No Small Boy Stuff, Investing Wisdom from Nassim Taleb, plus ChatGPT Prompts We're Using

what's up sam hey you like the you like the fit where did you get that our boys at jam sent it over the no small boy stuff christmas edition i feel like got ka rude to wear i know i could be what i want to from at all in it like a days off on a roll year you know it's pretty funny i actually used the phrase no small boy stuff like kind of a lot yeah i remember the guy who tweeted it i think his name was but bengal golly eighty seven and this is back in twenty twenty two he said best business slash entrepreneurship podcast out there big money that is no small boy stuff i love that and that's basically the phrase that we use for this podcast a lot no small boy stuff frankly i kind of used it a lot in my life like i don't know man that's small boy kind of stuff like it's sort of like an in succession where they say you're not a very serious person it's kind of like that i also used the phrase but i'd never say it because saying it to me feels so cringe but i think it like a thousand times for every one time that i say and every one time i say it it feels so awkward to me it's like saying it's like saying just do it in the nike slogan way something like you don't really wanna say that hey guys yeah this you know in the fourth quarter we just like baby just do it and then they'll be like what why are you saying logan's at us but i do think it a lot it's actually like think it a lot meaningfully it's affected the trajectory of my life is to use this phrase and because there's so many situations where there's like a little small boy response oh i'll i'll behave like a little small boy in this situation or yeah that phrase and what i'm ahmad said recently about what will make the better story that has had a a fairly meaningful change just and you know it's only been a few weeks but like i i think about that actually a lot he also says something else where he was talking about it was basically so comfortable with this like ten year plus odyssey that he's been on building this and we're like wow you've been doing this for so long and wow you did this for years before you had really any recognition or any funding and he just kept going and he was just like yeah i persist he was just like you he's like i think that's what i do he's like i i i didn't really think about it that consciously but like i'm pretty comfortable pushing the boulder for a long time up the mountain and i guess i realized like i guess that's my like competitive advantage like i in it for the long haul and i'll just persist no and it's like and we were both like small like yeah quick intake of breath what do you wanna start with today alright i got a good story for you so there's this great in the same tale quote or tweet where he tal lab who wrote black swan and anti fragile he's kind of this like contra thinker was he like a successful hedge fund investor but he was successful because he had an interesting life philosophy and then he became like a a thinker is that his believe so i believe so i believe he's like a successful trader and part of his success unless i'm mixing him up with somebody else a part of his success was that he he noticed that humans are we would rather win frequently in small amounts and then lose a bunch when we're wrong it's like gambling it's like playing crap right you know one roll the dice you made a little money two rolls that i you spend a little of money but eventually you roll a seven and it wipes out the entire board all of the chips go away but he's like humans are more comfortable with that versus he was willing to loo bleed a little every day and looks stupid every day for years but then when the his big you know sort of like the big short when his big bet pays off in this contra bit he's off he makes zach all the money in one day got it and i i think that's his story if it's not his story his book is talking about the guy who does that so i can't recall if it's him murphy if he's the author or he's the author and the the the hero of the story okay so he tel tweeted this thing he goes i con that if you gave an investor the next day's news twenty four hours in advance he would go bust in less than a year and this is basically the back to the future premise right so i don't remember the movie back the future but what's his name bi or whatever ben he finds like the sports betting book that tells all the winners for the next decade of exactly and he goes back in time and then he's just becomes a gazillion because he knows the scores okay so like let's take yes if you knew the exact score you have to be pretty dumb to not win what these guys did when what the same tele was saying is i can give you the news so not the price change but i could give you the news and i bet you would trade incorrectly dude i think about this all the time by the way all the time i think if i know what i know today but i was ten or fifty years ago how would i capitalize on that i think about that all the time right and you know usually the easy answers for that oh just buy bitcoin i just buy google right like yeah it would actually wouldn't be that hard if you if you could convince yourself hey do this one thing and just shut up and trust me like you doing don't touch it for fifteen years now what these guys did was a little bit of a different experiment so what they did was they took a hundred and eighteen as they call them adults trained at finance and they did the crystal ball test and the crystal ball test was as follows they said we're gonna give you money so they gave them fifty to dollars each so i said you have fifty bucks and you get to place trades and you're gonna trade but we're gonna before you make a trade we're gonna show you the front page of the wall street journal the actual front page of the wall street journal from fifteen random days in the last like i think twenty years something like that okay so fifteen random days we're gonna show you the front page the wall street journal and that's a wednesday edition and you're gonna place the trade that would execute on the tuesday so the day before that news so you had the news at twenty hours in advance they blacked out the stock prices so they wouldn't just show you oh johnson johnson's up twenty percent right but they would say like there would be the headline about johnson and johnson they would just red reject the actual stock price johnson and johnson beats earnings beats earnings exactly record record unemployment record jobs posting fed indicates blah right things like that and by the way anybody can go play this game online there's like a link to it we'll put it in the show notes but you can go actually do it yourself i did it too now there's a couple other caveats that's when you go do it which is it's not just a buy and hold because what i was gonna do i went did the i was like cool this is news from fifteen years ago i'll just put all my money in buy and i won't trade i won't do anything else for the next virginia year i know there was a bull market so i don't need to be smart but the way that this test was designed was the trade execute and you either go up or down that day so it's kinda like the trade closes that day you know i mean you get one day gain based on the one day news okay so they do it and the results are not good as you might expect otherwise i wouldn't really talk about this so the results are not good half the players lost money even haven't been given the news one out of every six players lost everything and the way they lost everything was they they let you trade on leverage so you can trade up to like twenty x leverage if you want to in this thing like an options trader could or you could just trade or you could skip you don't even have to trade any given day you could just say pass i i don't i don't feel confident an example headline would be like an example trade would be they would see something that says like fed is gonna cut rate today i guess you would assume that the index is gonna go up like a couple percent so you would bet on the index or bet on what basically the s and p five hundred or it's the the thirty year treasury so that you can best best you can bet on one of those two things you bet you buy the sp index for that day or you could short a bond you go longer or short or you can go longer or short the bond right so that's let me just show you an example so like this is the wall street journal that they the article that they show you so it's obama does something and then you see this business in finance section and talks about rupert murdoch chesapeake energy says that their ceo is gonna step down auto sales are up homeland security says blah blah right so there's all this there's all this news and so you then go here and you place a trade so you say alright i'm gonna go in this in this little game here you could see my screen where it gave me a million dollars so i'm gonna a trade and it says today's movement i you know i bet a million dollars so i use my full stack with no leverage and the day was up point six two percent so i got an extra sixty sixty two hundred dollars right then it gives me the next one and it says oh there's a there's a deadly plane crash iran is doing some shit okay cool bubble kraft doesn't talks to acquire this brazilian company and they're just black out any of the stock price news right you read this and you could decide what you wanna do and you do that over and over and over again so fifteen fifteen days in history and they tried to do it as fifteen like they did a third of the days were like fed quarterly meeting days a third was jobs reports and a third was complete randomness and they didn't they're like we're not trying to trick you there's no we're not like cherry picking like misleading days these are just actually like random front from pages okay this is an awesome experiment and so okay so back to the results now so like i said half the people lose the money one out of six lose everything because they got over leveraged the average person was only able to gain three point two percent so even being given the news during that era the market was up on average i think fifteen percent a year over the last fifteen years i don't know when this is done correct right but again these are like one day trades right so you don't you're not just like buying and holding for oh it was for fifteen days the experiment was a fifteen day experiment exactly got okay and the and so okay now why right there's two ways you could lose in in investing one is you bet wrong meaning you pick the wrong direction you think it's going up it actually goes down so basically even given the news there were basically only able to bet the direction correctly fifty one percent of time so it's the same as if you know you've just flipped to coin you would have been right the same amount of times as you were being given the actual front page of the wall street journal okay so information doesn't lead to actual insight especially news the second thing is that why do they do poorly they bet sized very poorly so when you had an event even when you were correct people didn't size up their bets enough and when they're incorrect they sized up their bets too much for the level of con conviction that they had and you know this doesn't go in line with what people think so they surveyed people separately and basically seventy percent of people thought that even if they got the news you know sort of like like basically they thought that even four week old stale news would be predictive and you know seventy percent of people thought that but but in this case you it just showed that even you know one day fresh news doesn't even really help you okay so then they went and they did an extra experiment they said go okay maybe those hundred and eighteen you know financial trained adults maybe they're not the best of the they went try to find the best of the best the best of the best actually did better so they went found five people that were you know hedge fund guy the head of trading at a top five bank seasoned macro traders so they're used to trading on this type of news they're considered the best in the world at this and they actually did better so what they did was all of them finished with gains so all five was gains on average they were up a hundred and thirty percent and they also didn't bet on one out of every three news things the one of the big ways that they were better was they just didn't bet all the time whereas the casual was too active okay what else did the pro do differently they were only right six percent more so you know if the i think if the the at the the the test group was right fifty one percent the time if it's going up or down these guys were only right fifty seven percent of time it wasn't like not they correctly interpreted it but when they were right they bet size properly and they never risked too much of their bank roll to where they couldn't recover and so isn't that amazing that you know only being you know six to ten percent better at your predictability but would yield a much bigger result right three percent average gain for the test group a hundred thirty percent average gain for the for the pros so it's the small edges that can make a huge difference when you apply leverage properly which was the the bet sizing and what's the takeaway that nas nas said which is which is what well he was saying it in a polarizing way he goes i can gesture if he gave investor the the next day's news he would go bust in less than a year got and and this kind of this basically showed that one out of six would go bust because they would get over z around this perceived edge that doesn't exist and on the whole most people would just do worse than if they if they didn't have the news it's no better than random right and that's actually one of his books fooled by randomness and at the end they use this quote by ray dahlia in there this is a great quote it goes he who lives by the crystal ball will die eating shattered glass did that's insane so like that's it's weird that multiple smart people come to that conclusion that i never would have come to like i i would have thought like i i guess everyone have thought that if you know the future you know the news you absolutely are going to outperform exactly exactly the counter wise conclusion let me tell you one one other related one said there was one other story here that was kind of interesting there was a real world version of this where a hacking group got access they hacked the press release system so they had access to the next day's press releases that companies put out when they have like major announcements earnings results etcetera they got access to all of the press releases that were coming out the next day and they were using it as like their own form of like you know home insider information right they were able to get insider information and so they could place a bet in the market overnight or the next morning and that's like obviously that's like a twelve hour leading indicator maybe because like if you're if you're gonna fire your ceo you submit the press release maybe at five or six pm on a went on a thursday and then nine am on friday you announce it or the or the the wire goes live something i don't know the exact timing i would imagine that it's a it's a tighter window that because there's too much leakage but even a twelve second advantage would be and a huge advantage if you knew twelve seconds ahead of time what the news is about to be you could just push the button right that's all you gotta do that's like an interesting like you know like hubspot for example whenever they have a that i'm a shareholder of whenever they have like an earnings i like i know when it's gonna to go live that day so someone is like writing that and they've submitted it to i forget what the p r com what the things called it's a popular our news wire or whatever yeah like the popular thing is that is kind of an i did i'd never even realized that that's why i just rules right when i was at amazon you couldn't trade the stock you a there's a window it's like a frozen window so x days before the announcement you can't make any trades oh i know that one i'm saying the employees of the p r oh right right the why they probably have the same right this yeah i i didn't even think about that as a leak tell you the when i when i accidentally did that trade and then i had to go to the what were they like you're an idiot so i i'm like i've learned about this afterwards right i'm a start up kid i don't know anything about this we get acquired i you know i make a trade and now i'm like oh shit well i'm a trade so we're at a subsidiary of amazon right you bought amazon before you sold to amazon i bought amazon stock i bought more where amazon stock or something or i sold to i know remember what it was and i i was like oh shit i just did i just inside our trade did i just get my hands dirty with a little big boy business and so i'm like oh shit what do i do that i you need to go speak to the general counsel and i was like what so i get a meeting with the general counsel urgent urgent possible possible big money move made and i send the email to get me a meeting stat i go in and he's like so what what happened and i was like i went and made a trade you know i'm in the window and know i'm executive so hang up taking me while i was up i'm a bad boy i'm bad i'm in a bad boy and take a away and he's like how much you bad boy and i was like i was yeah i was like a hundred and fifty grand and he was like it's okay you just my lunch is outside can you bring it in before you eat he was like this is for actual execs at the actual company who make actual trades i was like okay got you gotcha gotcha me us that's actually hilarious see just like totally dismissed you but what about let finish a story about the hackers so let's put you and let's let's test your criminal mastermind which i love i love doing this by the way how would i how would i cheat if i was gonna the way you know that it's always the women always think to themselves how would i get away from this bad person trying to hurt me and the men always think in this in the they're they align with the criminal would i be the bad person like how would i get away with this crime that's like a i i i realized that i'm watching a lot of true crime it's so go ahead i like this experiment so you're the hackers you get this but here's the problem you they're like sam we got it we hacked him you know dave over here in the corner did it he got into this we got root access and they print out all of the press releases coming out but they put it on your desk they're like hey we got like an hour we gotta make trade and now there's sixty thousand press releases on your desk what do you do i guess pick like a random five and whole and and and act on those as soon as yeah i mean it's that's a that's a very challenging situation i guess it's a it's a challenging so like they hate that the the first five and if it's good news by the stock if it's bad news somehow short about i even know to that so guess i would only find like the five good news ones right you're like i think i would still just end up holding the index fun vendors just say doing exactly what i always do eighty twenty stocks and bonds baby so what what they ended up doing was they were like alright you you you sort of need to do a search function to figure out what news affects the price the most in a positive or negative direction and i think what they figured out was that it was merger announcements that would be the highest kinda like volatility for the company that was getting acquired because it almost always gets acquired like a fifty percent premium to the way the stock was trading and so i think what they realized was we need to be able to quickly discard ninety eight percent of the news and information because it's noise right which it goes back to the same experiment right the most of the news of information is noise the secret is figuring out what is actually signal and most of us can't do that and we over overestimate our ability to figure out signal versus noise and so they they figured out the signal it was these merger things and they even they were only right in their predictive ability about seventy something percent of time was enough to make hundreds of millions of dollars very quickly before they got caught for doing this and then they all went into jail but isn't that cool also i that's the ending when we sold the hub when we sold the hubspot i think the share price i think it was three hundred and fifty dollars and then like the week they announced it it went to like four hundred and sixty dollars just something like this see anyone can go back and look at it was february of twenty one and damn sam the needle mover over here well i so that that stock price went like i i guess it's a market cap of like one or two billion dollars and i remember going to kip the cmo i go you're welcome he's like oh yeah it was this acquisition that got mentioned one time in our earnings call it just barely it wasn't the fact that we had just announced that we grew by forty five percent and have been compounded growth of like this this this and i was like they'll yeah c hospitalization is difficult to prove yeah i great yeah i'm like you don't understand though can i tell you alright so we two or three years ago we talked about ai girlfriends i sort of understood it because i like have actually developed like pretty good friendships mostly via text messages i think a lot of people who have group messages here feel the same way i didn't entirely understand it but in the last two or three months i've been using chat gb in a way that now i'm like yeah this would go away i would be very upset and i understand why people were very upset when they're when their ai girlfriend replica got when they did like a software update yeah and so it basically i've been using chat gb as like my thought partner slash assistant slash therapist and you actually said something recently that made it a lot better so i sat down and i'll explain how i've used it but i sat down and i said hey can you ask me all the questions that a therapist or a life coach or an executive coach would ask and we could spend a few hours but just me downloading giving you a download on my life and i did that and since then it's been magic and i've been using it for all types of purposes i use it all day and and i wanna maybe explain to you how i'm using it maybe you could explain to me if you doing the same which i think you are and how you're using it right by the way i'll just give you a quick one my prompt that i used yesterday for this i said i i was planning the situation i go ask me a few questions one at a time then when you feel you have enough info then try to give me a suggestion because otherwise it just tries to like you know man you know like mans planning or what is it called one like guys hear like your girlfriend is explaining something you try to fix the problem right away like no i'm not trying to get the fix right now i just want you to hear me and understand me and you're like what i thought you just want the answer as fast as possible shove in your throat and like that's what chat does by default it's it's yeah and there's a bunch of other downsides that i i wanna explain to all of this and how i'm working around it but first i i'm using it for a variety of things so i'm using it for personal finance stuff i'll give an example for you a second i'm using it for business questions i'm using it as like spa thought partner of like i'm thinking about doing this what's your opinion i'm using it as a therapist of like know i'm struggling with this person at work or my personal life how should i handle this or what should my life goals be and i'm also using it for help me me decide which tasks so i'll give an example so for net worth i use k cabrera k cabrera is like a net worth tracker you just log in with your bank accounts and all your accounts and tells you your net worth whatever well they actually have a feature where you can download the information specifically for chat gb and you upload it and it doesn't have any identifying information it's not like it has passwords it just has a bunch of numbers and so you can i will upload this to chat gb and i'll say things like you know i i like to be conservative like what would you rate this portfolio out of ten of risk or you know like what's your opinion on it like what would warren buffett say you can ask it at all types of questions like that or you could also say like a you know how much should i spend on a house or what will my net worth be in twenty years like things like that and it's been actually really amazing and another thing that i did was i took the main kpis for my company and i uploaded it to it and i'll be like what are the needle moving things that i can do for this company and you could do your kpis which is typically like an express excel spreadsheet like your company's churn new users things like that you can also do your company financials and then another thing that i've been doing is i will actually take screenshots of my calendar and i'll upload it and be like what task should i be doing for the next week the next month the next quarter to get to the goals that i've told you about you know my life goals which by the way you helped me create you helped me create quarterly and annual goals how should i be spending my time today tomorrow next week and next and it will it gives me an agenda that i literally print out and i work according to that it's like pretty wild and that's why i've been using it and then all day i'll be like how should i reply this the email what's your opinion it's kinda crazy so that's how i've been using it it's like you have neuro link they just never did the surgery alright like you're basically putting ai like as the you know operator in your brain in many ways but you're just like you know we just haven't reached that tech right where the chip is already implanted well the next step of that is here's what's gonna happen there's gonna be software it probably exists i'm tinkering with a few of them that records your computer screen your phone screen the words that you say out loud the things you type and it's gonna and it's gonna give you feedback on how you spent your day it's gonna give you feedback on what to do things like that so it's gonna like you know how they there's a book i forget what the book is but the premise is google knows more than you because you are more honest in your google searches than you are when you talk to your spouse so your friends or whatever the same thing happens where it's like yeah you know i i spend this much time working on this and this i'm gonna just be like no you did not spend that much time to doing and also you told me that you're trying to be nicer you wrote like eight really mean emails do you know what i mean like that's how it's going to be in the next six months i think there's gonna be products like that that are actually nailing that yeah i think the the ceo of microsoft i don't know if you heard the story but i guess when balm stepped down and they needed a new ceo and at the time microsoft was kind of in a downward downward to flat it was was an uni inspired stock and company at the time they needed something and i don't know for the story so the guy who became the ceo satya actually wrote a memo like wrote a kind of like a a manifesto an internal manifesto about like what what man what microsoft needs to do and he ends up getting the job and at the time it was like he's like i didn't he's like i never thought i'd be the ceo of microsoft like you know you joined bill gates as a ceo or whatever and then balm and he just assumed they're i was gonna bring in somebody but they actually promoted him from within and he he wrote this thing in one of the key principles that he wrote in this this is a while back but he he hear like o five or ten or something this was in twenty fourteen so he wrote he he bet on two things i i don't remember the second but i'm know the first one he called ambient intelligence and ambient intelligence is kinda what you're describing which is basically like how do you have you know computer intelligence artificial intelligence but just like kind of on and be like kind of in your in your environment so that it can be helpful to so it just knows what you need without you having to go fetch it without you having to go ask specifically it can either anticipated they can be aware of all of your context so that you don't have to like first blame the whole situation and then and be able to just ask your question it already knows your situation so you could just ask the question that sort of thing and so isn't that cool that you you know like so so long before and you know opening the eye wasn't even incorporated at that point or something like that this is this is a very long time ago so to bet on that as like one of the two like ways that the tech puck is going pretty baller which is shockingly hard by way it's hard to make these predictions and remove like the limit part of your brain and just imagine like yeah but what would be what would be amazing you know like what would be cool if if that that's actually that sounds easy it's it's really hard because you constantly think like well i can't do that you know like because that's impossible or that would cost too much money like there's all these limit but the way that i've been using this like if like it it doesn't work perfect yet by the way this is like there's a a few issues with this and i am like super not technical the first thing is contextual or context windows like the more you talk to it it doesn't always learn more you actually it runs out of memory in a weird way and and so i've been testing like a variety of different platforms gemini versus chat but i wanna use chat because i think it's gonna be around the longest and they're gonna innovate the fastest but it's not perfect at all but it's like right shocking how useful this is i finally for a long time i'm like yeah ai is great like i can look just like google stat and it's gonna tell me but now it's more like this is my life like i am using this more than anything and so like they had their new two hundred dollar a month thing come out and not even think i need the features but i'm like whatever i'll take it and so i've like contemplated contemplating like should like invest a little bit of money into like building out these systems just for my personal operating system and like making my life great and keep in mind i don't know anything about it anything this shit i just know that it's it it's just effective like it just literally is helping me get my day done better and it's like a great bit of advice i'll like here's a really another like practical way i mean you i'll upload my measurements for my body and i'll be like find me close that fit or like does this fit does this pair pants fit and you just like post a link like i just i've been using it constantly how are you if you are using it to be like this spa thought partner yeah yeah well i think this is the key so so what what we're saying is basically the way that i think by default people will use this is you ask a question it gives an answer and actually a equally if not more powerful way is to do the exact opposite you basically say i have a i'm trying to think about this ask me questions and then you and you get it to ask you the questions and then in that way it's your spa partner it is your thought partner in like kind of flushing out or or getting your own clarity around a situation and it's available twenty first seven it doesn't judge it's in it's you know super super intelligent but it also has like you know empathy you can it you can go back and forth instantly it's always available and there's no lag time right better than a friend right you know you have a friend who you bitch to look and you're like just need an event and like just give me like what should i do here but you kind of feel guilty like laying everything on them or making it all about you and like they don't quite understand exactly what you're trying for yeah this is just that person but better it's one of the right main reasons why coaches and therapists are great because you're like cool we're gonna have a completely one way conversation here yeah like i i don't gotta give you nothing i can come here and be a taker and that's the arrangement and like you know i gave you the money that's what that was for and now from there on out i don't need to consider your feelings in this interaction that sounds like ruthless but it's true it's why it's different than just just talking to a friend whereas his friend you gotta be like sorry my i take up to much your time i don't mean to put all this on you but you know you're like you're always trying to like kind of half apologize and then reciprocate and one of the cool things about a therapist coach is like that's not the social note contract that's not what's expected in that situation ai is even better it's like hey sorry to bug you at one am i just i'd like to talk right now and they're like instant responses with complete intelligence and i'll just keep saying no tell me you know no try again until i get something that's satisfactory to me it's like you couldn't even treat a human like that right so it's pretty great to be able to do that it's become strange i call it dude sometimes i like dude what's your problem that's wrong stop getting these like like like it's it's it's it's strange because if you think about it when you're you're texting your friends like it's because it's like in the same window or next to the same window on your computer like you kinda forget that this is a machine and you can train it out of talk it's very strange but it's actually quite effective do you know how an l works no you know what like deep learning is no i went and watch some videos other day just to get like i was like how about is this magic magic what is going on here i was one by this guy think it's called like three brown one blue is like his his username name or something like that it's you got millions of views and he explains you know like what is deep learning which is like the technique that worked with ai and the second thing was how large language models work what does it even mean what does is large what does language model what does that what does that even do but check this out so okay like here's the example that that that it gave okay so this is me mean not even trying to explain to you what it is because my explanation is gonna be pretty bad this is me just saying i can't believe that this is what actually is happening i cannot fathom that this is the actual scenario okay so let's take this example i wrote this i put this on a card because like i can't forget this i'll never forget what i learned alright so imagine this number seven right so let's say you're trying to train ai to be able to see that this is seven how do you do that you can hard code it but well every time you see the number seven it's like a capture it's like written a little bit differently so it's like you can't just say this is exactly a seven because you write your seven slightly different than me maybe you put a little line through it maybe you have a little angle to it whatever right so you just want it to be able to recognize anybody's handwriting and figure out seven or not seven right what number is it so how does it work so imagine basically a classroom okay so here's a row of kids so there's ten kids standing there and each of the ten kids is like holding one of these cards with a different number on it right but actually it doesn't have the whole number so or actually they have the whole number but for at first it just says alright there's a whole index card we gotta figure out we don't even know if this is a seven or a dog or a car it could be anything right so it just zooms in and it says let's look at this little section right here like these twenty pixels okay these twenty pixels you know on this area it's white so if you got color there sit down kids anybody's got color over here sit down because this picture is white over here can't be can't be you you're eliminated and then over here it's like hey there's some blue ink something is here so if you got blue ink in this little section stay standing if you don't sit down right so that like eliminates a bunch of you know like kind of thought processes so then it passes it to the next layer the next layer of ten kids and it says alright who here's got this flat line okay and so the the seven stay standing the five stay standing you know the threes are kinda like hey we got some stuff up here up top the eights but you know the four the number four doesn't have a little roof on top so it's like i'm out i'm out and like okay let's go sit down it's like people right here i'll go to sit on the side and then so now you're left with like you know some of the numbers and then it says alright we got a little little stick over here who's gotta stick over there and it's like the three is are like i'm out now that's not me but the sevens of the five fives is are like hey we're still in it might be us right bingo and so you just keep passing it from layer to layer showing it like kind of more pixels on the screen and it's trying to get with some level of confidence at the end right it's gonna be seven and maybe five at the end and the seven is like y i'm ninety percent sure it's me and the five was like it's maybe ten percent that it's me it's just a ugly five and then that's how the ai knows that this is a seven because it passes it from layer to layer to layer to lair looking at the pixels on the screen and basically trying to figure out trying to guess is it is it one of you i think with some probability it's this okay that's just recognizing a number okay now imagine what you're doing you're giving it kpis of your company it has to understand what a kpi is what a company is that you were looking for strategy what strategy sounds like it's gotta say something that you as a successful business person who sold your companies for you know tens of millions of dollars that you will respect the output of this like isn't it that mind blowing that that's even a thing and so that now you take how does that work so it now you take instead of the seven take an example where it's like the dog blinked right so it's like what's gonna come after it you know it basically sees the sentence the dog or the dog like what's a dog and what do they commonly do it doesn't even know that it does has no idea what a dog is there's no meaning it just has it read the whole internet so what they did was they were like hey go read the whole internet which like if you or i we were y sam i gotta like let's do this man we could do this we're gonna take so much adderall will stay up all night and we're gonna read twenty four seven all the text on the internet would be like thousands of years before we could ever in ingest what you know what they gave it in one training run right so they said go read all the internet cool done alright now user puts in a sentence the dog blank guess what guess what the next token is guess what the next little word is that comes after the dog the dog it's like the dog bark the dog jumps the dog you know is hungry right whatever it could be like one of many things so then it takes the next word which might be like the dog bark and then it passes that phrase back through it's like now you got the phrase the dog bark what comes after that and it just loops that over and over again to generate the next word so that's when you see chat writing it's literally taking like the the next token it thinks it should say then it feeds it back through and then says okay well if i said if i said the dog bark then i gotta say loudly right okay loudly period if i send the dog bark loudly what would i say next and then it would it would keep and it keeps for recur doing that and that's what's actually that's how it it generating training thing right that and that's like you know this is only part of it half explained correctly but let's assume for a second then i'm not like completely mis this let's assume for a second that this is only you know a percentage of what what is actually going on right there's still parameters and weights and all this other stuff that haven't even talked about yet this is like god right this is like what what like how is this even a thing is so mind blowing to me it's mind blowing it's absolutely mind blowing and i think that you know i think young you i don't hang around like eighteen olds i think they're using it for school so i think they get it i think i know a a little bit about it because i hang out with smart people and i'm on the outskirts of like what these guys are doing so i kinda see it online like play with it for the average joe for my mom and dad for a thirty five year old who isn't like tech savvy who just works as a mechanic i don't think that they're using it this way i don't think they're using it at all and it's gonna change everything it's just like so like crazy like when the average joe starts getting into this i think young people like a twenty one year old or something i think it's like changing schools by the way it's like the grading system is like totally after correct yeah like when i like think about this i'm like like like there is no homework you can't do homework anymore you know what i mean is someone dm me yesterday it's not just homework someone dm me last night they were showing me sky oliver oliver hahn he texted me the thing or did dm me the thing he said coding interviews right so okay you school yeah kids in school are using cha we write essays and the teachers are like fuck how we how are we get it's a cat mouse game to try to be like hey how do i stop you from using ai to just like do your assignments well the same thing is true for coding interviews so coding interviews which you're used to hire programmers that there's a set website leap code wizard dot io and basically it just helps you cheat on your coding interview like you got a coding test if you get a job just use this watch it right it's the same thing as a student to write the essay for you basically and it's like you know doing fifteen grand a month in recurring revenue of just helping people cheat i'm coding interviews this is insane it's so difficult right but it's kind of amazing how are you using this every day like let me just go to chat you just tell you like my last your tool of choice or do you like any of the other ones yeah it is my like default and then you know i play with everything else so usually if i'm like how factual correct does this need to be all per complexity so i go to complexity if it's analysis i'll use chap gpu like have you used like the o one stuff like the deeper thinking stuff only for twenty four or forty eight hours yeah it's brand new but yeah it's it's wild it takes a long time it's wild well yeah that's the point of it it's basically if you told the computer hey you don't have to just quickly like again shove an answer down my throat instantaneously where you're just predicting the next token and good enough to go right there's seventy percent chance this word let's just put it in they found they could get you could do more interesting tasks if you just said hey take your time before your answer this just give it more time to think and then it'll come up with a better answer is temperamental which is amazing so i use that like check this out so there was this press release recently for we were talking about ivf remember yeah well this kind of this amazing thing i don't know if you saw it it's called forte you see what happened with this thing called for so basically it was like the first live birth using eggs that matured outside the body so like if you've done ivf it's it's like a pretty expensive and pretty like harsh thing on the body like the woman has to get like injections which are hair hormone injections to try to get your they're trying to get your eggs to essentially mature be produced and mature inside your body and so what forte t did was they were like cool instead of doing that like long expensive sort of hard on your body process we can take an immature egg take it out of the body and let's do the hormones hormones stuff out of the body and get it to mature and it will put it back in the body and so it just like removes the the pain from from the process and the first like actual live birth happened of a baby that was born using that procedure it's kind of amazing if true it's gonna make you know the it's gonna change ivf you know it's gonna make it where you i don't know if the it'll just be called a new procedure or what that's basically for you know a fraction of the cost a fraction of the time and a fraction of the pain we can do the thing that we've been doing with ivf okay so dude it makes you realize that i think that saw hill i forgot his last name from gum road tweeted this like thing out where everyone made fun of him where he talked about how he's like giving birth is not gonna happen in the future you're just gonna be in the sack and that's how you're gonna grow this is of like oh shit you're right you know what i mean dude i remember we were at a dinner j m just set it casually in passing she was like yeah like i'm really you know excited for and fascinated by basically like artificial wounds and basically you know pregnant you know you won't give women won't give birth at a certain point right it'll be like riding horses for transport it's like you could you could do it if you if you wanna go have a unique experience she's like it won't it won't be necessary and she's like pass some past some mashed potatoes and you're like wait yeah so no like like literally that's exactly what happened and i was like and they at the table i looked around to be like was anybody else mind blowing by that well what's going on i don't we all want more information about that but i'm at oh was it there's like far diagonal seven peep people away but i heard her say it and i'm stuck over here talking about facebook ads with some door and like just get out of this side of the table get to that side of table after the what did you say about womb literally i flagged her down i was like oh you're getting an uber hey canceled that real quick and then she canceled it and i was like what was that thing you were talking about and then she explained and she explained the companies that she's tracking and like where we are in the scientific life cycle of like how real is that possibility and how what are the laws of physics is that inevitable or is it impossible right because basically if something is not impossible it's inevitable which in itself was kind of a dope idea right like not already kinda blows my mind and so she was explaining it so you know i've sort of been paying attention to any signs of movement in that area because i think that's really cool the world's gonna change pretty dramatically when that happens but what i did back to the ai thing i just threw the press release into chat and i said explain this article to me tell me what they're saying tell me what this means in simple terms it's a press release and so it might be misleading or overs stating the success of this so tell me about that too and then it just goes here's what it means in simpler terms this company has achieved what they call the world's first a healthy baby born with a woman's egg that was matured as of everybody normally in ivf the doctors are doing abc in this scenario what they're doing is abc and then it explains it and it goes in simpler terms the conventional path is x the new approach is why why it matters if this is true blah blah blah blah and then it says here's why it might be misleading it's a press release so it's definitely spin number two one success doesn't prove a trend it talks about the world's first but it doesn't mention how many others they've tried that have failed in the hit rate of this procedure stop peer reviewed it might be exaggerating the future impact we would need to know clinical trials blah blah blah and then you know then i asked it more i was like cool what is the what does the scientific literature say about this so all of a sudden i'm getting like a quick biology lesson another one brainstorming name ideas for a project i'm like hey here's a project great for that ask me questions about the project and then come up with names then it comes up with do names i'm like no make the names not do and long and don't make it feel like it's written by chat gp make it feel like it's written by david og and then it comes up with different answers a lot of financial analysis so analyzing stocks or just like you i see cathy wood on my screen a lot like is she actually like great at investing and then hey i like feeling like i'm monkey i see cathy wood up i screen she just hot or good at trading right it's like you know i'm asking these questions and again no judgments she gives me the answers which was spoiler no she under performs the indexes it has over like a fifteen year period and makes a hundred million dollars a year to under perform the index like wow good on you cathy will for you know for for for doing that let's see it's just other ones hey i'm trying to do this in excel but i don't know how to do it can you just tell me the function i need to write in because like you know if you go google this stuff you get like youtube videos you have to watch yeah so now i'm like alright forget the youtube video just give me the like the exact type thing i need to go type in or i'll screenshot the excel window and i'll just say i'm trying to figure out and column and see what are the ones blah blah and it gives me this like complicated you know whatever count ifs formula that's is multiple like selector or whatever oh i play games with my kids so we take pictures of like my son got all these sharks and so we just took a picture because he asked me questions right like data what is this shark and i'm like dude shit if i know right like you know i was kind of like something i always dreaded as a parent like oh cool my kid's gonna ask me questions that i you know where does rain come from and i'm like it's in the clouds like how to get the clouds i'm like think it was in the ocean and then it just like zipped up there because it was hot or something and then like like this is gonna be terrible i'm gonna expose myself and so i just do chad gp voice mode and i will be like i'll send it a picture and i'll go voice mode and i'll be like hey tell me what these sharks are from left to right and it reads it out to my kids and then my kid can ask a question he'll be like which one is the stronger shark and it'll be like actually the great white shark is the stronger shark with the most powerful bite and he'll be like no but what if it was with c hey back like well wouldn't be in the ocean but if it was in the ocean and like it'll like interact with my kids and we have like a fun time they'll they'll tell me all the time can we play with ai dude that's so good i i've got a bunch of friends whose children are like three four five talking age and they like are doing the exact same thing me i wanna do trivia another hack for parents you can go hey i'm sitting here with my two kids their names are when whatever timmy and tommy and we're gonna we wanna do paw patrol trivia ask us easy questions and when we're right say ding and when we're wrong say that's not right try again and keep track of the scores alright go literally you could just say that to it in voice mode and it'll be like alright first question marshall is a pup known for what and you're like fire and it's like ding anything think correct one you're gonna like fall in love with with with her like it it's pretty crazy how the like a imagine being you know raised with this this is insane the i'll give let me give three practical ways i'm using it so they have this new thing called i think it's new ish called projects and so i have three folders right now and the way it works is you have like a folder as a project and then you could upload files to the project and then you could have multiple conversations within the project and it refers back to the files or whatever information you give me the example you like let me give a on there i have a health folder and so you know how everyone has like their own health guru and it's like usually based off like one book they read well i go and download your buying yeah well i go and i download the book that i as sc to and i will upload and i if it's a book that's ep pub which is how i buy it on kindle i convert it to dot text file because that's easier to read and i upload the dot text file to though it's like huge because it's a book that works i give it a full book i the full book i download it and i convert it and then like so for example we were going to the grocery store today and i just said like you know there's like this interesting book i just read and i upload the i've uploaded the book and i would just say make the grocery list for me and and then i'll and i'll tell me actually and i'll say what which grocery stores should i go to in my area and it knows where i live and it says yeah like these three grocery stores will have exactly what you need i i think they will have what you need because like you know i'm this like clean meat kick or whatever and he was like yeah the author says like to buy this cut of meat and you should ask the butcher this this and like here's three butcher that appear to have what you need and it's all based off of like the files that i've uploaded for health but then within health i can ask it it no i'll like hey this quarter i wanna run a five k i at this particular time give me like a good app to use that could help track my running and also tell me like what my goal should be so that's like a a couple health versions the second one is i've got a clothing one where i literally took a photo of myself and i use a tape measure to measure various parts of my body and i upload it to it and i was like alright like make a chart with all my measurements thank you remember that always here's some like clothing that i wanna buy here's the links can you like go and figure out what size it is and let me like fit and they're like well this pants that it says that that the same width as your thigh but you actually want like two inches usually extra width that they'll probably feel more comfortable or what i'll do is i'll upload like a blog that like dye work wear blog and i'll say hey here's a picture a literally lay a tie next to a jacket and i'll take a picture of it and i'll upload it and like does this tie match this jacket and it'll be like no but that other tie that you showed me a picture of a while ago that actually would look great here it's like that's how use it and then the final way that i use it and this is like my life coach folder which is like it's like partially like i'll complain to it and i'm like you know i noticed you've been complaining about this a lot or i'll upload business financials to it and that's like more of like my spa partner throughout the day and so i have three folders right now health clothing and like a life coach and so those are like the practical ways and i'm using projects that's the that's the term on chat jb and that's why i'm using it as of now you people are just gonna replace their c cofounder with with this right like you're gonna see a lot more solo founders because you could just have an ai c cofounder you're gonna say well you know you'll reduce churn if you use this messaging when you email your users and then you're just gonna say yeah well you have my login to mailchimp like a shopify go yeah get it done or you'll be like you know my shopify store it's like a two point one conversion rate and it's like hey i you know we ran this ab b test it like increase your can the three percent and you're get after it you know go do it and that's what's gonna happen and so anyway we've had these intelligent people dark match whatever explain to us all these things but it wasn't until the last two months and in fact recently actually since you told me to ask him the the ask chad to that question that like i'm like oh my god this is my life now in fact you actually sent out a wonderful email the other day where you said here's how to ask powerful questions i uploaded that email to chat gb and like remember these questions and like ask me them often or ask yourself these questions often yeah i mean it's just so it's incredible and it's also so obvious that i think that chat gp i mean it is the google of our generation and i guess the only question is was like why am not why am i not a shareholder of open ai like what how do i how do i go to sleep at night well i mean da had to buy a ten million dollar domain and then convince them to buy it in order to become a shareholder so like it's like it's like ashley like there's a way to there is always a way write everything but that's like saying like why am i not a billionaire like well like you could be but like here some of the barriers to entry that you've gotta overcome so there's certainly you should ask chat dp that by the way it's a good question by the way why am not a billionaire it is a great question but like there have ever asked yourself that question i asked a friend that question and they weren't even really that close friend so it kind of a you know it was a blunt question to ask out of dinner i was like why are you not already a billionaire and he gave a great answer and he goes or actually what he was saying was you know i wanna start a billion dollar company some self selling and i was like why have you not already done that and he goes i think when i was starting these other companies that i started because i didn't actually understand what a billion dollar company look like and if i had known that i would have built the different company and he was he was correct and and you know the the as we dug in it's like what makes a company a billion dollar company like you know there's really only a couple of paths to that and you know one of them for example is like building something that has network effect so he had been building companies that could do like great revenues that could even be profitable they could grow fast like you know those are some of the things you need but there was no network effect there was no durability there was no def there was no like win the category it was like just go to a category where you can win inside that category but there there'll be other winners and you were it like just for as an example that was like a a gaming company it's like there's a lot of mobile gaming companies and at the time like to build to to build a billion dollar gaming company require like you really had to be like one of the like you know pre that we're gonna get built in a five year window right like you had to build you know clash of clans or you had to build candy crush or you had to build like one of those and even in one of those it was like oh actually you know i'm sitting here tinkering on cooled game designs and actually the thing i need to do is build a enormous paid marketing team that is like point the top the top paid marketers in the world to acquire hundreds of millions of customers is what i need to do and like the cool arts c game design that's gonna win me awards is not gonna that's not what a billion dollar gaming company looks so he just didn't understand the shape of something and i i find that to be i find that to be true about most of the goals so instead of how can i do this goal another way of saying it is why have i not already done this goal why is it not already true for me and then it points out some like you know either knowledge gaps or execution gaps that are today that that are like more more close to your timeline versus when you set like an ambitious goal that's like far in the future and you sort of bake that it's gonna take a long time you sort of avoid the maybe the harsh realities that might be actually existing today in your world about those yeah you had a great email with a bunch of those questions it was here's a here's a bunch of decision making questions which is i'm not sure i'm not sure what should i do instead you should say what would i do if i afraid one bad question is how can i make the succeed the better question is what would make this certainly fail a final example is i can't decide which path is the right to pick a better question or better version of that is what path makes for the best story this is actually a pretty good email i think i replied said this was a ten but you had like a list of better questions and i use those questions in chat gb because what you're what i'm learning with chad is you have to get it to ask you better questions in order to you know its input is important for its output and so yeah and i it a stole that email yeah the i think the the realization was tim first had said something way back i think i put it in the in the email but he gets he used this phrase he goes he was talking about it in the in the in the podcasting realm but first first he had this quote yeah you could read it out he goes if you want confusion and heartache ask vague questions if you want uncommon clarity and results ask uncommon clear questions often all that stands between you and what you want is a better set of questions exactly and he said this about as podcast he goes i view questions as like a a pickaxe for the brain like you know like a pickaxe when you're summit a mountain and you you you use it to list or like pierce the the the side of the mountain and and and use it to pull yourself up and so in many ways you are ex the brain with this pickaxe and your pickaxe access questions another phrase i use all the time of businesses is ask a better question get a better answer so often does somebody asks a a bad question and i'll call a bad question either a vague question open end question or a question in the wrong direction i think the rookie move is just to answer have question i face value like you should not answer one hundred percent of the questions asked like a lot of the questions need to bounce back to sender this has the wrong address on it you gotta write a better address on that the this won't get delivered the way you've written this address is not gonna get delivered and and so you you bounce back some questions and say maybe the better question to ask is blank for example like you know instead of how could we succeed which is like a million paths all unknown it's what would make this certainly a failure that's much more noble and we can we can establish a fruit ground rules from that question get some momentum towards this and you could see this with your brain just like if you ask chad you know they call it prompt engineering when it come for ai right being able to ask the ai in a certain way that's gonna get you a better result absolutely the same thing is true for yourself and for people around you to ask better questions right i do i i i ask annoying stupid questions to my team all the time like it'll be one question i love to ask is what are we stupid for not doing right now and it's just that question it comes loaded with a presumption that there's something stupid we're doing of course there's is we're always doing stupid things and specifically what are we stupid for not doing right now meaning what is an obvious low hanging fruit that's in our face and we're out here searching for the complex when the simple stupidly obvious thing is is here and you know i i would say more than fifty percent of the time there's a useful answer to that question but if you didn't ask that question it would just go unspoken in your company right so like how many are those another one that i learned from amazon is amazon asked this thing in the if you're like if you're an exec exact that leads a team you have to like write this document at the end of the year called the op p one i think it's the operating plan one and you you do it two a year right the operating plan one and then you have the operating plan two halfway through the was that effective yeah it's great i'm i'm a fan of the amazon writing culture it's easy to make fun of also and easy to do wrong but when done right super effective so one of the things that they one of the like common questions that they ask and that is what are the dogs not barking and it's back to that sherlock holmes story where he solves the case because he's like and they're like how does you know sherlock and he's like because there's like a house break they're trying figure out who did it and he's like well it was the dog of course they could put the dog the dog didn't do anything he goes exactly the dog didn't bark which means he must have recognized the person that broke which means it must have been you know the house or whatever right and so in your business there's what are the dogs not barking is a good way of asking what are the things that there's there's really like i i interpret in two ways one is what are the things we should be hearing that we're not so for example one week i didn't send out my friday email and i just sat there and i was like like you won't to be getting selling about emails being like hey where's the friday thing man i love that oh i didn't get that okay dog not barking right and then i had changed how i did friday emails because of that it's like well why'd did you make that pivot it's like because i i did jen dude i took a block out and the tower was fine nothing nothing fell out i'm trying to only have like i'm trying to be an email in your inbox that if i remove that email your life got worse you know you and you you want you wanna speak to the manager where's my goddamn email right like if door doesn't deliver your food you're you're you're knocking on a door i wanna be at least more powerful than the door delivery right like i that that's that's what i'm striving for and so that's one way of interpreting it the other way is what are the problems that you don't hear about yet but are certainly there that's another way to think about the dog's not barking is like you know anticipate a problem around the corner because we know it's gonna be there but we just haven't heard it yet but you know we we can anticipate it and maybe get ahead of it dude i'm telling you there's gonna be a world probably in three years where you're gonna like so the issue that a lot of smart people like you and me and people listening is like you're like well i'm really smart and i feel like i'm wise and feel like i know what to do but like a lot of work and then like literally the the the idea guys are going to thrive in five years or the wise people because there's gonna be ai agents doing all of this for you you know what i mean like you're not gonna have to actually do that work you're just you're your opinion or you're right because then who's why can't the a i do the idea part too right who's that's too that's or it's not you're not i don't think you want so then what right and then that's when the brain breaks and you're like i guess it's over then and i'm not sure wait so you actually afraid yeah kind of like i i don't wanna say afraid because i'm not like you know quiver in my boots about it but i guess like i don't have a satisfying answer and for most things in my life i got a pretty satisfying answer sometimes the answer is just i'll deal with it when it happens right i'll just adjust right that and i could feel safe ag i could feel comfortable with that that's usually my fail safe with this one it's kinda like so when the ai can do everything right which is like it seems like it's a matter of when not if at this point okay and it's like seems like it's in my lifetime probably in the next ten years it could do the work but it can also figure out what the work to be done is alright well i guess like i'm less afraid of the like oh and then it's gonna crush human humans and try to you know it'll go rogue and it'll it'll attack us like i'm not as afraid of that as i am just like what's the point of all this what's point of doing any of this stuff if that's gonna be true and that's kind of just like a a weird place to land so you wanna in there what the fuck right podcast podcasts are all that safe dude no they're not no they're not per p has a daily podcast that's really good they just take the news that as great and then they or no it's not placid it's a what's the the eleven labs eleven labs has they use like a steven fry voice and they read the news i listen to it it's awesome it's not safe we're not safe no it's safe maybe like a plumber a plumber safe well i actually think our strategy is pretty genius because we are getting stupid alright just like we dumb ourselves down and ai is trying to get smarter and so there's actually a white space in the market for some just imperfect knowledge some some half baked ideas and some some some incorrect i think we've really i think we've stumbled on to something i think we might be the last one standing in this whole podcast game it's us and von it's just like the dumbest conversations on earth are gonna be all that's left because ai is gonna do all the smart ones maybe i mean i baby mark dr should be scared right now not yeah the smart guys are fucked like the smart guy built they the smart guys are digging their own graves they're like their shovel are clan together on accident as they're like digging the same grave they're like oh sorry my bad it's like they don't realize that you guys are c into this grave at about a year is they name on stuff yeah that's weird problems there another mark here two market reasons like if they think that they're like they're like we're put the blue collar guy in this grave and we're gonna this fucking job they're like i've never mister reese said are you here like you know what i do dude i found my my music sick burn in the tic tiktok comments you know there's all these tiktok clips of podcast podcasts like we should probably be doing this but we don't really do it very much but like people just clip you know podcast sick snippets and that's like a lot of tiktok and the more viral the more basically the more outrageous the comment in the in the podcast the more viral the tiktok clip because you can need a bunch of comments being like this is that no that's wrong that's stupid that's whatever and i saw the best one it was just the top top liked comment on a podcast clip which is it just said podcasting equipment is way too readily available this is like damn anybody could just get a microphone now that's how i feel when i see a lot of these clips i'm like wow this shit is these microphones are way too easy to access have you heard that song another white boy with the podcast no just song yes to this i'll call another white boy with the podcast how did i not do that it's sort of like that like finance six four blue eyes it just says like joe rogan like it just says like a bunch of like random phrases but it's called the number we should do with play that song on the way out of this that'll be our out alright cue the music another white boy with a podcast crypto jim and make a pot d for five mike's we get shares we sit down with black stares we're gonna be billionaires don't forget the lack of share oh another white boy with a podcast