My Interview with Farnam Street’s Shane Parrish

Note: This is an excerpt of my interview with Shane Parrish that was originally published in the December 2017 issue of Value Investing Almanack (VIA). To read the entire interview and more such interviews and other deep thoughts on value investing, business analysis and behavioral finance, click here to subscribe to VIA.

Shane Parrish is the curator behind Farnam Street, a website aimed at mastering the best of what other people have already figured out. Shane is the founding partner of Syrus Partners, a holding company that acquires and operates businesses in North America. Before Syrus, Shane worked as an executive in the Canadian government, where he led the creation and execution of key cyber-defense initiatives.

This isn’t your typical value investing interview, but one around topics of reading, learning, and multidisciplinary thinking.

Over to Shane!

Safal Niveshak (SN): Please share about your background. What led you to the wonderful work you are doing at Farnam Street today?

Shane Parrish (SP): I started working for an intelligence agency on Aug 27, 2001. Two weeks later the world changed forever, and I was thrust into a leadership role — not because of any competence on my part but rather because of necessity. As the promotions kept coming, I realized that I was increasingly making decisions that impacted not only my team and their families but also the organization and people around the world. The problem was, I had no idea “how to make decisions.”

My first response to this was to look around the organization and study how most successful people made decisions. This was a great inside view. To complement that I wanted to get an outside view, so I decided to get an MBA.

As intelligence agencies are incredibly insular, I figured the MBA was an opportunity to study decision making in the context of other environments. Only it didn’t really work out that way. A few weeks into my MBA, I realized that I wasn’t going to learn what I wanted to learn. I happened to run into someone who pointed me to how these two guys in Omaha made decisions. I was hooked. While I didn’t quit my MBA, I stopped doing almost all my homework and just focused on learning about Buffett and Munger.

When I decided to keep track of what I was learning, I created a website. That first website was called 68131.blogger.com. The reason it was 68131 is twofold. First, that’s the zipcode for Berkshire Hathaway’s main office. Second, I figured no one would ever type in a series of 5 seemingly random digits to get to a website. The site, which I no longer own, was a means for me to keep track of what I was learning. It was intended just for me.

To look at what it’s become today is crazy. From those beginnings we’ve come a long way. It wasn’t until about 2013 that I changed the website to farnamstreetblog.com so people could remember what to type in. Now we also have fs.blog which makes things even simpler.

Today we cover more than just decision making, but that’s always been the root of what we’re doing. Leading a good life is often a function of: Having good habits, good relationships, and making good decisions as they arise. It’s simple but not easy, my favorite category.

SN: You’re a voracious reader on a wide variety of topics. How did you first get interested in reading?

SP: When I was young, I hung out with the wrong kids. I was too busy to read — too busy with television, video games, and trouble. My report card was full of D’s. My teachers were not optimistic about my future to say the least.

Grade 8 was one of the worst years of my life. At 13 years old, I moved across the country to live with my biological father for a year. I had no rules. I could drink. I could stay out late. And I had near zero consequences.

Making friends was easy. One thing I’ve discovered is that it’s very easy to befriend the wrong people. These friends brought trouble — a lot of trouble. What began as childhood mischief quickly escalated into more serious problems. Skipping school was the least of my worries. If nothing changed I was headed to jail.

I can’t remember how I picked up The Stopwatch Gang, but that was the first book I read cover to cover. That book probably saved my life. I remember it because my friends knocked on the door to cause trouble, and I said “no” for the first time. Of course, I couldn’t tell them I wanted to finish a book. No, I told them I wasn’t feeling good and went back to my room to finish reading. As chance would have it, my friends found themselves in a police car that night.

Reading became a way for me to escape my reality and stay out of trouble. I could live in an alternate world. As I spent more and more time in my room alone, and less and less time with my so-called-friends, the amount of trouble I found myself in rapidly declined.

I was never the same after the year. Through reading I escaped a lot of disastrous outcomes. I returned to my mother for Grade 9 a very different person. And while we couldn’t afford many books, reading has changed my life.

One thing I did right away was that I changed my peer group to the smart kids. I learned how to program computers. Getting good grades became the expectation.

After University, I got a fantastic job working for an intelligence agency. I was making more money in my first year than my parents made combined in their last year. The only thing this changed for me was that I could buy any book that I wanted to read. Now my collection is over 2,000 volumes.

SN: That’s wonderful, your journey and your collection! Coming to the chief problem for someone who reads a lot, how do you retain what you read? Do you have any specific system for making notes and keeping track of what you’ve read?

SP: I get asked this question so many times, I wrote an in-depth article on how to remember what you read.

Let’s assume that you mean learn instead of retain. For me retain implies simply banging back some answer. It doesn’t mean I understand what I’m talking about. The world values understanding over retention, school is sometimes the opposite.

I’ve spent the last few years doing a deep dive into learning. Not just the academic theory but putting it into practice on myself and others. I’ve been experimenting with helping others learn better through our courses and our learning community, and I’ve dramatically improved learning outcomes across a wide variety of subjects for thousands of people from very different backgrounds.

One of the biggest misconceptions is that people think to read is to learn — we tend to think that just because we read something that we’ve learned it. That is simply not true.

To learn you need to mentally engage with what you’re learning. If it helps, picking up a book and reading it passively is the equivalent of going to the gym, but watching other people workout. You still have to actually do something for yourself – to own the book You have to think about what you’re reading and why you’re reading it. This is the work of reading. You won’t get the results you seek until you start to do this mental work. One thing I do that seems to resonate with others is to do the Feynman Technique before and after reading a book and compare the differences.

SN: What are some of the books that you’ve re-read multiple times?

SP: Oh man. There are many.

The first one that comes to mind is Poor Charlie’s Almanack, which I hope everyone reading this has gone through many times. I re-read portions of that basically every single year, and I keep learning new things. I re-read the Meditations by Marcus Aurelius with some regularity, of course. I re-read biographies I like – I’ve read the Buffett biographies several times, Steve Jobs’ biography, and a number of others. I also re-read great multidisciplinary books like The Lessons of History by Will Durant. Of course, that’s a short one. Re-reading is more important than reading. Schopenhauer nailed this.

SN: What big ideas have you changed your mind on in the last few years?

SP: My biggest learning over the past few years was to understand the value of vulnerability, especially amongst my close friends. I used to think that being open about discussing my worries, problems etc. was burdensome – but I learned that being a good friend means being open, sharing my problems and sharing my thoughts.

I wrote a piece about this on FS that resonated with a lot of people I think. It’s been a big change for me, it’s made me a better friend I hope. I have learned lots of other good ideas, but that one is important to note.

SN: What does your typical day look like?

SP: On a typical day, I’ll drop the kids off at school and head to the office. My mornings are blocked off for deep work. This is when I’m most creative and focused. Meetings and emails are moved to the afternoon. Everything else needs to fit in before I pick up the kids after school, and if it doesn’t, it gets dropped. At night we spend 30-45 minutes reading together before bed. The kids are now into the “Who Was…” series, so it’s fun. We’re learning together. After they’re asleep I’ll write down my top 3 priorities for the next day, read some of my own books, and then off to bed.

SN: Wonderful, Shane! Thanks for sharing your insights. I wish you all the best for your work and life.

SP: Thank you Vishal.