Adam Karr: Know Yourself, Pick Your Game, Build Your Blueprint (Lessons from a Janitor & Investing)

KEYPOINTS

• 01

  Pick your game deliberately, because each game needs different skills and environments.

  Investing runs along a continuum: algorithms scraping milliseconds, day traders, catalyst-driven pod shops trading around a quarter, Stan Druckenmiller looking 18 months out, Orbis’s four-to-five-year view, and Buffett owning forever. Karr is still surprised how few people are clear about which game they’re in. The skills and setup for one undermine another. Even Buffett evolved, from cigar butts to great businesses, as his capital grew and with Munger’s help.

• 02

  Set your life up for your obsessions, and never compete with someone who is obsessed.

  Kobe Bryant was in the gym at 4 a.m. and took up tap dancing to strengthen his ankles; ‘are you at the gym at 4 a.m.?’ Karr borrows Haruki Murakami’s idea of arranging your life around your obsessions so you grind in a way few others will. The flip side is alignment: you can only be as long-term as your clients allow. If they redeem when you’re out of sync with the market, you can’t play your game.

• 03

  To spot an obsessed CEO, ask questions they can’t answer from the script.

  Most investors ask about the quarter, margins or capital allocation, so CEOs ‘put in the CD.’ Karr asks: ‘My nephew starts at your company next week—what would you tell him to be successful?’ or ‘What’s important to you?’ Building something special versus hitting quarterly guidance is a very different lens. To pin down problems, frame questions so they must respond: ‘We’ve been hearing about high turnover in your sales team—why is that?’

• 04

  Public-market turnarounds have terrible base rates.

  Coming from distressed private equity, where you buy assets with a deep margin of safety and replace management, Karr carried that mindset into public markets. It’s the way he has changed most in 20+ years: he’s now leery of betting on management engineering a dramatic change in public. Average S&P 500 CEO tenure is roughly three to four years, and the market has little patience for hard work.

• 05

  Build a blueprint by studying someone who’s done it—you can have any mentor in the world.

  Karr is frustrated when young people say mentors are hard to find. Pick someone you respect, absorb everything about how and why they did it, and pose questions to yourself Socratically as they would answer. Imitate first, then keep what’s authentic and adapt the rest. Jay-Z’s The Blueprint, Sol Price’s model for Costco, Home Depot and Walmart, and Schwarzenegger’s three successive blueprints all show this. His first investing blueprint was Peter Lynch’s One Up on Wall Street: invest in what you know, accept being wrong often (55% right is good), and use six stock categories.

• 06

  Write it down, track it, and let data expose your biases.

  Every Orbis analyst runs a paper portfolio and writes the reasoning for each buy and sell. Results are reviewed every six months by type of decision: buys, sells, doubling down, and own versus others’ ideas. A decision-analytics team runs all PM decisions through third-party software. It found Karr has endowment effect and regret aversion—his habit of scaling in 50 basis points at a time was wrong; if it clears the hurdle, buy it. Coded ‘nudges’ now email him when the pattern recurs. People better at naming their emotions invest better, and he never sells the same day he decides to.

• 07

  The magic is in the last 5% of research—and often the bear case is the bull case.

  After months of work, Karr wants a few pages capturing the fulcrum issues and an ‘essence statement’ of what drives the company, not a 50-page report. Go to the source, because analysts persuading you may filter out risks. The breakthrough synthesis lives in the last 5%, when the common bear narrative can turn out to be the moat.

• 08

  Allocate time like capital: will three months of work move the odds?

  Capital can be replenished; time can’t. Deep work on a company’s distribution network might change the probabilities. Three months on TSMC’s core question—geopolitics—probably wouldn’t. Like Buffett’s filter, ask whether something is knowable. On the U.S. election, Karr calls it 50/50 and builds a resilient portfolio rather than tilting toward an outcome.