Howard Lindzon – Fintech and Trend Following

**Patrick O'Shaughnessy** (0:04)
Hello, and welcome everyone. I'm Patrick O'Shaughnessy, and this is Invest Like the Best. This show is an open-ended exploration of markets, ideas, methods, stories, and of strategies that will help you better invest both your time and your money. You can learn more and stay up to date at investorfieldguide.com.

**SPEAKER_1** (0:24)
Patrick O'Shaughnessy is the CEO of O'Shaughnessy Asset Management. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of O'Shaughnessy Asset Management. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.
Clients of O'Shaughnessy Asset Management may maintain positions and the securities discussed in this podcast.

**Patrick O'Shaughnessy** (0:49)
My guest this week aspires to be the Larry David of investing and we discuss why. Howard Lindzon is hard to categorize. He's primarily an early stage investor right now, but he's participated in all types of investing. He describes himself as a trend follower and always has a unique take on popular topics. In this conversation, we cover his investing history and his take on the FinTech investing landscape today. What I'll remember most is the idea that we should focus on what is happening versus what we think will happen or might happen. There is a Peter Lynch like quality to some of Howard's thinking and a willingness to embrace the weird that I find very appealing. The few times I've met Howard, I've smiled or laughed most of the time, which is about as nice a thing as I could say about anybody.
He's a good example of why I like this podcast format. His investing style bears literally no resemblance to my own, but it got me thinking about a lot of new things. I hope you enjoy our conversation.
So maybe we'll start with why your goal is to be the Larry David of investing.

**Howard Lindzon** (1:46)
He doesn't care who likes him, and that's the way I am with investing is I don't care what other people say. I'm interested in what they say, but I don't care what they think about me.
So I think the whole ability of people not caring what they think about me has helped me.

**Patrick O'Shaughnessy** (1:59)
A lot of comedy is just really good observation, and I've heard you describe that your investing skill, let's say, is really just that you're a trend follower.
So I'd like to talk about that notion of trend following in as many different kind of ways, maybe kind of beat that idea to death, because I think it's a really, your career is so interesting and looking back on it and weaving the narrative is even hard, because it's kind of all over the place. But talk about this idea of trend following and why that's how you describe your investing style.

**Howard Lindzon** (2:25)
The simple part of my theory is nature, like a pilot fish and a great white shark. If you look at a picture of a great white shark anywhere on Wikipedia or wherever you're going to look at a picture of a great white shark, it's beautiful, but there's all these fish underneath the great white shark, and they live a pretty damn good life. No one talks about them.
They're trend followers. As long as they don't stray too far away from the shark, they can talk smack, they can mess with other fish, and they're always going to get food. This shark doesn't eat everything. That is a trend follower in my opinion. That's nature. It's like stay close to the great white sharks without getting in front of them.
Then the other thing is Tour de France. I'm a cyclist, and I'm fascinated by the Tour de France, scared of obviously the peloton because you have to know how to stay with a peloton, and maybe Twitter help and other things. I mean, I look at Twitter and social networks as finally a global social peloton. You know who to follow, and you draft behind these smart people, you are a trend follower. You don't have to necessarily set trends. You just have to stay close to the trendsetters, and money will be made.
That is how I, at a very highest level, how I think of trend following. Then two is, with the Tour de France is, you can go really fast in a peloton if you know to stay with the peloton, and there are points where you can break off and go in the lead, but you got to pace yourself to know that the peloton is going to be coming for you.
That's like startups, is like you stay with something and you are using products and you love everything and you love the community, but there is something that is missing and you decide, I am going to go build it and you break off, but you better have enough money, you better have the right team, and you better have the runway, and you better have a business model or the pack is going to catch you. That is trend following in the startup world. I just look at it really simply like that, and I participate. The thing is, you got to be in the pack, and you got to know who the great whites are.