationalist movement
— The actor who prevailed
— The NFL's top quarterback
— The $5 billion ghost kitchen giant
— The finance app that made trading (too) easy
— Jay-Z's weed lab

PEOPLE TO KNOW.

Hollywood's most relentless agent: I do not mean it lightly when I say this profile has it all. It features Ari Emanuel, one of the country’s most prominent agents, representing Oprah Winfrey, Martin Scorsese, Charlize Theron, Mark Wahlberg, and Dwayne Johnson. But he doesn't just want to be a businessman. Emanuel wants to be a mogul. This profile masterfully details the youngest Emanuel brother's unorthodox rise to success. (The New Yorker)

“The question with Ari was always: How fast, how big, how much of an empire can we build?”

The secretive trader who built a $12 billion fortune: Jeff Yass is the cofounder and head of a global trading powerhouse named Susquehanna International Group. He bootstrapped Susquehanna in part with startup capital plucked from racetrack pots and poker tables in the 1970s and 1980s. Yass’s number one trading rule is also the mantra of every poker pro: there is no surer way to win than to bet against someone who is dumber or less experienced than you. At age 63, Yass has built Susquehanna into a global giant without taking a penny of outside capital. (Forbes)

“All of sports betting, all of playing poker, and all of options trading is making sure you’re betting against someone you’re smarter than."

The ambassador for the rationalist movement: Julia Galef is the host of a podcast called Rationally Speaking. She's also an ambassador of the rationalist movement: a community formed on the internet whose adherents strive to strip their minds of cognitive biases. In her new book, she elaborates on her ideas. "I take these ideas I think are great and try to explain them to a wider audience,” she says. In this profile, Galef argues in favor for adopting a “scout mindset,” rather than a “soldier mindset.” (New York Magazine)

“I often publicly identify as an ‘effective altruist' because it’s easier to explain, and it doesn’t rub people the wrong way the way ‘rationalist’ does."

The actor who prevailed: Twenty-five years after last working with Spike Lee, the consummate character actor Delroy Lindo took a role that changed his career. In this profile, the star of Da 5 Bloods goes deep on his difficult reputation, his abiding self-belief, and his rise to the ranks of great leading men. (GQ)

"I'm still believing in myself, man. I am. I'm not being defined by my circumstances.”

The NFL's top quarterback: Trevor Lawrence is considered the best quarterback to come into the draft in nearly a decade. He will enter the NFL with the billing of a generational signal-caller, a keen sense of self, and a burning desire to prove absolutely nothing. (Sports Illustrate)

“It’s not like I need this for my life to be O.K. I want to do it because I want to be the best I can be. I want to maximize my potential."

COMPANIES TO WATCH.

The $5 billion ghost kitchen giant: After building Uber into a global behemoth, founder and CEO Travis Kalanick got pushed out in the wake of tumult and scandal at the ride-hailing company. Now, he's back with CloudKitchens, a $5 billion stealth startup with no venture capitalists, no company perks, and no relationship with the press. Kalanick reportedly plowed in $300 million from his Uber fortune and later brought in just one investor: Saudi Arabia's sovereign wealth fund, which stuck by his side during the Uber fiasco. Here's what he's building now. (Business Insider; reply to this email if you can't access this article)

"Maybe the people who did go all in on equity will be filthy rich. But that's a huge risk to take."

The finance app that made trading (too) easy: Baiju Bhatt and his business partner, Vlad Tenev launched their company Robinhood in 2013. Their app popularized the zero-commission brokerage, eventually forcing its major competitors to follow, and introduced millions of millennials and Gen Zers to the market. But many are now asking the question: Is the product just a little too good at what it does? (Bloomberg)

“Companies making their products more engaging isn’t necessarily a problem—it’s progress. But there’s also a dark side."

Jay-Z's weed lab: Jay-Z is betting big on cannabis. Monogram, his new luxury marijuana brand, is being grown in a 100,000-square-foot weed factory in San Jose, California. The facility produces 11,000 pounds of cannabis each year. Here's how Monogram plans to turn its underground stoner culture into an upmarket luxury. (GQ)

“The way I approach the illicit world is how Jay approaches life — everybody scores."

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AUDIO TO HEAR.

Chris Dixon on the future of crypto: Andreessen Horowitz general partner Chris Dixon lays out his thesis on the opportunities and limitations of blockchain technology. "I believe, personally, that the most exciting new computing wave is blockchains and crypto," he says. This episode covers it all — base protocols, DeFi, NFTs, social coins, and the future of the internet. This is a really good one. (Link available to premium members.)

George Mumford on the secret to elite performance: As a performance coach, George Mumford has worked with some of the best professional athletes in the world, including Phil Jackson, Michael Jordan, and Kobe Bryant. He uses mindfulness and meditation to break his clients out of fear and doubt in the moments that matter. "When you change a behavior or a habit, you have to experience anxiety," Mumford says. "You have to experience uncertainty. You have to experience discomfort, because we’re comfortable with where we are." (Link available to premium members.)

Tom Bileyu on the power of strong relationship skills: As they say, "Money will solve your money problems," but what about everything else? There's no shortage of wealthy, successful people who are absolutely miserable in their personal lives. In this podcast, serial entrepreneur Tom Bileyu explains what it takes to build long-lasting relationships, create rituals for productive habits, and align your success with your values. (Link available to premium members.)

VIDEOS TO SEE.

Lori Gottlieb on why you should reject the familiar: If you're seeking a relationship, a feeling of familiarity could be a red flag. If you grew up around people who often disappointed you, you might be unconsciously looking for that same feeling in your dating life. Therapist Lori Gottlieb says: "We end up choosing someone who will disappoint us, and then we say, 'See what happens when I'm vulnerable?'" Take a moment to see how your choices are helping you repeat a pattern that keeps you stuck. (Link available to premium members.)

Robert Cialdini on persuading with purpose: As a leader, you want input from your team so you can cultivate a democratic culture within your company. How? You need to create a sense of unity, collaboration, and togetherness. Persuasion expert Robert Cialdini says you can do this by changing one word in your vocabulary. Rather than asking people for their opinion, ask them for their advice. "It invites partnership," he says. "The idea of advice is associated with collaboration and togetherness." (Link available to premium members.)

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