Lessons - The Decision-Making Framework That Leads to Profitable Investments | Shane Neman - Strategic Investor

In this lesson's episode, discover that successful investing is less about capital size and more about discipline decision making. Learn why removing emotions from investment decisions is essential. Understand how surrounding yourself with expert mentors, sharpen your strategy, and uncover how diversification opens doors to new opportunities even in volatile markets. So I asked you if you consider yourself a professional investor, but at the very minimum, you are a professional decision maker. That's what you, I think, but everybody is. I think that just, I think that actually it's all relative, I was going to say, because there's more capital, there's more stakes, but it doesn't really matter because at any level, it's all relative. Really, he could be putting in like five grand into a company. And if you lose it all, it's still five grand gone. If you're only making 70 grand a year or whatever, that's that's significant to you. So it doesn't really make a difference. So being a good investor equates to being a good decision maker and also being able to remove your emotions from the investment. It's a very hard to do. It's a very, I am not particularly good at it, but I'm seasoned and I'm hardened. So you sold easy texting. Yes, you started investing. I started investing. I made a lot of mistake. Okay, so, but even like the thought process, because again, I do see you being more active than a lot of the people that I know. A lot of people I know who sold the company, they only invest in the thing that they know. Yes, and all across the bar and or real estate. That's like the only like you could be like a SaaS founder and you just do like early stage prop tech, SaaS and then plus real estate or yeah, but you do everything. I do because I and you have to talk about the stuff that you put money into. Oh, yeah. So I'll tell you my strategy is very different now than it was before, but I started. Yeah, but I think that being able to control, if you if you look at the best investors, like a buffet or those guys, right, they're all like all slightly on the spectrum. And so they don't experience emotion the same way that an quote unquote normal people do, right? Or you and I do or we know, so so they could see like a huge loss on their account and not slinch because they're so certain about what they're they just did. And they're just like, I'm willing to wait, wait, be wrong for a long time until I'm right. Yeah, but for most people, if I thought hard attack, yeah, you go you go in and you see your account down 30%, 40%, 50%, you're going to have a hard attack and you're going to make a bad decision. Okay, and so that's an acquired skill. And sometimes it's even when you acquire the skill, like even during COVID, like I was on the verge of making some really bad decisions that I'm thankful that I didn't make, but I was this close, you know, like I'm not immune to it, right? To making emotional decisions. And so, you know, that's a practice. It's really it's it's just like working out, right? Like the more you practice it or you know, yoga or whatever it is, the more you practice it, the better you get at it. And you know, you can start small. I found, you know, a few few people who I respected, I talked to them all the time. It's very hard to find those people in whatever you're looking for. But like for me, it was for investments, you know, for other people, it could be a health, you know, you, you know, I know you and Gary are tight now, right? And you know, you have his own, like I mean, he's built a massive social media business with Valeria. So like he's one of the guys that I looked to for that. But there's not many people that that are killing it. Like could it 0.001% is for a reason, right? Yeah. So, so it's worth your time and effort to try and find those people that you want to surround yourself in. That's probably the 90% of the game. And the amount that I learned from those people. And now I'm adding value to them because I learned their techniques. I learned from them. And now I'm like contributing, right? And so I think that that's an essential. You really want to find those people that are experts in what you're trying to do and put yourself around them and put yourself into scenarios that give you high probability of meeting those people in situations. So, yeah. So now my investment thesis is very different than them before. What was it when I don't even know you don't mean what? I think I was trying to do a little bit of what you said. I know I didn't really state and I did sass and things I knew initially. But then, you know, when I put myself around other investors that were really smart, they were opening up whole new worlds for me and showing me biotech and showing me deep tech and showing me CPG. Like we did in Athletic Greens, for example. We were one of the investments that I did with one of my friends. It's an amazing investor as well. And then looking at late-stage businesses, you know, like we did Pacific Park at the Santa Monica Pier, which we bought that business, which is one of the, it's a number one tourist destination in Los Angeles. I know. So you've literally bought a Santa Monica Pier. We didn't buy the Pier itself. I can't. You can't own the Pier, right? It sounds cool. We bought the business of the Pier, so it's a little bit different. But there's, you know, there's a real estate component to it. But I think right now my tech, by the way, are those some of your biggest ones? So Athletic Greens? That's, yeah, so I think Athletic Greens. Athletic Greens, the Pier is one of the biggest deals I've ever, I've ever been involved with. The, I did a company called Figure AI recently, which is a humanoid robot that Brett Adcock founded. I don't think I knew you when I first invested. We've invested two years ago. It was a unique time because the markets were doing really poorly at that time. It was 2022, I think. And, you know, tech was down a lot. Inflation was raging and Brett comes out and he's like, I want to build a humanoid robot. And all he had was a few guys that he had hired from Boston Dynamics, a sample of a hand of a robot and a bunch of, I don't know, like, computerized prototypes. But he had a track record though. He had a track record and he was putting in 20 million of his own money. So that's, see, that's the thing when you make decisions, you have to also kind of take into, because if you just look at it at the face of it, you, most 99.9% of people would never even, like, even consider it because it's like, he's going to build a robot, a human robot that we're, yeah, whatever, right? Like, the one you put your money where your mouth is. Yeah, if as a founder. And going into details matter, right? So like, those things matter, you know, he had a track record. He's had two exits. He took archery aviation public. So he had a lot of hardware experience and scaling hardware. He was putting his money where his mouth was, he had gone pretty far even with very little money of actually making a functional hand, which is the hardest part of a robot mostly. Um, and so when I first did that investment, most people thought I was batch at crazy because, you know, first of all, the markets were in turmoil at that time. So it's very hard under fear to make investments. But that's where the removing your emotion piece. Absolutely. Absolutely. Like, whether it's in the public markets or the private markets, it's irrelevant, right? People get disgusted and they don't want to look, right? They don't want to look because they, they see their account down, right? And they're like, oh, yeah, now I'm going to make an investment and like take even more money out of there. But the thing is those two, those two things are completely separate from each other. It is logically speaking. But it's very hard to separate it out. And so anyway, um, as luck would have it, which I think 90% of all this is luck, obviously. Uh, Brett was successful. He made a prototype that actually works. It's actually deployed in Amazon and BMW right now. It's probably the him, him and Optimus from Tesla are probably the incumbents in the field, um, where they have a real viable product that can actually replace human labor. And if you think about a human labor, physical labor is a three trillion dollar tam, like at everything, like it's all the work that no one really wants to do, right? Like this is, you know, no one wants to go and pick and pack in a warehouse and go down aisles and pull things from boxes and, you know, take a piece of sheet metal and keep putting into a press a thousand times a day, um, which is where he's starting, which I think is the right thing and also in the warehouse, uh, you know, a robot's in a controlled environment. So the safety issues are kind of much more manageable, mitigated a little. Yeah, they're much more manageable. It's also talking to a computer that's giving it directions like a warehouse management system versus, you know, me, you know, robot being in my house and I'm saying wash dishes, right? It's a little bit different. It's almost like, um, well, robots exist in car manufacturing already. They do, but this is certain parts, certain parts of it. So this is just like almost finishing or, or, or more parts of the, the factory is now been. So Tesla, I think, you know, their idea is that the entire process will be done by a robot. And, and as a practical matter, all the other robots that work on, on anything are, you know, the environment is retrofitted for the robot so that the robot can work correctly in that environment, but the world is meant to interface with humans. It's meant to interface with hands, feet, you know, at, you know, stable. It like a human it, like even an iPhone, if you go and actually look at how it's made, a lot of it's done by hand. You can't even imagine, right? It's done on a huge scale in China, but a lot of the pieces are being done by hand. And so, if you can really, truly replace that, the, the, the, the opportunity is huge. It's almost like bigger as big as cars were when cars were invented, right? The opportunity is, is huge in the entire physical labor. So it's funny when, whenever an investor or an entrepreneur is like, Tam, like total addressable market, and they say some ridiculous, outlandish number. And you're like, well, if I just captured like 1% of Tam or whatever, then I can't really hold these successful. But this is, this is, this is really truly a giant Tam. I mean, like the payroll that's, I mean, first of all, Amazon and all these places, they can't even get enough workers. There is not enough workers to, they want to do this. So they have to constantly raise the price of, of what they're willing to pay. I mean, the port workers, you just saw what happened. It was just how the strike, it is huge. Yeah, no, it got resolved. But they're getting paid like $65 an hour now. That's, that's, that's significant. That's, that's huge. Yeah. So like, why wouldn't you replace that person with a robot if you could? It makes no sense. What do you need a person to like move cargo from one side of the port to the other? And like, there's a lot of issues with that because they're safety issues. Like if, if, if, if, if, you know, if a piece of cargo falls on a, on a robot, no one cares. But if they've got injuries of person, that's millions of dollars. And yeah, the productivity gains the, the things that come with it. And so anyway, just recently, they raised 650 million from like, Microsoft and open AI and Jeff Bezos put a hundred million dollars in. So, you know, I look smart. And now and now and now and then let's see what happens in two years. Yeah, all right. Like it could be a zero, right? Thanks for tuning in. If you found this valuable, don't forget to hit that subscribe button so you never miss an episode. And if you want to dive deeper into this conversation, check out the links in the description to watch the full episode. See you in the next one.