Graham Duncan, the co-founder of East Rock Capital, is a highly regarded investor and thinker whose insights on talent, investing, and life have been sought after by many. Through various interviews and essays, he has shared a wealth of knowledge.

On Investing and Strategy

  1. "It's not how well you play the game. It's deciding what game you wanna play."[1] - This quote, which Duncan attributes to philosopher Kwame Appiah, emphasizes the importance of strategy over mere execution.
  2. “In life the challenge is not so much to figure out how best to play the game; the challenge is to figure out what game you’re playing.”[2][3][4][5] - A slight variation of the above, this version appears in his essay "The Playing Field."
  3. “My appetite for finding the best person in the world to do the thing instead of me doing it is almost infinite.”[6]
  4. “Most investing strategies are downstream of the simple goal of (1) making money and (2) not losing too much.”[6]
  5. “The great ones view investing as a game, and they know exactly what game they’re playing.”[2][4]
  6. "An investor who uses one game will have less sustainable returns than those who reach the next stage."[4]
  7. “Great investors don’t have a static sense of identity, such as ‘I’m a value investor like Warren Buffett.’”[7] This can put them in competition with an index, playing a game defined by their peers.
  8. "Great investors come to understand which factors in the market they can control and which factors they cannot."[4]
  9. "The principal should set the condition that tells the agent that it is okay to make mistakes; if the agent feels that he cannot make mistakes, then he probably won’t take sufficient risks."[6]
  10. “I’m looking for a trace of fear in myself that this guy is coming for me, that he will replace me.” - Duncan quoting another investor on what he looks for in an analyst, highlighting the desire for intense ambition.[8]

On Talent and Reference Checking

  1. “Talent is the best asset class.”[9][10]
  2. "People think of references as a thing you do after the fact. To me, it's the whole thing."[9]
  3. “Hiring well is the most important thing in the universe.” - Quoting the gaming company Valve.[5]
  4. "On-list references have bizarrely high signal value because... nobody wants to lie." After about 10 minutes, they run out of their scripted positive remarks and the truth starts to emerge.[9]
  5. “Ask the candidate: ‘If you were hiring someone to fill this role, what criteria would you use?’” This reveals their understanding of what excellence looks like in the position.[11]
  6. "I sometimes imagine I've dropped the candidate I'm interviewing on a desert island and I come back five years later. Some people I'd worry about, some people I wouldn't." - A thought experiment to gauge resourcefulness.[3]
  7. "What’s a system or game you’ve hacked in the last year?” - A question borrowed from Y Combinator to explore a candidate's resourcefulness.[3]
  8. "Assess whether the reference giver is calibrated—what's their sample size and do they actually know what excellence in this role is?"[5]
  9. “When he was in his really heavy days at East Rock, Graham would know every talented person at every investment firm that might leave to start their own thing, but he could also think deeply and incisively about whether they were ready for that.” - A reflection on Duncan's process by Patrick O'Shaughnessy.[12]
  10. "He’d talk about how a person was amazing at Goldman, but did they have an independent identity? Were they self-aware enough? Were they unique enough?" - Patrick O'Shaughnessy on Duncan's evaluation of talent.[12]

On Self-Awareness and Personal Growth

  1. “Everyone’s genius is right next to their dysfunction.”[10]
  2. “My mission in life is to get as many people as possible into positive feedback loops.”[8][9]
  3. "It's a good skill to have because it's right next to a weakness of mine, which is I'm kind of lazy." - On his preference for setting up systems that run themselves.[8][9]
  4. "I like taste over judgment because judgment implies there's one answer, whereas taste is...you have a certain taste."[9]
  5. “The greatest exercise you can do when you’re stuck or in a rut in your life is to remember what your favorite children’s book was...somewhere in that book is the clue to not only what makes you tick, but also to your life’s purpose.”[1]
  6. "Only those who will risk going too far can possibly find out how far one can go." - Quoting T.S. Eliot.[4][7]
  7. "The self-transforming mind both values and is wary about any one stance, analysis, or agenda."[5][13] It understands that any single framework is incomplete.
  8. "Having a socialized mind dramatically influences the sending and receiving of information at work. If this is the level of mental complexity through which I view the world, then what I send will be strongly influenced by what I believe others want to hear." - On Robert Kegan's stages of adult development.[5][13]
  9. "I invest a disproportionate amount of my income in paying for an ever-growing collection of trainers and coaches."[8]
  10. "Swimmers talk about the concept of 'water feel,' which is getting a grip in the water and pulling your body past that point instead of ripping your hand through the water." - An analogy for moving through life with efficiency and grace.[14]

On Mental Models and Decision Making

  1. "The most useful mental model I have found to help understand what makes people tick is...the ‘Big Five’ or OCEAN: open-minded, conscientious, extroverted, agreeable, neurotic."[13]
  2. "There is a difference between what Chris Argyris called 'espoused theory' (what someone says when they are interviewed) versus their 'theory in use' (the mental models that actually drive their actions in daily life)."[5]
  3. "Visualize yourself riding a huge elephant while you interview someone riding a second huge elephant." - Using Jonathan Haidt's metaphor of the rider and the elephant to understand conscious and unconscious drives in an interview.[5]
  4. "When people use a lot of jargon and cliches and language that at times doesn't feel like their own... that's a sign that maybe they're a little bit earlier in their development."[8]
  5. “Eventually you will see that in the way of the Dao, you’re not going to wake up, see what to do, and then go do it.” - On the emergent nature of decision-making.[6]
  6. "Humor and having a 'light grip' can help ease tension during high-stress situations."[6]
  7. "One of the greatest gifts we have for each other... is the positive feedback loop we can put someone into purely by believing in them, by seeing their genius and their dysfunction clearly and then helping them construct conditions for the former to flourish."[3]
  8. "In the hiring context, many people are blind to the way that they are creating the interaction themselves with the other person." - On the importance of self-awareness for the interviewer.[6]
  9. "Compulsively seeking new ways of seeing reality." - As described in his X (formerly Twitter) profile, and noted by Patrick O'Shaughnessy.[15]
  10. "Whatever a human being desires for themselves will not come about exactly as they first imagined it... what always happens is the meeting between what you desire from your world and what the world desires of you."- Quoting the poet David Whyte.[3][5]

On Career and Mastery

  1. "The people who really love you are the people where you scramble together with difficulty and you’ve jointly gotten through." - Quoting Charlie Munger on the value of shared adversity.[13]
  2. "The small minority of managers who reach this level are truly absolute return oriented. They define success in terms of what they believe they can achieve over decades, not relative to what others are achieving at any given moment."[4][7]
  3. "Athletes move up to the top ranks through qualitative jumps—noticeable changes in their techniques, discipline, and attitude... accomplished usually through a change in setting." - Citing sociologist Daniel Chambliss on the nature of achieving mastery.[7]
  4. "As few as 20% of us are in the seat that best optimizes our talents and skills at any given time—the seat that makes us feel at home in the world."[5]
  5. "Managers are more significant than firms." - One of the founding theses of East Rock Capital.[12]
  6. "Smaller funds perform better than large ones." - Another of East Rock Capital's founding theses.[12]
  7. "It's the way you learn to play the cards you've been dealt, rather than the hand itself, that determines the worth of your participation in the game."[2]
  8. "You unleash all this extra investment energy and genius that they weren't accessing in their prior context." - On the benefit of helping talented people start their own firms.[8]
  9. "Favorite hats are like happiness: you'll never find it when you're out looking for it. It can only be stumbled upon and henceforth worn for all its worth and warmth."[16]
  10. "Desire wants what it wants; get in tune with your desire."[6]

Sources

  1. tim.blog
  2. danielscrivner.com
  3. moontowermeta.com
  4. youtube.com
  5. grahamduncan.blog
  6. podcastnotes.org
  7. youtube.com
  8. youtube.com
  9. tim.blog
  10. tim.blog
  11. youtube.com
  12. joincolossus.com
  13. grahamduncan.blog
  14. meaningring.com
  15. joincolossus.com
  16. duncangh.com