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…I don't think I've ever had a Guinness. Unlike Scott Wu, I've had many, many, many beers, perhaps thousands, but I'm not sure I've ever had a Guinness. Wow. So you wake up ahead of earnings— No, no. Forget earnings. Every day. You just want to see what happens at the open. No, I don't want to wake up. I actually don't want to wake up. I mean, if I ran a private company like Stripe, I wouldn't go public. I think the public markets— It's kind of ironic because you're a public markets investor. Yeah. I think the public markets are kind of problematic at this point. Should we try to split the G? Oh my God. No, we cover this in an episode with an actual Irishman. It's completely—it's an invasive species. It's a made-up TikTok thing. How did that start? But you can. You're a crass American, so you can, and maybe we should get it on camera and that would be funny. Are we really trying to do this? Split the G? Only Mike is. That's not bad. Can we zoom in here, please? Camera roll three. Dan Sundheim is one of the world's top hedge fund managers. He runs D1 Capital, which invests in public and private companies across a bunch of totally different industries. Dan's one of the smartest investors I know. So Daniel Gross and I tried to get into his head and figure out how he analyzes companies. Cheers. Cheers. Okay. Daniel and I were wondering, what trading app do you actually use if you are trading underneath the table during this interview? Are you in Interactive Brokers? Are you WhatsApping someone who executes it? I'm just emailing. I'm emailing the trader with that, yeah. I'm checking Bloomberg all day long. That's the app on the my phone, but I'm just emailing, texting my traders. And if the trader's sleeping or something? Is there an app that you use? Or— If he's sleeping during the day…we haven't encountered that problem. That'd be a different problem. But if you're sleeping at night, we actually have overnight traders in Asia. Once you told me sometimes when you struggle to sleep at night, there's nothing better to do than wake up and start trading Asia. So, is that your East Coast trader or do you have another person? Yeah, we have another person who sits in—that we outsource. I see. Yeah. I see. And then what fraction of AUM is just Dan Sundheim trades or Dan Sundheim decisions? 90, 95% plus. Oh, so all of it? Yeah. I mean, people have trading authority but most of the trades, I put in myself. So memos come up to you and then you ultimately size them and decide whether to do them or not or something like that? h. I mean, people have trading authority but most of the trades, I put in myself. So memos come up to you and then you ultimately size them and decide whether to do them or not or something like that? Yeah, I mean, the process starts way before the memo. I'm in dialogue with the team about the idea, why they like it. We're having conversations way before it gets to the memo stage, and then it gets to the memo stage and usually we start buying it before, because in the public markets, if you have a good idea, you could take a month and a half to write a memo but by that time, the price may have moved. So usually we start buying it before the memo's done, and then the memo is the final compilation of the due diligence. And that's when the best thing that could happen is we're buying it and then the stock keeps going down. So by the time you have the memo and have even the most conviction, you can buy more. A lot of times it's going the wrong way. But a fraction of the time, do you finish writing the memo and you're like, “Oh no, this is a terrible company, this is not good.” Yeah, yeah. No, that doesn't happen because usually they'll start writing the memo and then they'll come to me and be like, “I think I made a mistake” and we'll sell it. I don't think I've ever owned a position because we had discussed it, then read the memo and been like, “Oh my God, what are we doing here?” Yes. That'd be a bad sign for the analysts. We jumped right off the deep end. Describe what D1 does—AUM, strategy—for the uninitiated. Yeah, so we invest in public and private companies. We do fundamental analysis, and so deep research, trying to understand business models, trying to understand company prospects, choosing the right management team. And whether it's public or private, we're investing with a horizon of three to five years. And we apply the same due diligence process to both public and private. Obviously, private is a one-way door and public is a two-way door, so that's different. Is private actually a one-way door, even as just the private markets have matured and there's so much more secondary activity and things like that? Do you still have to treat it as a one-way door? Definitely. I mean, you can sell—the best companies, you can sell easily, but those aren't the companies you want to sell. So we rarely transact in the secondary market because we don't want to sell the best companies. And it's hard. People think you can just transact in the secondary market, but if you want to sell $50 million, a hundred million dollars, people have to get information rights from the company. And then it's like— And it's viewed as a signal if you're large— Exactly. They go to the management team and say, “I want to sell,” and the person doesn't follow through. It's not great. So the AUM is about $25 billion—about two-thirds private, $10 billion public. Public is long, short, all bottom up, no quant. Really kind of the same thing people were doing in terms of stock picking 30 years ago.…

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