#17 -The Writer

Vitaliy Katsenelson is an investor, writer and stock-picker. He eschews the usual equity index 60:40 portfolio and uses  individual stocks.


Vitaliy Katsenelson is an investor and writer. Born in Russia, he now runs an investment adviser in Denver which specialises in picking individual stocks and eschewing the usual 60:40 portfolio with equities indexed. In this podcast we talk about investing, about his third book and about his life philosophy – Vitaliy has a wisdom beyond his years and his positive attitude can improve anyone’s life.




Vitaliy grew up in Russia and moved to the US at the age of 18. He was hired by an investment firm for his computer skills and at the same time was taking a finance class. He then had an “aha” moment, when he realised that investing was what he wanted to do. In 1997, he faxed his resume to every investment firm in Denver. One firm needed an analyst but hadn’t yet advertised the job. He started there as an analyst, moved to portfolio manager, then CVIP, and 25 years later, today he is CEO and owner of a $350m AUM firm in Denver.


Similarly to Richard Oldfield, Vitaliy is not a proponent of indexing or using ETFs, but believes in stock-picking. He believes that we could be in for an extended period of sideways markets in which investors will have to rely on stock-picking to deliver returns. In the long run the market tracks earnings growth; sometimes valuation will add to returns and sometimes, when coming from a period of high valuations, it will detract from returns. Today we are coming from a period of high returns.


In any investment firm, having the right clients is the key to success. Vitaliy’s clients find him. He spurns the cocktail circuit and his firm does no cold calling. Rather clients find him, generally through his writings. He thinks his client base has a much lower tendency to FOMO than many others. He likens himself to a pilot flying a plane and he keeps his passengers/clients calm through continuous communication, especially when the going gets turbulent – he wrote to clients weekly during the initial phase of Covid in March, 2020.


Vitaliy believes that scarcity is an essential concept that enables him to lead a more fulfilled life. US society is an aspirational society, it’s about abundance. But where there is abundance, we don’t value things. We all have different wealth, different health but on average a similar amount of time. And he views time as a scarce resource, which makes him value his time with his kids, so that the school run is no longer a chore but a privilege – he will only take his elder daughter to school another 400 times, so he wants to appreciate each time. I thought this was a wonderful demonstration of his mindful approach to life.


This positive attitude of Vitaliy’s is apparent when he talks about learning and uses the example of his chess teacher. His teacher has a rating of 2300 – 2800 is world champion level and 99% of players are under 1700. Huis teacher is no longer progressing and is not enjoying the game as much. Rather than envying his teacher’s rating, Vitaliy celebrates his lack of proficiency as it gives him the opportunity to improve. We can learn a lot from this positive framing and Vitaliy’s attitude to life.

ABOUT Vitaliy

Vitaliy Katsenelson was born in Murmansk, USSR, and immigrated to the United States with his family in 1991. After joining Denver-based value investment firm IMA in 1997, Vitaliy became Chief Investment Officer in 2007, and CEO in 2012. Vitaliy has written two books on investing and is an award-winning writer, for publications including Financial Times, Barron’s, and Institutional Investor. Vitaliy lives in Denver with his wife and three kids, where he loves to read, listen to classical music, play chess, and write about life, investing, and music. Soul in the Game is his third book, and first non-investing book.

soul in teh game


We talked about the book Blindness by Portuguese author Jose Saramago as Vitaliy loves classical music so much he cannot imagine losing his hearing and would rather lose his sight. I highly recommend the book, but it’s really scary.

Vitaliy recommended the wonderful book Richer, Wiser, Happier: How the World’s Greatest Investors Win in Markets and Life by WiIliam Green – if you haven’t read it, please go out and buy it.

He also recommended The Art of the Good Life: Clear Thinking for Business and a Better Life by Rolf Dobelli, which is a good book, but I think his The Art of Thinking Clearly is even better, especially for investors.


His site about classical music

Get extra chapters of his new book here

The Intellectual Investor podcast is an audio version of Vitaliy’s writings.



Soul in the Game is published by Harriman House and until the end of 2022 you can get 30% off using the code BTBS30.



Vitaliy reached out to Steve to ask to come on the podcast to promote his book and Steve took a nano second to ask for a date and time, as he has been a long time admirer of Vitaliy’s writing.



00:03 – Wealth preservation in 2020
21:10 – Talking money with clients
37:24 – Amazing reviews and endorsements
46:28 – Working smart and productive
01:04:25 – Instilling love for classical music
01:11:29 – Fun reading and London memories



STEPHEN CLAPHAM: Vitali Katznelson is a Russian born investor and writer in this fascinating and wide ranging discussion. We talk about wealth preservation in the 2020 s. Why it will be different from previous decades and how he thinks stock picking will be key to preserving wealth.

STEPHEN CLAPHAM: We discuss how in turbulent markets, he dampens the volatility of his client’s blood pressure by regular and clear communication, how he doesn’t look for clients but allows them to find him because he thinks having the right clients is key to success in any investment firm.

STEPHEN CLAPHAM: And we talk about his life philosophy as set out in his latest book, Soul In The Game. We also talk about why scarcity is the key to a happy and fulfilled life. And you’ll learn what I have in common with General Stanley Mcchrystal Vitali’s life philosophy reveals a wisdom beyond his years and his positive attitude can improve anyone’s life.

STEPHEN CLAPHAM: We spend less time on investing than in some previous episodes, but it really was enjoyable. And my friends at Harriman House are offering 30% of Vitali’s book and indeed my book, The Smart Money Method until the 31st December visit their website and use the Code BT BS 30.

STEPHEN CLAPHAM: Vitali. Welcome to the podcast. I’m really excited to talk to you. Thank you so much for coming on.

VITALIY KATSENELSON: It’s my pleasure. Thank you.

STEPHEN CLAPHAM: So look, let’s start by talking about how you got into investing because that’s how we always start. And it’s very interesting. So many of the guests, their entry into investing was completely serendipitous.

VITALIY KATSENELSON: Tell us about how you ended up the boss of I ma So, it is, I guess I would, I would argue that I had the same kind of experience. It was serendipity and luck.

VITALIY KATSENELSON: So, I was born in Russia and, and I moved to United States in 1991. I was 18 years old and I had no idea what, what I wanted to do when I kind of grow up. So I went to college and in college I tried six or seven different majors and couldn’t really find the one I liked. And then I got a job at an investment firm and they hired me because of my computer skills.

VITALIY KATSENELSON: And at the same time I was taking a finance class, and this kind of serendipity between me taking a finance class and work investment firm. I started to discuss what I learned at school at work and start to have a lot of interesting conversations with portfolio managers. This is where I realized, oh my God, actually, this is something very interesting to me.

VITALIY KATSENELSON: And at that point, it’s like this, I had this aha moment like this is what I wanna do for the rest of my life. And I changed my major for the last time to finance, got my graduate and undergraduate degree in finance, graduate degree in finance C FA. And basically kind of focused on being in this, you know, kind of doing the best thing for the rest of my life. Now I got this job. This is kind of interesting story.

VITALIY KATSENELSON: So the firm I worked for before they did not need another Analyst. So I had to look for another place to work. And so this is 1997. I want you to remember this is before the internet, kind of like the internet was there, but not really. So I literally opened Yellow pages.

VITALIY KATSENELSON: Yeah, that was the time Yellow pages and faxed my resume to every single firm in Denver. Like it took me, I don’t know, three or four days to do this, but I kind of just, just send one fax at a time and this firm, the Analyst who was working here before me, she left and they did not even post the job online yet.

VITALIY KATSENELSON: I mean, they were on the newspaper so I was competing against nobody because they, so I, you know, as, as I’ve been told after the fact I was the only person who, who was in, you know, who was interviewed for this job. And so I do very well in competitions when I can, when I compete against nobody. So I won.

VITALIY KATSENELSON: And and that’s how I got the job. So this was 1997 today’s the 2022. So that was 25 years ago. So I started here as an Analyst then, over time transitioned to manager then then Cio and now I’m a CEO and owner of I ma fantastic.

STEPHEN CLAPHAM: And you’re, I mean, it’s a big firm, right?

VITALIY KATSENELSON: You’ve got several $100 million in, in, well, because, you know, we manage about $350 million so big, you know, the relative world but, more than this, you know, universe. But, you know, it’s a, it’s a, we are a good firm. I’m, I’m a, I’m a, I’m a, I don’t look at how big we are. I look how good we are. And I would argue we are a good firm. So that’s more important to me than the size.

STEPHEN CLAPHAM: Well, I, I, I’m sure you are, but I was fascinated to read in your book, which we’ll come to later that you aren’t even the top in the top 20 in Denver.

VITALIY KATSENELSON: I mean, that seems extraordinary that you, you’ve got that we may actually, it’s kind of, it’s, to be honest, I’m not even sure anymore you may be, but I just, I, I stopped looking is a difficult business, isn’t it?

STEPHEN CLAPHAM: Because I did a spell where I used to advise a large wealth manager in, in the UK. And I used to help them pick international equities because they had a lot of experience in the UK. But they wanted to go more Overseas and I then started running or helping them run some money. So it was technically run by somebody else.

STEPHEN CLAPHAM: But I picked the stocks and it was really difficult because everybody had a different portfolio. And so, you know, when you’re successful, more people want to give you money, but the stocks that you’ve picked for the first people aren’t necessarily the stocks you pick for the next. Do you have a model portfolio that everybody follows? How does it work?

VITALIY KATSENELSON: You’re asking good questions. So yes. So the what we do every portfolio is customized for the client. But there’s a when I, when I say this, it sounds a little bit, I’m overstating the case a little bit. So let me, let me kind of peel the layers of that. Ok. So when a person comes to us, we ask him, you would you like to be, we have two products and not the right two strategies.

VITALIY KATSENELSON: You have a dividend. We have a kind of our active value strategy, which is kind of traditional value strategy, active value strategy. And then we have a dividend strategy, which is a similar strategy to the first one except now we, you know, we also want, we want to buy stocks that paid, you know, a significant dividend. Ok.

VITALIY KATSENELSON: So once people, they make this choice, they also tell us about if they have any kind of restrictions, like meaning some people don’t want to own.

VITALIY KATSENELSON: I don’t know like a tobacco stocks or energy stocks. So, so they have these kind of restrictions and then finally, when we buy stocks for them, we only buy stocks that are still undervalued. So this is an important point. This is where customization happens. A lot of customization happened. Let’s say you bought a stock, which we think is worth $100.

VITALIY KATSENELSON: And six months ago, we bought it when, when it was at $40. And let’s say now it’s at $80. So if the stock has doubled and it’s still not at the fair value. So if there’s, we’re still holding it, we might have reduced the position a little bit. Ok. So when the new account comes in, we would not buy that stock for this, for new, for a new client.

VITALIY KATSENELSON: And we would buy some other stocks. So a lot of times what would happen, new new clients portfolios would look different from the accounts that just started with us.

VITALIY KATSENELSON: Let’s say you have two clients with, with, with without any restrictions in the same strategy, but they come to us even two weeks apart or six months apart, all their portfolios will look different and the amount of cash, this is a very important point, the amount of cash they have will will be different as well.

VITALIY KATSENELSON: Over time, this portfolio will look similar more, more similar over time. But in the beginning, they’re gonna look very different.

VITALIY KATSENELSON: And this is actually like this has helped us tremendously over the last six months because like we had, you know, we, we would not buy into stocks that were fairly, you know, kind of undervalued but not as undervalued. And so now we can buy them a lot cheaper. So, yes.

STEPHEN CLAPHAM: Can you talk a little bit? Because, I mean, 60 40 has been the sort of staple diet for wealth managers here, Ria s in the US and it isn’t going to work any longer. I mean, it’s not been working this year, obviously and it seems unlikely that it will work for, for several years. Well, what’s your view on that?

VITALIY KATSENELSON: I think it was a kind of a mindless strategy from the nineties.

VITALIY KATSENELSON: You know what I mean by this? Because when you had a normal environment where the bond market was kind of when interest rates were more or less a free market rates, then the strategy worked fine, right? Because the bonds at the time provided, I don’t know, six, you know, the in inflation plus, you know, you know, three, you know, three or 3% or something.

VITALIY KATSENELSON: Well, the interest rates and also the strategy had worked well because interest rates have been declining for the last 30 years.

VITALIY KATSENELSON: Now. I think the environment we are facing in today is that interest rates may not be and it may not be declining for a long time. I mean, I I’m not talking about next six months, but I’m talking about long term and therefore you mindlessly buying bonds because you’re used to buying it because, because, you know, you’re supposed to at this age and this age, you’re supposed to be at this strategy.

VITALIY KATSENELSON: I think it’s very dangerous. And I would argue that there will be time to own bonds. But I don’t think this is the time right now again, like, you know, the rates may decline over the next six months from this point on. I, I have no idea what they’re gonna do.

VITALIY KATSENELSON: But I, I would argue that the, if you did this, you know, if you, if you, if you basically, by the way, I would have told you the same thing if you and I talked a year ago. So, but yeah, so if you follow the strategy, I think it’s probably not gonna work well for some time. At some point, there will be time for it again.

STEPHEN CLAPHAM: So what’s the alternative? Are you 100% equities or, or, or just more than 60?

VITALIY KATSENELSON: I mean, this is like, you know, I’m, I hate to be the, like when I, when I answer this question, I feel this guilt because I don’t have a good answer like I really don’t. And, and the, and the, so the, because the answer I have is very inefficient answer and the answer is basically you have a Barbell strategy.

VITALIY KATSENELSON: You for you, you basically want to have your enough savings to say if you are in your sixties or you wanna have enough cash that for the next five years and you, you put this cash into something, I don’t know, like six months to one year treasuries something riskless.

VITALIY KATSENELSON: Basically, it’s, it’s not gonna keep up with today’s inflation. Don’t get me wrong, but it’s gonna pay your bills and you won’t have to rely on the, on the whims and the stock market. And then what that does, it buys you time horizon to invest in, you know, in a kind of undervalued individual stocks.

VITALIY KATSENELSON: But all, but it’s, it’s, it’s, again, it’s not the most efficient portfolio, right? Because you are that, you know, you, when you buy, you know, 61 year bond, six months or one year bonds, you are getting 3 3.5% returns when inflation is much higher than that.

VITALIY KATSENELSON: But that’s, but you, that portion of your money is there just to buy you peace of mind. So, you know, when the, when the stock go up and down, you are not forced to sell stocks when they, you know, when they’re low. So you can pay for your daughter’s wedding or whatever. No. Absolutely.

STEPHEN CLAPHAM: And the daughter’s weddings can be very expensive. I I, I know that and you espouse individual stocks. I mean, a lot of our I A s in the US favor ETF S and they favor like an index strategy and maybe add in a factor of ETF a momentum ETF or whatever I had on the podcast. Two months ago, a guy called Richard Oldfield who’s a very skilled investment manager who wrote a book called Simple but not easy.

STEPHEN CLAPHAM: And he likened investing in the index to hang on to the coat tails of a lunatic. He said, look, the more the stock goes up, the more you own of it. And that can’t be a sensible strategy. And I, I mean, I completely agree with them that anybody can invest in the stock market. You don’t, you do need to have a bit of discipline.

STEPHEN CLAPHAM: You do need to understand a little bit about what you’re doing, but it’s not, it’s not a complicated thing. It’s, it’s not easy to manage but it’s, it’s very simple. I mean, do you use a lot of ETF S, do you agree with that single stocks are, are, are the way to go? And do you think it’s, it’s possible for individuals to embrace individual stocks? I mean, what, what’s your, what’s your thinking?

VITALIY KATSENELSON: I think it’s extremely easy to invest in the stock market. I don’t think it’s very easy to do it. Well, yeah. Ok.

VITALIY KATSENELSON: That’s point number one. And I agree that the way the most C T F s are structured is that, you know, the most, you know, the most successful for the company in the largest company. Like think about it. If I apply this strategy in our portfolios, my co my new clients would be basically be buying the largest position that we hold in the accounts that came to us, you know, that six months ago or a year ago, three years ago.

VITALIY KATSENELSON: So I would argue that this is not like this is not a strategy that actually benefits clients. I think ETF S, you know, so I think ETF S are, are dangerous, could be dangerous because they look so safe because they, they could be dangerous because they could be dangerous because they look so safe because everybody thinks that you’re buying a diversified investment.

VITALIY KATSENELSON: Therefore you can’t blow up on that. Well, you can, because if you, if you, if this investment, if you buy on this investment, you’re buying a lot of overvalued companies, then yes, you’ll get it. You, you, you do get diversification on the individual company risk. But, you know, you are diversified against, you know, the fact that these companies are all overvalued.

VITALIY KATSENELSON: Like it’s, if you, if you owned Cathy Wood’s ETF which is down the A arc, it’s, I don’t know how much it is down now, like down 50 70 80% from its high. She owned a lot of stocks in it, but they were all overvalued. So there was no safety in numbers because when you own a lot of overvalued stocks and market and evaluation of the market declines, you get blown up.

VITALIY KATSENELSON: So I am a believer that in analyzing like I the way we approach what we do here.

VITALIY KATSENELSON: Like as if we were a business person analyzing each company if you were buying the whole company? And we ask yourself, do you want to be in this business? Do you, do you like the management who runs the business? And then we ask yourself, how much is this business worth?

VITALIY KATSENELSON: And then not just the next six months, next five or 10 years? Ok. And then we say, well, how much how much discount to what it’s worth do, do we need, based on its risk? And that’s how we approach building our portfolio, for each client.

STEPHEN CLAPHAM: Yeah, I mean, Kay Woods, of course, a classic example. I mean, I don’t know, I would even classify. I mean, I know she technically it’s an ETF but I don’t know, I would classify it as a, as a, as a, as an index type ETF because she owns such a style bias that it’s not at all diversified.

STEPHEN CLAPHAM: And of course, she’s been the biggest buyer of all the stocks that she owns. And, you know, it might have done, I don’t know how much it’s done 70 80% but if it doesn’t fall another 70 or 80% I’d be quite surprised to be honest.

VITALIY KATSENELSON: But, let me, let me, let me add one more point to this. I think ETF S could be a good tool if used wisely. But what has happened over the last decade. Etf S basically allow any person who used to be an insurance salesman to masquerade as an investment advisor basically. And that’s, and that’s what they do.

VITALIY KATSENELSON: So, and people feel safe people and give people this, full safe of security because they feel like they’ve been diversified. And I would argue as the, as the tide goes away, you’ll find out that a lot of this, you know, people were swimming naked because they owned a lot of overvalued stocks.

STEPHEN CLAPHAM: Well, I think the, the issue is, I mean, my perception is that if we look at to 2032 over the next 10 or so years is highly unlikely to be like the last 10 years. It’s much more likely that in 2032 the market’s done very little. I mean, it might go up a bit but, you know, everybody seems to be assuming that because the market’s going up at 8% for decades that it’ll go up 8% per annum this decade.

STEPHEN CLAPHAM: And that’s not what experience tells you because when you start off from a period of high valuation and you go through a period of in particularly an inflationary period, the stock market may not do anything. And we’ve seen that in past decades.

STEPHEN CLAPHAM: And, you know, we’ve all got this of, we’re fixated on our recent experience and it’s also very difficult I think to go back in history from before when you were investing. But I’ve asked a number of people about what it was like to invest in the 19 seventies. Obviously, I I’m too young to remember investing in the 19 seventies.

STEPHEN CLAPHAM: And there are very few people around investing today who are investing in the 19 seventies. Very few. And people don’t, people have lost this sort of memory or they don’t have the memory. And of course, what happened in the 19 seventies was the stock market didn’t keep up with inflation overall.

STEPHEN CLAPHAM: And you had to be in a particular type of stock in, in, in small cap volume in order to beat inflation. And it seems to me, I mean, you know, I, I don’t have a crystal ball, but that is a very plausible scenario for the next 10 years. I mean, would you, would you disagree with that?

VITALIY KATSENELSON: Or, you know, it’s probably the biggest lay up I ever seen to, to to my writing because I wrote two books on this subject. The little book of Sideways Markets and active value invested and both argue the same point. You just made the, in fact, in fact, if you look, you know, if you’re listening to this my, my, my latest book.

VITALIY KATSENELSON: Well, no, I’m sorry, my latest investment book, the little book on subways market came out in 2010. And I would argue that this book is more relevant today, you know, than ever before because I agree with you 100%. What happens.

VITALIY KATSENELSON: And you, you use the right words, you said recently bias, we look, we usually look in the past and we especially, we have a lot of data points and we draw straight lines through those data points, you know, you, you know, but the problem is with stock market and the economy that there are some things that mean reverting.

VITALIY KATSENELSON: In other words, if they’ve done incredibly well, a lot of times there will be payback time for those things. One of those things is price earnings when price earnings goes up and it goes from below average to above average in the future. What happens?

VITALIY KATSENELSON: Price earnings actually, you borrow your future returns when price earnings went to above average and then when, when mean reversion happens, price earnings goes from above average through average to below average. And what that means if you think about returns for stocks, I’m excluding dividends.

VITALIY KATSENELSON: Just the simplicity of it, they come from two sources earnings growth and change in price earnings. If you look over 100 plus year period, the price churning movements really kind of canceled out. And what you got was earnings growth. And in the long run earnings growth really kind of equated to GDP growth. Ok.

VITALIY KATSENELSON: So or economic growth right now, when you, when you enter the market, when the price earnings at much above average price Charing stops being your friend actually becomes your enemy because when it declines, it’s actually subst the return you get from earnings growth.

VITALIY KATSENELSON: And I would also argue today, it’s less like it’s very likely that the earnings growth for the economy is gonna be less than it was when it, what it was over the last 10 years or last 20 years, especially in the real terms because of high inflation, we may still get account no earnings growth, but the real growth will will probably gonna be either flat or slightly positive, maybe even negative.

VITALIY KATSENELSON: So, so yes, I think we’re gonna be, we are interested in a period of sideways markets and if you just own the market, you’re gonna get very little. This is why individual stock selection value, you know, stock peaking becomes so paramount.

STEPHEN CLAPHAM: Yeah, I mean, you were, you were a bit early with the books.

VITALIY KATSENELSON: Well, it, yes and no, because I was the the oval investment. I started working in this 2005 when we, you know, and I think we, we were basically in this, arguably we were in subway markets until about 67 years ago. And then the, and then the as interests went to zero to negative, they broke through the, you know, we were kind of into, into bull market.

VITALIY KATSENELSON: The issue is like when I was writing these books, you know, especially in 2010, I never thought that interest rates could go down to, can become negative. The concept of negative interest rates. Was com, was unfathomable to me because why would you give somebody money and then you agree to get less money at the end of six months or a year?

VITALIY KATSENELSON: It’s a, that’s, this just makes no economic sense, et cetera. But we were, you know, we were the negative interest rates for a while and, and interests worth, you know, near zero for a long period of time. So, yeah, that’s, you know, that’s so that’s basically why we went into bull markets. Yeah.

STEPHEN CLAPHAM: Well, and it’s been a very interesting, it’s been a very interesting few years. How do you keep your head?

STEPHEN CLAPHAM: When there’s sort of madness all around, it must be quite difficult when you’re dealing with individuals who’ve entrusted their wealth to you and they see their neighbors making out in game stop or whatever and you’re keeping your feet on the ground and, and having a, you know, a routing in, in value.

STEPHEN CLAPHAM: How, how does, how have you coped in the last few years? I mean, have you had pressure from your clients or do they understand? I mean, how do you explain that to them?

VITALIY KATSENELSON: I think a key for investment firm succe any investment firm success in the long run. It’s Kevin the right clients.

VITALIY KATSENELSON: And I’ve been fortunate that the way we market attracts the right clients. And let me explain how we market. And it’s very simple, let’s say there is no mystery here. I write articles, people read these articles, they can relate to how we invest. They come to us. That’s it. We don’t make cold calls. We don’t, I don’t go to parties in country clubs. I hate, you know, these kind of things.

VITALIY KATSENELSON: It’s, and I, and, the beauty of this, it’s a kind of reverse self selection. Our clients select us, you know, and, and therefore they come to us because they want to grow and preserve their wealth. And they, I guess I would argue our clients probably have a lot less formal than, you know, clients of other firms. And but that, that’s point number one point number two is communication. I mean, let me give you this analogy.

VITALIY KATSENELSON: I had this client this in my, I had this client in my office and we were just chatting and he used to be a pilot, commercial pilot and I was telling him how I’m afraid of flying. Like I was like, no. Well, let me, let me explain you what I mean? I fly all the time.

VITALIY KATSENELSON: So let me just put this, I have a fear of flying, but I fly all the time just because I’m, if you just think about you are, I don’t know, 50,000 ft in the air and this thing can fall any time. Yeah. So I have this kind of a kind of a very normal fear of flying, you know, I, I don’t need to get medicated to get on the plane, et cetera.

VITALIY KATSENELSON: But, you know, I have this, you know, slight uneasiness when I fly, that uneasiness becomes less slight when I am in the air and we go through the turbulence, I become a little bit more religious during that point in time again. So there, there was the two sides of it, there was the rational side of me who understands that planes don’t crash in the mid air. Most, most, most, most accidents happen on the takeoff and landed.

VITALIY KATSENELSON: I, I, I know all the statistics. I know all the statistics. That’s the rational side of me, the emotional side of me while in the turbulence. I am scared. So it’s just, it’s, it’s because I’m a human. Ok. Now, so I was telling him about this and he said, you know, vitality is kind of interesting when I was flying when I was in the cockpit.

VITALIY KATSENELSON: I was never afraid of anything. Now, when I’m a passenger and it goes through the turbulence. Yeah, I get a little bit nervous too and then I realized this is kind of interesting when he was in the cockpit, he had control, he had all the information, you know, in front of him, when he’s in a cabin, he doesn’t have that he’s just another passenger.

VITALIY KATSENELSON: So I realized my job as a money manager is not just being in the cockpit is not good. And it is not enough, I have to bring my clients as close as possible to cockpit without giving them the control and communicate to them as clearly as possible, how, what I see and how we are and how we adjust to the environment we’re going into.

VITALIY KATSENELSON: And so therefore, my job is not to really reduce volatility on my client’s portfolio, but reduce the volatility of their blood pressure. Ok.

VITALIY KATSENELSON: And so anyway, so that’s, that’s so you ask me how we get through these times, that’s how we get through these times, right? Clients and communication. And I would argue sensible strategy. Yes, of course.

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STEPHEN CLAPHAM: So you in the book, you talk about a trainer who works 20 hours a week and lives in a small flat and you talk about your spending habits and how you spend on health on experience, on, on experiences, on buying more time for yourself, on education.

STEPHEN CLAPHAM: And you also talk earlier in the book about how somebody explained to you that you needed to have a sinking fund when you needed to buy, replace your car. How do you talk about money to your clients? How do you explain this philosophy or, or, or explain the philosophy to the, to the listeners?

VITALIY KATSENELSON: Ok. Well, so let’s, first of all, we have to clarify a little bit. Now we’re talking about a different book, not the little book of Mars, your new book, which I let me just introduce your new book.

STEPHEN CLAPHAM: So your new book is called Soul In The Game, The Art of a Meaningful Life. And it’s a brilliant book. And I was telling Italy before we came on that, his book is published by Harriman House and Craig Pearce is, is his editor, who also was my editor and I had lunch with Craig who asked me, well, Steve, what’s your second book going to be about?

STEPHEN CLAPHAM: And I said, well, I thought my second book might be not about money and about finance. And he said, oh, no, we would never publish that. But you managed to persuade them to publish your book. And the book is great and it’s probably better than my book will be about. Not about finance.

VITALIY KATSENELSON: But tell us about your philosophy towards money because I think this is a really interesting So, first of all, I, let’s, let’s make this clear, I’m, I spend very little time talking to my clients about personal finance because that’s not what we do like, you know, the. Ok. But, but let me tell you about in general, my, kind of finance, personal finance, philosophy.

VITALIY KATSENELSON: Well, I think the, let’s start with this, money buys the most when it buys things you value.

VITALIY KATSENELSON: Not every $100 created equal or every £100 in your case.

VITALIY KATSENELSON: Because £100 to buy things you don’t want or don’t care about are don’t buy as much when buy something you care about. So the problem is we go through life and a lot of times our financial, our spending is done in a very mindless way because it’s just one of the things we do and it’s kind of, you know, we get a paycheck and we can spend money.

VITALIY KATSENELSON: What I argue you for money to buy you the most. You need to mindfully approach the subject. How do you do this? You start with budgeting and budgeting. You know, anybody who’s listening, you know, knows the concept and up and I’ll, I’ll start with a simple one, but I add some layers on top of that simple budgeting.

VITALIY KATSENELSON: You have your, you look how much income you make and then you look at the expenses that you can see your cable bill, your mortgage, your car insurance, all these things, things you can see, you know, on your, on the credit card bill every year, every month.

VITALIY KATSENELSON: Now, the I would add to it that there’s a lot of expenses that you don’t see on a monthly credit card bill that happen on a semi regular basis, just not monthly and some expenses has not, have not happened yet but will happen to you. Your daughter will get married, ok, in 10 years. Therefore, you need to pay for that wedding. So you need to start saving money for that.

VITALIY KATSENELSON: Now, you are, you’re gonna need to buy another car in five years. Again, that’s an expense that’s gonna happen in five years. So you could, if you figure out how much it would cost you a month to save for that, that should go in your budget and things like that, ok? By doing this, what you’re doing, you’re taking future expenses, you know, bringing them into the present, ok?

VITALIY KATSENELSON: By the way, your retirement is the same thing, ok? And the reason we’re doing this because I would argue you wanna spend as little money as possible on interest expense because the power of the, the power of compounding works both ways. If you, if you borrow money, it’s actually working against you.

VITALIY KATSENELSON: So it’s a, it’s obviously fine to borrow, you know, to borrow money for, you know, for your mortgage, etcetera.

VITALIY KATSENELSON: A reasonable amount of money.

VITALIY KATSENELSON: But at the same time, you probably the one don’t wanna live on credit cards, you know, and you don’t wanna but you, you, you know, and so why are we talking about this? Because once you created the budget, once you created, you look, create all the lines of your spending. Now you, you ask yourself a question. Which item do I value the most?

VITALIY KATSENELSON: Which item I value the list. This is the key because you find that you say you go to Starbucks once a day. And you spend $1200 a year on Starbucks and then ask yourself a question. Do I actually enjoy Starbucks? That’s this much. Is it 12? You know, I do, I actually maybe enjoy $200 you know, as much, not $1200 as much.

VITALIY KATSENELSON: And because no matter how much money you make, you make $50,000 or $5 million you can always spend more than you make. Ok? And so it, so what, you know, budget is basically prioritized prior God, I can’t say the word priorities, prioritizing tool. Thank you, prioritizing tool to, for you to say I like travel more than I like Starbucks.

VITALIY KATSENELSON: Therefore, I’m gonna have to give up Starbucks so I can travel more. And that’s basically, and for by the way, for each one of us is gonna be different, like I’ll give you for me. And this is a completely personal and it I’m not saying this is what it should be for you or somebody else, but I value travel experiences.


VITALIY KATSENELSON: I value time and about value education. So when I say this, what does it mean? Well, so in those categories, my, my budget is much looser. So it’s a, it’s a larger portion of my, you know, of my spending. But, and now, now, so now you think, ok, this is the wealthy guy, money manager in Denver.

VITALIY KATSENELSON: Well, guess what? I live in the same house, you know, we bought 20 years ago for a long time. I’ve been driving, you know, same car for, you know, almost 10 years. My wife been driving the same car for 13, 14 years. So it’s a we for us to travel more. We, give up on, on, on a larger house on new cars.

VITALIY KATSENELSON: So those are, you know, sacrifice is not a big one, you know, it’s kind of, is a somewhat overstatement, but those are the things we had to give up, you know, to get other things now, like, you know, you know, like in the book, I talk about my, my, my trainer, you know, so my trainer lives in a small apartment has a roommate.

VITALIY KATSENELSON: He’s, he’s divorced but, and he’s not making a lot of money. And, he loves, you know, he loves, you know, he likes two activities the most, he loves traveling and he likes cars. So every three years he leases a new car and, and when, and, once or twice a month, he travels somewhere in the country.

VITALIY KATSENELSON: But when he travels, he stays, he stays in very cheap hotels. He eats out in a very smartly so, but so he’s, so he’s given up, you know, so he doesn’t, when he’s in Denver, he doesn’t go out much. So he doesn’t spend much on food.

VITALIY KATSENELSON: He also doesn’t, he also lives in a very modest apartment but he’s, that’s what he’s given up to travel and, you know, and to buy a new car to lose a new car every three years because this is in, in the United States, in particular, it’s a society in which everybody seems to be happy to borrow.

STEPHEN CLAPHAM: I, I mean, it’s partly true in this country as well and people, I don’t think pay sufficient attention to what they really want. That’s what you’re saying. Right.

VITALIY KATSENELSON: Yeah. No, I mean, like, if you think about what money is supposed to do after you paid for your kind of basic needs, it’s really just supposed to buy you freedom, freedom to make choices, what we do by borrowing money excessively, we give up freedom.

VITALIY KATSENELSON: And, and, so this is why, you know, this is why I’m not quite a minimalist. Like, in a sense my house does not look like this. Japanese, you know, kind of Japanese minimalistic house. But I, I get a lot more enjoyment out of relationship and out of experiences than I get from buying things.

STEPHEN CLAPHAM: Well, I think, I mean, I think most people, most people do. I mean, obviously, you know, people have different priorities when it comes to spending money. But let, let’s just turn to the book and your Philosophy of Life.

STEPHEN CLAPHAM: I mean, for my first question about the book was you’ve got the most amazing reviews from the most amazing people, General Stanley Mcchrystal, Morgan Housel, Bill Miller, Jim Chanos and Ralph De Belly, who is one of my heroes. But I think he’s one of the most brilliant, brilliant writers. Do you know all these people personally? I mean, how did you manage to do all that?

VITALIY KATSENELSON: So, OK, so let me put it this way for me to get these endorsements. I had to have a good book. Like, and I, and I, and I, and I, and I, and then at this point is very important. So I know some of them, some of, some of them I know very well. Some of them I know, you know, kind of had a conversation or two in my lifetime. Some of them I’ve never met like, I’ll give you one example, General Mcchrystal I never met in my life.

VITALIY KATSENELSON: I, I heard his interview on Tim Ferriss podcast and I, yeah. Yeah. And I really liked him as it just, I I just, I could, I could, I could really relate to him as a human being. And I emailed him. I said, here’s my book, you know, I, I just, I just finished the book. Here’s the manuscript. I would love to get your endorsement.

VITALIY KATSENELSON: And so he asked, you know, he mailed me back the next day. He said, what, what’s your deadline? I said I need in two weeks. He’s like, I’ll read it. However, if I don’t like it, I’ll tell you if I don’t like it, I’m not gonna endorse it. And if I like it, you know, I may endorse it. So that was, that was his response.

VITALIY KATSENELSON: So, so this is why having a good book again is a prerequisite, is a prerequisite for that. I got an email back maybe within a week and he said I was on the train. And so I had some extra time and, you know, I, I, I read your book and I loved it and it wasn’t just like it was a very lengthy email kind of you describing how could, how he could, how he relates to it. And he provided this wonderful blurb.

VITALIY KATSENELSON: That was, that’s like this is a kind of an example of a person I did not know some people as you know, like some people I knew much better, you know, like, well, or I’ve met at least, and and they, but again, they read the book, you know, and if they did not like the book, you know, they would not have provided a blurb.

STEPHEN CLAPHAM: So I’m sure you look, of course, it’s a great book.

VITALIY KATSENELSON: I mean, but I just know my, but my point is let me, let me, I guess, let me, let me just like, let me go to the punch line. The punchline is this, but if you’re creating a product or service, you need two things. You need a good product and you need luck and you need to create your, your luck.

VITALIY KATSENELSON: So in other words, even if I did not know a lot of people, you know, if I did not know some of the people, I would still have enough blurbs in this book from the people I did not know because I just reached out to complete strangers being vulnerable saying here’s what I wrote.

VITALIY KATSENELSON: Would you look at it and that’s a, that’s an act of vulnerability by the way, because I am basically, you know, kind of, I can, I could, I could get a no. And by the way, I did get plenty of nos nos meaning like I don’t have time for this, you know, kind of thing. I don’t think I had a single person who said, who read it and said, I’m not gonna endorse it, any person who has endorsed it.

STEPHEN CLAPHAM: I, I’m amazed that, somebody like General Mcchrystal would have time on a two week deadline because I, I got sent your book, I mean, months ago and Barbara, your P A we, and I put this date in the diary and I’ve got a lot, I’ve got a very high reading pile and it’s quite a big book.

STEPHEN CLAPHAM: I didn’t want to take it on holiday with me because it was heavy. And so I got back from holiday and I was thinking, oh, man, this is a disaster because I’ve got this interview and I haven’t read the book.

STEPHEN CLAPHAM: And very luckily last weekend, a friend called me up and he said, I’ve got a spare ticket for Goodwood. I don’t know if you’ve heard of Goodwood, but it’s a, it’s the Goodwood revival meeting is back to the 19 sixties motor racing festival where all the cars are old cars. So they sold cars.

STEPHEN CLAPHAM: And I, I it’s a great event and I normally go to a super friend of mine who has become a recluse since COVID and didn’t want, didn’t want to go. And so what I did was instead of driving, this is a nightmare because the traffic is, is horrible. I took the train and I read your book on the train down and on the train back.

STEPHEN CLAPHAM: And, you know, I, I, I, I, I read almost all of it and it was, it was, it was really, I really enjoyed it and of course, made my, my journey, an awful lot, an awful lot easier So, you and General Mcchrystal have something in common.

VITALIY KATSENELSON: You both were in the book on a train?

STEPHEN CLAPHAM: All right. Yeah. Well, that, that probably is about the only thing I’ve got in common with him, but I’ve been trying to persuade my 13 year old that because General Mcchrystal says that you, the first thing he does in the morning is he makes his bed and I can’t get my 13 year old to make his bed, just got no interest in making his bed. And I was hoping that would inspire him.

VITALIY KATSENELSON: But maybe I think, you know, I have a strategy for you. General Mcchrystal is not the person to use, use Wim half because Wim Hof was one of the endorsers as well. And Wim and Wim is am for 13 year old, Wim Ho who set 25 world records, getting out doing things in the, in the cold temperature.

VITALIY KATSENELSON: He would be so much more impressive for your 13 year old, trust me. So the General Mcchrystal is just, you know, a little bit too old for 13 year old. So I think, you know, would be more appropriate.

STEPHEN CLAPHAM: My, my son is actually, you know, he’s very interested in the military. So I was hoping I, I’ll try that. I’ll try that example. I mean, the, the funny thing in, in, in the book, you, you talk about a very painful experience about losing your mother at quite a young age but that it make bringing you closer to your father and you obviously have an incredibly close family. Would you mind sharing? Yeah.

VITALIY KATSENELSON: Yeah. So I, I lost my mother when I was, my mom got sick when I was 10 and she died, you know, five months later when I was 11 at the time.

VITALIY KATSENELSON: And the at the time I didn’t realize that, but losing my mother basically made me value my father so much more because I realized that at some point I’ll lose him too, you know, and, and that was kind of ingrained into me since a very young age. So I always, and you know, and just to make it clear, I, my father made it so easy for me because he’s, it was, he’s a such a wonderful human being.

VITALIY KATSENELSON: So I even in my twenties, in my thirties, in my forties, I, I am intentionally would go out like when I already moved out and had my family, I would intentionally take time to spend time with him. I would go to his house for breakfast, we would go for morning walks, we would travel to Europe, we would South Africa, we would drive to Santa Fe together.

VITALIY KATSENELSON: That, that is a, there is a, you know, you know, it’s kind of interesting to see if I rewrote this book today. One of the central concepts in the book would be scarcity, like when you like, like live in the United States. And we kind of we abundance and I would argue the the scarcity is this, you know, and, and, and I understand why, right?

VITALIY KATSENELSON: Because 100 years ago, 200 years ago, all the experience in life was scarcity, right? There was not enough food, there was not enough food, you know, we worked this insane hours, we lived in this ungodly conditions, et cetera today.

VITALIY KATSENELSON: And therefore we kind of put abundance in this kind of super, you know, super aspirational things what we want. But the problem is abundance is that you usually don’t value things like you live in, you know. So when I realize that when you realize you have a scarcity of time, when you see, when you realize spend, that’s probably one of the most scared that’s a in scarce constant for everybody.

VITALIY KATSENELSON: We all may have different wealth, different health, but we all have the same amount of time, you know, it’s a, you know, and therefore, I appreciate the scarcity made me appreciate my kids so much more because I know that they’ll grow up and they’ll leave my house.

VITALIY KATSENELSON: And then instead of seeing my like when my son lived with us, now he’s in the in college. I spent four or five hours a day with him. Now I spent two hours a week at the most. Ok. And so what, so today and this is very important because today when I drive my daughters to school and they are eight and 16, especially the 16 year old I realize that I only have about 400 more times.

VITALIY KATSENELSON: I’m gonna drive my 16 year old daughter to school. So that’s changed my perspective because now every time I drive her, I look at it as an port. I look at it as a privilege as an opportunity, not a chore. And suddenly when I’m in a car with her, I’m not listening just to another podcast.

VITALIY KATSENELSON: I’m not talking to on the phone to a friend, et cetera. I’m spending time with my girls and I pay attention to them and I’m mindful. I’m, I’m, I’m being present and it’s the concept of scarcity. It’s this, you know, kind of realization of scarcity because it brings me closer to them.

STEPHEN CLAPHAM: It was a great thing and, you know, some of the comments you make in the book about, you know, being a parent, it’s a funny thing, isn’t it? Because there’s nothing prepares you and, you know, having parents yourself.

STEPHEN CLAPHAM: I, I obviously everybody has parents although they may not know them has a tremendous influence on your own relationship with your own children. And that can be a good thing or it can be a bad thing obviously, for you, it’s been a really really super experience.

STEPHEN CLAPHAM: But it, it’s, it’s very funny because anybody who’s got children understands this, how difficult the relationship can be and how it’s so the most precious thing and how to make the most of it. And that’s a great comment about the scarcity.

STEPHEN CLAPHAM: I, I was talking to Herb Greenberg, a couple of months ago I was telling him that, you know, we were going to have this conversation and he said, oh, yeah, because her, obviously, I, I, I don’t know how old you are, but I would guess there’s 15 years between you and he said, oh, yeah, he’s got a wise head.

STEPHEN CLAPHAM: He’s got like, he’s got my age in a, but in a younger body sort of thing, which I thought was a very funny and very, very true, very flattering, comment.

VITALIY KATSENELSON: Let’s get a funny, I, I herb read my book like, like, it wasn’t quite a draft but it was already almost a done version. And he said, you know, he said when he agreed to read it, he said, I, oh no, when I asked him to read it, I just want to get his feedback. He said, I don’t know if I have time to read it because I’m in the process of launching this new business.

VITALIY KATSENELSON: So I, I just don’t know if, if I get to it and then he comes back to me literally, maybe a little less than a week. He said I read it almost in one sitting and I couldn’t, I couldn’t put it down and he said, I, this funny thing happened, I go around talking to my wife and now I keep quoting your book all the time.

VITALIY KATSENELSON: Yeah, it was, you know, and I’ve known her for a long, long time, probably for 18 years or so. And he’s a phenomenal, phenomenal, kind, generous human being. So, you know, so I’m kind of hearing it from him and somebody I really greatly, greatly admire, so hearing it from him, really kind of, you know, molded my heart a little bit.

STEPHEN CLAPHAM: Have you sent the book to your clients?

VITALIY KATSENELSON: Yeah. Yeah, I know you sent it to every client, you have sent to every client. And and yeah, so far, you know, it was a very good feedback.

STEPHEN CLAPHAM: Oh, good. Well, I’m sure I’m sure you wrote that COVID was a, a big opportunity for you to reorganize your working environment. What, what did you change?

VITALIY KATSENELSON: So at first COVID was not a good, you know, at first COVID was not good for me. Not like for like, let me just put it this way. I, I say this and I feel like my life was impacted the least in general, right? Because everybody at my firm can work remotely so we didn’t have to be in the office. So we had zero interruption with the business.

VITALIY KATSENELSON: And what I found especially the first months of COVID, I work from home all the time and when I worked from home especially like all these crazy things were happening and I had to read a lot. I had to, you know, research new companies, try and try and figure out what we’re gonna do.

VITALIY KATSENELSON: And in addition to this, during COVID, especially first two months, I wrote, like, where I usually like 3 to 4 times a year to clients. I wrote once a week because like, again, I had to bring them closer to the cockpit.

VITALIY KATSENELSON: So, but what happened, like, normally I had, when I went to the office, I had this, I had a routine and this routine get completely screwed up by COVID because I was working from, out of my home. I went to sleep late. I got up late because I worked long hours. Just I, I didn’t, I didn’t, you know, aside from writing letters to my clients, I didn’t write much.

VITALIY KATSENELSON: So it was, I was a complete, complete mess. I just didn’t realize it at the time. So I didn’t have this self awareness. Actually, I would argue to recognize this and then recognized that I gain weight. I don’t feel good. I just, I’m a mess because, and then, then what happened?

VITALIY KATSENELSON: I realized what happened, I completely give up my good habits, all the habits I worked very hard to develop for years. I completely abandoned them because my routines have changed. So I actually had to rebuild my habits. And, so, the, so I started getting up early and, you know, early in the morning walk in the park.

VITALIY KATSENELSON: I, you know, we bought a rowing machine for home because I couldn’t work out as, as my trainer and, I kind of rebuild my habits. But I also realized that the way I work in the past when I had to go to the office, I don’t have to work that way. I don’t have to sit in front of, you know, I don’t.

VITALIY KATSENELSON: And this actually, especially this is not quite a fair to everybody because I, I own the firm. I can set my own schedule. But even then if I, I have more flexibility than anybody else, but I was behaving as if I didn’t. So, so today, like today, like I’ll give you, I’ll give you a couple of examples.

VITALIY KATSENELSON: Like on Wednesdays, this is my day when I never, like, I don’t know if you ever tried to schedule an appointment with me on Wednesday. It’s impossible because on Wednesday my day is completely blacked out. I can do whatever I want. Like I last, you know, a few months I just on Wednesdays, I be just, I have this friend, we go to lunch and we have a 34 hour lunch and we just talk.

VITALIY KATSENELSON: So I could say like this is me trying to be like, you know, kind of kind of trying to slow down time. But you know, a lot of times I just go to the, I just go to the park and sit and read in the park on, on, on Wednesdays. That is my time. That is the time that I don’t or to the family to I ma that is my time.

VITALIY KATSENELSON: Because who said that you have to work 40 hours a week? Even, even if you do eight hours a day. Because I, you know, I, you know, I, my, my day starts at five in the morning and I usually go home at three.

VITALIY KATSENELSON: You know, sometimes I work on the weekend and sometimes I don’t, it’s like investment business is not a kind of ideas per hour. And the more you work, it doesn’t necessarily lead to more outcome because when I’m tired and I’m working, my comprehension declines a lot, a lot.

VITALIY KATSENELSON: And, well, I also found that, for instance, it’s also how smart you work, like in the morning, I don’t like the reason you and I actually have an interview today, you know, in the, like the time we are, you know, we are having because, 11 o’clock, my time, I never do this. I rarely do this.

VITALIY KATSENELSON: The only reason we’re doing this because, you know, with time on difference, normally, we don’t schedule a podcast interview until one o’clock. And there is a good reason for that because I am extremely protective with my time until, until one o’clock I don’t do phone calls with clients or anybody.

VITALIY KATSENELSON: So, you know, so I try to work smart when, and I, when I realized if you are, if you’re a morning person, you should protect the morning time. If you’re an evening person, then you should protect that evening time. And, so that’s anyway, so those are kind of, some of the takeaways, from, from pandemic.

STEPHEN CLAPHAM: It’s a bit like the, the Dan pink book when I don’t know if you read that where he talks about, you know, everybody’s got a natural rhythm. You’re a morning person, you’re an evening person, you should organize your life around that. Obviously, you’ve got the luxury of being able to do that.

STEPHEN CLAPHAM: And I, as I do because I’m self-employed and I can set my own times. And interestingly, I mean, I take Fridays off. So I’ve, no, I never have any meetings on a Friday. And the one thing I, the one thing I do do every Friday, which you’ll laugh about is I have a Zoom meeting with a friend who’s got a robotics business in Eastbourne, in the south coast of, of England and a psychologist in Chicago.

STEPHEN CLAPHAM: And the three of us write together on a Friday afternoon and it’s, I mean, it sounds like a weird thing, but it’s very, it’s very creative because how do you write together things?

VITALIY KATSENELSON: How do you write together? Because I like the, the writing together to me are almost like the, we, we discuss what we’re going to, what we’re going to do.

STEPHEN CLAPHAM: And I often will turn up on a Friday with nothing, nothing in my head and just talking, listening to what they’re talking about, I’ll come up with an idea and then you, and then I’ll go and write and we write and then we write for an hour, an hour and a quarter and then we spend 15 minutes at the end discussing each other’s pieces.

STEPHEN CLAPHAM: Oh, although we haven’t written a finished product, but we’ve written, you know, maybe an email, typically it’ll be an email to, you know, like the emails you send out each week, I send out an email each week and I might not have finished it all.

STEPHEN CLAPHAM: But when you, then when somebody else reads it, they go, oh, why don’t you change that word or that sentence doesn’t make sense? And it’s, it, it’s incredibly productive. It’s a really good idea. It’s a really good system.

VITALIY KATSENELSON: See, and that’s, and see, that’s the thing. Like, I could not do what you do. Like, like, and I, and, but I’m not criticizing this and I’m quite the opposite. I could not do what you do.

VITALIY KATSENELSON: But yeah, I don’t have, it’s, but what you do has to work for you. And I think the key to what I’m saying is you need to figure out what works for you. And so when you, when, when when people listen to this and watch this and they, they’re like, oh, vitality gets up at five o’clock in the morning.

VITALIY KATSENELSON: So I should do the same thing. That’s not what I’m saying. What I’m saying is you need to figure out mindfully what works for you. How like you a, a analyze yourself as if you were an outsider and say, if you could, if somebody else could manage you, how could you get the the most out of you? Ok.

VITALIY KATSENELSON: And then you find out like, you know, by the way, they same applies to my, to my people at I ma they all work differently and they, they all get to choose what works for them the best. And so, but you need to figure out what works for you and for you like, you know, the writing together works for me. It will not work. And so what?

VITALIY KATSENELSON: No, you not tried it. That’s very true. Very, very true. It’s, it’s, I mean, I was quite surprised actually, but I, I, I kind of, I like for me writing in this very meditative experience and just like this day with a computer for two hours a day in the darkness, like with my headphones on listening to music.

VITALIY KATSENELSON: That’s I, I, I kind of learned to appreciate that and to love that. Could, I could, I do this differently maybe. But I’m, I’m in love why change? Like it’s like I’m in love, why change? So that’s, that’s that. But again, that’s, that’s me and I listen to classical music. Some people will say there was no way I could write this classical music on and fine listen to different music. Don’t listen to music.

STEPHEN CLAPHAM: We, we listen to as a musician as well as being a psychologist and he chooses the, he chooses the music. So we get a very wide selection, including quite a lot of classical.

STEPHEN CLAPHAM: Now, you are an advocate of perpetual learning and interestingly, the, the guest on my podcast this month in, we’re recording this in September is Sir Clive Woodward, the manager of the England rugby team and he is an absolute advocate of this perpetual learning.

STEPHEN CLAPHAM: He said there isn’t, I, I would get on a plane to anywhere to learn something. Just talk a little bit about why you believe this is so important and how do you implement it in practice because you’re a busy guy, right? I mean, you’re getting up at five o’clock in the morning.

VITALIY KATSENELSON: Yeah. But I here’s the thing like the, this is kind of the beauty of being an investor. Like if you think about investing, it’s really pretty. It’s a in investing. That’s what, that’s all you do is learn. Right? That’s, that, that’s number one, number two.

VITALIY KATSENELSON: But I think it’s almost almost like a state of mind. It’s something you train yourself and I had to train myself that it’s a, especially being a writer helped me to kind of get in the state of mind because I always look at something as a possible story.

VITALIY KATSENELSON: Let me tell you this story. This is I’m taking chess lessons because I decided that I decided that like, we usually spend a lot of time working out our body of muscles, right? But I, I realized as you get older, you also need to make sure that you’re the most important, the muscle, your brain also gets to work out.

VITALIY KATSENELSON: And so I started taking chess lessons because first of all, I love, I love chess. And second of all I realized this is probably one of the most intense mental exercises you can do.

VITALIY KATSENELSON: And so the, if you presume that I’m Russian, you know, I was born in Russia, so I should be very good at chess. Well, not really. I mean, I, I was born in Russia and I was introduced to chess in a young age, but I haven’t really played seriously throughout my life.

VITALIY KATSENELSON: I mean, I mean, I’ve played throughout my life but not very seriously played with my kids. My kids now play chess better than I do. You know, they, you know, my daughter, my 16 year old, you know, kills me in chess. No. So I decided I’ll take, I’ll take a, I’ll, I’m gonna have a teacher and, my teacher, like in chess, the ratings are like Magnus Carlson is rated 2800.

VITALIY KATSENELSON: Ok. The chess beginner is rated 400. Ok. Like probably 99% of people in the world could play chess are rated below 1700. Ok. So my teacher is, he’s rated about 2300, which is very high. Ok. But here’s the interesting part.

VITALIY KATSENELSON: He told me that he got to the level now where he stopped enjoying playing chess as much because he’s not progressing.

VITALIY KATSENELSON: Got to the level where there’s very little progress. And I realized how lucky I am. I am. I’m coming from such a low level that for me, there is so much of the, the the the area of my ignorance is so high that there’s a, there’s so much I can learn and this is exactly how I look at this. So instead of me trying to say, I wish I was like him.

VITALIY KATSENELSON: Now, I’m thinking I’m so lucky, I’m not him because I get to learn.

VITALIY KATSENELSON: So that is that is the mental attitude I have towards learning. And obviously some subjects, if you, some subjects are more interesting to me than others, but I still try to have an open mind, even the subjects that may not appear interesting to me because you may get surprised how things that they’re so mundane.

VITALIY KATSENELSON: There is a mental model that’s buried, that’s buried in it that I can take from that subject and bring it to some, you know, to, to something else.

STEPHEN CLAPHAM: Now, before we finish, and I, I should have said to you at the beginning, I didn’t say, I mean, I often ask people to recommend a book, but when I’ve had an author on, I usually ask them to recommend their own book.

STEPHEN CLAPHAM: But if you’ve got a book in mind, but before we do that, can we just touch briefly on two subjects? I know very dear to your heart. One is art and one is classical music. And your father is a professional artist. Is that right? And your brother is an artist?


VITALIY KATSENELSON: My father, it’s kind of interesting. My father was, until he was 58 years old, a professional teacher. He was a, he was a professor at the university in, in Russia. He told that he has a phd in electrical engineering and he painted all his life because he just loved painting when he moved to the United States.

VITALIY KATSENELSON: Like, it’s very difficult to get 58 years old to learn English, good enough to, you know, to teach. So what he did, he kind of, he took his hobby and turned it into profession. So, until, you know, 567 years ago, he was selling his paintings. He doesn’t do this anymore. And so that was his, you know, that was, that’s how he earns his living.

VITALIY KATSENELSON: My brother is a professional realtor but he loves to paint and, so, he, he, he does it as a hobby. Yeah. And so I was not, I, I don’t, I don’t have a gift of, painting.

VITALIY KATSENELSON: But, unfortunately I wish I did. I, you know, I wish I was gifted that way but I’m not.

STEPHEN CLAPHAM: Yeah, it’s, it’s annoying, isn’t it? Because I love art as well. Do you have a favorite museum? I mean, when you come?

VITALIY KATSENELSON: Yeah. So, it’s kind of interesting. Yeah. So they like my, one of my favorite museum is actually in, they have this called Kuns House, I think it’s a, they just have a beautiful beautiful collection of impressionists.

VITALIY KATSENELSON: And I also, you know, like, I love to go to the, every time in New York, I take my kids to the Metropolitan Art Museum and we usually go to the impressionist section and we go to the Flemish section, you know, and you know, and so usually, you know, when I go to, you know, I usually spend about two hours an hour and a half at the Metropolitan Museum.

VITALIY KATSENELSON: So I, I, I love art but I, I, I would argue that I love paintings less than like it’s all relative than classical music. So I, and I truly like, this is like one of those loves that. I, I listen to classical music every day, several, you know, more than a few hours a day and I enjoy every second of it.

VITALIY KATSENELSON: And I would like, if I like, here’s the, here’s the, so I feel like if you have to, if I, if I face the dilemma, if I had to give up my eyesight or my hearing, that would be very, very difficult, you know, I would probably, you know, give up my eyesight for my hearing. Oh, really?

STEPHEN CLAPHAM: That’s very, very interesting. I don’t know if you ever read a book by a Portuguese author, whose name will escape me? But I’ll put it in the show notes. It’s called Blindness. And he envisages a, a society in which there’s been this disease in which everybody goes blind and there are only a few people that have eyesight and its most horrific book, Jose Sara Gamo.

STEPHEN CLAPHAM: I’ll, I’ll, I’ll put it in the show notes. Very, it’s a very, very good book. You might change your mind about that. But you’ve also tried to instill your love for classical music in your children.

STEPHEN CLAPHAM: And I love art, but I found it very difficult to persuade my children that they should love art. How do you, how have you done that? You, you, you, I mean, you just take them to museums to, in the case of art or show them stuff, but in the case of classical music, you can have it playing all the time. Is it easier to, to do that?

VITALIY KATSENELSON: So it’s a good question. So with art, I think I had a secret weapon, which is my father, my, my, my kids adore my father. And you know, and therefore, like, we would go to Santa Fe and we go to Santa Fe every year. And my father and in the Santa Fe, they have this street called Canyon Road and imagine like a sleepy neighborhood where they take every house.

VITALIY KATSENELSON: It used to be a house and now convert, convert into gallery. There’s, I don’t know, a few 100 galleries, you know, or, you know, and, and we would go from the, in the morning by, you know, nine or 10 in the morning in the morning and walk down the street from going from gallery to gallery.

VITALIY KATSENELSON: And my father would tell my kids about, you know, discos and paintings and I’ll tell you this, that is such a special time for my kids because, you know, they, you know, the grandpa who they respect tremendously and love dearly shares with them, they’ll, you know, kind of makes them see art differently.

VITALIY KATSENELSON: And now even when we travel without my father, and we would go to an art museum, like we would go to a new city and for us going to an art museum is just something we do. It’s not, it’s, it’s not something we discuss, something we just do. And you would argue that like this is like, but it’s always followed by something like what’s considered to be universally fun.

VITALIY KATSENELSON: We go, you know, you know, to get sushi, we go to there, you know, just something that’s considered to be universally fun for younger generation and that’s how I always mix that. So, like when we go to classical music concert, we then, you know, after that, we’re gonna go out for burgers or before that or something like that.

VITALIY KATSENELSON: So my, so they say it’s kind of, it’s a mixture of like in the way my parents did the same thing. But when I was little, we would go to, they would take me to a classical music concerts and in the intermission, they would buy me some sweets. Yeah. And so, I mean, I, I’m sure I’m making my dentist very happy.

VITALIY KATSENELSON: But this is how I kind of get my kids to.

VITALIY KATSENELSON: So it’s, it’s very, you can’t force anybody to love anything. But, but what you can do, what you can do, you can kind of introduce it to them. Ok? And I, you know, and I, and so in classical music, I would argue it’s a, you know, especially classical music, it’s a very complex medium which has a lot of layers.

VITALIY KATSENELSON: So when you listen to it for the first time, you usually get the top layer and the top layer, a lot of times it doesn’t have the beauty, the beauty is actually five layers lower. But for you to hear the beauty, you need to hear it if you know, half a dozen times. So by me playing this music in the background, very often my kids get to kind of, you know, kind of get through those layers little by little.

STEPHEN CLAPHAM: And is there a book you recommend to someone thinking of becoming an investor to yourself?

VITALIY KATSENELSON: That would be Yeah. No, I’m not gonna, I’m not gonna recommend my books. I can, I’ve just plenty of this during the show already.

VITALIY KATSENELSON: Let me see some good, some good books. Well, you know what? Actually, yes. William Green just did the wonderful book. Richard was happier. I would, you know, and I think that’s a terrific book and I highly recommend it. The, the one book I really enjoyed by a of the Belly. Actually, the the Art of The Good Life.

VITALIY KATSENELSON: I thought it was a terrific book because what it does, it has a 52 little chapters and they all just like, it’s kind of like in the hindsight, I didn’t realize it when I wrote my book, but it’s a kind of similar this, this has a lot of short chapters and you can read one chapter at a time and it’s self contained and his book is kind of like that as well. So the, the, the, the Art of the Good Life, I funnily enough.

STEPHEN CLAPHAM: I’ve got that on, on my nightstand and I’ve been reading it, for quite a while just picking it up and, because it is that nice thing that you can just pick it up just when you want to read just one chapter. So that’s great. And tell me, you’ve got a, a website where you’re writing a website on classical music. Could you just tell the listeners where they can find?

VITALIY KATSENELSON: So, I’ll give you several websites. Number one, if you wanna learn about classical music, if you just want to get a curated list of classical music, go to my favorite classical dot com.

VITALIY KATSENELSON: If you want to learn. So the see what happens is that after I wrote the book, I couldn’t stop writing and I keep writing. So I, since the book came out, I already wrote five chapters, new chapters and I work on the sixth one. So you can get those chapters absolutely free.

VITALIY KATSENELSON: Once you buy the book, if you go to Soul in the game dot net, soul in the game dot net, and you can also subscribe to my articles from that website. So you can get my articles where I talk about life, classical music, invest in different topics. And finally, we have a podcast and the podcast is basically my articles read to you.

VITALIY KATSENELSON: I’m not, you know, I, I don’t have a, I don’t, I don’t interview guests, etcetera. I don’t do anything specifically for it to say my articles read to you. Luckily not by me and you can, it’s called the Intellectual Investor podcast. You can find it anywhere you can listen to podcasts or you just go investor dot F M. That’s it.

STEPHEN CLAPHAM: That’s brilliant. Listen. Thank you so much for doing this. It’s been really a pleasure. It’s been so, so much fun reading the book and so much fun talking to you. I’m looking forward to you coming back to London and taking advantage of the, as we, as we’re recording this, the dollar is pound rate is about one oh seven or if you’re a paypal user trying to transfer dollars into Sterling 1 16. Thanks paypal.

STEPHEN CLAPHAM: So you really need to come over and you know, London is so enjoyable at a dollar seven for, for America.

VITALIY KATSENELSON: Is you, you, you, you, I talk to like when I was in London 19, I think 1997 I think the was a two. So it, and I, at the time I was just started my career and it was a lot of money like, so the like you go to mcdonald’s and everything seemed like if you convert to us dollars seemed like twice as expensive.

VITALIY KATSENELSON: So I had to imagine that it wasn’t really the, the prices were not in pounds but in us dollars. So now I don’t have to, my imagination does not have to be as rich as it was that you’re, you’re laughing.

STEPHEN CLAPHAM: I mean, they, I the reverse experience. We were in restaurants in the States. So I was in America, in August. I’m a restaurant in the States and you know, the price it is in pounds because by the time you’ve added 20% service, it was 1 20 when I was there.

STEPHEN CLAPHAM: And so it was just in pounds and it was, and it was quite frightening. There was one thing I just want to ask you about before we go because you in the book, you keep explaining that you’re having terrible experiences with rental cars. You see when you go to the rental car desk and they don’t, and you don’t get an upgrade.

STEPHEN CLAPHAM: Have you had like a really bad experience because I’ve had a really bad experience with Hertz where I’ve been a massive customer for many, many years and I got ripped off when I was renting a car and returned it early and they charged me twice the price and I wrote to the Hertz people.

STEPHEN CLAPHAM: I mean, absolutely impossible. I eventually ended up writing to the CEO in America and they offered me a voucher which was like a third of the, what, what, what it cost me? And I know, but have you had the same? Was it Harris?

VITALIY KATSENELSON: Tell me it was Harris that I, I’ll be honest, I like I had a, I rent a car but rent the car experience with almost probably every rental car company there is. And, and the thing is it’s really what I learned from that is that it’s really up to me to interpret it as a bad experience or as a learning experience. So today I, I, today I put it proudly in the kind of a learning experience.

VITALIY KATSENELSON: But, you know, in the book I had to use some. Yeah, I had to, you know, come back to something. So that was my, that was my go to because that’s probably the most universal bad character, you know, but when we have bad experiences, most can relate to it. Yes.

STEPHEN CLAPHAM: So, well, thank you so much for being on and I’m looking forward for us meeting up in London.

VITALIY KATSENELSON: Absolutely, Steve. Thank you very much. It was a pleasure. Thank you.

STEPHEN CLAPHAM: You know, I don’t think Vitali does anything without thinking really carefully about it. His life philosophy, the idea that time is scarce is a really powerful idea and his habit of framing things in a positive way is an approach we can all learn from. I hope you enjoyed it and took something from it. Thanks for listening and for your support.

STEPHEN CLAPHAM: This podcast is aimed at serious and aspiring equity investors. I hope you enjoyed it. And if so, please leave us a review on Apple podcasts and please check out our other great content on the website behind the balance sheet dot com. Did I mention the free sub stack? Thanks for listening.