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Ryan J. Morris - 07-15-10 Air dATE.mp4

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Published on Jul 9, 2010

At the risk of appearing unconventional, I would propose simply that conventional or average inputs should lead to average outputs and that unconventional inputs are required to get outputs substantially different than the norm. Whether those outputs are in the positive or the negative direction in the long run is of course yet to be determined but the track record so far would strongly suggest the positive.

The reason I spend some time here discussing early childhood is because the competitive advantages I mention are things that are established very early in life. Indeed this is the reason they are so difficult to replicate by would-be competitors. Benefits that occur later in life such as university degrees, certifications, and accumulation of factual knowledge, are much easier to duplicate and thus tend not to convey an advantage once everyone has them.

Very early in childhood I was aware of the importance of money. I do not know precisely where that came from but I know that the collecting instinct was always much stronger than the consuming instinct. The collecting instinct with respect to knowledge and understanding of how things work has always been the strongest driver for me. At age 11, I learned about man-made nuclear fusion - something with the power to solve the world's energy problems. After spending the year or two learning as much as possible about fundamental physics, I was introduced to a key insight that I could contribute more to distributive side of the problem rather than the generation side of the problem. By allocating capital efficiently, I could create more positive change in the world than if I became a great scientist.

With this new insight, I took the plunge and bought my first stock. It was around then that I read about Warren Buffett and his teachings - both his original insights and what he has passed down from Ben Graham. Everything made sense to me but this was around the time of The Great Bubble so my sense of context was quite distorted. It ended up being the perfect time to learn; the great optimism followed by great humiliation succeeded in removing the emotional component of investing for me.

I pursued my interests in science academically even though the long term intention was to go to the business world. I had the notion that if I follow the same path that many others do, then I couldn't get the fundamental and multi-disciplinary understanding I felt I needed to be truly effective. I got both my undergraduate and masters degrees from Cornell University in the major of Operations Research and Information Engineering. The field is essentially applying computer science and math techniques to solving distribution problems. The combination of scientific rigor and lateral thinking fit me well and the education made my thinking much more thorough and robust.

During my academic years I was also a championship rower and road cyclist. I needed something to apply my desire to learn how things work and actually apply it (applying school knowledge to merely getting a better grade didn't have the same real world appeal) and I did so with scientific training. Unfortunately after reading almost every peer reviewed study published on physiology and training that related to rowing or cycling (there are only about 500), the learning need wasn't satisfied anymore and I moved on. The world of investing and business grows faster than any individual could keep up, so there is no danger of that need being unfulfilled.

After graduating I co-founded VideoNote, a software company, with Cornell University as our first customer. We made software for delivering educational video with search capability so students could target their studying effectively. The goal was to create technology that augments education. We were successful in helping several thousand students learn more and scientifically demonstrated improved grades by performing a controlled study. Most importantly I learned a great deal about business and people from those two short years that I felt comfortable enough to become a fiduciary and begin to rationally invest other people's money.
Copyright © 2010 Meson Capital Partners. All rights reserved.

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