June 2, 2025 • 17 mins
“In war, events of importance are the result of trivial causes.”
– Julius Caesar, Commentarii de Bello Gallico
When Julius Caesar set out to conquer Gaul, he didn’t rely on raw force or divine luck. He relied on systems. Strategy. Discipline. And an unshakable understanding of how empires are actually built — and lost.
In this first installment of Letters from Gaul, I explore five timeless laws Caesar deployed in the field — and how they map directly to investing, operations, and capital stewardship in today’s world.
We talk:
- Why Caesar always built the fort first — and why most investors don’t
- How local terrain always beats central planning
- Why logistics, not genius, win wars (and deals)
- How to stretch your time horizon without losing conviction
- And why the edge of empire is always more fragile than it looks
This episode isn’t about history for history’s sake.
It’s about mastering the timeless mechanics of risk, power, and execution — the kind that don’t change, even 2,000 years later.
Subscribe to the Timeless Investor Newsletter for our long-form content.
Follow the Timeless Investor Show if you want to hear more of our podcast content.
Get your own copy of Timeless Wealth: Real Estate Through the Ages.
If you want to learn about new investment opportunities through Lombard Equities Group (accredited investors only), please reach out here.
Think Well. Act Wisely. Build Something Timeless.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
SPEAKER_00 (00:00):
In war, events of importance are the result of
trivial causes.
Julius Caesar, Commentarii deBello Gallico.
This is an amazing quote fromJulius Caesar's Letters from
Gaul, which is an incrediblebook that I first came across
years ago, actually in highschool, come to think of it, and
(00:20):
which has stuck with me sincethen.
It is fascinating.
I highly recommend it.
And also, I just want to pointout, it is probably the first
known example somebody who livestreaming their life to a
broader audience.
The context of this book isincredible because it details
the journal, well, actually theletters of Julius Caesar to the
(00:42):
Roman public back home about hisexploits in ultimately
conquering Gaul and subjugatingmultiple very dangerous tribes,
chieftains, war leaders.
And the purpose of it was thateven though Caesar was far from
home, he wanted to send almostlike a periodical series of
updates to the Roman publicabout what he was doing.
(01:05):
So when I say it was livestreaming, it's about as close
as you can get to live streamingin the era.
And it's an incredible story.
because let's go back to thatfirst quote.
In war, events of importance arethe result of trivial causes.
That is a direct quote fromCaesar's letter back home.
And what's true in war is truein basically everything else.
I mean, war is just like life,stripped of all its civility and
(01:28):
kindness and other aspects,right?
I mean, you do whatever you canto win.
And, you know, I think sometimestranslation of war to business
is maybe overdone, but notreally.
And I think there's a lot ofvalidity to it.
I mean, we read Sun Tzu's art ofwar and try to apply those
lessons to business every singleday.
So think about that quote.
(01:49):
Because I think it's true inreal estate investing in
business and in life.
Events of great importance arethe result of trivial causes.
Trivial causes in real estateinvesting are your execution,
your ground game, how focusedyou are on the minutia.
I think there's a tendency inthis business to be focused on
the big glamorous activities,raising capital, buying a new
(02:10):
building, social media updatesfor everyone.
But what really matters is themicromanagement of the
day-to-day operations on theground.
And just like in war.
You make one couple of bad,small decisions can have huge
knock-on effects down the line.
So in this new series, I'm notgoing to do this on a
week-to-week basis, but Ienvision this being up to four
(02:32):
to five total podcast episodes.
We're going to dig into Lettersfrom Gaul, and maybe later we'll
do The Art of War.
I don't know.
But I like Letters from Gaul alot.
I don't think the audience isaware of it, so I want to
highlight this bookparticularly.
And in this series, we willexplore the enduring laws of
strategy, empire, and executionthat map really well to the
(02:53):
world of investing.
Because this isn't historicaltrivia.
This is unchanging, timelesslogic behind power, risk, and
control.
Because again, war is theultimate laboratory of high
risk, high reward, whereeverything is removed.
It is just civilization at itspurest, most unadulterated form.
(03:15):
I I'm a Hobbesian, right?
So if any of you read my book,you know I love Thomas Hobbes.
And Hobbes' whole perspective isthat humanity built governments
around itself for the purpose ofprotecting itself from stronger
oppressors that might try tosteal their material possessions
from them.
So it's a rather pessimistic andkind of dark look at humanity.
(03:37):
And I think anybody would agree.
that if we had a massiveearthquake and there were two to
three weeks without socialservices, I think civilization
would fall apart pretty quickly.
Well, war and business are twothings.
I mean, business is certainlymore controlled by law, but they
are things that really peel backthe polite veneer of
civilization and show us thingsin their true primal form.
(03:57):
So let's talk about the campaignto subdue Gaul because it's an
interesting story.
Gaul was a place, Gaul, by theway, for those of you who don't
know, is modern day France,which is why, you know, Charles
de Gaulle of France, like, youknow, the term has lived on
obviously beyond this period.
But at the time, the Romans knewit as Gaul.
It was a place of tremendousuncertainty, difficult terrain,
(04:17):
logistical nightmares, augmentedtribes, constant betrayal, local
allies that turned on them on awhim, you know, just constant,
many, many, many setbacks.
And Caesar had to rely onprinciples to succeed.
He had to fortify first.
He had to respect the localconditions.
He had to secure logistics.
(04:37):
He had to think in years, notjust in terms of battles.
And honestly, I think investing,especially in real estate, or I
think private equity as well,but real estate for sure is not
too dissimilar from this.
It's not just a cleanspreadsheet exercise.
I've talked a lot about howunderwriting, you know, makes
what is really an art at the endof the day masquerade as a hard
(04:58):
science.
Real estate is a chaoticbusiness.
You don't know what's going tohappen.
There's a lot of risk.
you know, the one certainty isuncertainty, right?
Like things go wrong, pillarsbreak, pipes burst, pipes
freeze.
There's, you know, in the lastbig snowstorm we had here in
Portland, I knew multiple peoplethat had brand new buildings
(05:18):
where their pipes froze andburst.
And we own 1910 vintage assetswhere the pipes rode through it
like it was nothing.
How do you account for that?
Nobody would expect that tohappen in a brand new building.
I mean, it's wild, right?
Wild.
And you don't know.
So in my view, Those with clearframeworks, frameworks that they
have conviction in, notcertainty, but conviction, are
(05:41):
most likely to survive.
So let's talk about what I viewas the five strategic laws that
Julius Caesar kind of passeddown to us as universal field
strategy that you can apply toyour investing business or to
your approach building yourportfolio as you think about
being an investor.
So first of all, the Romans weremasters at this.
(06:03):
Number one, fortify before youexpand.
Every single Roman campaignbegan with a fort.
And I grew up as a kid, youknow, I love this joke about how
often do men think about theRoman Empire.
And I think the short answer isI think about it all the time.
But I was thinking about it as akid before it was a meme.
And I had a book thathighlighted the way the Legion
(06:24):
worked and operated.
And one of the things thatalways stood out to me was every
time the Roman army would camp,they would build a fort, which
is amazing.
So they were always fortifying.
They were always building outsomething sustainable for
themselves to protect themselvesas they advanced and conquered
more territory.
And in investing...
I think it's a similar point.
Don't scale your portfoliowithout getting your operations
(06:47):
in order.
You need to first stabilize,then grow.
And this looks like a lot ofdifferent things, right?
I mean, if you're an investorthat is investing in passive
syndications, it's a little bitdifferent.
You don't have the same worriesthat I might have on a
day-to-day basis, but thesubject matter is the same.
I think if your home base isriddled with credit card debt
(07:09):
and you're spending more moneythan you make, Like you ought
not to be investing insyndications then.
Like you first need to get yourhome operations in order.
If you're making more money thanyou spend every single month and
you can start putting capitalout, great.
Then the next question is, whatare your backend operations look
like as an LP, as a wealthyindividual that invests, right?
Like how are you tracking yourspending and your income?
(07:32):
How are you tracking yourinvestments?
How are you managing your dealflow?
How are you managing what'scoming in?
What is your process to buildout your backend as a sponsor?
doing what I do, it looksdifferent, right?
It's how am I monitoring KPIs?
How am I managing day-to-dayoperations?
What does my accountingmanagement process look like?
What does my backend look like?
(07:53):
One thing we've been working ona lot is the backend for
bookkeeping and accounting.
I mean, it hasn't been great andwe're improving it.
And we're investing in newsystems and software to improve
and strengthen that function,because it's an important piece
of the entire puzzle.
And a lot of people, you know,myself included at times, grow
faster than we build up ourbase, because I think our
(08:16):
society really glamorizes fastmovement and aggression.
But like, we also need to moveforward while fortifying as we
expand.
Number two of the five strategiclaws that I take away from
Letters from Gaul.
Caesar made battle, well, let mesay, local reality is greater
than than central vision.
What do I mean by that?
So Caesar made battlefielddecisions based on the terrain,
(08:39):
not on what some higher up backin Rome told him to do.
He had to deal with what washappening on the ground.
I think there's two ways to lookat this.
I'm going to try to break eachof these down into how an LP
might think about this and how asponsor might think about this.
So from an LP standpoint, Ithink I go back to the Warren
Buffett-ism, invest in what youknow, right?
(08:59):
Don't do things that are notsomething that you understand.
Your ability to understand andcomprehend what you are
investing in is really critical.
It is the on-the-groundmicro-understanding of what it
is you're doing.
As a sponsor, I think it looks alittle bit differently.
It's like, trust what's going onon the ground.
understand what's happening onthe ground.
(09:20):
I have had so many instanceswhere I was, you know, I'm an
investor in multiple states andmultiple cities.
And my home base is Portland.
And I grew up in the SanFrancisco Bay Area.
So I know both of those marketsvery well.
We also invest in Seattle.
I've been very fortunate to havevery good mentors and partners
in Seattle.
And, you know, I understandSeattle very well.
We've invested a lot in Seattleand Tacoma.
(09:41):
But I don't know it as well as alocal.
I'm not on the ground.
And it's fascinating when Ibring a deal and Capitol Hill,
right?
Great neighborhood.
And I say, this is a fantasticdeal.
It's a good location, blah,blah, blah.
And local operators will say tome, hey, you don't want to be on
that end of the street.
It's fascinating.
That end of the street.
It's that micro.
(10:03):
Understand what's happening onthe ground.
Understand that models candistort the reality of the
situation.
Another quick anecdote, welooked for a little very short
period at investing in EastPortland, which is a relatively
rough part of town when I wasvery early in my career.
And we underwrote a deal.
It looks fantastic, high cashflow, beautiful, like it was
going to be amazing.
(10:23):
And I had a long conversationwith another mentor that had
more experience in the market.
And he was like, your numbersare all off.
Like you don't understand thisneighborhood.
Like this neighborhood is reallyrough, really hard to collect
rent.
You need to...
Factor in a large delinquencyloss.
You need to factor in thedifficulty of collecting rent,
of security patrols, of a muchhigher management fee because
(10:46):
the asset is so managementintensive.
Local understanding versus50,000 foot high.
If Caesar had taken thatperspective of looking at a map
from hundreds of miles away andtrying to make decisions, he
would have lost.
He would have lost dramatically.
So deep local understanding.
The third, logistics management.
Now, the Romans were experts atthis.
(11:07):
The Romans obviously builtroads.
They mastered logistics, foodsupply, discipline.
It wasn't about flesh.
It's actually reallyinteresting.
If you compare Gallic andGermanic warriors to Roman
legionnaires, generallyspeaking, they were larger,
fiercer warriors.
There's a reason a lot of thegladiators that were brought
back as slaves were Germanwarriors, for example.
(11:29):
But the Romans beat them.
And now we all know the, youknow, Teutonburg Forest, some of
the big disasters that happenedto the legion.
But generally speaking, Romesubjugated countless tribes that
were comprised of warriors thatpound for pound were better and
stronger fighters than youraverage Roman legionnaire.
So why did Rome win?
Because at the end of the day,logistics and discipline are
(11:52):
what wins, right?
And The Romans had really stronglogistics.
They kept their supply linescontrolled.
This goes back to point one,fortify before you expand.
They had a system to feed thelegion, to equip the legion,
that they were able toout-compete and out- logistics,
their opponents, right?
(12:13):
In our world, that looks likeproperty management systems,
CapEx systems, managing yourdebt, managing everything that's
going on.
Logistics in this case is reallya proxy for all of the different
components that go into managingand running your investment
portfolio, whatever it may be,right?
So if you're an individualinvestor that's buying stocks,
(12:33):
what is your process of tounderstand and keep in touch
with everything that's going onwith your portfolio.
What is your process to hold thepeople that invest money on your
behalf accountable?
What KPIs are you looking at?
I think all of these areanalogous to logistics.
As a direct real estateinvestor, what are the KPIs I
hold my property managementcompany accountable for?
(12:53):
What are the systems that I putin place so that we don't have
drop balls all over the placeand everything is really clean?
Number four, Strategic timehorizons have to be stretched.
Caesar didn't fight in thisbattle for quarter-by-quarter
wins.
I will say, it's a fascinatingread because there's so many
setbacks, like legionsdecimated, allies turning on
him, marching into battle, andone of his closest allies turns
(13:17):
against him and they have tobeat a hasty retreat.
I mean, it can go on and on.
There's so many amazing thingsabout it.
But this is the thing.
They never stopped They didn'tgive up.
I mean, that was like one ofRome's great talents, right?
They just never stopped.
They can take dramatic losses,but they were never willing to
stop the fight.
They had a long-term strategictime horizon and they stuck to
(13:39):
it and they won.
Ultimately, they won becausethey outlasted their enemies and
they kept going.
And I really think investing isa lot like that in general
across the board.
Your time horizon is cannot beshort-term if you want true
long-term success.
You must be a long-term investorto really benefit from the
compounding effect.
(14:00):
I mean, I'm going to quote myfavorite Charlie Mungerism
again, never stop compoundingunnecessarily.
Well, compounding really happensbest when you have a long-term
time horizon.
So you have to stay at it.
And number five, the edge ofoperating at the very edge is
fragile.
So therefore, discipline isnon-negotiable.
When leaders get soft, if Caesarhad gotten soft, they would not
(14:24):
have won.
There are many examples now ofdubious historical quality,
because remember, this wasreally a puff campaign for
Caesar to represent himself toaudiences back home.
But there are several examplesof Caesar himself entering the
fighting alongside his men torally them and win battles that
might have been lost otherwise.
There's many examples of himproviding commendations and
awards to centurions who did thesame, who inspired the legion to
(14:47):
fight harder.
Don't get soft.
Being soft in investing lookslike passive ownership, not
being involved in the details.
Inattention equals ruin.
Remember our first quote inthis.
In war, events of importance arethe result of trivial causes.
The sloppiness that comes fromlack of discipline are the
(15:09):
trivial causes that lead tosignificant issues down the
road.
And I said earlier, you know,this point on Germanic warriors
being bigger and stronger thanthe average Roman soldier.
It's true.
But Romans still won becausethey were disciplined, because
they locked shields and workedas a team and fought together in
a disciplined format.
And Germanic warriors were usedto one-on-one duels,
(15:32):
overwhelming their opponent withgiant sword swings.
And the Romans didn't fight likethat.
And they won, like they wondecisively.
So discipline is non-negotiable.
You have to be disciplined.
You have to monitor the micro.
And I think that's the same ifyou're an LP, by the way.
I think the best LPs we haveunderstand what's happening.
(15:52):
I prefer my investors to knowwhat's happening and like
engaged investors that ask goodquestions and understand.
Because ultimately, good or badoutcome, it's better for me if
my investor understands exactlywhat's happening than if they're
very, very passive andunattentive to what's going on.
So...
Discipline is non-negotiable onthe edge of anything.
(16:13):
So Caesar didn't win Gaul justbecause he had better swords.
He won because he built amachine that could survive
stress.
And honestly, that is our jobtoo.
Whether we're buying realestate, managing capital,
stewarding a team, building yourfamily's portfolio, the laws,
the timeless laws and strategicwisdom here do not change.
(16:34):
We will go further into each ofthese principles on a go-forward
basis, why they're so hard to doand why it separates the pros
from the amateurs.
In the meantime...
If you haven't done it already,on the course of listening to
this episode, I would highlyrecommend picking up your own
copy of Letters from Gaul.
It's a fantastic book.
It's really interesting.
You will really enjoy it.
If you haven't done it yet,please leave a review for us on
(16:56):
your podcast service of choice.
It really helps the show out.
The Timeless Investor Show isgrowing.
We're having an increasingnumber of downloads per episode
as we continue to produce goodcontent.
And I have an interesting lineupof future guests that are going
to be coming on as well.
So you won't always just have tolisten to my voice, but there
There'll be some good stuffcoming down the pipe.
Think well, act wisely, buildsomething timeless.
(17:19):
Thank you for being here.
This is your host, Ari VanGemeren with the Timeless
Investor Show.
And I look forward to seeing younext week.
In war, events of importance are the result of
trivial causes.
Julius Caesar, Commentarii deBello Gallico.
This is an amazing quote fromJulius Caesar's Letters from
Gaul, which is an incrediblebook that I first came across
years ago, actually in highschool, come to think of it, and
(00:20):
which has stuck with me sincethen.
It is fascinating.
I highly recommend it.
And also, I just want to pointout, it is probably the first
known example somebody who livestreaming their life to a
broader audience.
The context of this book isincredible because it details
the journal, well, actually theletters of Julius Caesar to the
(00:42):
Roman public back home about hisexploits in ultimately
conquering Gaul and subjugatingmultiple very dangerous tribes,
chieftains, war leaders.
And the purpose of it was thateven though Caesar was far from
home, he wanted to send almostlike a periodical series of
updates to the Roman publicabout what he was doing.
(01:05):
So when I say it was livestreaming, it's about as close
as you can get to live streamingin the era.
And it's an incredible story.
because let's go back to thatfirst quote.
In war, events of importance arethe result of trivial causes.
That is a direct quote fromCaesar's letter back home.
And what's true in war is truein basically everything else.
I mean, war is just like life,stripped of all its civility and
(01:28):
kindness and other aspects,right?
I mean, you do whatever you canto win.
And, you know, I think sometimestranslation of war to business
is maybe overdone, but notreally.
And I think there's a lot ofvalidity to it.
I mean, we read Sun Tzu's art ofwar and try to apply those
lessons to business every singleday.
So think about that quote.
(01:49):
Because I think it's true inreal estate investing in
business and in life.
Events of great importance arethe result of trivial causes.
Trivial causes in real estateinvesting are your execution,
your ground game, how focusedyou are on the minutia.
I think there's a tendency inthis business to be focused on
the big glamorous activities,raising capital, buying a new
(02:10):
building, social media updatesfor everyone.
But what really matters is themicromanagement of the
day-to-day operations on theground.
And just like in war.
You make one couple of bad,small decisions can have huge
knock-on effects down the line.
So in this new series, I'm notgoing to do this on a
week-to-week basis, but Ienvision this being up to four
(02:32):
to five total podcast episodes.
We're going to dig into Lettersfrom Gaul, and maybe later we'll
do The Art of War.
I don't know.
But I like Letters from Gaul alot.
I don't think the audience isaware of it, so I want to
highlight this bookparticularly.
And in this series, we willexplore the enduring laws of
strategy, empire, and executionthat map really well to the
(02:53):
world of investing.
Because this isn't historicaltrivia.
This is unchanging, timelesslogic behind power, risk, and
control.
Because again, war is theultimate laboratory of high
risk, high reward, whereeverything is removed.
It is just civilization at itspurest, most unadulterated form.
(03:15):
I I'm a Hobbesian, right?
So if any of you read my book,you know I love Thomas Hobbes.
And Hobbes' whole perspective isthat humanity built governments
around itself for the purpose ofprotecting itself from stronger
oppressors that might try tosteal their material possessions
from them.
So it's a rather pessimistic andkind of dark look at humanity.
(03:37):
And I think anybody would agree.
that if we had a massiveearthquake and there were two to
three weeks without socialservices, I think civilization
would fall apart pretty quickly.
Well, war and business are twothings.
I mean, business is certainlymore controlled by law, but they
are things that really peel backthe polite veneer of
civilization and show us thingsin their true primal form.
(03:57):
So let's talk about the campaignto subdue Gaul because it's an
interesting story.
Gaul was a place, Gaul, by theway, for those of you who don't
know, is modern day France,which is why, you know, Charles
de Gaulle of France, like, youknow, the term has lived on
obviously beyond this period.
But at the time, the Romans knewit as Gaul.
It was a place of tremendousuncertainty, difficult terrain,
(04:17):
logistical nightmares, augmentedtribes, constant betrayal, local
allies that turned on them on awhim, you know, just constant,
many, many, many setbacks.
And Caesar had to rely onprinciples to succeed.
He had to fortify first.
He had to respect the localconditions.
He had to secure logistics.
(04:37):
He had to think in years, notjust in terms of battles.
And honestly, I think investing,especially in real estate, or I
think private equity as well,but real estate for sure is not
too dissimilar from this.
It's not just a cleanspreadsheet exercise.
I've talked a lot about howunderwriting, you know, makes
what is really an art at the endof the day masquerade as a hard
(04:58):
science.
Real estate is a chaoticbusiness.
You don't know what's going tohappen.
There's a lot of risk.
you know, the one certainty isuncertainty, right?
Like things go wrong, pillarsbreak, pipes burst, pipes
freeze.
There's, you know, in the lastbig snowstorm we had here in
Portland, I knew multiple peoplethat had brand new buildings
(05:18):
where their pipes froze andburst.
And we own 1910 vintage assetswhere the pipes rode through it
like it was nothing.
How do you account for that?
Nobody would expect that tohappen in a brand new building.
I mean, it's wild, right?
Wild.
And you don't know.
So in my view, Those with clearframeworks, frameworks that they
have conviction in, notcertainty, but conviction, are
(05:41):
most likely to survive.
So let's talk about what I viewas the five strategic laws that
Julius Caesar kind of passeddown to us as universal field
strategy that you can apply toyour investing business or to
your approach building yourportfolio as you think about
being an investor.
So first of all, the Romans weremasters at this.
(06:03):
Number one, fortify before youexpand.
Every single Roman campaignbegan with a fort.
And I grew up as a kid, youknow, I love this joke about how
often do men think about theRoman Empire.
And I think the short answer isI think about it all the time.
But I was thinking about it as akid before it was a meme.
And I had a book thathighlighted the way the Legion
(06:24):
worked and operated.
And one of the things thatalways stood out to me was every
time the Roman army would camp,they would build a fort, which
is amazing.
So they were always fortifying.
They were always building outsomething sustainable for
themselves to protect themselvesas they advanced and conquered
more territory.
And in investing...
I think it's a similar point.
Don't scale your portfoliowithout getting your operations
(06:47):
in order.
You need to first stabilize,then grow.
And this looks like a lot ofdifferent things, right?
I mean, if you're an investorthat is investing in passive
syndications, it's a little bitdifferent.
You don't have the same worriesthat I might have on a
day-to-day basis, but thesubject matter is the same.
I think if your home base isriddled with credit card debt
(07:09):
and you're spending more moneythan you make, Like you ought
not to be investing insyndications then.
Like you first need to get yourhome operations in order.
If you're making more money thanyou spend every single month and
you can start putting capitalout, great.
Then the next question is, whatare your backend operations look
like as an LP, as a wealthyindividual that invests, right?
Like how are you tracking yourspending and your income?
(07:32):
How are you tracking yourinvestments?
How are you managing your dealflow?
How are you managing what'scoming in?
What is your process to buildout your backend as a sponsor?
doing what I do, it looksdifferent, right?
It's how am I monitoring KPIs?
How am I managing day-to-dayoperations?
What does my accountingmanagement process look like?
What does my backend look like?
(07:53):
One thing we've been working ona lot is the backend for
bookkeeping and accounting.
I mean, it hasn't been great andwe're improving it.
And we're investing in newsystems and software to improve
and strengthen that function,because it's an important piece
of the entire puzzle.
And a lot of people, you know,myself included at times, grow
faster than we build up ourbase, because I think our
(08:16):
society really glamorizes fastmovement and aggression.
But like, we also need to moveforward while fortifying as we
expand.
Number two of the five strategiclaws that I take away from
Letters from Gaul.
Caesar made battle, well, let mesay, local reality is greater
than than central vision.
What do I mean by that?
So Caesar made battlefielddecisions based on the terrain,
(08:39):
not on what some higher up backin Rome told him to do.
He had to deal with what washappening on the ground.
I think there's two ways to lookat this.
I'm going to try to break eachof these down into how an LP
might think about this and how asponsor might think about this.
So from an LP standpoint, Ithink I go back to the Warren
Buffett-ism, invest in what youknow, right?
(08:59):
Don't do things that are notsomething that you understand.
Your ability to understand andcomprehend what you are
investing in is really critical.
It is the on-the-groundmicro-understanding of what it
is you're doing.
As a sponsor, I think it looks alittle bit differently.
It's like, trust what's going onon the ground.
understand what's happening onthe ground.
(09:20):
I have had so many instanceswhere I was, you know, I'm an
investor in multiple states andmultiple cities.
And my home base is Portland.
And I grew up in the SanFrancisco Bay Area.
So I know both of those marketsvery well.
We also invest in Seattle.
I've been very fortunate to havevery good mentors and partners
in Seattle.
And, you know, I understandSeattle very well.
We've invested a lot in Seattleand Tacoma.
(09:41):
But I don't know it as well as alocal.
I'm not on the ground.
And it's fascinating when Ibring a deal and Capitol Hill,
right?
Great neighborhood.
And I say, this is a fantasticdeal.
It's a good location, blah,blah, blah.
And local operators will say tome, hey, you don't want to be on
that end of the street.
It's fascinating.
That end of the street.
It's that micro.
(10:03):
Understand what's happening onthe ground.
Understand that models candistort the reality of the
situation.
Another quick anecdote, welooked for a little very short
period at investing in EastPortland, which is a relatively
rough part of town when I wasvery early in my career.
And we underwrote a deal.
It looks fantastic, high cashflow, beautiful, like it was
going to be amazing.
(10:23):
And I had a long conversationwith another mentor that had
more experience in the market.
And he was like, your numbersare all off.
Like you don't understand thisneighborhood.
Like this neighborhood is reallyrough, really hard to collect
rent.
You need to...
Factor in a large delinquencyloss.
You need to factor in thedifficulty of collecting rent,
of security patrols, of a muchhigher management fee because
(10:46):
the asset is so managementintensive.
Local understanding versus50,000 foot high.
If Caesar had taken thatperspective of looking at a map
from hundreds of miles away andtrying to make decisions, he
would have lost.
He would have lost dramatically.
So deep local understanding.
The third, logistics management.
Now, the Romans were experts atthis.
(11:07):
The Romans obviously builtroads.
They mastered logistics, foodsupply, discipline.
It wasn't about flesh.
It's actually reallyinteresting.
If you compare Gallic andGermanic warriors to Roman
legionnaires, generallyspeaking, they were larger,
fiercer warriors.
There's a reason a lot of thegladiators that were brought
back as slaves were Germanwarriors, for example.
(11:29):
But the Romans beat them.
And now we all know the, youknow, Teutonburg Forest, some of
the big disasters that happenedto the legion.
But generally speaking, Romesubjugated countless tribes that
were comprised of warriors thatpound for pound were better and
stronger fighters than youraverage Roman legionnaire.
So why did Rome win?
Because at the end of the day,logistics and discipline are
(11:52):
what wins, right?
And The Romans had really stronglogistics.
They kept their supply linescontrolled.
This goes back to point one,fortify before you expand.
They had a system to feed thelegion, to equip the legion,
that they were able toout-compete and out- logistics,
their opponents, right?
(12:13):
In our world, that looks likeproperty management systems,
CapEx systems, managing yourdebt, managing everything that's
going on.
Logistics in this case is reallya proxy for all of the different
components that go into managingand running your investment
portfolio, whatever it may be,right?
So if you're an individualinvestor that's buying stocks,
(12:33):
what is your process of tounderstand and keep in touch
with everything that's going onwith your portfolio.
What is your process to hold thepeople that invest money on your
behalf accountable?
What KPIs are you looking at?
I think all of these areanalogous to logistics.
As a direct real estateinvestor, what are the KPIs I
hold my property managementcompany accountable for?
(12:53):
What are the systems that I putin place so that we don't have
drop balls all over the placeand everything is really clean?
Number four, Strategic timehorizons have to be stretched.
Caesar didn't fight in thisbattle for quarter-by-quarter
wins.
I will say, it's a fascinatingread because there's so many
setbacks, like legionsdecimated, allies turning on
him, marching into battle, andone of his closest allies turns
(13:17):
against him and they have tobeat a hasty retreat.
I mean, it can go on and on.
There's so many amazing thingsabout it.
But this is the thing.
They never stopped They didn'tgive up.
I mean, that was like one ofRome's great talents, right?
They just never stopped.
They can take dramatic losses,but they were never willing to
stop the fight.
They had a long-term strategictime horizon and they stuck to
(13:39):
it and they won.
Ultimately, they won becausethey outlasted their enemies and
they kept going.
And I really think investing isa lot like that in general
across the board.
Your time horizon is cannot beshort-term if you want true
long-term success.
You must be a long-term investorto really benefit from the
compounding effect.
(14:00):
I mean, I'm going to quote myfavorite Charlie Mungerism
again, never stop compoundingunnecessarily.
Well, compounding really happensbest when you have a long-term
time horizon.
So you have to stay at it.
And number five, the edge ofoperating at the very edge is
fragile.
So therefore, discipline isnon-negotiable.
When leaders get soft, if Caesarhad gotten soft, they would not
(14:24):
have won.
There are many examples now ofdubious historical quality,
because remember, this wasreally a puff campaign for
Caesar to represent himself toaudiences back home.
But there are several examplesof Caesar himself entering the
fighting alongside his men torally them and win battles that
might have been lost otherwise.
There's many examples of himproviding commendations and
awards to centurions who did thesame, who inspired the legion to
(14:47):
fight harder.
Don't get soft.
Being soft in investing lookslike passive ownership, not
being involved in the details.
Inattention equals ruin.
Remember our first quote inthis.
In war, events of importance arethe result of trivial causes.
The sloppiness that comes fromlack of discipline are the
(15:09):
trivial causes that lead tosignificant issues down the
road.
And I said earlier, you know,this point on Germanic warriors
being bigger and stronger thanthe average Roman soldier.
It's true.
But Romans still won becausethey were disciplined, because
they locked shields and workedas a team and fought together in
a disciplined format.
And Germanic warriors were usedto one-on-one duels,
(15:32):
overwhelming their opponent withgiant sword swings.
And the Romans didn't fight likethat.
And they won, like they wondecisively.
So discipline is non-negotiable.
You have to be disciplined.
You have to monitor the micro.
And I think that's the same ifyou're an LP, by the way.
I think the best LPs we haveunderstand what's happening.
(15:52):
I prefer my investors to knowwhat's happening and like
engaged investors that ask goodquestions and understand.
Because ultimately, good or badoutcome, it's better for me if
my investor understands exactlywhat's happening than if they're
very, very passive andunattentive to what's going on.
So...
Discipline is non-negotiable onthe edge of anything.
(16:13):
So Caesar didn't win Gaul justbecause he had better swords.
He won because he built amachine that could survive
stress.
And honestly, that is our jobtoo.
Whether we're buying realestate, managing capital,
stewarding a team, building yourfamily's portfolio, the laws,
the timeless laws and strategicwisdom here do not change.
(16:34):
We will go further into each ofthese principles on a go-forward
basis, why they're so hard to doand why it separates the pros
from the amateurs.
In the meantime...
If you haven't done it already,on the course of listening to
this episode, I would highlyrecommend picking up your own
copy of Letters from Gaul.
It's a fantastic book.
It's really interesting.
You will really enjoy it.
If you haven't done it yet,please leave a review for us on
(16:56):
your podcast service of choice.
It really helps the show out.
The Timeless Investor Show isgrowing.
We're having an increasingnumber of downloads per episode
as we continue to produce goodcontent.
And I have an interesting lineupof future guests that are going
to be coming on as well.
So you won't always just have tolisten to my voice, but there
There'll be some good stuffcoming down the pipe.
Think well, act wisely, buildsomething timeless.
(17:19):
Thank you for being here.
This is your host, Ari VanGemeren with the Timeless
Investor Show.
And I look forward to seeing younext week.
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