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May 21, 2024 • 2hr 1min
#739: Brené Brown and Edward O. Thorp
The Tim Ferriss Show
In this episode, Tim Ferriss interviews Dr. Brené Brown, a research professor at the University of Houston and author of six #1 New York Times bestsellers. They dive deep into topics of self-acceptance, narcissism, curiosity, relationships, parenting, and more.
#739: Brené Brown and Edward O. Thorp
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Key Takeaways
- You can't truly change in a lasting, meaningful way unless it is driven by self-acceptance. Self-accepted complacency is likely an oxymoron.
- Narcissism is the shame-based fear of being ordinary, not about self-love. It's driven by grandiosity and self-hatred.
- Efficacy isn't always efficient. The process of developing self-awareness is not an efficient one.
- Pathologies are often armor developed to protect oneself from being hurt, but at some point that armor no longer serves us. The weight of the armor becomes too heavy and keeps us from connecting with others.
- In midlife, the universe tells us the armor is keeping us from our gifts and potential. We have a choice to double down on denial or become curious about ourselves and the world. Curiosity is midlife's superpower.
- An 80/20 marriage hack is quantifying each partner's energy/investment and making a plan when the total is less than 100% to avoid hurting each other when both are threadbare.
- Parenting is a loving course from compliance to commitment - teaching the "why" behind rules so kids internalize family values.
- Maintaining a family-focused family vs kid-focused or parent-focused requires compromise from all to serve the family system's health.
Introduction
In this episode, Tim Ferriss interviews Dr. Brené Brown, a research professor at the University of Houston and author of six #1 New York Times bestsellers. They dive deep into topics of self-acceptance, narcissism, curiosity, relationships, parenting, and more.
Topics Discussed
Self-Acceptance vs. Self-Improvement (7:30)
Brené argues you can't truly change for the better in a lasting way unless it's driven by self-acceptance. Self-accepted complacency is likely an oxymoron. Tim pushes back with examples of narcissists who seem self-accepting but complacent. Brené clarifies narcissism is actually shame-based fear of being ordinary driven by grandiosity and self-hatred, not self-love.
Efficacy vs Efficiency in Self-Awareness (14:06)
Tim worries his audience, used to efficient tools for unlocking performance, may be scared off by the inefficient process of developing self-awareness. Brené agrees it's not an efficient process but a critical capstone conversation. "What's it all in for? I'm fit, I'm winning, I'm smart, I'm successful and I'm on my third marriage and I don't speak to any of my children…It's easier [to focus on unlocking performance]. That's why it's the hardest challenge you've issued." - Dr. Brené Brown
Armor as Pathology (15:48)
95% of what Brené sees that people call pathology is armor - behaviors developed to protect from being hurt. But at some point, that armor no longer serves us. Its weight becomes too heavy, keeping us from connecting with others.
When someone with heavy armor seeks help, Brené points out they're living inside their Pandora's box, not outside it. Deep trauma work with a therapist is needed to take off the armor piece by piece. Curiosity about oneself is key to replace the armor.
Midlife as a Developmental Milestone (21:26)
Midlife is when the universe tells us the armor is keeping us from our gifts and potential. We can double down on denial or become curious. "Curiosity is really the superpower for the second half of our lives because it keeps us learning, it keeps us asking questions, and it increases our self-awareness." - Dr. Brené Brown
80/20 Marriage Hack (23:33)
Brené and her husband quantify their energy/kindness/patience out of 100% combined. When it's less than 100%, they make a plan to be kind and not hurt each other when both are threadbare. It's never 50/50.
Parenting from Compliance to Commitment (27:04)
Parenting is a loving course from compliance (following rules) to commitment (internalizing family values). Brené and her husband teach the "why" behind their yeses and nos. They have veto power but use it sparingly.
Family-Focused vs Kid/Parent-Focused (25:18)
Brené's family aims to be family-focused rather than kid-focused or parent-focused. Kids' desires are weighed against parents' needs and the whole family system's health. It requires compromise from all.
Conclusion
The conversation covers a wide range of topics related to self-acceptance, relationships, and parenting. Key themes include the inefficiency but importance of developing self-awareness, the need to shed protective armor that no longer serves us, using curiosity as a midlife superpower, and aiming for commitment vs compliance in how we relate to ourselves and others.
Introduction
Edward O. Thorp is a legendary mathematician, blackjack player, hedge fund manager and author. In this episode of the Tim Ferriss Show, Ed discusses his early interest in gambling and mathematics, how he devised strategies to beat blackjack and roulette, his pioneering work in quantitative investing, meeting Warren Buffett, identifying Bernie Madoff's fraud, and his thoughts on having "enough" and knowing when to walk away.
Topics Discussed
Early Interest in Gambling and Mathematics (29:54)
Ed's curiosity led him to explore ways to gain an advantage in gambling games like blackjack and roulette in the late 1950s and early 1960s. He used computer simulations and developed the first wearable computer with Claude Shannon at MIT to predict roulette outcomes.
Beating Blackjack and Roulette (37:04)
Ed developed and published a winning blackjack strategy in 1962 that could provide a 44% advantage over the house. He proved its effectiveness in casino play before writing the book Beat the Dealer. With Claude Shannon, he created a wearable computer device to predict roulette outcomes, which proved extremely profitable in casino tests.
Meeting Warren Buffett (40:13)
Ed met Warren Buffett in 1968 when Buffett was closing down his partnerships due to market conditions. After their meeting, Ed told his wife Buffett would become the richest man in the world based on his investing acumen and record. Years later, Ed invested in Berkshire Hathaway when the opportunity arose, recognizing Buffett's talent.
Pioneering Quantitative Investing (42:16)
Ed's 1967 book Beat the Market, co-authored with Sheen Kassouf, launched them both into the nascent field of quantitative investing. Ed applied mathematical strategies like warrant hedges and convertible hedges to generate steady profits with low risk. His hedge fund, Princeton-Newport Partners, achieved a 20% annual return over 20 years with very low volatility.
Identifying Madoff's Fraud (51:15)
In 1991, Ed reviewed the investment portfolio of a firm that included Bernie Madoff's funds. Ed recognized Madoff's stated strategy and steady returns were mathematically impossible. After thorough analysis, he concluded it was a fraud and convinced the firm to exit. But many, including financial professionals, still refused to believe Madoff was a fraud for years.
"Enough" - Knowing When to Quit (1:37:00)
Ed shares why he closed his successful hedge fund when it stopped being fun and became too bureaucratic. He quotes the classic exchange between Kurt Vonnegut and Joseph Heller about "having enough" - true wealth is reaching a point of contentment. Ed focuses his time now on reading, learning, fitness, family and friends.
Conclusion
From devising gamblings strategies to launching quantitative investing to identifying frauds, Ed Thorp's career is a testament to the power of mathematics, rational thinking, and knowing when you have "enough." His insights into investing, risk management, and life philosophy hold timeless wisdom.