The Market Is Crashing. Here’s What We’re Doing About It…

Shaan Puri

Can we?

Sam Parr

Talk about the stock market going down because I had to yell at a bunch of people. So basically, the markets dropped what? 5% this week. In our little circle-jerk world, it felt like the world was ending.

Shaan Puri

So, I guess the Dow had its worst day in two years. The S&P 500 is down about 5% so far this week as of the time of recording. I think the tech stocks did a bit worse. For example, Nvidia is down 12%, and Google, along with a couple of other tech stocks, which may indicate where we are in the bubble, did worse. They gave back a lot of the gains they had been experiencing so far this year. It was a bad day for the markets. By the way, I wake up and I think some people on the East Coast—you're on the East Coast, a couple of people in the chat are on the East Coast—and it either says one of two things: it says "the world is ending" with four or five likes on it in our group chat, or it says "we're going to Valhalla, boys," which also has four or five likes on it every morning. I really don't even check the market; I just look at that text, and I know directionally if the arrow is up or down. But it kind of gets to you, that way of fixing.

Sam Parr

Bothers me. I had to yell at my partner, Joe, because he just calls me and says, "Are you freaking out about this?" I'm like, "Freaking out about what?" He's like, "The markets are just going down like crazy. Should we sell everything? What do we do?" My reaction was just like, "This is expected." If you just buy index funds like I do, there are ups and downs, but in general, over 5, 10, or 20-year periods, you're expected to see that go up and down. He just freaked out, and it made me angry. It made me angry because I wasn't stressing, but now I am, and this is not healthy. That's what happened.

Shaan Puri

Okay, so I had a similar experience. Ben calls me, I'm on vacation. So Ben calls me and he's like, "Dude, what are your thoughts on, you know, the market?" Like, first of all, are we only gonna do calls when the market crashes? About the market? It's not a topic we normally discuss. Okay, so first of all, I have no thoughts. It reminds me of that skit back in the... the Dave Chappelle skit where he... where it was like, "What does Ja Rule think? What's Ja say about this event? We gotta get Ja on!"

Sam Parr

The line.

Shaan Puri

What's... yeah, let's get John on the line. Let's talk about the mark. The second thing he said was, "Yeah, we should probably do that thing." But, you know, I did think maybe we should do X, Y, Z. He laid out some new plan. The funny thing is, I have been in a mode where I've just been trying to... I've understood that one of the most powerful things you can do is take a simple idea very seriously. I'm actually going to do a whole episode on this: taking a simple idea seriously. In general, I focus on picking a few things that matter and then simply doing them as well as possible and reinforcing them. So, I actually do a thing where I wrote out for the year, "Here are the three big things, big shifts." I always call it the "three shifts" I'm making this year. I'm making this shift, this shift, and this shift. Those are the three things I need to change in my life. The rest of the things are going great; I don't need to talk about them. Every single week, I write down that shift again in our Slack. I retype the exact sentence and then I say what I'm doing today and how that ties to that shift. If I am going to do something today that doesn't tie to that shift, I simply don't do it, or with very rare exceptions. I've been doing this for a while now, and I told Ben, "So remember that thing we've been saying over and over again about what we're doing this year, why we're doing it, and why it's the right plan? Did we need to add a disclaimer, which was, 'Unless the stock market crashes, then we're just going to throw all the shit out the window and suddenly change our decision-making about all the things we're doing?'" It sounds ludicrous to say it like that, but that's where his mind went in the moment. I don't blame him because my mind used to go there too. I've developed a set of rules for myself through making horrible, expensive mistakes. Fundamentally, when markets crash, I have to assess: "A, is the wolf at the door? Do I actually have an existential crisis?" If so, okay, I'll shift my attention to this and change. But if that's the case, it's because I somehow over-leveraged or really stretched myself too thin, or I made a huge bet that I should have never made in the first place. So, is the wolf at the door? No? Okay, if the wolf is not at the door, simply do not react. Just do nothing for 30 to 90 days and then see where you land.

Sam Parr

How would you have reacted five years ago?

Shaan Puri

Well, I could tell you how I reacted five years ago, making mistakes. So, when COVID happened, even before COVID, I remember at the end of maybe 2019 or 2020, we had just sold our company. My cousin, who's a hedge fund guy, and really all I know is that he's my cousin and a hedge fund guy. Our whole family thinks he's the smart stock market guy. You know how people in your family are? When you don't really understand what people do, you just boil them down. You categorize them into roles. He is the doctor, so no matter what my issue is, let's call the doctor. He's a heart doctor. I have a foot issue? It doesn't matter; that's the doctor. I'm the tech guy, so whether your router doesn't work or you need help with a startup investment, just call Sean. Well, this is the stock guy. He was like, "You know, it's been a long bull market. I'm moving this, this, and this." So, I went to cash. I was like, "Yeah, yeah, you know, longest bull market in history. I'm going to shift some of my allocation around because I got this one hot tip from my cousin about the stock market."

Sam Parr

Isn't that funny? When you phrase it as wonderfully as "We're in the longest bull market ever," you're like, "I don't know any of the evidence, but that was a great line. I'm in."

Shaan Puri

Exactly, exactly. He told me something about a "dead cat bounce." Damn, that sounds fancy. What's that? I'm Googling it. It's like if someone is making decisions off a Wikipedia article. I just read that bad things were happening in my life when COVID happened. You know, it's like, I don't know, it's a global pandemic, the world is ending, and people are talking about L-shaped recoveries, W-shaped recoveries, or whatever the hell, like V-shaped recoveries. I don't know what's going on. I'm drawing on my notepad trying to figure out, "Oh, that means the stock market goes up," or "It just stays down." And by the way, you know what? It ended up being a K-shaped recovery—the letter they didn't even talk about at the time. I was listening to all the smart money, and it turned out to be a K-shaped recovery where, you know, mainstream Main Street went down. It just got bogged down by inflation, and assets soared.

Sam Parr

Like, doesn't there... there's multiple lines on that chart, I guess.

Shaan Puri

K is.

Sam Parr

All over the top.

Shaan Puri

Up and down.

Sam Parr

Or when they talk about "flattening the curve," I'm like, I literally have to draw an axis. I'm like, "Wait, so what does flatten... what does that mean?"

Shaan Puri

By the way, the dumb thing isn't drawing it out and trying to understand it. That actually is the smart thing to do. It's taking poorly informed action; action was the mistake. I ended up doing a bunch of things that I really never should have done. I sold a bunch of things thinking that was being safe and conservative, but it was actually a poor decision. In general, the number of poor decisions I've made simply from reacting versus responding is significant. I define a reaction as making a decision in the moment based on an emotion that I'm feeling, usually fear or greed. Responding, on the other hand, means I have let the emotion cool off. I have let that settle, and I am now choosing a decision based on some sort of logical rationale that I could write down. I could write down the counterargument for it, and when I look at my argument for and my argument against, one of them wins. So anyways, now that's the short version of my current process, which I do not claim to be foolproof, but it is just an improvement over the dumb mistakes I made in the past.

Sam Parr

I found this great chart. I think it was starting in 1990 or 1994. This chart breaks it down to show what your portfolio would be like if you missed the top gaining days of a market versus what it would be like if you just set it and forgot it. The starting number was $10,000. If you missed the 30 best days, you would only have $30,000, which is roughly 83% less than if you just set it and forgot it. If you just set it and forgot it, you would have $181,000. If you missed the 30 best days, you would have $30,000. If you missed the 10 best days, you would have $83,000. You know what I mean? When I see this chart, I posted it, and people are like, "Yeah, well now do that chart with missing the worst days." I'm like, "Well, you'd have way more money." But if you have some magic balls that could tell me, you know, we could get that pole vaulter guy with the huge balls. Maybe he could tell me where the worst day is that I could time it, and we're good. You know what I mean? But like...

Shaan Puri

Tell me where I'm gonna die, and I'll know not to go there.

Sam Parr

Yeah, like that type of situation. I'm team "set it and forget it." I also think that you have to look at VTI, the Vanguard Total Index Fund. We're still up like 8 or 10% year to date, even with this little crash. So, I still feel good.

Shaan Puri

Okay, great. Good segment. Then we talk about the stock market. It reminds me of any time a tech VC suddenly becomes a foreign policy expert or a pandemic expert. You know, I'm a novice when it comes to investing outside of my realm. My realm is basically starting businesses or investing in private startups. Those are the two things I have actually spent enough time in to feel like I know what I'm talking about. Anything beyond that, I'm better off sticking to an 80/20 type strategy where I just avoid huge mistakes and don't try to beat everybody.

Sam Parr

Yeah, and if you look at how many hedge funds beat the market, it's something like 5% of them. These are companies that have thousands of nerds just sitting around a computer trying to beat the index, and still, the vast majority of them struggle. So whenever I see that stat, I'm like, "Yeah, don't try that." Alright guys, really quick. Back when I was running The Hustle, we had this premium newsletter called Trends. The way it worked was we hired a ton of analysts and created this sort of playbook for researching different companies, ideas, and emerging trends to help you make money and build businesses. Well, HubSpot did something kind of cool. They took this playbook that we developed and gave to our analysts, and they turned it into an actionable guide and a resource that anyone can download. It breaks down all the different methods that we used for spotting upcoming trends and identifying different companies that are going to explode and grow really quickly. It's pretty awesome that they took this internal document that we had for teaching our analysts how to do this and turned it into a tool that they're giving away.

Shaan Puri

It is available for free, and anyone can download it.

Sam Parr

So if you want to stay ahead of the game and you want to find cool business ideas or different niches that most people have no idea exist, this is the ultimate guide. If you want to check it out, you can see the link down below in the description. Now, back to the show.

Shaan Puri

Alright, dude, I gotta ask you about the Olympics. You're my Olympics guy, and I am famously not an Olympics guy. I like watching them, to be honest with you. I just think the Olympics are an insane sport. I emailed you as part of my Friday newsletter thing, and I was like, "Dude, what should I be watching for?" You gave me a couple of tips, a couple of storylines that made the Olympics, I don't know, ten times more interesting for me. I want to talk to you about a couple of the things that you brought up, starting with this 1500 meter race. How good was that race? I did not even know I cared about it. I didn't even honestly know this event existed. But can you set this up? Because you gave me the storyline I needed to really care about this, and it was incredible.

Sam Parr

Alright, so going into the 1500 meters. The 1500 meter race is 109 meters short of a mile, which is roughly 15 seconds off a mile time. A really fast mile, let's say, is 4 minutes, while a good 1500 is 3 minutes and 44 seconds. Going into the race, there were two clear favorites. One of them is a guy named Jacob Engelbretsen. I basically call him the "Justin Bieber of track and field." He was raised by his father and, I think, he has 7 siblings, of which 2 or 3 others are also elite runners—not as good as him, but still elite. He grew up in a family with a very disciplinarian father who is also his coach. They were raised to be great runners. In Norway, where he's from, they have a TV show, so these three brothers are almost like reality TV stars because they excel at running. Jacob is the best; he has been since he was about 18. He has, I think, the 2nd or 3rd fastest mile time of all time and holds the world record in the 2-mile. The problem with him is that he's kind of a pretty boy. He has these cute tattoos all over his body, and all the runners tend to be a little arrogant and cocky. You have to be like that to be one of the best athletes in the world, but his cockiness comes off as more arrogance. It also kind of sucks because he's been the best since he was young, so he's not easy to root for. You know, he's the guy who's had it all, and he acts like "the man." The other guy he was going to race against is named Josh Kerr. I've been lucky enough to meet Josh in Austin one time because I was friends with his manager.

Shaan Puri

Was this the guy you asked to see his calves or to touch his calves or something?

Sam Parr

Yeah, yes, yes. So, Josh, I think he's from Wales... Oh no, Scotland! Sorry, is it Scotland? Whatever it is, it's part of the UK. They run under the British flag. He has more of a silly, quirky attitude. He's got that British "shithead" kind of charm that's very likable. Interestingly, the reason I talked about his calves is that, unlike a lot of the runners, he's still a really skinny guy. He's not as skinny as the other runners, so he kind of sticks out. But he's like the man. Leading up to this race, they've been talking trash to each other constantly. Track and field is usually a gentleman's sport; no one talks trash, and that kind of makes it boring. But they talked trash going into this race, framing it as Josh and Jakob versus each other. Josh is typically slower, but he usually wins races because, in championship racing, it's not always the fastest person who wins. It's the person who shows up that day, has the best tactics, and comes through in the end. Oftentimes, they go sort of slow, and then the second half of the race is really fast. So it's typically not about who's fastest; it's just about who performs that day. We go into this race thinking it's just going to be those two. It comes down to the last 200 meters, which is half a lap. The last half lap is setting up exactly as we thought, with Jakob in front, winning the race because he's the faster runner, and Josh Kerr behind him, waiting to kick and beat him. Josh takes off and is about to catch Jakob, but out of nowhere, this American, Cole Hocker, who has the slowest time of most of the other eight runners in the field, comes out of nowhere and wins! Not only does he win, but with 100 meters left—that's the last straightaway—he's boxed in between Josh and Jakob. You see him try to take off, and Jakob is kind of blocking him a little bit, so he pushes him a bit but loses his momentum. That's really hard in running because accelerating is the tough part. When you lose momentum, that's typically your one and only chance to do it. Somehow, Jakob goes just to the right a little bit, allowing Cole Hocker to slip right through him on the inside rail, and he beats him! Not only does he beat him, but Jakob fades to 4th, which is insane. Josh Kerr gets 2nd, and Cole doesn't just win; he runs the Olympic record—the fastest time ever in the 1500 meters. He runs something like the 7th fastest time in the 1500 meters ever and crushes his personal record. It was one of the best races I've ever seen.

Shaan Puri

That was a great summary. A couple of things that I thought were fascinating about this: when he was doing the trials, the semi-finals, like basically leading, that guy Jacob had this strategy where he was so cocky. He would start at the very back. So, the race starts, and he doesn't really care. He lets every single runner get ahead of him, and he would just hang back. Then, like kind of the second lap or third lap, he would pass everybody and win the qualifiers. It was just a cocky thing to do, but it was also effective because he knew he could push the pace. He just didn't want to burn too much energy right at the very start.

Sam Parr

The goal of the semis and leading up is to win and qualify using the least amount of effort.

Shaan Puri

Right, exactly. In the semis, him and Josh were going at it, and it looked like at the end they both kind of were feeling each other out. It looked... it was the first time running felt like boxing, where you could see, "Oh, they're kinda measuring each other's distance, their power, and they're getting a feel for each other." You could tell even in the seventies [likely referring to the last 70 meters], there was almost a moment where Jacob won, but Josh kind of realized, "If I had pushed this last 50 meters, I think I could've taken them, but I don't wanna show them the full bag right now."

Sam Parr

They did something that was very controversial... well, not controversial, but it's very much part of the story in running. When you are winning a race or you're at the end of the race, if you look around to see who's around you, that's like a cocky move. And what you do is you see Jakob turn his head as if he's looking behind him. It's like, "I see you behind me." That adds to the story, which is always fun.

Shaan Puri

Yeah, yeah, the runner's insult. So, in the final, what you were saying was amazing because he did the exact opposite. He starts the race immediately in 1st place. This guy, Jacob, goes faster than anybody had planned in the first two laps—faster than even expected. As I was reading some interviews, I found out that when asked why he faded so hard, he said, "Dude, I went way too hard at the start accidentally. I didn't pace myself properly. I just got out, you know, kind of lost myself in the moment, lost some composure." He just went too fast at the beginning, pushed the pace. That part where the American dude tried to pass him and got kind of pushed back—it looked like it was a complete wrap for him. It seemed there was no way he could get bumped back and then pass him again. But it ended up working out, which I thought was amazing. So, if you haven't seen that one, go to YouTube and just type "men's 1500 meter." Watch the 6-minute clip on the NBC Sports channel. It is like straight out of a sports movie. You know, if you're an American and you watch that, it is super inspiring to see this guy who was a complete underdog. Nobody was even talking about him; it was just a question of which of these two other guys would win. Then this little engine that could basically passes them all at the very end and runs the race of his life. I thought that was amazing.

Sam Parr

And the best part, dude, Paris has killed it with those Olympics! The best part is they have this bell right at the finish line of all the events. When you win an event, you walk over to the bell and you ring it. He goes over and rings this bell, and it was just a really cool moment. I was all about it! I was screaming so loud I woke my kid up from a nap. I was so pumped from this! So yeah, I'm happy. I've been a distance running fan for years. It's not the most popular sport because it's not that exciting, but I'm happy this existed. It's good for the sport.

Shaan Puri

Okay, so I have a couple of other winners and losers I want to go through with you. A winner for sure is Cole Hocker in the 1500 meter race. I'm going to mention another winner here: the mixed relay. That's another race I didn't even know existed. Did you watch this?

Sam Parr

So historically, America's greatest event is the 4x4 relay, which is a quarter of a mile - one lap, four people each running one lap. We've almost always been the best at this event. The mixed relay, I think, is a weird event. It's only lasted for two Olympics, I believe. This might be only the second Olympics that we've done it. And America... we got our ass kicked by... was it Belgium?

Shaan Puri

No, the Netherlands.

Sam Parr

The Netherlands. Sorry.

Shaan Puri

This was a hilarious race because the way that the mixed relay works, I guess, is 2 guys and 2 girls, and they alternate. So it's a baton; you're handing off the baton. The American guy gets off to a good start, but the woman for the American team is standing in the wrong spot. Did you see this? She was standing 30 meters forward, and at the last second, the official was like, "Yo, what are you doing way there?" You see all the other people in her leg of the relay; they're all standing literally like 20 meters back. She just spaced... she just spaced during the Olympics and didn't pay attention to where she was supposed to stand. It's like if you lined up for a kickoff at an NFL game and one dude was just at the 30-yard line while everyone else was standing somewhere else completely. It made no sense. At the last second, she gets into the zone where she's allowed to be, so she didn't get disqualified, which would have been horrible. But then the crazy part was this woman at the end, Femke Bol. Femke Bol is awesome! I am thrilled by this athlete that I didn't even know existed 24 hours ago. If you haven't watched her, you gotta go watch this woman run. She just dominated the U.S. in the last leg. She's this Dutch runner who looks like she's not even expending any effort whatsoever. She's like... she's like AI, dude! She looked like ChatGPT grew legs and ran effortlessly, while the rest of the humans were sweating and trying. Femke Bol, dude! I feel like in another life, that would be your dream girl, Femke Bol.

Sam Parr

I love her. I love her. She is my dream girl. She's gonna be.

Shaan Puri

So, she's alive.

Sam Parr

This life... Yeah, hey Fem, if you're listening. She's a 400-meter hurdle specialist, and she's gonna race this woman named Sydney McLaughlin. Sydney's gonna kick her ass, but Fem's gonna get 2nd, and it's still gonna be a fun race. That's my prediction.

Shaan Puri

Wow, okay, fighting words! I am officially... I'm like a half citizen of the Netherlands after watching that race. So I'm in on that one. That's another big winner for me. That race, and specifically **Femke Bol**, was a huge winner. Can I do some losers? Losers of the Olympics...

Sam Parr

Let me do one more winner. This is a relatively new thing. Starting in 2016, I think in Rio, the Olympics did something cool. They created a team for refugee athletes. So, there are a bunch of refugee athletes, like a wrestler who fled Iran because he was protesting. He can’t compete for Iran anymore. There are also a bunch of Syrian athletes, and so on. What the Olympics does is they put these athletes into this team—I forget what they call it, but it's basically the refugee team. They come into the stadium with the Olympic flag, and I always cry. I get really emotional when I see these athletes come in because this is like the definition of the Olympics for me. They select athletes who are refugees and who have a shot at doing well and hitting the standards. For example, they have this one boxer from Cameroon who had to flee Cameroon. It’s the first time that one of these refugee athletes has ever medaled. She’s guaranteed to get at least 3rd place, maybe even 2nd place in boxing. Her match, I think, is tomorrow, and that’s amazing. A lot of these young men and women fled countries like Cameroon or South Sudan because they were being recruited to be child soldiers. They walk across countries to flee, and now they’re in the Olympics. That’s my favorite part of the Olympics.

Shaan Puri

Do they have, like, the Olympic flag? What do they wear when they're at the Olympics? I haven't seen this. What's that uniform?

Sam Parr

Historically, they wear blue Olympic jerseys. When they come into the stadium, they all look different because there are Syrians, Africans, and others from various parts of the world. It's really cool to see this group of people who are all from different places but have similar troubled backgrounds. They all come together wearing this jersey, and it's really inspiring to see how the jersey unites them.

Shaan Puri

Yeah, I love that. By the way, there's a surprising number—or maybe they just stand out—when you hear the story. But there is a surprising number of Olympic athletes who were either foster kids or adopted. This is basically the "Blind Side" story, right? It's like, "Oh, there's their parents," and you're like, "Oh, that doesn't look like their parents. Interesting. What's the story here?" It's like, well, they had this incredibly tough upbringing. But then it makes sense at the same time. If you're looking for the people who are extremely gritty and the ones who are going to overcome an incredible number of obstacles to become the best in the world at something, it kind of makes sense that maybe you were forged in the fire that way.

Sam Parr

I remember, you know, I was a track athlete and I remember being really nervous before races. But you wouldn't be as nervous if you came from a really hard life because you'd be like, "This is easy, dude! This is nothing compared to what I experienced." Like, today is a day off from my normal life.

Shaan Puri

I'm running... I'm running for a time, not running away from dictators. Right? It's different stakes.

Sam Parr

Yeah, and so that's why I love sports. So, who are the losers?

Shaan Puri

So, we got another winner! The team refugee team, and my honorable winners are the parents who adopted several of these foster Olympians. That may be my future career. Alright, so some of my "losers" here, and of course I say this playfully because they're Olympians, they're not actually losers. I'll give you the most controversial one first: Simone Biles and, in general, gymnastics. Can I give you my case? Can I zag here? Please, there's something about gymnastics that just creeps me out. Dude, there's something strange and joyless there. Not only is there the controversy that happened with a lot of sexual assault stuff going on in gymnastics, but it seems so high-stress. Like when she fell on the beam, and like, whoop, there goes four years! There's something just... they have to do this fake smile while they're doing their routine, but it's like they look like the Joker. Dude, that's not a real smile. I've seen real smiles; that is not a real smile. It just seems incredibly stressed. It seems like a joyless sport. She is so dominant, which is amazing, but there's something uncanny about it. It's like watching an AI video where you're like, "This looks beautiful," but there's something inhuman about what I'm watching here. There's something joyless about gymnastics, dude. Is it weird?

Sam Parr

That you're judged in a sport on your appearance and your smile... I think that's weird. I think that's weird. Like, if one of these women didn't smile and just had a plain face, I think she would get hurt [in terms of scoring].

Shaan Puri

Did you see our YouTube comments? Everybody's judged on appearance, right? It's just weird.

Sam Parr

That it's like sports.

Shaan Puri

I'm going to get ripped for everything I'm saying and mostly for the way I look.

Sam Parr

I think it's weird. I also dislike sports that are mostly judged. You know what I'm saying? That always makes me mad.

Shaan Puri

Yeah, it's just... gymnastics was a rough watch for me. I also can't tell the level of difficulty.

Sam Parr

It all seems hard.

Shaan Puri

They all look absolutely incredible, and it's like, "Well, no, this one was clearly 4 tenths of a point worse than that one." And so it is kind of an unwatchable sport, also because everything that all the athletes are doing looks superhuman to me. Whereas a race, there's something just so pure and primal about it. It's like, that person ran and won. I could tell who won and lost. In gymnastics, I really can't tell who wins and loses at all.

Sam Parr

So in skateboarding, which is now an Olympic sport, and I like to skate, you get points if you do certain things. There's your regular stance, the way you skate all the time, and then you get more points if you do a "switch." That's when you put your non-dominant foot in front, you know, you switch around. It's freaking weird. Like, who cares which footed footage you are? Why do you get... well, it's like, what if you're...

Shaan Puri

You know.

Sam Parr

What I mean is... I always thought that's weird. It's similar with gymnastics, like if you use your less dominant hand to lead. Who's to determine what's more challenging? I think it's weird. That's why I'm not [in agreement with this practice].

Shaan Puri

A fan asked, "If I take the SATs with my left hand, do I get an extra hundred points?" So, that doesn't make sense.

Sam Parr

Any sense, right? Or like with an eye patch?

Shaan Puri

So, I think that's strange. Okay, other losers that I have... this pole vault guy going viral. Does he gotta make a song?

Sam Parr

Yeah, okay, you picked.

Shaan Puri

The wrong contest. Yeah, exactly, dude. If I see another meme about this guy, everybody had the same joke. It's actually not even him; it's everybody who made the same exact joke of like, "He actually won."

Sam Parr

But dude, come on.

Shaan Puri

Basically a...

Sam Parr

A guy went up on a pole vault. He cleared the bar, but on his way down, his *dick* hit the bar and it fell over. That sucks. It really sucks.

Shaan Puri

No, keep on, dude. Alright, last one is a winner: Noah Lyles. What do you have to say about this? The guy wins what seemed like the closest 100-meter race. They... nobody even realized that he won until it was finally like the camera in a 90-degree analysis realized that his chest hair crossed the line first.

Sam Parr

Noah has a little bit of a problem. He's an amazing athlete, and I think he's a great guy, but he's really cringe. So, if you pay attention, he's going to be running the 200 meters, which is his best event, and he's probably going to win because he's great. He's got a cringe problem, which is what they call in UFC the "triple C." He's a three-time champion, and the third medal is for cringe.

Shaan Puri

Cringe.

Sam Parr

Yeah, so he's the cringe champion. No, Lyle has a little bit of an issue with that.

Shaan Puri

Were you surprised or impressed by the finish?

Sam Parr

I thought that he was going to get second. Yeah, I was surprised that he won. I was surprised that he won. Here's another thing: I was surprised that the Jamaican guy who got second. You should look up how big that guy is. People don't realize this—these 100-meter runners and these 200-meter runners look jacked and ripped. They look jacked and ripped because they're mostly naked and they're flexing, right? You always look better when you're working out. But if you look at their body weight and their height, they're pretty lean, small guys. It's actually like Usain Bolt was 6'4" or 6'5", but he only weighed about 190 pounds. He's actually not that huge of a guy. The guy from Jamaica is just a beast—a beast of a guy. I was shocked that he did as well as he did.

Shaan Puri

He's like Usain Bolt's protégé, right? He's like training with him or something.

Sam Parr

The well, Jamaica is a small country. They all train with similar coaches. So, no, he's not good enough to be called his protégé, but he's good.

Shaan Puri

Okay, fair enough. Fair enough. Okay, two questions for you. Number one, do you believe that any of these guys are clean?

Sam Parr

Yes, I tend to be optimistic. I also thought Lance Armstrong was clean, though. But I tend to be optimistic. I think beating drug tests is fairly challenging, but I think they're clean.

Shaan Puri

Right before you ask me for my investment advice, I advise you to look at my portfolio.

Sam Parr

I thought Lance was clean, so you don't...

Shaan Puri

Right, okay. Second question: what's left to look forward to for the rest of the Olympics? For me, the Olympics are also a complete... the other loser is the Olympics programming. It's how impossible this is to follow and watch. If you didn't tell me, "Hey, here are 3 or 4 storylines that you should pay attention to," I couldn't get emotionally invested in it and understand what I'm looking at when I look at it, and which event to pay attention to. This would have been impossible to even enjoy. So, what's left to enjoy for me?

Sam Parr

So, the men's 200 will be fun. Here's a sleeper of an event: there's a kid named Quincy. There's a grown man named Quincy Hall who's in the 400 meter. He potentially is going to win. But then there's younger Quincy, who's a 16-year-old kid. He looks like a 16-year-old kid, you know? A lot of 16-year-old prodigy athletes don’t look like children, but he looks like a child. He got 4th at the 400 meter trials in America. You have to get top 3 in order to go to the Olympics, but he got 4th, which means he's put on a relay. He's probably not good enough to be in the final 4x4, but if you watch the prelims from when America is in the 4x4, watch this young kid Quincy. He's 16 years old. He's like a darling; he's got the perfect type of charisma where he's composed, but he still talks like a child. That's going to be really exciting. I think he'll be the youngest American track and field athlete ever to go to the Olympics.

Shaan Puri

My mind only has room for **MK Bowl**. So, I really look at my notes here. I've just put boxes around the name **Femke Bowl** like, you know, 16 times as you've been talking because I'm not really paying attention to anything except for her.

Sam Parr

I mean, she's good, but she's gonna get her ass beat in the 400-meter hurdles. But she'll be... she's a wonderful second-place winner. So watch Quincy in the 4x4 relay prelims. He'll be a runner, and that will be really exciting.

Shaan Puri

Okay, one last question for you. You're a runner. One of the things they were talking about was like, "Yeah, I had to recover from that 100-meter thing to be ready for the 200," or whatever. They're like... Now, I was talking about this. I understand that in theory, but also this is a 10-second race. They run it, it takes 9 seconds. You really need... like you have 2 days. Is that really hard to recover from a 9-second race?

Sam Parr

No, so yeah, it is because...

Shaan Puri

You get a score from that.

Sam Parr

To run a race at a big championship, you have to complete three races. One sprint race actually consists of three parts: the quarterfinal, the semifinal, and the final, which are usually held on the same day. So, that final happened, I don't know how many hours later, but it was the same day as the semifinal. He had run that morning as well. When you run sprints, it taxes your central nervous system, which is different from other types of running. It's sort of like if I were to say, "Hey, you have to do this box jump squat 20 times in a row, and you have to go for max height." You're going to feel a different type of soreness, where your insides feel like your nerves hurt, not necessarily like your aerobic system. Do you know what I mean?

Shaan Puri

This is like how when I get done with this podcast and I go hang out with my wife, and I'm just like, "I need to just not talk for a while." And she doesn't understand. She's like, "You talk for a living. What do you mean you're tired from talking?" I need to go with this sympathetic nervous system explanation just to confuse her... to make it acceptable.

Sam Parr

So, that's how it feels. If you go and do an explosive workout, it's like your insides just feel depleted. It's a kind of weird feeling.

Shaan Puri

I guess I'll take your word for it. I'm never gonna do it. Alright, that's the Olympics segment. Thank you, Sam, for making that interesting for me.

Sam Parr

Alright, so let me tell you a story, and I want to hear your thoughts on how it ends. In 1929, there's this guy who starts a company that has a very odd focus: he cleans the rags and uniforms for circus performers. It's a strange start, but that's how this company begins. He turns it into a business and calls it **Acme Industrial Laundry**. He scales it up, but not by much; it's still a very small business. Eventually, he starts doing laundry for other uniform businesses. Fast forward to 1960. His son, who is about 21 years old, comes into the business and says, "Hey Dad, I would love to work for you and maybe take this over one day." The dad responds, "Yeah, sure, let's do it." The business does okay, but inevitably, there's a little argument between the father and the son. The father calls the son into the office and says, "Hey, look man, this isn't working." The son is totally expecting him to say, "You’re fired, you’re out." Instead, the dad hands him the keys and says, "You run it. Let's see what you can do. I'll step out of your way and see if you can pull this off." At the time, the son, whose name is Richard, is about 21, 22, or 23 years old. He takes control of the business and thinks, "Let's grow this sucker." When he takes over in 1960, the business is doing $180,000 in revenue, which is roughly $2,000,000 today, and it has 12 employees. Richard decides to focus on doing laundry for companies that need cleaning supplies, like extra rags. Essentially, they are just washing rags, and he grows the business successfully.

Sam Parr

After about 8 years, the business grows from $200,000 a year up to $1,600,000 a year, which is the equivalent of like $15,000,000 a year in today's money. He's growing this business, and he's now expanded into laundering company uniforms, which is a very strange thing to get into. I didn't even know that existed! He grows this company for the next 50 years, and now they've renamed the company to Cintas. Have you heard of Cintas?

Shaan Puri

Yeah, I see their trucks.

Sam Parr

I see their trucks all the time too, and I have no idea. Okay, so do me a favor: go to Cintas' market cap, just Google that, and look at what it says.

Shaan Puri

$75 billion

Sam Parr

It's a $75 billion company, and their main business is still lawn care. Now, they launder uniforms, but they also supply the uniforms. They make uniforms for all types of businesses. You know, like if you see a typical janitor outfit, that's a very easy example. But it could be for restaurants; it could be for anything. Then, they rent you your uniform and they'll launder it for you. But they've expanded. So, like, if there's a fire extinguisher in the bathroom of a restaurant, it probably has come from them. If there are cleaning supplies, it probably comes from them as well. Because once they made inroads into a business, they're like, "Hey, along with your uniform, we're going to sell you all these other things." I think they do something like $8 or $9 billion a year in revenue, and it's subscription revenue. So, it's a huge company.

Shaan Puri

Why is it subscription revenue? It's uniform rental. Oh, nice.

Sam Parr

Yeah, they gotcha. It's called RAS, you know, like "Rental as a Service." I don't know, it's just what they do. They sell uniforms or they rent uniforms. So, they're able to get these subscription businesses, and then it's also like real recurring revenue because they'll sell you all this other stuff. They've got inroads. But as the business was taking off, Richard Farmer—his name—he starts getting old, and he's like, "I need to figure out a way to keep this within my family." To this day, the Farmer family still owns something like 20%, I think maybe 18% of the business. He was like, "I made it my mission to create this generational thing." I've trained my children to help take this over and to make decisions as it comes to giving away our money, but also governing the company. A family member isn't the CEO, but they're still involved. The reason why I looked this guy up is that I'm very fascinated with how you could pull this off—keeping your family in the business. I think that it's very hard, and it's high risk, high reward. So, I've been studying all these families who have pulled it off, and these guys have. From the outside, there are a dozen other examples of people who have crashed and burned, and this has not worked. My question to you is: Is this a thing that you aspire to? Do you want one of your three kids to take things over or to pass the baton to them? Or do you not care about this? Because I've talked to a lot of people, and it seems 50/50—some are adamantly in favor, and others are just like, "I don't give a shit."

Shaan Puri

My answer is really split. I don't aspire to do this, meaning it's not something I'm planning to do or really want to push on anybody. Do I think it would be awesome? Yeah, totally! In the same way that if my son plays basketball as his favorite sport, that's going to be awesome for me because I love basketball. I could coach him and help him in a way that I couldn't if it was tennis or not sports at all. So, to me, it's a bonus; it's not a plan. I do think about this stuff because on two ends of the spectrum, on one end, I've met way too many rich guys who talk themselves into working too long and working too much with this idea of, "I'm just doing it all for my kids." It's like, dude, kids just kind of want you at home. They just want to spend some time with you right now. They don't really care whether you leave them $12,000,000, $22,000,000, or $42,000,000. It's not like your kid right now cares. Also, giving them more might actually be a disservice to them. This goes back to our earlier conversation about the Olympics and where character comes from. I think it's really dangerous to talk yourself into, "I'm doing this for my kids." I refuse to let myself do that. I think anybody who says that honestly is lying. I think you're doing it for yourself and using your kids as a justification for why you're doing it. That's my general opinion. So, I just safeguard myself from ever lying to myself in that way because it's such a sexy lie, right? Who's going to say anything bad to you? You can never get checked. There are no checks and balances if you just say, "I'm just doing it for my family. I'm doing it for my kids." I think it's really important for myself to not lie to myself that way. If my kids happen to have an interest or appeal to it, awesome! I will be super excited and can't wait to do that. I do hope that happens, but hope is not a plan; it's not a strategy. On the other hand, I'm on vacation, and one of the best moments of my day yesterday was when I went to a water park. Dude, have you been to a water park in the last 20 years?

Sam Parr

Dude, Nick Gray rented a water park for his 40th birthday! But in order to save money, he rented it from 7 AM to 9 AM. So me and a bunch of 40-year-olds went to his birthday party where we had a whole water park to ourselves.

Shaan Puri

He's outside the van. Have you been to a water park?

Sam Parr

No, it's just too full of pee, man. It grossed me out.

Shaan Puri

I know, I was absolutely disgusted by being in that pool with so many people.

Sam Parr

Did somebody say "Tweety Bird" shirts? No, not for me.

Shaan Puri

Yeah, they did this thing where, because I'm in the kids' section, they take a break at the top of the hour for 5 minutes as a potty break. Like, "Hey, this is the time to take your kids to go and pee."

Sam Parr

That just brings more attention to it.

Shaan Puri

Nobody left the pool, and I was like, "Nobody's leaving right now." There can only be one explanation for this.

Sam Parr

It's filthy.

Shaan Puri

Besides that, there was one beautiful thing amidst the disgust. While we were walking in, there was this dad pulling a wagon. You know how when you have kids, you bring so much stuff everywhere? His kid was walking next to him, probably about 7 years old. The kid stopped about 10 feet ahead of us on a really narrow path. Normally, my flaw as a parent is that I'm very impatient. I get really fussy and annoyed easily when I'm beyond a four-hour stretch with my kids. I just become cranky. So, when this guy stopped, I was ready to be cranky. But then I realized why he stopped. It was because his kid asked him something. The dad, who looked kind of athletic, was showing his son something. The dad didn't look super athletic; he looked like your typical water park American. He said, "Oh, when you're doing that in soccer, when they come at you this way, what you want to do..." He was showing him how to use his feet to keep the ball from getting stolen. The kid wasn't making eye contact but was processing it. He was watching his dad and taking it all in, not saying much back. In that moment, it was just a dad teaching his son something. I don't know, I've gotten pretty soft, but that touched me. It was amazing to see this dad passing down a little bit of information. The kid was genuinely interested, and you could tell he had had a bad experience and was trying to figure out how to overcome it. I loved it. For the rest of the day, I found all these little moments to have different conversations with my kid. Later that day, while parking the car, I told my son, "Come back to me." He's only 3 years old, and I did something illegal that you're not supposed to do. I put him on my lap and had him "drive" in the parking lot to park the car. It was only about 50 feet or so. I told him, "You know why I let you drive just now?" He asked, "Why?" I said, "Because I'm teaching you how to be a man." He replied, "Okay." I told him to go tell his sister, "You know why I got to do that? Because Dad is teaching me how to be a big man." He went into the room and said, "Hey, Blushing, you know why I got to drive? Because Dad is teaching me to be a big human."

Sam Parr

Dude, that's awesome! I'm excited for when my kids are old enough that I could try to do that. I'm totally gonna do a ton of them. Yeah, I'm thinking about the same thing too about children and like what it means to bring them in, if it's at all possible. But I do believe that what you said was true: it is mostly a lie that we tell ourselves about why we are *granting* it. It ain't for them, it's so we could feel fucking dope and powerful. **Yes, exactly.**

Shaan Puri

By the way, I didn't answer your question fully, which is: if they're interested? Yeah, a lot of people don't want to do it because they're like, "Oh, working with family is messy. Working with friends is messy." I learned one thing on this podcast episode, some... I don't know, one of the first 20 episodes with Mike Brown. I asked him about bringing his brothers into his business, and I was like, "Was that a good idea?" He looked at me like I was asking him, "Are you sure you're drawn to drink water? It's pretty wet." He goes, "My view of life is you find the people you love and you do life with them." That became central to my core. In that split second, I changed as a human being. I was like, "Oh, okay, that made total sense to me." And that's the answer, right? Find the people you love and then do life with them. I will hit up people and try to find an excuse to just do a project with them, or do a trip with them, or do something with them. That has been so fruitful. In one of my businesses, we brought in... I do business with my wife. We brought in my sister into a business. I've done so many businesses with my two best friends. That has become just an operating philosophy that has served me very well. And like, yeah, there are times where it doesn't work out well. So what? That's like everything. There's no foolproof strategy. But the upside of finding people you love and doing life with them is so much higher than the downsides of when it doesn't work out, in my opinion. And that's how I feel about this podcast, by the way. You know, when we met, I always loved hanging out with you. It's like Sam's this crazy combination of really smart, but smart about things that nobody else I know is smart about. He knows about this family apron rental business, you know? You just have a trillion of these things, and you're also really fun and funny, which I learned to appreciate is very rare in people. The more successful you get, the more serious people get. Whereas you were one of these people where the more successful you got, the sillier you got. I was like, "Dude, I just want to have this guy in my life somehow." Right? Like, I don't know what the excuse is. You moved away, but I'm glad this podcast became an excuse to do that.

Sam Parr

Well, I'm glad too. And by the way, to the people listening, that shit takes work. Like, you and I... we give and take to make each other happy. But I would imagine it's the same thing with children and business, where it's like: "I know this is the wrong thing that we should be doing, but I gotta let the kid... fuck up, you know what I mean?" And I think that's really hard to do.

Shaan Puri

Dude, there was a great quote. I don't know if I'm allowed to quote this, but I think I am. When I went to that tiny event in Canada, Chris Andrew Wilkinson and his partner Chris, they own Tiny, the Holdco. The Holdco has like 40 companies inside. They were doing a session about Holdcos, and somebody asked them, "Hey, I'm setting up my Holdco. I'm in year one, and I just want to know, how much support do you guys have from the back office? Do you centralize finances? Because I think that could be really good for cost savings and an easy way to have oversight. Do you centralize legal? What do you guys centralize to get the most synergy?" Their answer was, Chris said, "Up till now, we've centralized almost nothing." He had two reasons for this. Number one, he had a smart reason, and then he had a great quote. His smart reason was, "Whenever we own the financials, it felt good because we felt in control. The problem was, we were in control. The CEO looked at the numbers and was like, 'Those are your numbers, those aren't my numbers. I don't know, Matt. I don't know what that target is. I don't know what those numbers are. I'm on the receiving end of these numbers.'" And that's a good point.

Shaan Puri

The second thing, the quote he said, he goes: > "We wanted all of our companies to be able to run without us, and the only way to do that was to just completely... you know, not completely neglect, but like, to neglect them to not offer support and services." And he goes: > "The children of deadbeat dads grow up tough and independent." It was like a groan in the audience, but I was like... I like that. I like that a lot.

Sam Parr

It was like it.

Shaan Puri

It's true. You know, it's the kids that grow up in a harder environment that are tough and independent.

Sam Parr

The refugee team of the Olympics.

Shaan Puri

Exactly! I thought that was such a good quote and a great insight. He said, "By the way, now that might not be the answer. We might end up centralizing more as we're now a public company, and there are other reasons to do it now. But what got us here and what worked for us was that."

Sam Parr

Alright, that's the pot.