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Transcript: Michael Schwimer – Moneyball as an Investment Strategy (EP.72) Published Date: October 15, 2018 Length: 55 min Web page: capitalallocatorspodcast.com/schwimer

Michael Schwimer is the CEO of Big League Advance, a company that makes investments in Minor League baseball players in exchange for an agreed-upon percentage of their future earnings. Before founding BLA, Michael was a professional baseball player, working his way through the minors and reaching the majors as a pitcher for the Philadelphia Phillies. A shoulder injury left him pondering what to do next, which led to the creation of BLA.

Our conversation discusses Michael’s career as a player, the difficult life of Minor Leaguers, and his mission to improve their fortunes. We discuss his passion for statistics, application of Sabremetrics, and development of a team of All-Stars in the game of sports analytics. We close with a look into the future of BLA and Michael’s prediction for this year’s World Series Champion. Whether his bet proves right or wrong, Michael’s rationale exemplifies second order thinking through the lens of data analytics that is never far from his mind.

Edited by: Rev.com

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Capital Allocators Podcast EP.72 Michael Schwimer

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Ted: 00:05 Hello, I'm Ted Seides, and this is Capital Allocators. This show is an open exploration of the people and process behind capital allocation. Through conversations with leaders in the money game, we learn how these holders of the keys to the kingdom allocate their time and their capital. You can keep up to date by visiting capitalallocatorspodcast.com. My guest on today's show is Michael Schwimer, the CEO of Big League Advance, a company that makes investments in minor league baseball players in exchange for an agreed upon percentage of their future earnings. Before founding BLA, Michael was a professional baseball player working his way through the minors and reaching the majors as a pitcher for the Philadelphia Phillies. A shoulder injury left him pondering what to do next, which led to the creation of BLA. Our conversation discusses Michael's career as a player, the difficult life of minor leaguers, and his mission to improve their fortunes. We discuss his passion for statistics, application of sabermetrics, and development of a team of all stars in the game of sports analytics.

Ted: 01:20 We close with a look into the future of BLA, and Michael's prediction for this year's World Series Champion. Whether his bet proves right or wrong, Michael's rationale exemplifies second order thinking through the lens of data analytics that's never far from his mind. Please enjoy my conversation with Michael Schwimer.

Ted: 01:45 Michael, thanks for joining me.

Michael: 01:46 Thanks for having me on. It's a pleasure to be here.

Ted: 01:48 I always start with people's stories, and yours is definitely a little bit different from the other people I've interviewed. So, why don't you just dive right in?

Michael: 01:54 Sure. I grew up in Alexandria, Virginia. I've always had two pretty deep passions, and that was sports and math. Ended up going to high school, taking all the AP stat classes, placed all that at UVA. I did attend college at University of Virginia on a $3,000 baseball scholarship.

Ted: 02:09 Now, I understand you were a multi-sport athlete back then.

Michael: 02:12 Yeah, that was probably the toughest decision I've ever had in my life. High school, I was a much better basketball player.

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Ted: 02:18 For those people who aren't in front of you, how tall are you?

Michael: 02:20 6'8". Yeah, 6'8" and at the time, I was more of a shooting guard, point guard type player, which was very unique at that time. Now you see everybody is ... You get Kevin Durants and everybody can do anything. But I was one of those players that could really score, but really couldn't defend other teams guards. So, I was, in high school, able to guard the other teams big man.

Michael: 02:40 Essentially, I kind of figured for myself that I'm almost at my ceiling at basketball. And I was recruited by Duke, Louisville, really high caliber programs and I could get better surely, but I couldn't really be great, I thought, because of my limitations physically. My wingspan for example, is much shorter than my height. You almost never see that in the NBA. And really quickness. Guarding a guard, I was going to always struggle guarding a guard. That was always going to be a big problem for me, and quickness, and some of those types of skills are much harder to gain than a jump shot.

Michael: 03:14 So, in baseball, while I wasn't that great at the time, I was the perfect build for a pitcher. The 6'8", and I could throw the ball in the upper 80s at the time. I thought that if I could ever figure out how to pitch, then the sky is limit for me. And so, I just sort of made that that's what I wanted to do. I also love baseball, and I figured my biggest asset, and I hope it doesn't sound conceited, this was just me thinking at the time, was my brain and being able to figure out how to succeed using my brain. In basketball, it's a lot harder to do. In baseball, it's much easier. You can kind of figure out sequencing, figure out how to get hitters out. And so, even if I was ever stuck, I could rely on that tool in order to help me succeed.

Ted: 03:58 So, after UVA.

Michael: 04:00 Yes. After UVA, we went ... probably the best four years of my life and it was a major learning experience on pitching. It was a really cool time. The dream was always to be a baseball player. Right when I made the decision to go to UVA to play baseball, that was the goal. But as a pitcher, you never know when your arm is going to blow out. So, I always wanted to have a plan B. I actually interned at a hedge fund up here in New York.








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Ted: 04:21 Which hedge fund?

Michael: 04:21 PAW Partners. And so, Peter Wright is the manager there. He took me under his wing, really liked me, and offered me a job as an analyst of baseball. Didn't work out. So, I was doing market research on Nokia and [inaudible 00:04:35] all the time. Kind of funny looking back. So, I asked Peter, I said, "What classes do you want me to take at UVA?" So, he gave me some classes to take. I took them, and then played baseball. That's what happened. Fortunately for me, baseball did work out and I was drafted in 2008 by the Philadelphia Phillies in the 14th round. There's 40 rounds now in the Baseball Draft, and I was a 14th round pick. My signing bonus was $5,000.

Michael: 04:59 So, most people think of, "Oh, signing bonus, you're making millions of dollars." Even my friends, there was a running joke. I made $3,200 after taxes and my friends were like, "What was your signing bonus? What was your signing bonus?" I said, "I signed for 3.2…thousand." But it was tough. And right after you get drafted, the scout comes to your house and signs you. And I'm all excited, what's going to happen? He says, "Well, your salary is going to be $5,500 for the year, and the team's not going to pick up housing or anything like that." Which was shocking to me. Even coming from a program as great as UVA, it doesn't really get talked about, minor league life. So it was kind of surprising and I thought at this point here, I graduated, I don't need my parents' help anymore. And then of course, a couple weeks later I'm knocking on their door, "Hey, can I have some help?"

Ted: 05:41 That sounds like it's more of a typical minor league experience then.

Michael: 05:45 Yes. So, that is very typical. There's 7,000 minor leaguers, and less than 10% will play one day in the major leagues, and less than 3% will actually get to arbitration and make big money. Yet all 7,000 think we're going to be Hall of Famers. So, you don't put yourself through it. And it's really, really tough. This is going to be some bad radio here, but we're in a room, how many square feet do you think this is? 80 square feet or so. We'd call this either a two or three-bagger, where two people would literally live here and sleep here, mattresses on the floor and a fridge. That's what you did for the season.







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Michael: 06:19 And then really in the off-season, you have to take jobs in order to support yourself. I reffed basketball games, babysat the ... Kids these days, they have it easy. They get to drive Uber's, which is a much easier way to make money for the upcoming season. But this idea that these players are trying to live their dream and they're not spending the off-season doing everything they can to make it and to work as hard as you can, because they can't, they have to be able to support themselves, was something that I always thought wasn't right and thought that there was ways that I could help fix the problem. Which, fast forward in my career, I get to the major leagues in 2011 with the Philadelphia Phillies here. I'm at the best team in baseball, a very veteran group, Roy Halladay, Cole Hamels, Cliff Lee, Chase Utley, Ryan Howard, Jimmy Rollins, Brad Lidge.

Michael: 07:05 So, obviously, very veteran team with the Phillies. And it's really cool now thinking seven years later that Brad Lidge, one of my favorite teammates, saw what I was doing, was really happy with what I was doing in obviously helping minor league players that he reached out to me and asked if there was anything he could do to help. And now he's on our advisory board helping out. So, it's really cool to have Brad on board. I can go on and on. It was really good team. And there was some rookie hazing in there. But at the end of the day, I was really honored when at the end of the year, they nominated me to be a player rep in the Union to represent their best interest, which was really cool for me.

Ted: 07:40 So, I have to ask the question. Every player, I imagine, growing up at some point in time you dream about being on SportsCenter.

Michael: 07:47 I can do better than that. I think I have a major league record that I don't think will ever be broken, Ted.

Ted: 07:52 What's that?

Michael: 07:53 I was on the ESPN Not Top 10 Plays twice, and only thrown three pitches in my entire career. So, first of all, part of the hazing was they made me, again, I'm 6'8", 250 pounds at the time, and they made me wear a pink Hello Kitty backpack with pink bows hanging off of it to the bullpen. And it's a long walk from the dugout to the bullpen right before the game. It's 10








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minutes before the game starts, so all the fans are there. And here I am running around with a with pink bow-

Ted: 08:18 Was that a one-time thing?

Michael: 08:19 No, I had to do it until next rookie came on, and they had to do it. And then my first outing, it was in DC, which is where I'm from. Everybody's in attendance. My first bat I'm facing is Danny Espinosa, who I absolutely owned in the minor leagues. I think looking back it was like 0 for 12 with eight strikeouts against him. So, this is going to be great. I get called in the game. Of course, the adrenaline is going. I can't feel below my knees at the time. First two pitches, not close two strikes. Third pitch, just groove it right down the middle, hits the ball 500 feet, dead center field.

Michael: 08:50 But the problem was, and this is at UVA, I blame UVA for this, not really. But when the ball goes up in like a pop up to the shortstop or second base, the pitcher always points to the sky. And says, "Oh, shortstops ball." And every time the ball's in the air, we're taught to point up. I've been doing this my whole career, but no one cares since it's the minor leagues. Now every other major leagues, I point up like it's a pop up to shortstop, and of course, the ball goes 500 feet. So, that was another not top 10 moment for me. But things got better after that. So, you live and you learn.

Ted: 09:19 How did you use your brain in your pitching career? You talked about sort of that being an advantage compared to other players.

Michael: 09:26 So, in baseball in the minor leagues, the scouting reports are awful. A pitching coach will come in and say, "Okay we're facing this guy. He's really bad on curveballs, cutters. When you get ahead, try to elevate a fastball." Like, "Well, I don't have a curveball, I don't have a cutter. What am I supposed to do?" So, I went and I analyzed every hitter that ... You have film on all these guys, and where they stood in the box, what their mannerisms were, what pitches do you swing in the first pitch breaking ball. All this kind of stuff to determine what I should throw to them. And I'm not looking against the other teams short left-handed pitcher, I'm a tall right-handed pitcher. So, I try to find who, facing him with similar stuff to what I had, and what they did, and how they were successful or unsuccessful.







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Michael: 10:13 I used that to create my own model for how I would face hitters. Now, it doesn't go everything according to plan, because that means you have to execute the pitch perfectly in order to get to the next step. So, I would have ... Okay, I knew exactly the first pitch I was going to throw to every hitter. Then from there, if I fell behind in the count, this is what I was going to do. If I was ahead of the count, this is how it's going to get a strikeout, or get a weak ball in play. Somebody that throw low 90s with very below average stuff. I'm sitting here in the minor leagues and literally 90% of pitchers had better stuff than I did. And how am I going to make it? Well, I have to figure out what to throw. And that's why when people ask me, "What's the best pitch you have?" I say, "Whatever I think that hitter doesn't want to see." None of my pitches were really good enough.

Michael: 10:59 I probably had an above average slider, but that was about it. For my career, I averaged more than one strikeout per inning, which is a huge mark in baseball. And it wasn't because of the stuff. It was all because of me being able to figure out what they were seeing, what they wanted to see and throw the opposite. It's really like poker, except for if you're playing against a poker player who you got to see the last five tournaments every single hand they had and what they were folding. So, I know that okay, every time you have Jack 9, you fold pre flop, just like every single curveball you see first pitch, you take.

Ted: 11:35 So, you were planning a minor league game every day?

Michael: 11:37 Every day.

Ted: 11:37 Are you going in between innings into the dugout-

Michael: 11:39 No. You have a three-game series. So, you do the research before. So before every series was the research time so then that would last and I'd have no cards and I'd keep them in the bullpen. Just a reminder of, "Okay, you're going in the game right now. You only face three hitters. You know the order. You know who's coming off the bench, just in case the pinch hitter and you know the seat." By the time you get in the groove of it, it's easy memorization and you go from there. But again, it led to me leading the league in shake offs and catchers didn't like it too much.








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Ted: 12:04 Joining the Players Association, what did that mean for you? And how did that drive you through to the next steps?

Michael: 12:10 Yeah, so that was really cool for me. So I joined the union, fell in love with the business of baseball. I joined the Licensing Committee for the MLBPA and the Executive Subcommittee, which directly negotiates the collective bargaining agreement with ownership. And my big thing was, I had thought I'd figured out a way to help minor leaguers getting paid. Minor leaguers are actually not covered under the major league Baseball Players Association. They're not represented at all. So I thought, "Okay, I got this PowerPoint together." I went to Michael Weiner, who is in my opinion, one of the best union leaders in baseball and really in any union around. I mean, he was incredible.

Michael: 12:47 And I said, "Listen, here's what we gotta do. We gotta give everyone that's making $5 million or more in baseball," so very few, "they get 1% of their salary gets taken out and it's tax free so they never get 1% of it." The owners match it and now instead of baseball players making $55,000 a month, basically $2 an hour, now we can pay them minimum wage and they can make a living and they can end up becoming better. It helps baseball. It helps everybody. And he looked at me and told me, "You've got to understand my position. This is a business I represent major league players. I'm trying to get more money to players. You have a proposal that's going to take millions of dollars away from the guys I'm representing."

Michael: 13:24 I said, "I understand that, but what about what's right?" And, "I have to do my job here." Again, I totally get his point, totally understand where he's coming from but still, it stuck with me that nobody's looking out for these guys. No one cares about minor league baseball players and I wanted to change that. And fast forward, I played a little over two years in the big leagues and unfortunately I tore my labrum. I has a shoulder injury, tore my labrum, which is a year long recovery and it's about ... The most you can use, about two hours a day in rehab. And after the first month of being severely depressed and really I got to give a lot of credit to my wife for snapping me out of it. My wife is very understated and she's incredibly supportive and she sat me down and gave me the speech that I'll never forget.

Ted: 14:12 What was that speech?







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Michael: 14:13 Basically, "Let's get your head out of your ass here and you're wallowing in your own self pity and I'm not going to stand for it anymore." It was really what I needed to hear and she knew that and just like any good relationship, she knows me better than I know me at times and I really needed that and I was like, "All right, I'm going to get going here." And I thought about what am I going to do and I thought about becoming a professional poker player at one point. I thought ... Well, I always had the job at analyst with Peter. I called Peter. He was, "Whatever you want, you can come on in." And I was like, "You know what, this idea I have for minor leaguers. I really want to give this a shot."

Michael: 14:45 And I had it, when I was in the minor leagues, obviously there's this huge separation is, can I create a company that takes some of the career risk away from these players where instead of making no money now being 25 years old, with a family with no skills now and you're released and now, what are you going to do? Can I invest in them, give them money, hundreds of thousands, at some point, sometimes millions of dollars in exchange for a future share of their earnings. If they don't make it, they keep all the money. And if they make it, we share in their success. And I always had that idea. I thought it was a really good idea. At the time I only knew two people that had money and one was Marvin Bush, and the other was Peter Wright, the hedge fund guy and I went to both of them, told them my plan, and they said, "There's no way you're going to raise any money for this. Because look, there's 1,000 people that can tell me who's good."

Ted: 15:36 And odds are long, for the numbers you set it.

Michael: 15:38 Odds are very long. You're throwing darts. It's a 3% chance. So I said, "Okay, here's what I'm going to do. I'm going to put the math together to confirm my beliefs." So I put some pen to paper, get the stat hat back on if you will, ran some models and after a couple months, I really had to swallow my pride and realize that I didn't know anything.

Ted: 15:56 What was the data at the time?

Michael: 15:58 What I thought was important for hitters, let's say, on base percentage.








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Ted: 16:02 The basic Moneyball stuff?

Michael: 16:03 The basic Moneyball stuff. Exactly. And it really didn't matter in the minor leagues in terms of predicting major league success. The lesson I learned was it's not ... The results are not predictive to future results. It's actually the process that is far more predictive to future results than the results themselves. I'll give you an example. So if I'm 100 for 100 with 100 broken bat doubles over the first baseman's head, and you're over 100 with 100 line outs to center fielder, you have a way higher probability of success in the major leagues than I do even though my on base percentage is incredible. I'm just great player with any stat, but you are this terrible player with any stat. You have way brighter future than me, because the process, you hit so many line drives, they're going to fall over time and if I hit so many broken bat shots, they're going to get out over time.

Ted: 16:56 So are there specific statistics that you can model in the minors that look different from the statistics in the majors?

Michael: 17:05 Well, they're all there. It's just how you analyze them. So the other thing that I did is a lot of conceptualizing of the statistics. So let's say you and I both have 10 home runs, but you hit your 10 home runs in 10 nothing blocks versus the team's fifth reliever and I hit my 10 home runs against Clayton Kershaw in tied games. I have way more power than you, major league potential power. So in major league baseball, all pitchers are going to be very, very good compared to minor league pitchers. So what we care about at bats, a lot more at bats with position players that face higher quality pitching.

Michael: 17:41 If you're facing a pitcher that's not ever going to be a major league pitcher, what do I care if you've hit 10 home runs and you've built all your numbers based off that? It's amazing that what translates to future success is really how well you do against those types of pitchers? In what circumstances? What's the ballpark like? You have to conceptualize everything to get a true predictive model.

Ted: 18:03 And were you using just hardcore Excel in front of a computer?








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Michael: 18:07 Yes, I did. I am self taught are, but not completely honest, not strong. The process actually took me more than a year and 14 to 16 hours a day. And I ended up analyzing-

Ted: 18:19 14 to 16 hours a day of crunching numbers?

Michael: 18:21 Yeah, two hours of rehab, 14 hours, 16 hours a day and then sleep and do it again. But I love that stuff. I mean, I love the long term puzzle. It's so much creative thinking that goes in with it. And it's frustrating because 90% of the stuff you do doesn't actually matter. But you don't know until you try it. And there was a lot of guess and check. And now again, I've built this incredible team. Now they could have probably done it in two months. But that process got me to a model that I thought was going to be very successful.

Michael: 18:48 I then went back to Marvin and Peter and said, "Now you've got something here. Now it's time to write a business plan, do the due diligence, get the legal work." So now we're in, I guess, middle of 2014 and I'm 29 years old, I'd never done, at the time, never done anything like this. And it took me about a year. I went to my first investor meeting in October 2015 with this game plan of what we were going to do. And I met with 13 individuals from Washington, DC, who were all very intelligent individuals. It was my first meeting, I thought, "This is perfect. This is going to get my feet wet. They're going to destroy me. And then at that point, I'll learn from it be able to answer their questions. And then when I go to really try to raise money, I'll be more prepared."

Michael: 19:29 And they heard it and they said that they're in, but that there was a catch. See, I was raising money, it was set up as a hedge fund structure. So I had limited partnership and a general partnership. I was the general partner and I was looking for limited partner money and they said, "No, no, no. We will put in money in that limited partnership, but only if we also get a third of the general partnership and we'll pay you for that." And I ended up accepting that deal. And we were off to the races. It took about six months. I had about $5 million. A lot of people were coming in for the minimum but I understand.

Michael: 20:01 I was 29 years old, never run a business in my life. I was a former baseball player. It's hard to kind of get your head past that from an investor. It wasn't until I had the biggest break in








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BLA history. Big League Advance. I shorten that to BLA, history, which was when I got a call from a friend of mine asking me if I wanted to go to a health care conference. And I had just gotten back from a red-eye from San Francisco. I said, "What am I going to healthcare conference for?" And he said, "Well, there's a guest speaker, Paul DePodesta." And for those of you who don't know Paul, he's the Moneyball guy and I believe the best GM in baseball history for 20 years. Took teams to the playoffs, winning records and then tried to move on. He's now with the Cleveland Browns.

Michael: 20:42 And I met Paul just to shake his hand and say, "Thank you." I had no designs of any business, anything. He's a busy guy, and I shook his hand. Of course, he remembered me. He was running the Mets from 2010 to 2015 and I was pitching from 2011 to '13 with the Phillies. He's, "Oh, what are you doing?" And I said, "I just really want to thank you for creating all the metrics and stats that you did because that's been instrumental in my modeling, in what I'm doing." And he asked what it was, and I told him, "I'm going to create a company that's going to invest in minor league players."

Michael: 21:14 And I've never seen a man's face go white before and it went, he was like a ghost. And he said, "Whoa, I gotta go up and give this speech right now. I'm canceling my flight back to Cleveland. We got to talk." And I was, "What's going on?" I'm freaking out. This is like my hero. I'm absolutely freaking out just listening to his speech, almost shaking. And he gives a speech, comes back and tells me, he says, "In 2004 I was going to do this exact same thing to the point where I had money raised to do it. And I was about getting ready to get started when the Dodgers called me and asked me to be the GM of the Dodgers. And my wife and I, we had this long talk and it was really 50/50." And he ended up taking the Dodger job.

Michael: 21:54 And he goes, "I've been waiting 12 years for somebody come up to me and tell me they're doing this. This is awesome. This is a great idea. I got to be a part of it." Skip to the end, he's the second largest shareholder besides myself and a partner and now I can say a really good friend. So that was a huge break and then he told me, "Hey look, there's this investor that was going to invest a lot of money in this. Why don't you go see him?" I went to see him.





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Ted: 22:16 And snowball starts rolling.

Michael: 22:17 He writes a $5 million check, fund was closed in three days.

Ted: 22:19 So you have a model, a statistical model that tells you a little bit more about the likelihood of a minor leaguer making to the pros. How do you approach the first minor leaguer and get them to sell you a piece of his future?

Michael: 22:34 Yeah. So it's important to note that I started this company by players for players. I put myself in the player shoes. So what would the player want in this? And my idea was the money we're giving them is actually going to help them succeed. I mean, me personally, if I had $100,000 in the minor leagues, maybe I go to ASMI and get my delivery with the electrodes and see how I can pitch healthier. Maybe I stay healthy. Maybe I make tens, hundreds of millions of dollars playing. I don't know.

Michael: 23:01 The idea is the money that we give them should help them achieve their dreams of making the major leagues, but I want them to be as informed as possible on their decision making and I don't want to sell them on anything. So I never have ever gone to a player and say, "Hey," of the 128 players we've signed now and probably 300ish we've offered or more, "you should do this, you shouldn't do this." I said, "Look, this is the option for you and you need to be informed about this decision." If a player's interested in it, I say, "You need to have a lawyer review it. You should talk to your agent, your financial advisor," all these minor leaguers have agents, financial advisors, "talk to them."

Michael: 23:33 And then after that, just to make sure they understand, we videotape the signing, before the signing and ask them all these questions. "Do you understand if you make $500 million you will owe us 25 million in your career," assuming they do a deal for 5%. "Do you understand? If you never make it, you'll never owe us a penny." And go through the ... There's a list of 20 questions. I won't bore you with them. But that's the most important part of it to me, is making sure they absolutely understand what they're doing.

Ted: 23:57 And who was the first signing?

Michael: 23:59 I can't give you names unfortunately and it's really to protect the players.










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Ted: 24:02 What's the story of the first signing?

Michael: 24:04 Well, the story is, this gets into not great stuff here and I had to learn on the fly. And that was, a lot of players were saying no early, which is again, fine, but I went to go ... Keep in mind, I talked to all the agents about what we're doing. They all seemed to like what we're doing, they clearly understood it. And I was going through the agent to talk to the player, figuring that's how it was going to work because again, we're helping their player get to the major leagues and we're not taking anything out of the agents pocket so I thought this was great.

Michael: 24:33 And all of a sudden I go to player, say, "Hey, I know you said no. Just curious as to why?" He said, "Well, I don't want to give up 35%" "35%. That's insane. We would never ask for that." Another player says, "Well, I don't want to do this deal because if I don't make it, then I'm going to be bankrupt." Like, wait, no, you get to keep the money if you don't make it. So I'm getting that there's a major red flags here. So I go to the agents. Some of the agents aren't picking up my call. I'm like, what's happening here?

Michael: 24:58 So finally, one of my good friends is an agent. I call him and he says, "Listen Schwim, I'm just going to tell you how it is. I don't know how you didn't see this but what you're doing is obviously helping players. There's no doubt about that, but also I'm going to forbid every one of my players from doing these deals." I said, "That doesn't make any sense to me. Walk me through that." He says, "Well, agents are heavily regulated by the union. We have to sign a player every single year and we don't get paid from a player until they play three years in the major leagues." So they have guys in a ball, they're not going to get paid for seven years, but they have to get that guy service every single year."

Michael: 25:32 So he says, "Listen, if you give a guy a million bucks, he doesn't make it. What do I care? But if you give a guy a million bucks, he's one of the good ones. He's one of the very, very few that do make it to arbitration. Now, other agents are going to come in and say, 'Look at this terrible deal you made. You're going to make all this money and give all this money back into the advanced. If I was your agent out of never had you do this deal.' And now the original agent is worried that the player will leave him right before the agent's been paid."







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Ted: 25:55 Oh, yeah.

Michael: 25:56 So I didn't figure that. And again, that's only a few agents. Most agents are really good about it. But then that's when I started going to players directly. And I said, "Look, you hear from me and then you talk to your agent. So if the agent tell you anything different, you now know the truth. More importantly, I'm happy to have a three way call with you, your agent and get all the right information." And then players started signing left and right. And that's when this snowball effect happened.

Ted: 26:20 And how successful was your predictive model?

Michael: 26:24 Incredibly successful. So to the point where over 75% of the players that we sign aren't top 300 prospects in baseball when we sign them, which is amazing to think about. So if you have a 3% chance of making big money and now you eliminate the top 300 players, now it's down to fractions of 1% of those guys. Now, again, when we sign them, they're outside the top 300. They become prospects and they become good and that's what's happened. But we've been very, very successful to the point where our first fund was a $26 million fund. Also, I should say, the biggest X factor in the plan was, are players going to sign?

Michael: 27:05 I'm going to these investors. And I've got everything figured out and there's, "How are players going to sign?" They are. I don't know. No scientific reason for that. You know how I knew I was this was going to really work? Was when investors came to me and said, "Of course you can build a model to figure this out, but there's no way players sign." And then I went to players, "Every player in the world is going to sign this, but there's no way you can predict which one of us is going to make it." And that's when I knew I had the vortex, if you will. And that's when, we expected the fund the last five years. I thought it was going to be three. They thought I was crazy. It ended up being 18 months.

Ted: 27:38 In terms of deployment.

Michael: 27:39 In terms of deploying them. We raised a second fund. We raised 130 million dollars for the second fund in order to do it over a much longer period of time.









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Ted: 27:46 Yeah, and I don't know if it's the right metric or is it too soon, but what percentage of the players that you signed in the first fund ultimately played the game in the pros?

Michael: 27:56 We believe that over half for players we signed will play a day in the major versus under 10%.

Ted: 28:01 Wow. All right, so there's some alpha in this model, as we like to call it. Is it too proprietary to ask what are some of the things you figured out?

Michael: 28:09 Well, that's what's going into it and conceptualizing it all. What we figured out is what we talked about earlier, what actually matters to major league success, an actual value of players. Now, the one thing that we haven't touched on yet is pitching. It was raw offensive stuff. Pitching my model initially was very weak compared to my offensive model because I'm saying all these pitchers are going to be great in the minor leagues, but they weren't because they got hurt and they did elbow shoulder surgery and that can really, really hurt a career.

Michael: 28:36 So I was doing tons of research, did all these deals with all these different companies to get more than 12,000 pitching videos and I had done so much research on injury stuff after I'd gotten hurt and I'm looking at angles on all different kinds of parts of the delivery to try to figure out exactly how much stress pitcher's putting on his elbow and shoulder to determine what's his likelihood of getting hurt.

Ted: 28:58 So was there scientific research that went into what you're looking for in the mechanics of a pitch?

Michael: 29:03 Dr. James Andrews is one of the best surgeons around. He did my surgery, talked to him at length about this, biomechanic experts. I talked to everybody I could talk to about it and just basically tried to test for what they were saying. And what came out of it was what they were saying was kind of accurate, but not quantifiable. It was good enough for me to build a model to say, "This guy's high risk, medium risk, low risk." That was it.

Ted: 29:28 So I gotta dive into this model a little bit. So you have 12,000 videos of players that are pitching and then you or your team go in and are modeling some statistics about either either the arm angle or the wind ... How does that work?










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Michael: 29:45 Right. So we're trying to figure out throughout the delivery how much stress are you putting on your elbow and your shoulder. So you look at the delivery. There are so many theories out there on what causes arm injuries. Now, we're just going to try to test for them all. Now, in the beginning, in the first one when I was doing this we were investing in pitchers because I was able to get the high, medium, low. It wasn't until we raised a second fund that we had a lot of money from the management fee to really get a team and they were able to crack the code on pitching that I wasn't able to.

Michael: 30:14 Sam Hinkie, who ran the 76ers, is in our fund, Paul DePodesta obviously and now here we are with the second fund. We got a lot of capital. I called them both and I said, "I want to turn this thing from a baseball company that invests in minor leaguers to the world's greatest sports analytic company is my dream and my vision." Now, I want to hire these guys to help the baseball model obviously, but then get into whatever else we think we should get into. So I called Sam, I was like, "Who's the smartest guy we know in sports, all sports?" And he goes, "Well, that's easy. The answer to that is this guy, Jason Rosenfeld, but he'll never ever do it because he got tapped by Magic Johnson. He will be the Laker GM in five years or a GM of another team in very short order. But in his experience, he'll know who's good."

Michael: 30:56 So I did some digging on Jason and I found out he went to Harvard and was a two year president of the advanced analytic for Sport Club and in turn for Daryl Morey and Sam with the Rockets and really helped build that system that Rockets use. Then while with the Rockets, met Yao Ming, thought that there was a lot of potential business with the NBA in China. Keep in mind he's like 19 at this point. And decides to teach himself Mandarin, becomes fluent in six months and he end up majoring, a second major in Mandarin at Harvard. I mean, the guy's out of this world smart. Out of this world. It's just another level.

Michael: 31:28 And ended up going to the Shanghai Sharks and was so good they announced him as the Assistant General Manager of the team in his early 20s, which was amazing. Did a great job there. Came back to League Office. Turned down jobs. Turned down jobs. Finally Magic Johnson tapped him and said, "Hey, come work at Lakers. Your office will be right next to mine. You'll report to me. You can build your team and let's do something."






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And I gotta give Magic a lot of credit for a lot of the old school guys wouldn't have done that and wouldn't trust numbers and math, but Magic, and I don't know Magic at all, but just in hiring Jason, what a smart move to understand, look, I may not understand this stuff, but I want to bring on somebody that will.

Michael: 32:06 So I called Jason up and I said, "Hey, I'm trying to build this team." And after talking to him more and more and more, he calls me back a couple weeks later and said, "This is my dream job. This is what I want. Do you mind if I do it?" Which, of course, I was like, "Absolutely." So Jason did leave the Lakers, came to work for Big League Advances, our chief strategy officer running the entire analytics team. He brought on several people, one I'll name in particular, Zack Bradshaw, who ... There's a competition called Kaggle Competition for Machine Learning Experts and thousands of people apply for this all across the world.

Michael: 32:41 And the data set at the time was predicting March Madness. And he won that competition. I mean, this guy's another out of this world machine learning expert. So getting back to pitching now. So now I have this team and I was telling about the pitching. They said, "Well, let me take a look at it." And what they did is they saw and they said, "Look, you're looking at this the completely wrong way. You're looking at this linearly. You're measuring the angles and you're comparing it to the subset of these 12,000 pitchers. That's not how you should do it."

Michael: 33:07 For example, what I was doing was, I know when your front foot hits the ground at certain angle, it should measure between 20 and 40 degrees. And I know that's the healthy degree. And they're saying, "No, that's the healthy degree for all 12,000, but not that specific pitcher. You have to individualize this and see how he gets to that position. So this pitcher," they showed me, "look, he should be between 35 and 55 because of how he got to that position." So it's all about the preceding step, not in general with pitchers." So once they showed me this, they built a model that was truly revolutionary to where we can predict when a pitcher is going to get hurt with incredible accuracy to the point where MLB teams are paying for our service now, and it's been a really, really big hit.

Ted: 33:52 Talk about competition. So you start this. Clearly you're a first mover. There aren't other people doing it. Are you still the only






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game in town now, trying to buy stakes in minor leaguers or are other people come in, try to compete with you?

Michael: 34:05 So there are a couple people that have tried to compete with us, but nobody really can because nobody goes and gets the guys that are outside the top 300 prospects because you can't predict which ones are going to be. So there was some Goldman guys that quit and tried to do it. They have a couple players, then they left because they realized they couldn't do it. When they were projecting the player, "Okay, I know this guy is going to be good." It was too late, we already had him because we could project them and figure it out earlier. Unfortunately there's been some bad actors coming in the space that I'm hearing from other players saying sit him down in a room, "Hey, sign this contract right now, I'll give you money."

Michael: 34:39 Which is a big, big problem for me. And players aren't understanding the contracts, not in their native language. They don't have a lawyer review it. They don't understand what's going on, which again, is a major problem, which is actually a big reason why we're pushing for a law to make sure these players are protected. So we're going to try to get that through Delaware this year.

Ted: 35:01 And I guess it's probably relevant to talk about, you did have a lawsuit that went through?

Michael: 35:06 Yes.

Ted: 35:07 Why don't you want to describe what happened there?

Michael: 35:08 Yeah. So unfortunately we did have a player sue us and his complaint was actually the first time the public had heard anything about us as a company, which was a really probably my biggest mistake I've made so far as CEO and I'm sure I'll make a lot more, but I wanted to keep it as low profile as I possibly could in running this company. And the reason for that partly was selfish. I don't really like the spotlight. I like to operate under the radar. So the public now hears of us from this complaint from Francisco Mejia, who, when we signed him we had 42 games in a ball, wasn't a top 50 prospect. He was a good player, definitely a good player at the time, but wasn't one of these sure fire, can't miss guys.








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Michael: 35:55 The next year he has the season of a lifetime, gets all the way from 42 games in a ball to the major leagues. It's almost very, very rare. So another company comes in. They spot him later and offer him a lot more money. And now he gets upset, "Why did I do this original deal?" I'm not sure what happened. But someone convinced him, "Hey, make a fuss about this, this company Big League Advance is big. They'll settle it. It won't be an issue." Which of course, we would never do. And so he comes out with this complaint filled with lies and that people started believing these lies. He didn't have a lawyer review the contract. We forced him to do these things.

Michael: 36:28 The good news is we had proof to back up every single thing that we said. And once they saw that proof, they knew there was nothing. Francisco ended up dropping the case, we actually countersued him. We settled the counter suit. He paid a portion of our legal fees for the case and then wrote a very long apology that was highlighted actually in the Sports Illustrated article that came out about us, which was good. Look, he made a mistake in doing that and making up these things, but he ended up accepting responsibility for that and I love Francisco. I love all of our 129 players now that we have and I root for him ... During the entire time, I rooted for him every day. It's like family. In family sometimes it's going to be disputes. If we have 129 players, if one is upset, that's one too many, in my opinion.

Ted: 37:15 How do you track enforcement as these players, sort of the ones that make it to the majors?

Michael: 37:20 We have many, many players in the major leagues. They've all paid on time and in full. It's because of how we sign them. We get their financial advisor involved, we get everybody involved so everyone understands the deal. It actually comes straight from their financial advisor at this point and it's pretty easy process.

Ted: 37:33 Yeah. So to the extent you've cracked the code on better predictability of pitching injuries, how do you think about this from a business perspective? Let me lay this out. On the one hand, you have your investment fund. And the other hand, I have to think that every major league team would like to have access to what you know about not just those pitchers, but maybe even the pitchers in the majors.







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Michael: 37:54 That's right.

Ted: 37:55 And are those sort of conflicting?

Michael: 37:58 No, absolutely not. We have really good relationships with teams. It's important to note this objective analysis that goes into our offers. We have the math part, which gives you ... Let's say this player, we were going off this player $500,000. Then we call the team. Our scouts are the teams. So we'll say, "Hey, what do you think about your player?" And they'll give me the work ethic. They'll give me the how he's like in the clubhouse, players like him. I'd call opposing scouts, "Hey, what do you think about this player?" And that you get some very valuable insights.

Michael: 38:28 We had one player that was a third baseman and really dominating. We love this kid. We call the GM of the team, who tells us, "You know what? This guy is going to be a first baseman. He's not that great defensively. He's going to play himself out of the position." Well, our model has third base versus first base is a big difference in terms of dollars. So now we can massage the number. We put it in his first base and Paul and I will both go over the numbers and come up with offers. Put it this way, last year the trade deadline or 2017, 17 teams called us. This year 24 teams called us at the trade deadline, asking our advice on who are the underrated prospects in this organization.

Ted: 39:02 And you'd just give that out?

Michael: 39:04 Of course. It's a very mutual thing. And now that we have the pitching metrics, it's even better. The pitching metrics that we came up with help our fund and investing in players, it helps our relationship with teams, helps investing in players.

Ted: 39:16 Yeah. So what's next?

Michael: 39:19 Well, that's a great question. So we've assembled a team that is truly incredible and it's really an honor to work with those guys. And I tell them that and it's kind of easy to assemble a team to be honest with you, because you look at these guys, Harvard, all these brilliant people and they can go make half a million dollars a year on Wall Street, but a lot of them make 50 grand a year working in sports because there's so many people that want to work in sports. They care about quality of life, their quality of work. The salary is not nearly as important.










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Michael: 39:53 Well I say, "Hey, I'll give you a triple or more of what you're making in baseball plus equity in the company." Every person that comes with me gets equity in the company. So they're part of it. They're partners. They don't work for me. And they kind of do. But they're part of the team. So we have this team. We say, "Okay, now we're going to do." We've been getting offers ... Every day it's a new offer. Two soccer federations have reached out. We have nobody that has any experience in soccer by the way. Two soccer federations reached out to us offering us multimillion dollar year contracts to help them in advance of the World Cup in Qatar using advanced analytics.

Ted: 40:28 Are you doing that?

Michael: 40:28 We are not. So we chose not to do that for several reasons. We have to weigh the cost of our time and our effort and the ultimate end goal and our chances of success in that endeavor. Two NBA team ... Actually three NBA teams now called us wanting to fire their entire advanced analytic department, have us be the analytics apartment for those teams remotely. Look, they know Jason. They know Zach. We have guys on our team that they know. I mean, we picked off the very best guys on all these different teams and now teams are taking notice of this.

Michael: 40:57 They say, "Look, I can hire guys full time but they're not going to be in the same ballpark as your guys. And do you want to do this?" Offering us great deals. We have two or three ideas that we're really kind of narrowing in on right now that could all be very special and we're looking at ... Doing feasibility work on all of them before we decide of what's going to happen next, but it should be in the next three to six months, we'll be pick one and really attack.

Ted: 41:25 I imagine you can't answer, but I have to ask the question-

Michael: 41:27 Sure.

Ted: 41:28 ... if you can disclose what any of those are.

Michael: 41:31 You can have me on in three months and I'll tell you. How about that?

Ted: 41:33 All right. We'll do a part together. That sounds great. What's been the most disappointing aspect?


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Michael: 41:39 The most disappointing aspect by far was the pushback from different groups, organizations, people about what we're doing and it's all because they only care about the subset, the small subset of the group that makes it. Just because I said over half the players will make it. We're still projecting 20% to be profitable. Keep in mind, they had to play three years ... Even if they do 10%, they're returning 150,000 because they make 500,000 dollars a year. In order to be successful you gotta make the big money. If we can get 10%, we'll be very successful. I think we're getting to get about 20%, which means we're going to be losing money on 80% of these players.

Ted: 42:18 This is a venture capital model?

Michael: 42:19 Exactly, right. But the problem is there are groups, the MLBPA for one. Let's say we invest in 500 players. 499 never make it. We have $150 million. One makes a hundred million bucks so owes us, gives us 10 million bucks. 140 million was split between 499 people. The MLBA looks at this, players just lost $10 million because they don't care about the minor leaguers and to see the amount of pushback we're getting from them and from agents that obviously don't care about their players and care more about them keeping their client is very frustrating.

Michael: 42:54 And I think that the goal should be to inform the players. I'm not saying you should tell players to take this. Never. I don't think anybody should ever tell a player to take this deal. I also think nobody should ever tell a player they shouldn't. They say, "Here's the options. Here's what we're forecasting for you. You make the choice." That's all I want out of this and maybe I was too idealistic in thinking that was going to happen, but it really didn't happen that way early and that was frustrating.

Ted: 43:20 What have been your biggest mistakes?

Michael: 43:22 Oh God, do you have another five hours? I've made a lot. Obviously the media mistake was a big one. I would say it's this kind of ... In baseball there's a term called eyewash. And I don't of many people know what it means or is, but it's basically doing things just for the sake of doing it. So you take three hours of pitching cover first base. You hit it for five minutes. What am I going to gain if I do ... Just because you're there. Eyewash we call that. Such eyewash. So I wanted to create a company that








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didn't have any eyewash. We're not going to have meetings every five minutes or every week or anything like that.

Michael: 43:54 I create a team and I say, "Go." I trust Jason. I trust his team. Figure out how we can do things. Well, that didn't work. And the reason is when there were certain things I needed or wanted for different meetings, they would produce things that weren't exactly what I wanted and I said, "Wait a second. If you don't understand something, let me know and we can go over it some more." I was thinking everyone would come to me, but nobody really did. So now I'm like, "Okay. Do we have to have meetings?" I'm kind of going back to maybe there is a reason people do these things.

Michael: 44:26 As you can imagine at 29 when I started, now 32 years old, I always look at everything, if I started this today, how would I do it? And then do it that way. I had this idea and most of it works, but there's some of that I have to understand, we have to conform and do things the normal way I guess, if you will.

Ted: 44:43 So as you put to work fund two or you think about fund three, do you have any sense of like portfolio construction?

Michael: 44:51 Oh, absolutely.

Ted: 44:52 And how do you think about that in this investment strategy?

Michael: 44:55 Right. So it's funny that a lot of investors, especially in the financial world, they say, " Oh, we have too many shortstops." Like, no, people can get traded. And this is too much of our portfolio to a single player etc. So that is eliminating our second fund with sample size. We're going to have 500 players in that fund. Our first fund, there was a major concern about that. We have 77 players in it. We don't want the concentration of that money going to a couple guys. So that was a very big concern early, but it kind of worked itself out. So in the beginning we had such a good array, some low, some high, some different positions that it really just worked itself out, but it was a strong consideration.

Ted: 45:40 And do you use sort of, call it conviction weighting, in the sense that if the model tells you that someone has a better chance than another one you're willing to ...









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Michael: 45:49 Well, that's the interesting thing about the model is we could have two players that we think are 500,000 players, but one we think has only a 20% chance to be in the major leagues, but has a 5% chance of being a hall of fame type player versus another guy has a 98% chance of being in the major leagues.

Ted: 46:08 That's sort of high beta, low beta?

Michael: 46:10 Exactly. High beta, low beta is exactly right. So we didn't want all of these guys that we don't think of a 20% for these long shots, a full fund long shots or a full fund of sure things. And that was what I was kind of talking about. We got lucky to have a really good mix of both. I was going to just play it by ear. If we were signing all the long shots then I would take a step back. Or if we were signing all the sure things, I would take a step back, but it really worked out naturally well and that's really lucky I guess, for that to-

Ted: 46:35 Yeah. There's always this element of luck versus skill when you're talking about kind of a base rate of 10% of the guys making the pros and 3% really making it. And you have numbers that are 20, 30, 40%. There's clearly skill. Where do you think, in the results you've seen so far, the outcomes have come from that skill and the model and where has it just been good luck?

Michael: 46:57 I would say as a fund, it is definitely skill. From a player to player level, there's luck, if that makes any sense. So there are players that we gave a $100,000 to that I thought were long shots that all a sudden break camp with a team. I'm like, "How is this happening? That's lucky. Way better than we ever expected." But then there are players that were 90% going to make it, now they're having down years, they get demoted. I think that's unlucky too. But it's all depending on how you feel about the model to really determine that.

Ted: 47:31 All right. We're about to head into the playoffs. As you watch the major league baseball playoffs now, do you have a completely different lens where you're rooting for your players like a fantasy game and not rooting for-

Michael: 47:41 100%. 100%. I don't care about teams anymore. I used to and I don't. It's just it's my family that's out there. And I just root for those guys hard. My wife, my family, friends that come over, we're all pulling for our guys and it's really a lot of fun. It's really,









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really cool. You want a little baseball playoff prediction from me?

Ted: 48:02 Yeah, go for it. Make sure you know you're in front of a Yankee fans so just, let's start that as ...

Michael: 48:07 I grew up a diehard Yankee fan. My dad, born raised in New York City. It was hard and not nearly as much because I got players in the Red Sox that are major leagues. They're hitting home runs and I'm excited. I'm a like, who am I? But I think the Astros are going to be tough to beat. I think that they're the clear favorite in our I guess modeling, if you will.

Ted: 48:27 Not the Red Sox?

Michael: 48:28 Not the Red Sox.

Ted: 48:30 Interesting. Why?

Michael: 48:30 Not in a seven game series, not with the pitching staff. Offensively it's ... And a lot's going to depend on a couple of starters here and there. The Red Sox have done an incredible job, great team, but if you look at what the Astros have done against quality pitching, what the Red Sox have done against quality pitching and the types of pitchers you're going to face in the playoffs, I would not bet against the Astros, that's for sure.

Ted: 48:53 All right. There's the prediction and we'll have to get this out either slightly before or slightly after it all plays out. We'll see. All right. We'll go straight into some closing questions. What's your favorite talent or hobby that you either have now or you had in your past?

Michael: 49:08 Well, I was going to say basketball that we talked about that earlier. I'm going to go with ... You know what I do every single morning before I start my work days is Evil Sudoku and I try to do it under five minutes and that's how I know my brain is getting sharp or how I'm feeling on the day. So I love that. I think it's a really good mental kick starter for the day. I'm a huge Game of Thrones nerd as well. I've read all the books. I post on message boards. So it's pretty, but that's a hobby as well.

Ted: 49:36 Awesome. What's your biggest pet peeve?











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Michael: 49:38 That's pretty easy. Efficiency. When people do things inefficiently it bothers the crap out of me. I'm a kind of guy that everything I do I try to make as efficiency as possible, whether it's you're at a urinal and trying to figure out when to flush the toilet to make sure the pee in the water goes down together so you save those two seconds every time every day. I can't stop thinking about how to be more efficient. It's probably bad, but then when I see people do things inefficiently, it's bothersome and it's hard.

Ted: 50:08 All right. What teaching from your parents has most stayed with you?

Michael: 50:11 Really the way they taught by example. I was very fortunate. I grew up in a middle class, maybe upper middle class family. Both my parents always wanted me to follow my dreams, whatever they were and I've always loved sports. Not only did they tell me to do that, but they supported me in doing that. Any kind of pitching lesson I wanted, they gave me. Any kind of team I wanted to play for. Anything at all like that. My dad was unbelievable about that, but I do want to talk for a minute about my mom if you don't mind because she is my true inspiration. And I've been very fortunate to have two women in my life that are incredible. But my mother obviously first. She is the American dream. She is the definition of resilience.

Michael: 50:49 She grew up in a very tough family situation to the point where on her 18th birthday she left the house and had to figure things out completely independent on her own, took a job just like entering data and just really worked really hard. Met my dad, had me, started working at the Department of Justice very low level and ended up ascending to becoming the CFO of the Department of Justice Office of Justice Programs, which manages tens of billions of dollars and all the while took night school to go to college. All the while never missed a single one of my games.

Michael: 51:29 When I realized ... I guess it was in my 20s like what she had done. It was, how did you do that? She's truly inspirational in the fact that she will fight and compete and do everything she can in order to succeed. And I think I get that from her and. And she is my true role model in life.







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Ted: 51:49 What information do you read that others might not know about?

Michael: 51:52 Well, book I read a few months ago from Annie Duke, it was Thinking in Bets, which was really how I've kind of always done everything. Kind of reading it was sort of an entrance into my own brain. It was like she knew me better than my friends knew me. It was the weirdest thing. But also some of the behavioral stuff that I hadn't really understood was really cool insights. And I think that for business people, investors, I mean, anybody can get anything out of this book. I think it's really, really cool.

Ted: 52:24 Yeah. That's a good one for sure. If you can meet one person, dead or alive, shake their hand and just say, "Thank you." Who would it be and why?

Michael: 52:35 I'm going to go with Bill Gates. And the reason isn't the Microsoft stuff. It's what he's decided to do with his wealth. And you're on this earth. I want to make a ton of money and then use it to help as many people as I possibly can. And Bill Gates is living that. I mean, he had a great idea, ran an incredibly successful company obviously and is now using that to give back and the whole giving pledge with all these guys, I don't think people realize just how important that is for the economy, for just mankind in general, of what that's going to mean, giving 99% of your wealth up in order to help others, I think is admirable and I would love to meet him and shake his hand and say, "Thank you."

Ted: 53:16 All right. Last one. What life lesson have you learned that you wish you knew a lot earlier in life?

Michael: 53:21 When I see things that are just wrong and that I don't like, I handle it very ... Learning how to handle that was something I really wish I had learned earlier. In baseball there was problem after problem because I had these algorithms, models to determine what pitches I should throw to what hitters. And that's kind of how I became successful, being senior signed, I mean, one out of 1,000 chance was because I was able to figure that stuff out. And I would shake off and a hitter would get a hit, which happens of course as much, as I shook off and the pitcher would go, "Why did you do that? Why did you throw that there?" Like, "Do you want to go back and analyze every single time I've shaken off? I bet my records better than it was when I








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wasn't." And he was like, "You can't have those kind of conversations like that."

Michael: 54:02 And it just, would get into these fighting matches and then this guy's a coach that's going to help determine if I get moved up or down and here I am getting in these fighting contests with him instead of really when emotion is ... There's a saying, when emotion is high, logic is low. And when you're in this situation, just say, "Okay." And move on. Then, hey, let's have a meeting. Let's sit down one on one and say, "This is what I was thinking there. What were you thinking?" And really listen and understand. Then you can get your point across and then it's a much better chance for people to understand my side and for me to understand their side instead of just right when something annoys or frustrates, used to jump on it. Really take a step back and have that conversation. I wish I had learned that much, much sooner.

Ted: 54:50 Great. Michael, thank you so much. Really enjoyed it.

Michael: 54:53 Well, thank you. I really appreciate you having me on.

Ted: 54:55 Hey, before you take off I've started sending out a monthly email that chairs a small selection of what caught my eye over the month. I get a lot of emails like this and I'm sure you do too. So I'm only going to send no more than a handful of the very best things that caught my eye. If you'd like to receive that email, hop on my website at capitalallocatorspodcast.com and join the mailing list.





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