Arjun Raghavan, CEO of Partners Capital, shares how optionality, risk asymmetry, and disciplined decision-making have shaped his career and investment philosophy.
He discusses the importance of learning through bold career moves and the power of making rational choices amid global uncertainty.
Drawing on insights from Annie Duke and Barack Obama, he underscores that good decisions aren’t always about good outcomes – they’re about sound process.
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Arjun on decisions
Key Takeaways
- Optionality is power: Make decisions that open more doors than they close. Judge opportunities by asymmetry – risk vs. reward.
- Be willing to take pay cuts for learning: Twice in his career, Raghavan took massive financial hits to explore new paths and deepen understanding.
- Impact needs timing: You may want to change the world at 27, but significant influence often comes later with experience and credibility.
- In investing, process > outcome: Good decisions can have bad outcomes and vice versa. Focus on the decision-making process, not the immediate result.
- Diversification is resilience: Spread bets across many investments and asset classes. Avoid concentrated risk.
- Volatility is the norm: What seems like exceptional uncertainty today is actually a return to the historical baseline. Plan for chaos.
- Client psychology matters: Rationality must be tempered with empathy – clients’ emotional responses to gains/losses affect investment decisions.
References
- Annie Duke – Thinking in Bets: A guide to probabilistic thinking and decision-making in uncertainty.
- Hans Rosling – Factfulness: A data-based antidote to fear and pessimism.
- David McWilliams (economist): Featured in earlier episodes discussing how markets discipline populists.
- Barack Obama (on decision-making): Knowing you made the best call with the information available brings peace of mind.
- “Where Are the Customers’ Yachts?” by Fred Schwed Jr.: A classic critique of Wall Street’s appearance vs. reality.
Great Quotes
“When you make the right decision and get the wrong outcome, it was still the right decision.”
“I look at the asymmetry of outcomes. What’s the downside vs. the upside?”
“Create the optionality and it so happened that it worked out. But if you don’t create the opportunity, you just never know.”
“We’re not investing in country balance sheets—we’re investing in companies.”
“Markets put manners on megalomaniacs.”
“Don’t be afraid to cost yourself money, take a pay cut even, to explore new things and learn what you need to learn.”
“Sleep well thinking you made the best decision you could with the information that you had.”
