The ultimate boon, 1995-2010

If you can't name, specifically, what a person or a team is genuinely good at and where they're weak, you can't design roles, checks, or safeguards around that reality — you're just hoping the gaps don't matter, which they eventually do.

Tools and data helped enormously in this period, but the core of it stayed stubbornly human: people willing to argue openly in front of each other, accept pointed feedback without becoming defensive, and genuinely change their minds when the evidence warranted it. Once that behavior became the normal, expected culture rather than an occasional virtue, performance improved measurably, because errors got caught earlier — often before they became expensive — and the whole organization's learning accelerated as a result.

This period also produced the firm's best-known achievement: correctly anticipating the 2008 financial crisis well before it hit, largely because the systematic, principles-based approach forced a level of stress-testing against bad scenarios that pure conviction-based investing tends to skip. The “boon” of this era, though, was never a secret market insight or a clever proprietary signal. It was an operating method in which reality — not seniority, not confidence, not charisma — was treated as the final referee, and where the organization kept improving specifically by studying its own mistakes with a level of discipline most firms reserve only for their successes.

The same systematic thinking produced All Weather, a portfolio designed to hold up across the different economic environments — rising or falling growth, rising or falling inflation — rather than betting on which one would come next. Instead of predicting the future, it balanced risk so that no single environment could do outsized damage. Growth brought its own lesson: the firm could only keep scaling if the people joining it could learn the principles and think independently, rather than waiting for me to make the calls.