I was sitting down alone by myself in a jam packed bistro on a Saturday morning. The bistro was located at an office tower Kuningan. It was buzzing, full of patrons chattering to one another. Some were nodding curiously to their conversation partner. Some were laughing to what seemed like a funny joke. And a tiny fraction was patting one another on their shoulders.
We Indonesians have the reputation of being highly amicable, including to strangers.
Because yes, I know people that were conversing in that bistro were all strangers to each another. Yet they look like they have just met a new long-lost friend. That Saturday morning was not an ordinary Saturday. It was a Saturday where we experimented with gathering 36 of our customers together and got them to have a 1-1 conversation.
To be honest it felt strange for me because I have known many of them for a year or so but I’ve only known them through their corresponding WhatsApp groups. So to see the life behind the screen felt rather unreal.
By the way the name of the event is Quiet Circle. But it is definitely a misnomer because it wasn’t quiet at all. And we surely did not form any circles. We just had people in pairs talking 1 on 1. So it formed a line, not a circle. So a Loud Pair? Anyway.
I’ll come back to you about why we built this event in a bit, but because we are all about investments, I’d like to bring your attention to a hedge fund wizard who wrote a book.
Friends of the Good
The name of the hedge fund wizard is Demond Martin. Martin spent 21 years as a partner at Adage Capital, one of the world’s largest hedge funds, with AUM of more than $46bn as per June 2023.
Hold on a sec because before I continue, I am sure that you are expecting me to write about:
His investment philosophy or his wisdom in the capital market that we all can learn from.
Or his sheer perseverance as a person from a minority racial group to achieve extraordinary success in the finance space in the United States back in the days when black lives matter was not an active campaign.
Initially that was what I expected as well. Well those two were really just minor cameos. Each chapter of the book was an earnest description of one good friend to the next.
The entire premise of the book is simple:
“Success is never a solo act.
It is built in loyalty, shared belief, and the quiet power of friends committed to one another’s good.”per this post was written, the quote above was directly copy pasted from
https://demondmartin.com
We love the phrase “self-made”. It is not a lie per se because our effort is real. But it’s a rounding error of a story because it inadvertently exclude everyone who play a part in our efforts.
Now lets think about life for a second.
I bought my first stock in the Shanghai stock exchange in college because of my friend.
I picked up Spanish randomly because of a friend and that annoying Duolingo.
I started supporting Manchester United because Sir Alex Ferguson rang me up, gave me a hairdryer for looking at Chelsea. No, kidding. Because of a friend of mine in middle school too.
Friends honestly might be the largest position in a person’s life portfolio. And I’d have to be first to admit that it is the only position that rarely gets reviewed.
And when we review it, we use the wrong metric
The number one metric that we use to review the quality of our friendship is how pleasant it is to be around the person. A good friend is the one who’s fun. The one we party with, eat well with, watch the match with.
Sound familiar?
Well that’s usually how a new beginner investor picks stocks. If the position is green, therefore it is a good company. The price went up this week, therefore I was right. It usually entails pleasant feelings as a proxy for quality of investments. At least this is how Budi and I started. Eventually, investors would learn that bad price action ≠ bad quality. Good price action ≠ good quality.
So the right metric?
Back to friends. Martin’s definition of a good friend goes right to the fundamentals which is largely based on action. One that communicates genuine interest for you to become a better version. Which also supersedes how you might feel in the moment.
Example, I might feel terrible when my friend said that I was overweight and I needed to subscribe to a gym membership and gym together with him. But on hindsight, that painful suggestion was a good indication that the friend, is truly a good one.
So the friend who tells you the business plan has a hole in it. The one who asks how you’re actually doing and doesn’t accept “busy” as an answer. The one who says the thing you needed to hear at the precise moment you wanted to hear anything else. The one who asks you to stop procrastinating when it is really time to lock in.
Is the good friend who commits their action towards your betterment.
Quiet Circle
Unfortunately as Demond Martin argues, good friends are getting rarer nowadays. Especially amongst men, conversation might only revolve around Brazilian Jiujitsu and cultured running.
We can talk for three hours and disclose nothing. Work is “busy”. Family is “good”. The actual pains and hardships are parked neatly outside the conversation. Somewhere along the way we signed an unwritten agreement that disclosing our struggles would be a shame to us and a burden to the other guy, simultaneously.
Except that there’s a plot twist: that agreement doesn’t exist.
So let me finally explain what we actually did that Saturday morning.
At Quiet Circle we paired our customers 1 on 1, most of them complete strangers to each other, and had them take turns answering questions from a set we prepared. You answer, your partner answers the same question, then you both move on to the next one. No phones, no business cards, no distractions.
The questions themselves are the engine. They escalate in three levels: ice breakers to warm you up, brewing questions that goes deep a little, and deep talks that most people have never been asked out loud. Probably not even by the people closest to them.
In other words, it is the opposite of a networking event. Networking goes wide: you touch everyone in the room shallowly, collect thirty contacts, and make zero friends. Quiet Circle goes deep: one person, all the way down.
It is a setup heavily inspired by Nicholas Epley, a professor at Chicago Booth who designed a similar conversation event amongst hedge fund managers (coincidence that everything is about hedge fund managers in this post isn’t it?).
Example questions that were put in the event:
Ice breakers:
”What’s a small hobby or useless thing you do just because it’s fun, not because you want to be good at it?”Brewing:
”What’s something you envy in other people, and what do you think that envy is trying to tell you?”
”What advice do you find yourself giving to others that you don’t actually follow yourself?”Deep talks:
”If all your titles, degrees, and businesses vanished tomorrow, who is the person that remains?”
”If your younger self could see your life now, what would they be proud of and what would disappoint them?”
Before we continue, how would you feel about answering those questions to a complete stranger?
Indeed before the event, I briefly asked some participants predicted how it would go. Consistently, they will predict:
It will feel awkward
And perhaps because people believe that they aren’t good communicators.
Then people went in to have the conversation, answering these tough tough questions to each other. Then hearing each other’s responses carefully.
But.. the awkwardness never showed up. People enjoyed the deep conversations very much as they felt connected to the stranger across the table. My favourite part, people were consistently surprised by how much the other person cared about what they had to say.
So essentially, this is the funny conundrum. Everyone in the room wants a deep conversation. But everyone in the room also thinks that they are the only ones who want to have a deep conversation.
To me this sounds like a mispriced asset
Everybody sees this activity as a risky one: I will be judged, I will feel a bit ashamed, and so on. But the return everyone is ignoring, new connection, shows up almost every time. So we are not really bad at friendship afterall. We are just bad at forecasting friendship.
That distinction matters, because it means the loneliness of surface-level friendship is not a character flaw. It’s a forecasting error. And unlike character, a forecast can be corrected by simply looking at the data.
Further, we have learned that when reality is better than expectation, we get none other than excess returns 😎 (of course not financial advice haha).
Closing remarks: the real heroes
Let me close this essay with Martin’s premise.
Success is never a solo act. Remember, the man managed money at one of the largest hedge funds on the planet, and when he finally sat down to summarise his life, the table of contents came out as a list of friends.
This got me wondering what my own table of contents would look like. The college friend who got me to buy my first stock in the Shanghai Stock Exchange. The friend who tricked me into Spanish. The middle school friend who handed me Manchester United, which some seasons feel less like a test of patience (sighpie). The friend that got me to wake up at 5.45AM to go for 40-50 mins runs.
And honestly, a few chapters would be filled by our customers, because a lot of what Budi and I know today was learned from them.
Compounding wealth is a hard thing done over a very long period. And I’ve come to believe what Martin believes: to do hard things over long periods, good friendship is not really a nice-to-have, it really is indispensable.
The real heroes of your story are probably already in your contact list. They are the largest position in your portfolio. Maybe it is time we review it like one.
Cheers.
Special thanks to Dr. Rindang Asmara from 1,000 Days Fund who passed me Demond Martin’s book out of the blue. I am running a marathon for them so I am going to shamelessly ask you to visit this page and donate. Shoutout to Quiet Circle attendees (hope you had fun) and all customers turn friends and the other way around. To our readers, may you be able to forge great lasting friendships in this one!