20VC Alex Rodriguez (AROD) on Investing Lessons from Warren Buffet, How a Meeting with Magic Johnson Changed His Approach to Business and The Single Best and Worst Investment Decisions he has Made and Why AROD Is Not Buying More Real Estate

Summary Notes


In a profound conversation with baseball legend and business mogul Alex Rodriguez, the host delves into Alex's personal and professional life, revealing how childhood adversity and a major career suspension shaped his mindset and approach to success. Alex discusses the influential guidance of mentors like Warren Buffett and Magic Johnson, emphasizing the importance of staying within one's circle of competence, investing in quality, and separating emotion from business decisions. He shares his transition from athlete to CEO of Arod Corp and co-owner of the Minnesota Timberwolves, highlighting the value of team collaboration, prioritizing deep expertise over breadth, and the significance of being a present and loving father. Alex also touches upon the importance of maintaining accessibility for fans in the evolving sports franchise landscape and the transformative power of accountability and personal growth.

Summary Notes

Warren Buffett's Investment Principles

  • Alex Rodriguez shares insights he learned from Warren Buffett.
  • Buffett emphasizes sticking to your circle of competence.
  • He advises to buy the best companies and forget the rest.
  • Buffett also stresses the importance of separating emotion from investing.

"I think I learned from Warren a few things. He always talks about sticking to your circle of competence. Number two, he always talks about buy the best and forget the rest. And then he always talks about separating emotion from investing, being a great investor. Companies, stocks, they don't care about your emotions."

The quote summarizes the three key investment principles that Alex Rodriguez learned from Warren Buffett: staying within one's area of expertise, focusing on quality investments, and not letting emotions dictate investment decisions. These principles are fundamental for successful investing.

Introduction of Alex Rodriguez

  • Harry Stebbings introduces Alex Rodriguez, emphasizing his athletic and business accomplishments.
  • Rodriguez is a 14-time MLB All-Star, 2009 World Series champion, and successful businessman.
  • He is the chairman and CEO of Arod Corp and co-owner of the Minnesota Timberwolves.

"It is not every day we welcome one of the greatest athletes of all time to the hot seat. Alex Rodriguez joins us in the show today. Alex is a 14 times MLB all star and is a 2009 World Series champion with the New York Yankees. And in the world of business, Alex is the chairman and CEO of Arod Corp. And is co owner of the Minnesota Timberwolves."

Harry Stebbings provides a brief overview of Alex Rodriguez's career highlights and current business ventures, setting the stage for the interview and establishing Rodriguez's credibility in both sports and business.

Personal History and Impact on Mindset

  • Alex Rodriguez reflects on his father leaving when he was ten, a pivotal moment in his life.
  • This event significantly impacted Rodriguez's life and mindset.
  • Rodriguez's suspension from Major League Baseball in 2014 allowed him to reflect and change.

"Yeah, I think for me, probably where my heart and mind goes to is dad leaving at the age of ten when I was ten and leaving my mother and my two siblings behind. And I was the youngest of three and I thought that was a pretty significant part of my life. That kind of for better or worse, had a huge impact in my life."

Alex Rodriguez shares a personal story about his father's departure from the family, highlighting a formative experience that shaped his outlook on life and his personal development.

Transformation Through Therapy

  • Rodriguez discusses his transformation after working with Dr. David, who helped him rewire his brain.
  • The therapy sessions began following his suspension for performance-enhancing drug use.

"It wasn't until then that I had a real opportunity to dive into the deep end of the pool, turn the lens inward, and met a guy, a doctor that really saved my life."

Rodriguez credits Dr. David with significantly changing his life, indicating the importance of mental health and therapy in overcoming personal challenges and improving one's mindset.

Redefining Success and Winning

  • Post-suspension, Rodriguez's definition of success shifted from material achievements to gratitude and collaboration.
  • He emphasizes the importance of being a present and loving father.

"What I understood post suspension, post Dr. David, was that I was completely out of my mind. None of that is really winning and success. While it sounds nice and it's fun, success today is really built more around gratitude, others around me, winning, collaboration, being a present and loving father, completely different."

Alex Rodriguez describes how his perspective on what constitutes true success and winning evolved after his suspension and therapy. He now values personal relationships and emotional well-being over material success.

Importance of Priorities and Focus

  • Rodriguez advises focusing on a few important things rather than spreading oneself too thin.
  • He believes in the effectiveness of going narrow and deep rather than wide and shallow.

"I think it's really about priorities and it's much easier, I would say, to say this in my 40s versus twenty s and thirty s, because the thought that I always share with my team is this whole idea that I see a lot of young people make this mistake where they go wide and shallow and they try to be experts at all things."

Rodriguez reflects on the importance of setting priorities and concentrating efforts on a few key areas to achieve greatness, a philosophy he applies in his personal life and at Arod Corp.

Assembling Great Teams

  • Rodriguez discusses the importance of pattern recognition in identifying talented and gritty individuals.
  • He emphasizes the need to read resumes carefully and avoid being misled by good communicators who may not be the best fit.
  • Rodriguez suggests hiring slowly and focusing on candidates who are the best of the best.

"The key is the tens and the fives are easy to recognize. The tens jump out of the page, and the fives are people you're probably not going to hire. The challenge is when you have the six and the sevens."

Alex Rodriguez shares his approach to team building, highlighting the importance of distinguishing between average and exceptional candidates and focusing on hiring top talent for better culture fit and performance.

Deal Making Skills

  • Rodriguez believes empathy and compassion are key to great deal-making.
  • Understanding the other party's top priorities is crucial for a win-win outcome.
  • He asserts that good deals cannot be made with bad people and emphasizes the importance of mutual understanding.

"I don't think, Harry, you can make a good deal with a bad guy. That's number one. Number two, I do believe in this concept of win-win."

Alex Rodriguez outlines his philosophy on deal-making, stressing the importance of ethical considerations and the need to ensure both parties benefit from the transaction.

Effective Negotiation and Listening Skills

  • Understanding the importance of being a good listener in negotiation and entrepreneurship.
  • Recognizing the flexibility of terms and prices in negotiations.
  • Realizing that not understanding the rules of engagement can hinder negotiation success.

"I think working from there and then working backwards is really important. But also being a good listener, I think so many people are busy with running their mouths."

This quote highlights the strategy of starting with an end goal in mind and working backwards, as well as the value of listening over speaking in negotiations.

Decision-Making: Head vs. Heart

  • Evolution of decision-making approach from heart-driven to a combination of head, heart, and common sense over the years.

"I think today I'm a combination of head, heart and just some common sense."

Alex Rodriguez reflects on his personal growth in decision-making, indicating a balanced approach that now includes logical reasoning and intuition.

Reflection on Past Deals

  • Successful deal: Buying a third of Petro's pace, an ESG lending brokerage business, and later selling it for a significant profit.
  • Unsuccessful deal: Purchasing apartment units before the financial crisis, leading to a loss in value, but eventually selling for a profit after negotiating with banks.

"The best deal, or one of the best deals that we've done here at Aroc Corp is we bought a third of a business called Petro's pace almost five years ago... this year we sold it to Apollo for almost twelve times."

Alex Rodriguez discusses a successful business acquisition and its profitable outcome.

Mentorship and Lessons from Magic Johnson

  • Magic Johnson as a source of hope and inspiration for success in business.
  • Learning the importance of hiring the best people, leveraging personal strengths, and staying connected with industry leaders.
  • Significance of preparation and sincerity in gaining mentorship.

"What magic did for me is he gave me hope... he taught me framework, and he basically gave me his floor plan on how he took Magic Johnson, the hall of fame iconic basketball player, to a hall of fame iconic businessman."

The quote emphasizes the inspiration and guidance Magic Johnson provided Alex Rodriguez, contributing to his successful transition from sports to business.

Warren Buffett's Investment Wisdom

  • Adhering to one's circle of competence.
  • The principle of buying high-quality businesses at fair prices.
  • The importance of separating emotion from investing.

"I think I learned from Warren a few things. He always talks about sticking to your circle of competence... buy the best and forget the rest... separating emotion from investing."

Alex Rodriguez summarizes the key investment principles he learned from Warren Buffett, underscoring the importance of knowledge, quality, and emotional discipline in investing.

Business Prioritization and Specialization

  • Strategy of starting with small bets in various ventures to gain understanding and experience.
  • Narrowing focus to areas of passion, understanding, competitive advantage, and value addition.
  • Specializing in sports and real estate, leveraging lifelong experiences and interests.

"We're only doing things that we're passionate about, that we understand really well that we have a competitive advantage and where we can bring real, real value to the founders."

The quote captures Alex Rodriguez's approach to business, focusing on sectors where he has a deep passion and can provide significant value.

Relationship with Money

  • The evolving perspective on money as a means to time and quality of life.
  • The realization that money is indifferent and prioritizing process over financial results.

"But my relationship with money has changed over the years because what money allows you to do is to have more time."

Alex Rodriguez shares his matured view on money, emphasizing its role in providing time to spend with loved ones and the importance of focusing on the process in business and investing.

Discipline in Process

  • Discipline is crucial in maintaining a successful process.
  • It can be mundane and boring, but necessary.
  • Alex Rodriguez emphasizes the importance of coaching and developing young talent.
  • Leadership qualities such as sympathy and compassion are vital.
  • Investing time in coaching has a high return on investment (ROI).

"I think it's discipline. It could be mundane. It can be boring. It can be. We spend a lot of time here in coaching. We have a lot of young, talented people."

This quote highlights the importance of discipline in the process of coaching and development, acknowledging that while it may not always be exciting, it is essential for nurturing young talent.

Mindset in Adversity

  • Slowing down and practicing gratitude is key when facing challenges.
  • Maintaining health and wellness is essential for resilience.
  • Investing in oneself helps to better handle life's difficulties.

"Some of the things you got to do is just slow things down a little bit, continue to be grateful and appreciative... And then I would double down into your health and wellness."

Alex Rodriguez discusses the importance of taking a step back to appreciate life and focusing on personal health and wellness to stay strong during tough times.

Work-Life Balance

  • Believes in work-life balance but recognizes the need for sprints and marathons.
  • Importance of having a supportive team and strategy.
  • Creating a fun and celebratory office culture is essential.
  • Safe environments for mistakes encourage learning and team improvement.

"Yeah, I do. But I mean, sometimes there's times where you have to sprint and sometimes it's more of a marathon."

This quote underscores the belief in work-life balance while acknowledging that different phases of work require varying levels of effort and commitment.

Creating a Safe Work Environment

  • Leadership sets the tone for a safe work environment.
  • Leaders must be accountable and vulnerable to build trust.
  • Cultivating talent and creating a trusting culture is essential.
  • Past experiences in sports influence business leadership strategies.

"I think it starts at the top, right? We talked about hiring slow, and then it's cultivating that talent."

Alex Rodriguez stresses the role of leadership in fostering a safe work environment where trust is paramount, drawing parallels between sports and business practices.

Future of Sports Franchises

  • Concerns about the increasing business nature of sports.
  • Importance of maintaining passion and connection to the fan base.
  • The balance between institutional capital and passionate ownership is key.
  • Uncertainty about the future landscape of sports franchises.

"I think you have to thread the needle, Harry. I think what's beautiful about sports, it's the great passion, these progressive owners over the years."

Alex Rodriguez expresses the need to balance the commercial aspects of sports franchises with the passion that connects them to their fans.

Sports Franchise Landscape in Five Years

  • Predicting the future landscape is challenging.
  • Significant changes have occurred in the last five years, more than in the previous thirty.
  • The rise of direct-to-consumer models is expected.
  • The impact of television and national deals will be significant.

"I think we've seen more changes in the last five years than we've probably seen in the prior 30 years."

This quote reflects on the rapid evolution of the sports industry and anticipates continued significant changes, especially in how fans engage with sports franchises.

Concerns for the Sports and Real Estate Industries

  • The affordability for fans and the broader population is a concern.
  • The impact of economic changes on people with modest means should be considered by leaders.
  • Empathy for those who may be priced out of enjoying sports or maintaining their homes.

"We cannot forget about my mother. My mother is a figurehead for someone who can't afford her apartment or someone who can't afford to come watch their favorite sports team."

Alex Rodriguez uses his mother as a symbol for the average person who may struggle with affordability, emphasizing the need to consider the less fortunate in the sports and real estate industries.

Impact of Fatherhood on Business and Performance

  • Becoming a father has greatly influenced Alex Rodriguez's priorities and responsibilities.
  • The commitment to being a present and responsible parent is paramount.
  • Personal experiences, such as his father leaving when he was young, shape his approach to fatherhood.

"Well, I think with my background and dad leaving when I was ten, ever since I was 1112 years old, I remember thinking to myself and making a promise that if I ever had the privilege to become a father, that would be my number one responsibility."

This quote reveals how personal experiences have shaped Alex Rodriguez's commitment to fatherhood and the impact it has on his approach to life and business.

Importance of Parenting and Child Development

  • Raising children is considered the most crucial responsibility in the world.
  • The focus should be on the home environment, including engaging in conversations without distractions.
  • Parents should avoid a win-at-all-costs attitude with their children, particularly in sports.
  • Conversations post-activities should be about enjoyment and effort, not just results.
  • Avoiding a results-focused approach can reduce anxiety in young people.

"The most important responsibility we have in this world is to raise our children."

This quote emphasizes the speaker's belief in the paramount importance of parenting and child-rearing as a foundational responsibility in society.

"It shouldn't be about results, results, results. That creates a lot of anxiety for young people."

Here, the speaker is advising parents to shift the focus from results to the child's enjoyment and effort, highlighting the negative impact of pressure on children's mental health.

Fostering Ambition in Different Financial Environments

  • Ambition and hustle in children can be influenced more by actions than words.
  • Having strict and fair role models for children can be beneficial, especially if they grow up in privileged environments.
  • Learning from losses and receiving honest feedback is important for children's development.

"I think it's less about what you say and more about what you do."

This quote reflects the speaker's belief that children learn more from observing actions, particularly the behavior and principles demonstrated by their parents and caretakers.

"So the more, in a weird way, the more they lose and the more they can learn from those lessons early on, the better they're going to be."

The speaker suggests that experiencing losses and learning from them is valuable for children's growth and development, especially when they come from affluent backgrounds.

Choosing a Historical Figure for Dinner

  • Jackie Robinson would be the speaker's choice for a dinner guest.
  • Robinson's courage and impact on breaking racial barriers in sports are of particular interest.

"I would say Jackie Robinson because Jackie was a four sport athlete out of UCLA and he was actually the first African American."

The speaker expresses admiration for Jackie Robinson's athletic prowess and pioneering role as the first African American in Major League Baseball, indicating a desire to understand the courage behind his achievements.

Reassessing Investment Strategies

  • The speaker has put a pause on buying real estate assets.
  • Observing the market and waiting for the right opportunity is the current strategy.
  • There is a current disconnect between what buyers are willing to pay and what sellers expect.

"We're sitting back and just watching and seeing where the fed goes with."

The speaker is indicating a cautious approach to investment, choosing to observe market trends and regulatory changes before making decisions.

"Eventually they'll call and they'll say, okay, we'll take the three, and then we'll say, okay, we'll wire the money."

The quote suggests a patient investment strategy where waiting for the right valuation can lead to favorable deals.

Overcoming Personal Challenges

  • The speaker views his suspension from baseball as a painful yet valuable lesson.
  • Taking full accountability and undergoing therapy were pivotal in his personal growth.
  • The speaker believes that learning from mistakes sets the foundation for a better future.

"That season allowed me to, I really think, lessons learned, taking full accountability."

The speaker acknowledges the suspension as a period of learning and taking responsibility for his actions, which was instrumental in his personal development.

"What was most rewarding for me, Harry, and I've come to the place where I've forgiven myself."

Forgiving oneself is highlighted as a crucial step in overcoming past mistakes and moving forward.

Defining Personal and Professional Identity

  • The speaker would choose the word "collaborator" to represent his legacy.
  • Successful endeavors are attributed to teamwork, while failures are often faced alone.
  • The speaker values collaboration and recognizes the importance of a supportive team.

"Anything that I've done that's been great, has very little to do with me and really around the people that we've collected around the room to work as a team together."

This quote underscores the speaker's belief in the power of teamwork and the lesser significance of individual effort in achieving greatness.

Legacy and Future Goals

  • The speaker wants to be remembered as loving, fair, and a good father.
  • In five years, he envisions continuing his work with a great team and achieving a world championship for the Minnesota Timberwolves.

"I think someone who is loving, fair and a very good father."

The speaker's desired legacy is centered around his personal qualities and role as a father, indicating the value he places on family and fairness.

"I'm probably right here at my office with the great team and hopefully with a world championship for the Minnesota Timberwolves."

The speaker expresses a commitment to his professional endeavors and sets a goal for future success in sports management.

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(Note: The promotional mentions are not provided with verbatim quotes as they are not part of the conversation between the speakers but rather promotional content.)

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