ExpertsFMPatrick O’Shaughnessy - Creating on Principle - [Invest Like the Best, EP.455]
Invest Like the Best with Patrick O'Shaughnessy · January 20, 2026
5 Selected Lessons:
framework · 2 heuristic · 2 reasoning_pattern · 1
Inventing on Principle (find a principle, not a goal)
Source
Invest Like the Best with Patrick O'Shaughnessy — Patrick O’Shaughnessy - Creating on Principle - [Invest Like the Best, EP.455] (January 20, 2026) · at 16:27 ▸ · at 19:45 ▸ · at 22:09 ▸
When this applies
when you're trying to find direction for your career or company and goal-setting feels hollow or short-sighted
The takeaway
Organize your work around a reusable principle that fires whenever a condition is detected, rather than around a single fixed target, so you stay open to opportunity from the periphery.
Why it works
A principle is a standing obligation triggered whenever you see it violated, so it generates action continuously and adapts to new situations, whereas a goal is a fixed endpoint that creates blinders once set.
One level up
Durable motivation comes from a repeatable rule for action, not from a finish line.
Where it stops holding
This stops working when you need fast, measurable, time-bound execution (e.g., shipping a specific product by a deadline) where a concrete goal provides necessary focus and accountability.
Detail
procedure:
- Identify a condition whose violation genuinely bothers you (e.g., gap between creation and feedback; undiscovered talent going unnoticed).
- State the principle as an obligation: when I see X, I must do Y.
- Apply the principle universally — across investing, hiring, friendship — rather than confining it to one domain.
- Resist setting concrete goals, since goals create blinders and foreclose serendipitous opportunity; let principle-following surface opportunities from the periphery.
rationale: A principle, once found, informs every decision made with your time daily, and it took the speaker roughly a decade to be able to articulate his own clearly.
In their words
I love that way of thinking about finding one's life's mission is find a principle. Don't necessarily have a goal, but find a principle. And my principle is like when I see undiscovered talent, it is my obligation to do this thing, to get to know them, to learn from them, to start introducing them to people, to start.
Learn, build, share, repeat
Source
Invest Like the Best with Patrick O'Shaughnessy — Patrick O’Shaughnessy - Creating on Principle - [Invest Like the Best, EP.455] (January 20, 2026) · at 1:28:31 ▸
When this applies
when trying to turn a personal habit or passion into a compounding career, without a predetermined plan
The takeaway
Pick an activity you already do obsessively and at high repetition, and build a public loop of learn→build→share→repeat around it; let the destination emerge from the loop rather than being set in advance.
Why it works
Each loop of learning, building something from it, and sharing it publicly creates new relationships and opportunities that weren't predictable in advance, and those opportunities compound because they build on cumulative trust and visible output.
One level up
Compounding, unpredictable career paths come from sustained loops of action on a natural passion, not from goal-directed planning.
Where it stops holding
This stops working when there is no natural high-repetition passion to anchor the loop, or when circumstances (privilege, resources, time) don't allow sustained low-return effort before compounding kicks in.
Detail
procedure:
- Find the activity you naturally do at extremely high volume/reps because you love it (for Patrick: reading).
- Learn obsessively within that activity.
- Build something from what you learn (an email list, then a podcast).
- Share it publicly and repeat the loop continuously.
- Let each stage introduce unplanned people and opportunities that daisy-chain into the next stage.
rationale: Patrick explicitly traces an unbroken causal chain: reading → email list → podcast audience → relationships → software business sale → angel investing → Positive Sum fund, none of which was planned in advance.
In their words
I used to have the saying, learn, build, share, repeat. And just like, do that until I die. And I believe in that. And so it's still learn, build, share, repeat.
Patrick's take: originality, hardship, transformation may make a story compelling
Source
Invest Like the Best with Patrick O'Shaughnessy — Patrick O’Shaughnessy - Creating on Principle - [Invest Like the Best, EP.455] (January 20, 2026) · at 24:53 ▸ · at 37:57 ▸ · at 1:18:47 ▸ · at 1:48:09 ▸
When this applies
when crafting or evaluating any narrative meant to inspire or persuade — a pitch, a brand story, a personal path
The takeaway
Patrick's view is that a compelling story (and perhaps a compelling venture) tends to combine a distinctive, uncopied starting point, a real cost/difficulty endured, and a meaningful change produced — he suggests any one alone may be insufficient.
Why it works
Patrick suggests an original path may require owning full responsibility and leaving comfort, which could signal authenticity; hardship may filter out easy imitators and suggest commitment; transformation (of self or customer) may give the story a payoff that makes it memorable.
Where it stops holding
This stops working when applied as rigid formula rather than diagnostic — some valuable stories or businesses may lack dramatic hardship yet still matter (e.g., quiet competence).
Detail
approach: Patrick suggests breaking a compelling story (personal or business) into three components he identified and looking for all three.
signals:
- Originality — Patrick suggests the person/venture chose a path that wasn't already laid out, which may feel scary because it could mean total ownership of outcome.
- Hardship — Patrick suggests the path to the outcome was genuinely difficult, which might both suggest commitment and deter easy copying.
- Transformation — Patrick suggests something or someone (the founder, the customer) is meaningfully changed by the journey or product.
rationale: Patrick speculates that fear of an original path (full ownership, leaving comfort) may be a reason people default to conventional paths instead of their own.
In their words
The best principles for a great story that I could come up with were originality, hardship, and transformation.
Chase the feeling of being alive, not money/power/fame
Source
Invest Like the Best with Patrick O'Shaughnessy — Patrick O’Shaughnessy - Creating on Principle - [Invest Like the Best, EP.455] (January 20, 2026) · at 44:25 ▸ · at 51:39 ▸
When this applies
when choosing between opportunities and unsure which to prioritize for long-term fulfillment
The takeaway
Use a felt signal ('does this make me feel more alive') as the compass for direction, because extrinsic rewards become addictive targets that distort subsequent choices.
Why it works
Money, power, and fame are intoxicating but create escalating appetite (you chase more of the same), whereas the feeling of being alive is self-renewing ('abiding joy') and doesn't run out with use.
One level up
Internal, renewable signals are more reliable long-term guides than external, depletable rewards.
Where it stops holding
This stops working when you have urgent survival-level financial or safety needs that must be met regardless of how you feel about the work.
Detail
rule: Orient decisions around the feeling of being alive / abiding joy rather than around money, power, or fame.
threshold: If you catch yourself chasing one of the three traditional targets (money, power, fame) instead of the feeling itself, treat that as a warning sign.
rationale: Abiding joy increases with use; money/power/fame create a craving loop that, once started, becomes the new goalpost and crowds out the original motivating feeling.
In their words
And money, power, fame will not. And so I think the answer to your question or your worry is just like, make sure you're chasing the feeling of being alive and that the intuition around that, and you'll be fine.
Judge by the best work, not credentials or potential
Source
Invest Like the Best with Patrick O'Shaughnessy — Patrick O’Shaughnessy - Creating on Principle - [Invest Like the Best, EP.455] (January 20, 2026) · at 1:08:20 ▸ · at 1:21:22 ▸ · at 1:24:07 ▸
When this applies
when deciding who to hire, promote, or back for any role
The takeaway
To fill a role, find whoever already produced the best observable example of that exact work, and go get them — don't bet on potential or abstract traits.
Why it works
Past demonstrated output in the exact relevant craft is the strongest available signal of future performance, because it bypasses the noise of self-reported traits or unproven potential.
One level up
Revealed output beats stated or inferred capability as a predictor of quality.
Where it stops holding
This stops working when no one has yet produced the relevant work (a genuinely new category), forcing reliance on adjacent signals or trial engagements instead.
Detail
rule: Find the single best existing example of the work you need done, identify who made it, and recruit that person directly.
threshold: Evaluate by the single best piece of output, not an average or a resume; 'did they make a good invention/profile/company' is the only question that matters.
rationale: Charlie Munger's answer when asked how he and Buffett find great CEOs: find someone who is already a great CEO; don't hire for potential.
In their words
If you want to hire someone for a thing, just go consume as much of the thing made by