of the circus but the results can Russian lady who understands the tool greatness of the Cossacks Russian lady in this country like us she is in exile and so when she sees the magnificent riding which we she writes your love letter yeah no that is not like that at all this not as dignified worthy of a great lady who writes to a great artist so it is like that now this lady must be clever to write so fascinating a note what does she say I will read it to you at the top she says my dream right now it is as I said the lady is a romantic yes perhaps but she's also dignified and wait you listen the countess Rita rimsakov not one of the wealthy families of Rimsikov don't enter up Olga of course it must be the famous old family we know they are all in exile yes and we know too that they brought a fortune out of the old country go on this is the most important part tonight I am giving a grand costume ball at my estate state that sounds as if she is very wealthy Olga I am sorry but I will be quiet if you will honor me by coming in costume I will send my chauffeur with the down car for you huh you see she is rich beauty entrance at the circus grounds at 1130 the motive of the costumes for the ball is childhood so dress accordingly that is quite simple she's asking her guest to dress like children it is quite the custom in this country America probably the countess is trying to please her American friends so that must be it she finishes like this a young Russian countess in exile salutes you and eagerly awaits the opportunity to show her appreciation in person for your exquisite performance that is all is that not enough it sounds like a very discerning lady you see she appreciates the beauty of my writing and probably the beauty of your profile I cannot help it the fully lovely ladies are attracted with my appearance it is a cross I must always bear you do not fool me Boris you love it and you work hard to keep yourself looking well but it is good you do not show your age you will still be handsome for many years it is so but not a question is what shall I do about his charming countess I suppose you mean by that what will I do about fixing a costume for you by tonight good I knew I could depend on you I'll get I have not yet said I would do this no but you will for my pleasure and for the good of the family how do you mean the good of the family you do not see and I thought you so wise for a woman if this Russian lady is so wealthy with an estate a town car elaborate party yes but what does that to do with us Olga I am not yet married of course you mean if there is enough money it might be worth yes of course the rules of need more money and always more money all right Boris I will fix you so great a co costume that you will put to shame all the Americans are then this part good you will not be sorry Olga as head of our family I will see that you will be rewarded it is true that you and I seem to realize more than the utterest the importance of having our own search we must take advantage of anything that looks like an opportunity to further the interests of the roof soft family now about this party tonight what shall I wear you must be very grand perhaps I should make you some velvet nickel blockers like the great people were at court yes that is good I will look well in short velvet knickers would perhaps those silver buckles of yours at the knees I will gladly lend them to you for so good a court and a silk shirt with a gay colored stash at the base you will make a very fine Romeo and I will ask that youngster Jerry to lend me his plumbed hat which he wears in the ring with El Mundo Boris you are a genius indeed you will make such a fine Romeo the great lady will fall head over heels in love with you of that I am sure I must declare at once the wardrobe I may need some assistance of course for you only have a few hours in which to make this costume don't forget to ask Jerry for that hat of his it will be very dashing with the costume yes and it will give me a chance to make a very costly bow before the lady when we meet I am afraid Olga we will have these wealthy contests eating out of our hands before the night is out hey slant oh there you are Jerry I was wondering what happened to you are you sure Boris got the letter that's allowed I'm sorry we must be sure no one knows of this but ourselves if Boris talks to her that is fine he's talking all right you should have heard him boasting at dinner about this fine lady who was invited him to her mansion and how rich he is and I was Mr. Randall air I'll say and bumps and everybody Boris has been making a big fuss over the whole thing and everybody seemed to fall for it I bet he won't come to meals for a week when he finds it again I feel sorry for him if he hadn't been so mean to why don't you worry about him he needs to be taken down he's one of the venous men I've ever met in this business speaking of angels here comes our hero right now where oh yeah he's hidden for us you don't think he's guessed already of course not well hello there Boris you look particularly well tonight yes I feel unusually fit and it is well as I am having a very important engagement this evening that's all you're going to do another actor well in a way you are right in a way you are wrong that sounds pretty mysterious but I will no longer be mysterious I have been invited this very evening by a very famous lady and a very rich and exceedingly beautiful lady to be a guest of honor at the grand costume ball Jiminy see that sounds like a lot of fun it is a great responsibility for she is a great Russian lady who has heard of the greatness of the Russo family really my my my that's certainly unusual but I mean of course she would have heard of you that is better and now Jerry I have a little favor to ask you sure what can I do for you I wonder would you be kind to lend me the gay hatch you wear any act with Elmondo sure of course I'd be glad to lend it to you you think Mr Randall in mind after all it belongs to the circus I already tell him about tonight he told me to go ahead Claire is helping Olga with my costume my my you will be glad what's up I will probably steal the show but that is as it should be I finished my act you want it now no no I must go now but if you will bring it to my tent after my act I will be glad okay hope you have a nice time don't worry there I must go well he sure fell for it so I didn't think it I feel kind of mean well don't if he can't take a joke it's his own fault I know someone played such a crazy joke on me I'd laugh with him when I found it out but I'm afraid Boris won't take it like that Mario my look at that man Boris writes that the raping horse is if he were part of it he's your plane to the grandstand and I was the same the beautiful countess is only a myth boy Boris is out doing himself tonight all right yes the way he takes those bows you think he was a whole show he thinks he is but his brother just is good well I guess I'd better make a change hope I'm still a turn to do don't forget to take Boris the hat oh I won't he'd ought to add to the picture as he stands on the curb stone and wait I'll meet you on front before 11 30 we don't want to miss any of the fun from the way he's acted he'll be on time so come early I will so long slash bye meet you Mr. Randall it's a mighty fine show you got yes sir yes well if you've enjoyed it we're all satisfied I have Mr. Randall I tell you every time your circus comes to town I get out the old car and bring the old girl down family yes sir we wouldn't order summertime but didn't see your show well that's nice yes I was telling Liza only this morning Liza I said I guess about time we can them beans it's mid-summer and last year we can them beans we catch the circus comes down the circus is now almost a calendar for you I tell you if you're a circus it's kept our town this year lies in me probably clean forgot about them beans excuse me please I must see that boy about sure sure thing business before pleasure Jerry Jerry yes I want to see you but excuse us to see you next summer that's right bean cannon yeah I certainly did I wanted to get away from that man back there he was talking an arm off me yeah some folks the jerk can get all wound up and where you heading Jerry well I know it's a secret I don't want to buddy and oh no of course it's not I was supposed to meet slats out here oh I see well I'm still pretty crowded out here in the midway some of these towners like the hang around to the last minute and the nights the tents come down sometimes we have to call in the police to clear the way I don't blame them for liking to watch those big tops come down hey that's only excitement where over there in the corner look at that crowd something must have happened I don't think so the crowd just seems to be laughing it's Boris Mr. Angle Boris what on earth is he doing out here in that gala he does look kind of funny and it doesn't remember now he told me something about being invited to a costume ball he was pretty excited about the whole thing yeah I loaned him my hand recognize it I'm not very keen on his making a spectacle of himself out here I guess I better talk to him I thought you'd never get there what's happening say slats mr. Randall's kind of upset because Boris is causing such a commotion out here in front of the circus I'll say yes you should have heard a couple of the boys guiding him back there has he been waiting long got a while he's hot under the collar about all the kids he's getting hey look Boris is all excited talking to mr. Randall look at the crowd gather around oh there's a policeman see you you don't think there's gonna be any trouble not with mr. Randall there but it's lucky he came Boris was likely to say something mean to that card I sort of wish we hadn't gotten into all this don't worry he's waited long enough already anyhow the crowd is kind of losing interest now yeah it was only good for a laugh when they could get Boris's goat here comes mr. Randall now even mr. Randall certainly have got to see that a thing like this doesn't happen again how do you mean one of the performers coming out here in a costume with the audience not yet gone why it's ridiculous ridiculous well tonight folks I've got some things to do night night geez slats I sure hope we don't get into trouble on this


Hello everyone and welcome back to Conversations with Tyler. Today I'm talking with Mark Rowan, who is co-founder and now CEO of Apollo Global Management. Mark also has been leading a campaign to reform and improve American higher education. Mark, welcome. Thank you so much. And while I do lots of interviews, this is actually my first podcast. You said recently on Bloomberg that higher interest rates don't hurt the profitability of Apollo. How do you think about that in terms of your portfolio, what you do? How do you manage to be in that position? So I just look, I think globally about the shape of our business. So we are today a $650 billion asset manager. Roughly $500 billion of that is credit and $150 billion of that are various forms of equity. Quite frankly, it's just math. We do better on the $500 billion when rates are higher, up to the point that you have economic distress. And most of our equity, they are pretty savvy about how they borrow and how they lock in interest rates and using fixed rate and other hedging instruments. So generally we have upside to the level of interest rates.  I'm not sure it's better. I think you have to look at the structure of our business. So I assume by other institutions you're really talking about the banking sector. Sure. Which was bigger before the rise of private asset management? Well, yes and no. I mean, asset, private asset management has not caused the decline of the banking system. The banking system has been shrinking in the U.S. as a percentage of the total while it's been growing for a very long time. So just to set levels, the banking system today is roughly 20% of corporate and consumer credit in the U.S. The rest of it is not, quote, private credit, it's investors. If you think about it at a very macro level, regulators, governments, they're really only two choices for credit. You can have credit come from the banking system or you can have credit come from the investment marketplace. But now to your question, if you think about the banking system, the banking system borrows short and lends long. They are always mismatched. If you think about what we do and different than many, half of our money comes from individuals and institutions who are seeking a rate of return. They have no maturity. They have no defined outcome that they want. Therefore, they are willing to commit their money for lengthy periods of time so long as they are obtaining the right risk and reward and they are not focused on day-to-day liquidity. They're focused on the ultimate return for this piece of their portfolio. The other half of our money comes from the insurance industry, including our own affiliated insurer, Athene, and money we managed for Athora, our European affiliate, as well as a number of third-party insurers. And insurers, unlike the banking system, they borrow long and lend long and everything, therefore, is asset-matched. If you look at Apollo today, there is nothing that is daily redeemable. But there's a traditional history of insurance companies suffering from some kind of duration risk, right? In the 1990s, how is it that Athene, Apollo, avoids that? What is it you do that's different? So jumping around, insurance, if you have to really look at it over a long period of time, almost all of the problems that have come in the insurance industry of any scale for 100 years have come from traditional companies who have made poor choices as to their liabilities. We spent a lot of time today talking about assets, but most poor decisions have come from liabilities. Think about people who reinsured asbestos risk. Think about people who provided D&O insurance to the Enron's and others of the world. Think about people who insured Japanese earthquake and meltdown risk. Think about all of the mispricing in financial markets, whether it's what GE did on long-term health care or it's what many companies did on variable annuity. These are liability problems. The asset problems in the insurance industry have actually been quite modest over a really long period of time. You have executive life, you have mutual benefit, and then you have a large number of small companies that add up to essentially nothing. Assets have not traditionally been a weak spot for the insurance industry. It's been liabilities. But what's the source of your comparative advantage in making better liability choices than say older school insurance companies? Where does that come from? Well, it comes from a very simple business model. We are at a theme in one business. We're in the business of retirement services. And therefore, we don't guarantee or don't insure your life. We don't insure your health. We don't insure your home. We don't insure your automobile or any other form of catastrophe. We simply insure your retirement. And we do that through annuities and we do that through pension. Those simple liabilities are locked in and they are essentially a means for individuals to save. We have a retirement crisis in this country. People have not saved enough. Social security is unlikely to provide a good standard of living for the vast majority of people. And so we also have a system that encourages retirement savings. Retirement savings and insurance products are tax-free. They build up tax-free. And someone commits to these policies for 5, 10, 15, 20 years. And at the end of that, they have tax-free compounding at nice rates of return. So given that so few other institutions seem interested in addressing this problem of retirement risk, what's the source of the comparative advantage that allows Apollo to do it, make money doing so, apparently be stable? How do the pieces fit together? Where's the so-called free lunch coming from? Well, I'd like to say... It's your talent. The building you bought or what is it? I assure you it's not my talent. I'm fortunate that nearly 10,000 people make me look good most days. Not every day, but most days. So if you think about our industry, in our industry, you need four things to be successful. The easiest of those things is capital.  But if you look at our industry, the public companies in the retirement services business over the last decade have raised virtually no capital. Fundamentally, investors have decided they do not trust the public companies as good stewards of capital. And in fact, the vast majority of these companies have paid out their current book value as dividends over the last decade. So I start with, well, capital should be easy. Capital for this industry is actually quite hard. And so we showed up in 2008 with capital. That doesn't guarantee you'll be successful. The next piece is you need long-term, low-cost liabilities. Initially, as a startup company in 2008, we had no right to participate in this market, but 2008 was a very tumultuous period of time. Lots of companies were looking to get back to their, quote, home market and people were selling off old blocks of business. We bought old blocks of business and we did it successfully and got to scale. And we acquired a large amount of low-cost business. Today, that same opportunity, by the way, is no longer available because there are not big blocks for sale. The interest rate environment is different. There's not the same tumultuous need to sell. And so we are now the largest originator, organic originator, the sale of new products through traditional channels in the retirement business. Last year, we did some 60-plus billion. This year, we're projected to do 70-plus billion just in the U.S. This is a big market if you get it right. So long-term low-cost liabilities that are predictable that you can invest against. Third, you need a scaled, low-cost operating infrastructure. Even though we are not the largest insurer, we are the largest retirement services company. We focus on one product segment. You look at other big insurers. They have diverse operations. In some cases, they don't have scale in any of their businesses, even though they are quite large. We are, as one product, based in Iowa, really efficient, very low-cost, and that allows us to make money. But the other thing that you need to be successful, an insurance company, a retirement services company, needs to both be and appear to be and project solvency. Regulatorily, you need solvency. Rating agencies, you need solvency. And if you're backing 20-year promises, you need solvency. So you need lots of low-cost, higher yield, excuse me, lower risk, higher yielding assets. And we have become, at Apollo, experts in originating these higher quality, higher yielding assets, so-called private credit, and have been successful in originating them to the benefit of Athena and others in the insurance industry. So how do the macroeconomics of this new world work? If you don't have much maturity-matching risk, you're relatively insensitive to where interest rates are moving. So if the Fed is controlling interest rates, say, to disinflate, or for any other reason, it seems that matters much less than it used to. Do you agree? To us, yes, it matters much less than it used to. We run, in our retirement services business, a spread business. And in that spread business, the absolute level of rates is not all that important. What matters is that we are able to earn a spread on our assets versus our liabilities versus our cost of operations, such that we are profitable and therefore can both attract new capital, retain the capital we have, and provide investors with a reason to invest with us for the long term. But say more and more of the economy goes into relatively successful private credit. Doesn't the Fed have to raise interest rates all the more because there's no impact or no major impact on your lending and the lending of your peers, but there's still some banks out there, 20%. So to get those banks to respond, does monetary policy become tougher and tougher to pull off? How do you think about this? I think it has become tougher and tougher to pull off. I think that to the extent we lived in a world where banks were 100% of the credit market, there was a very direct relationship between Fed action and now and what happened in the economy. To the extent 80% of credit is now provided by investors. Forget about private credit for the moment, but by investors, there is a less direct, but still incredibly important because the alternatives, as rates go up, credit becomes more attractive to investors versus equities. As rates go down, the reverse happens. So there are a lot of ability still of the Fed to influence outcomes, but it is not the direct correlation that you once had. But I also don't think of it in just a monolithic way about, well, the Fed has less control. I think about resilient and necessary. Those are the words that always come back to me. I look at the U.S. and relative to almost every other big capital market, the U.S. is in an extraordinary position. And that is, in my opinion, reflective of the diversity of capital sources that we have. No other place in the world really has what we have. If you look at almost every Asian economy, two products, equity and bank debt. Look at Europe, equity and bank debt. Yeah, there's the beginnings of a fixed income market. There's a high grade, but there is not the diversity of capital sources that you have here. And so I come back to resilient and necessary. If the banking system, while really important and not going away and still vital for the country, is borrowed short and lent long, every dollar that moves out of the banking system and into the investment marketplace actually deleverages the entire system. Think about that, a bank is levered 10 to 12 times. When you move credit out of the banking system into a mutual fund, it's zero levered. But there's less liquidity in that world, right? Well, let's talk about liquidity anyway. So this is one of those things. Yes, it is less liquid, but we're going through a whole rethink of what liquidity means. So 2008, we had just an unbelievable series of changes that took place in our economy in response to the financial crisis. We essentially redid all of our financial markets, financial regulation. The problem is, none of us have experienced that yet for any length of time because right after we changed all the rules, we printed $8 trillion and everything went up into the right. Beginning in 22, we started to experience the new world and in 23, we experienced it more. But we all, myself included, we have a lot to learn about what this new world is. But if you just look at the numbers, trading capital, the capital used for market making is one-tenth of today of what it was in 2008. And why has that gone down so much? Is that Dodd-Frank partly? That is Dodd-Frank more than partly. A 10x effect from Dodd-Frank. Trading capital is 10% of what it once was. We had an incredibly liquid market and now we have a less liquid public market. By the way, we now have public markets that are three times their size. Doesn't take a genius to say that's one-thirtieth of the liquidity. But we haven't experienced it because everything is liquid on the way up. When we're printing $8 trillion, it all is good. But now, when things go the other way, we're finding out that what we thought was liquid is not as liquid as it once was. And I'm not talking about the top 500 stocks. I'm talking specifically about the credit market. I saw an article the other day was saying that the average length of time to sell an investment grade public corporate bond is now five days. We have had the first wholesale failure in a market of liquidity. Think about what happened in the UK in their pension meltdown. Institutions in the UK thought they had market liquidity at or near the market price. They tried to sell AAA and AA obligations. The market gapped down. They tried to sell more. The market gapped down again. Bank of England had to step in and stabilize the market before major damage happened. But why is there so much adjustment in the quantity of liquidity and not more in the price? So a 30x decrease is a massive adjustment in the queue or the quantity. We have. Why don't you just pay people to get more liquidity? That might be inefficient to higher price. But isn't that what's happening? Isn't that what LDI in the UK showed us? Is that there is liquidity? It's just not at or near the market price. And I do expect that in risk-off environments, we will actually see much greater price adjustment. And so this comes back. I don't want to go down the rabbit hole of liquidity. But I want to contrast this to what I see taking place in the world. We have this impression. This is my 40th year doing this. And we have an impression in the investment marketplace that private is risky and public is safe. Well, was that the case? That probably was when I started in business. That probably was true. Most things that were private were private equity, venture capital, and hedge funds. And things that were public were generally public for the right reasons. Well, is it true today? Right now, I look at the S&P 500. I look at 10 stocks that are nearly 35% of the S&P. I look at those 10 stocks that trade north of a 50 PE. And I said to myself, is that actually safe? Or is that just a reflection of a liquidity bubble and everyone piling into passive management and everything else? I don't have to conclude that. But my belief of where the world is today is public is safe and risky. And we've seen that. Look at all the tech correction that took place in 2020. It's recorrelated, right? Everything is correlated. But I'll make the point on safe and risky in public and safe on risky in private. Because something is private, no longer means it's risky. Private goes from AA to levered equity. Public, AA to levered equity. We're just talking about degrees of liquidity and whether liquidity or illiquidity is a risk or not. So to a wealthy individual, how many wealthy individuals, high net worth investors need 100% of their money on Tuesday? Probably none. Therefore, they should be looking at using liquidity as a choice. Are they getting paid for giving up that option to be more liquid? Same for institutions.  But how much of it actually needs to be liquid? And so I find myself asking and talking to CIOs today and CEOs today, not so much about public or private or liquid or liquid, but are you being adequately compensated for having less liquidity? And are you structurally able to be less liquid prudently? So if we're thinking about pre-Apollo, pre-Athene, traditional insurance companies, you're saying they were investing too much in too many liquid assets. And what's the reason for that market failure? Why did they make that mistake? It's not a question of market failure. This is when you grow up in a world and private is perceived as risky, insurance companies have always been investors in private placements. It's just the size of the traditional private market has been very, very small. And so a small portion of their asset, so they found themselves invested primarily in public assets because 20 years ago, public was safe and private was risky. Well, the world we're in today does not look like that. Even the term private credit, they're just two English language words that sound like they mean something. But for the most part, they mean nothing. In the popular press, people use private credit to refer to a very small sliver of a market. They refer to private credit as direct lending or so-called lending to buyouts. This is a below investment grade activity. Sometimes it's really attractive. Sometimes it's not so attractive, but it is a $1.5 trillion market, a large market. But the market that I'm talking about for private credit is $40 trillion. Everything that's on a bank balance sheet is actually private credit. Think about that, loans to companies, private credit, loans to consumers, private credit. We haven't yet gotten to a more sophisticated view of the market where private can be double A, just less liquid. Public can be triple C, just more liquid. There is nothing inherently credit sensitive about being public or private. It's just differing degrees of liquidity. So in the old banking model, say, I get a checking account, my local Chinese restaurant gets a small-sized loan. In relative terms, is there now less of that? I mean, what's the opportunity cost of moving to more maturity match, tire-yielding assets? What is the economy giving up, even if it's a good trade-off? I think it's clear that the largest companies in the world have access to both the banking system and to the investment-grade bond market every day. Medium-sized and smaller companies, no matter how credit-worthy, have less access to the banking system and have virtually no access directly to the bond market. And so they increasingly will come through intermediaries. Some of that activity is below investment-grade and speculative. That's a perfectly fine business. It's not primarily the business we're in. Some of that business is investment-grade and secured, and that is primarily the business that we are in. And so I don't think it's better or worse. I think that we're just looking at evolution. And I'm constantly reminded that financial services is not a status quo business. I go back to when I started beginning a high-yield bond market, not a lot of high-yield bonds, no levered loans, no ETFs, not a lot of securitized product. Those four products today we take as mainstream products. Why do we expect that 15 years from now or 20 years from now, the same four products will be as dominant? We will end up with a new set of products and a new set of markets that reflect differing market conditions and different regulatory conditions and different conditions of financial institutions. It's just change. How stable is all this as a political equilibrium? If you think about the four major banks, as you well know, they're very serious stress tests applied to them, capital requirements. The Fed is a major regulator. At least for insurance, it tends to be at the state level. One can reinsure it through Bermuda. Capital requirements are very different. Competence of the state regulators arguably is lower than that of the Fed. Whether or not one wants more regulation and generally I don't. But is this a stable situation? How's it going to evolve? Well, first I would have to correct almost everything you've said along the way to set the table for what I'm going to talk about. So first, the difference between not so much the banking system and insurance, but the banking system and the investment marketplace. There are plenty of ways. Let's start with this. There are plenty of ways for investors to lose money. Investors can buy speculative stocks. They could buy the S&P. They can speculate in almost anything. So the making or losing of money is not in and of itself a systemically risky activity because we allow, and for good reason we allow, speculative investing every single day.  You can lose money in credit as well as in equity. Okay, now we come to mutual funds. If a mutual fund which is daily liquid owns credit and investors want to get their money back, you're right, price just adjusts. Mutual funds are not price guarantors. Are they regulated? Mutual funds are regulated. Are they disclosed and transparent? Yes, they're disclosed and transparent. The holdings of a mutual fund are completely visible and they're delevered. Is that a risky activity because it moved out of the banking system and into a mutual fund? I don't think so. I actually think it has de-risked. It's made our economy and our financial system more resilient. So now I'll come to your question on political equilibrium. Insurance, if you just focus on insurance, has no federal guarantee, does not borrow short and lend long, has no access to the Fed and does not do liquidity transformation or maturity mismatch. And they are forced to hold amounts of capital. So if you look and I'll give you a comparison just for us, not for the whole industry, who holds more capital? Athene, our insurer, as a percentage of assets or the typical bank? You would think the typical bank but you would be wrong. We hold more capital per dollar of assets than anyone else. Who holds more investment grade assets? Ninety percent of our book is investment grade. The typical bank is two-thirds investment grade. Sure, but that's all time slicing. Let's keep going. Money market funds have been a source of systemic risk. AIG has been... I can't tell you there's not risks in the economy. We have a choice. We can have risk dispersed among lots of institutions or we can have it concentrated in the government-backed borrow short-lan long government-guaranteed banking system. Every time we disperse that risk, we make the system more resilient. If you want to focus on insurance which is your question on political equilibrium, there's more capital. There's no ALM mismatch. There's more investment grade and there is appropriate state-based regulation for institutions that do not have government guarantees or borrow from the Fed or do anything else. Insurance is very slow moving. We're talking about on average 10-year assets. This is a very slow-moving process. And again, most of the issues that have happened in the insurance industry have not been asset issues. They've been liability issues. Exactly the kind of thing that insurance specialist regulation is designed to detect.  You're worried about off-balance sheet risk. You're not very good as a regulator at monitoring off-balance sheet risk. So you overreact by extending your own reach, wanting to impose capital requirements on everyone. Then you want to monitor to them more. And eventually these private institutions, which are basically healthy, they become more and more like banks, no? So we have this example. We have Solvency 2 in Europe. Solvency 2 in Europe has been terrible for the retirement services industry. Capacity, just the mere availability of product is down almost 40%. That's an outcome. That's not the outcome we've chosen. And the question and credit at the end of the day, which is really what we're talking about, credit is a function of GDP. If you want GDP, credit can only come from two sources. The government-backed, government-guaranteed, borrow-shortland-long banking system or the investment marketplace. There's no third choice. Make your choice. If we want less GDP, that's a choice. It doesn't seem like a good choice given the other options that are available. Will crypto play a role in the future of the U.S. financial sector? Out of my depth. Just don't, absolutely no idea. But you interact with plenty of financial institutions that have opinions on crypto, right? You face the possibility of investing in crypto yourselves. You might not do it, but that itself is a stand. I'll give you my uneducated spectator from the sideline view.  I see every opportunity for them to reduce the cost, to reduce the friction of dealing with the financial system to be an amazing on-ramp. For the U.S., I don't really see, in a KYC, AML world, a value of an alternative currency. If you're in other parts of the world, maybe an alternative currency has more appeal. But in any case, Apollo's not doing it. Apollo is not engaged in crypto. Why would you spend a given free day in Japan? And where in Japan and what would you do? Well, first, Japan is an amazing place, as you know. It's just so different. And I'm surprised by something every time I'm there. But as a financial matter, you look at a society that is older, that has needs for retirement, that has lived through repressed yields for more than 20 years. And so you have a yield star of society in an older population, nearing retirement. They need yield. They are very comfortable in dollars. And to the extent we are providing safe yield, total return, investment grade, private credit, whatever buckets you want to talk, Japan is absolutely the perfect market for what we do. And I think it's a matter of education. And that education is taking place. Japan also has an insurance industry that is in the middle of a capital transition, has had a very, very difficult time raising capital. And so that's also a fabulous reinsurance market. So between my love of culture, my love of the food, the need for safe yield, and the need for reinsurance capital, it feels like a highly productive place to be. As you know, Japan has a total fertility rate of 1.3. South Korea now is at 0.7 and falling. That's astonishing. Do any financial models work when your total fertility rate is 0.7? You know, again, I want to stick to that, which I think I'm good at. So over the horizon, as a country, as a matter, probably not. The population projections I have seen for lots of places in the world are just shocking. But in the little corner of the universe that Apollo participates in, a 10-year period, a 20-year period is not really all that different than it is today. Your grandfather, Emmanuel Stein, he was an economist. He taught at NYU. Labor economics, labor relations. What did you learn from him? Well, he was my first job. I was living in South Florida. I would come to New York for the summer and he was a labor arbitrator. And so I would come work for him the summer. He would dump a bunch of briefs on me and I would summarize the arguments and then I would debate the cases with him and then he would go off and write the opinions. So it was a pretty good way to get a good view of the world as between labor and management. What made him a good labor arbitrator? Patience. He was just a remarkable individual, multi-lingual, a Torah scholar. Just had incredible amounts of patience and humility. Your free day in Japan when the work is done, where do you eat? What's the best food in Tokyo? You know, I kind of take it from the concierge at wherever I'm staying. I look for one traditional Japanese experience and one, give me the latest, newest, greatest because Japan does create new and great in addition to traditional. The best French food I've ever had was in Tokyo, in fact. It's amazing, isn't it? You never know what you're going to find. That's right. Your interest in architecture. Is brutalist architecture overrated or underrated? Is it actually good? So I don't know that I would say I'm interested in brutalist architecture, but I am interested in building things. So for whatever reason, I am not a collector of anything. I don't collect wine. I don't collect art. I don't collect cars, but I do like building things and have always liked building things. Starting from my late 20s, when I built my first house, I built lots of houses, lots of restaurants, lots of stores, small office buildings, and I just keep going. Whatever itch it scratches, I find it to be just an incredibly creative outlet, really enjoyable. And everyone always says, don't you get aggravated in building these things? And I said, well, only if you have to move in on a certain date. But if you're flexible, as it relates to brutalist architecture, you're referring to the apartment in New York City. On Fifth Avenue, yes. The answer is, I don't know that I would have chosen it, but there's something about it that I just found incredibly appealing. This was a full apartment built with no right angles. Everything curved in very simple materials, but very beautiful materials. And you feel it's held up visually? It's had to be redone. Visually, it's held up beautifully. But maintenance? Every surface that was, everything that was used to build in the 1950s, 1960s, 1970s is now gone. It's been rebuilt in the traditional, in the same style, but with new materials and new techniques. How do you think about whether or not there should be a red hawk nest at that building? I don't think about it at all. I've rarely seen the hawk or hawks and it does not interfere with my life. And you just never worried about the red hawk nest? Oh, there's so much else to worry about, but I never worry about the red hawk nest at 9275. Here's a question I've asked a number of guests. Both Patrick Collison and I both have made the observation. It seems there are really very, very few attractive residential neighborhoods built after World War II in this country. Or if you look at Europe, places rebuilt after wartime damage. They're mostly ugly or mediocre or maybe at best okay. You might challenge the premise, but why do you think we've lost the ability to build beautiful neighborhoods? Plenty of lovely homes, lovely individual corporate buildings, but neighborhoods, all the good ones are old. Why? Well, you got here first. Whoever got here first took the good physical location. I think we're in a rebuilding mode, certainly in most of this country and certainly in Western Europe. There are beautiful things in beautiful neighborhoods being created. I'm back from 12 days in the Middle East. We can like or not like the style of what's being built, but the scale, the ambition, the new neighborhoods, the ability to create new is extraordinary. And where impressed you there? So to see what's happening in Riyadh in Durya, which is their traditional neighborhood, there's 9 million people on the way to 13 million people. To see what's going on in Abu Dhabi on Museum Island and Sadiat and other places. The scale of ambition there is actually quite impressive. I don't love everything, but I am impressed of their ability to get things done and to actually re-envision on of grand scale something we really haven't done in this country in a very long time. In the United States, do you think we're on the verge of building a new Shaker Heights, which is not on a spectacular plot of land, right? It's outside of Cleveland. Gorgeous homes, wonderful neighborhoods, trees perfectly integrated. And they were quite poor compared to us. Why no Shaker Heights today? Or do you think we're doing one? I'm not sure, don't know. I mean, certainly I look at the places where you have population increases. Most of what I've seen that I really like, Austin, Texas. We're going to have whole new neighborhoods in Austin, Texas. Places that are physically beautiful, that were just outside the core and now are being built. Again, we can say that's progress or not progress. If you're commuting into the downtown Austin, you're not so excited about that. But I think in places that are still growing, it is pretty dynamic. And will we or should we repurpose these big box, big glass modernist office buildings? Are they permanent or they've passed their due date or how should we think about those? I worry less about the look and feel of the office. I think an office is an internal thing. Does it encourage the kind of collaboration and the kind of working environment that you ultimately want for a company? I look at you, you've just come from our cafeteria and the productivity increase that we've experienced from the casual collisions of people seeing each other every day needs to happen inside a physical space in this office. Does the exterior of the building really matter to me? No, not really. So what else have you done here at Apollo where we're sitting at the moment to make it a better internal office? How do you think about that design? Well, first, you're going from a very low bar to a much better situation. We were spread throughout this office building on non-contiguous floors with separate cafeterias in what I would call traditional executive offices for the more senior people and bullpens for the more junior people. Nothing that I've just said is now true. We are now in a contiguous low rise of this building on non-contiguous floors all connected by staircase. We have lots of places where casual collisions take place. We have our coffee bar. We have our cafeteria. And for the most part, we've become much more egalitarian with respect to offices. One of the things that I've done when I took over as CEO, I have a windowless office off the trading floor. And next to me is Jay Clayton, former head of the SEC. He has the same size windowless office off the... It's given me tremendous moral authority when it comes to the arrangement of people's offices to say, you're welcome to take mine. And I think that culturally, leadership here has embraced it. We now sit not with each other. We sit with our teams. We are spread throughout this building in a good way. If you need to hire a new person to make major decisions, significant commitments of funds, what non-obvious quality do you look for in that hire? So, I wish there were... I wish it were that straightforward. We could test for this and do it. So... But you must use your intuition at some level, right? We all do. What does your intuition tell us that I wouldn't learn from someone else? No one gets hired to make major decisions right away. So, let's start with that. I will say jokingly, your first year at Apollo is mostly useless. Your second year, you're at 30% capacity. By the third year, you feel like you've been here 10 years. We have lots of smart people. And there are lots of smart people in financial services. This is about cultural fit. And it's understanding where we're going and whether the organization can absorb the specific decision, the amount of change, or whether it has to be prepped in a certain way. We are not chess pieces that can be moved around. And I just got back from an offsite with all 201 Apollo partners in Abu Dhabi. Really interesting way to get together. Three most valuable days of the year for me. First thing I said, a small group of us cannot run this business. There are too many important decisions to your point that are taking place at levels that I will never see and that could never absorb. I have to get the buy-in of 200 people to successfully run this organization. And so, when I present or the leadership here presents a strategic plan, we're in debate mode. There's very little that gets done in the way of Dicta here. You're hiring a 22-year-old for an entry-level position, but a potentially significant one. What non-obvious qualities do you look for? Yes, they're smart, they work hard, maybe went to a good school. What else? So, they have to love their job. You can't fake this job for very long. People say, isn't it really hard? Isn't it tick over your life and everything else? Absolutely. And so, if you don't like it, this is probably not a good place for you. At the end of the day, though, being able to take a blank piece of paper and think about what's not there is the skill that gets them from mastery of numbers of analytics to actually decision-making. And I think back, and I'll relate it personally, for me, I started at Drexel Burnham. And at Drexel, we financed companies where there was a non-zero chance their business would not exist. You spent an awful lot of time thinking about the future, the business plan, the specifics. We were not banking Exxon. Exxon was there then, it's there now. That's a process of maximizing the efficiency of Exxon's particular corporate action that's needed. Something that forces you to think about where something is going, whether the business will exist, how things will change, how you make capital commitments in the context of uncertainty is really what you want to see. You don't see that in a 22-year-old because you see them as masters of their craft. You don't actually know till a number of years after someone's here whether they possess that ability, which is to bring all their outside influences, their knowledge of what's going on in the world to bear in the business, along with relationship. At the end of the day, this is a complex business, but it's also a really easy business. People do business with people they like. Are you likable? Are you relatable? Are you good at building relationships? Having the right answer is helpful. Being able to convey that answer in a way that someone else will absorb and to engage in a dialogue with them, much more important. Here's a quotation from you, I think, if you could explain it to us. Quote, Our business, like the real estate business and some other business, is hours of boredom followed by moments of terror. We really only make 20 decisions a year. What are you getting on about there? Well, I was really talking about, it's taken out of context, but it is what I said. Give us the context. The context is I was talking about the difference between being an equity investor and a debt investor. So in the private equity business, you look at, you work incredibly hard, but if you look at what we do as a firm and we're one of the largest in the private equity area, we make 10 or 20 decisions a year. Everything else is ceremony. And so hours of boredom followed by moments of terror when you actually have to decide. But if you think about that business, if I come in on Monday and I don't like what I see, I go home. Tuesday, same thing. And I keep doing that until I like what I see and then I make an investment because I'm only making 10 or 15 investments a year. And now I'll contrast that with the credit business. In the credit business, I come in on Monday and I take the least bad alternative on Monday and the same on Tuesday and the same on Wednesday. So my job in the credit business is to create more least bad alternatives, to create more origination, to create more diversification, to create more options because I know if I'm serving insurance companies, our own insurance company or someone else, a thing needs six or $7 billion a month. That's what I need to create. And so it's two different speeds. It's two different ways of looking at the business. It's two different ways of thinking. But I also want people to know that in the equity business, hours of boredom followed by moments of terror. Given recent developments and you've been involved in some of these, do you ever feel that Apollo and other top firms in the New York financial sector that they're just hiring too many people from so-called top schools? Are you rethinking that? I really don't think that because we as a firm, we've branched out so much and I'm sure the other firms have branched out as well, which is, yes, when we started, it was easy to hire from a core number of schools into the private equity business and it was very self-selecting. So I came from the University of Pennsylvania and it would not surprise you that when I ran recruiting 50% of the firm came from the University of Pennsylvania.  The fastest growth in our business right now is taking place in India and people say, well, that's back office. No, it's just an office. We're 500 people in Mumbai. We'll be 1,000 people in Mumbai in three years and those people are coming from all over the world. What makes you bullish on the India office? It's just an incredible labor pool. We have a place that grew up as a back office for everyone where it's now just become another office. The English speaking, the time zone, the work ethic, quality of people and we're scaling almost every business in India. Professional businesses, risk businesses, technology businesses and what you would consider traditional back office. It's all happening. What's the biggest obstacle to doing business in India? Biggest obstacle is just capital markets. I'm not sure we're going to deploy all that much in India. So if I think again about the Indian economy, like many other Asian economies, you have equity and you have bank debt. So now I'll talk about our strategy, particularly in India. It used to be that we were there supplying equity, but guess what? Local Indian entrepreneurs, the wealthy families, they have amassed significant amounts of capital. There is no shortage of equity in India and my guess is if there's an interesting opportunity in India, we would not be the first ones to see it. Therefore, it tells me we're not a great equity investor in India other than around the margins. On the other hand, in the banking system, banking system is very low cost and if the bank is willing to supply something, we should let the bank do it and not compete with them. So our business plan in India is to be between equity and between bank because there's virtually nothing that exists of size and scale. So when Adani buys the Mumbai airport, we lend him 750 million US. When families in Mumbai want to consolidate their real estate holdings, we lend them 400 million US. These are, there's a lot of business to do, but it is not, we can go there and say, we're in the equity business or we're in the bank debt business, but that's not the opportunity. It's also not the opportunity in most of Asia. Now, is this your correct title? Your chairman of the board of overseers at the Wharton School at UPenn, is that correct? We no longer use the word overseer. Okay, what is it? I'm chairman of the board of advisors at the Wharton School at the University of Pennsylvania. Why have so many university boards? They seem to have fallen asleep on the job or they're even part of the problem or it's hard to reform them. Structurally, what's gone wrong? Guilty is charged. So I was, you know, I've been very public in this. I was a member, not just of the chair of the Wharton board, but also a trustee of the University of Pennsylvania. There were approximately 50 trustees and the way you get to be a trustee for the most part is you put in service at one of the other boards and then you are graduated over time to the trustee board. Every other board at a university is a non fiduciary board. It's an advisory board, including the board that I chair at the University of Pennsylvania's Wharton School. It's an advisory board. When you move to the trustees, you actually become a fiduciary. No one tells you that. The boards don't behave any differently. With 50 members, it's very difficult to engage in substantive debates and for the most part, and I put myself in the negatives here as well, trustees have actually not fulfilled their duties. So if you take UPenn as an example, UPenn's charter is actually quite interesting. If you look at the questions that I've written to the trustees about and questions that I think they should answer in thinking about where the university goes and how they choose the next president, those are for the most part not questions that Mark Rowan dreamed up. These are questions posed directly from Penn's charter. Trustees are supposed to set standards for admission. They're supposed to set standards for faculty promotion. They're supposed to set a strategy for the school. They're supposed to evaluate the efficacy of various academic departments. Can they actually do that? The answer is sure they can. Can 50 people do that? No, 50 people cannot do that. So the boards are too big. You think they should be smaller on average. I think boards have to be of a level where people can actually have a debate and set a series of guidelines. And like every board of directors, they are not doing and micromanaging these universities just like boards of directors do not micromanage companies. They set strategy. They set tone. They set policy and they pick a leader. So imagine if you were the past president of the University of Pennsylvania. You arrive after two very long-serving presidents. You are hired by this board of trustees and you go to work. What's your goal? What's your plan? How is success judged? What's the university's policy on viewpoint diversity? What's the university's policy on free speech? The board of trustees, myself included, we never actually provided a roadmap for the president to be judged against. So it does not surprise me when confronted with difficult situations that there was no guide. I can't imagine that's a recipe for success. And so my own view, and this is what I've written at UPenn, is trustees should first answer fundamental questions about policy and where they want the university to go in partnership with their academic peers because the academy also has a series of rights and responsibilities. And once the university knows where it wants to go, hire the next president against a business plan, a strategic plan as to what they should do and what they should accomplish. It's unfair to leave them directionless. Now, fortunately, UPenn is in a very good place right now, has a very stable pair of hands and Larry Jamison, who's the interim president. So they'll have time to do this. Why are academics as a whole so cowardly and conformist? You said that, not me. That's fine. I'll say it. Look, but it's true in my opinion. The answer is, I think it's career risk. I do think that they've bet their careers on achieving tenure and achieving the notoriety or reputation amongst their colleagues and their loathe to lose that. So what's been interesting about this entire process, the number of professors, department heads, department chairs who have reached out and just said thank you. Thank you for saying what needed to be said. And I'll say thank you while we're on the record, but please continue. I say to them, I said, well, you don't know how many of you there are. If you're a Wharton faculty member, what are you interested in? You're interested in academic excellence and research. If you're an engineering faculty member, same thing.  Same thing. There's such a large group that is actually interested in getting to the core mission of a university, academic excellence and research. And without a guiding set of principles, every day of the university is facing some sort of crisis. Where do they stand on free speech? How, what is the, what are, are there any limits to academic freedom? How do we, what is the goal of the university? Is the university viewpoint neutral? There is no policy and in the absence of policy, many things seem arbitrary. And say you're talking to your grandkids or your kids or someday your great grandkids and they ask you, where should I think about going to school? And I put aside UPan, which obviously you might recommend for a bunch of reasons, but what insight do you have into this? Where should they go? What do you need to learn?  Not so much in academia.  And while the tools are better, it's not like high yield bonds, right? It stayed the same. It's not like technology. So I'll give you an analogy to what's happening. I am involved in academia in Israel. For the past 38 years, I have either chaired or co-chaired what has become Israel's best private school network. Public charter is probably a better way to describe it. We're 50 schools. We're roughly 30,000 kids in school. We're 3000 teachers. We only work in the periphery of Israel. Ethiopians, Yemenis, Druze, Bedouin, Eastern Europeans. And we teach, we use union teachers. We teach the state curriculum. And our kids from these poor neighborhoods who have a historical track record of not performing are now performing at among the best levels in Israel. Overall, the network is roughly 90% matriculation rate for their bug route, their university test. And we've wholesale changed communities. And we've now seen this over 38 years. So this is not true. And how did you do that? That's the punchline. So how? We have to teach the state curriculum with state teachers. The only way we can do this is we can teach it any way we want to teach it. If you go into a darker school, you are unlikely to find a teacher standing in front of a classroom in any class. Technology has been brought into the classroom. New ways of teaching has been chronic. Experimentation has been brought into the classroom. Games have been brought into the classroom. We trial lots of things and we double down on those things that work. We are essentially a laboratory for changes in academia. So I can't imagine the status quo is going to hold that 20 years from now, we're going to have professors standing in front of classrooms doing what they do. The tools are just so different. The amount of intelligence that people can gather from outside the class and research is so different. What do they need to know? How to figure out what's true. Critical reasoning. How to use the resources and apply critical criteria to those resources. Is the memorization of dates and times and places and orders of all that important? Probably not. Critical reasoning context. If someone's doing a trip to Israel, they might typically go to Jerusalem, Tel Aviv. Where should they go that you know about and maybe they don't? They need to go to the desert by a lot. I am of the things that I do and I don't do all that many things well. But of the things I do well, age-adjusted, I mountain bike pretty well. In Timna Park near a lot is a landscape that is otherworldly. Desert, rock, sand formations, unbelievable. And beautiful new hotel there also. How many restaurants do you own in Long Island? Three. Another, as I joke, I'm the accidental restaurateur. Two under the name Duries. One in Montauk, one in Orient Point, and then Lulu on the main street in Sag Harbor. What have you learned about the economics of restaurants from those? I actually learned that the restaurant business is a better business than most people give it credit for. And I make the following observation. It is the restaurant business. Most people who go into the restaurant business don't know anything about the business side of restaurants. Most people who go into the business are undercapitalized and therefore the first time that they experience some sort of difficulty, they go under. And also a lot of it is very parochial. People haven't traveled the world to see what's out there. And the best thing I've learned is find the right partner who knows something about running a restaurant because I know nothing about running a restaurant, but I know a lot about business. How much of your profit do you make on wine and drinks compared to food? That's the Eau Clochette, right? The food is breakeven. Is it true or not? No, it's not true. I mean, I think about the decisions we've made out in Montauk where reputationally we've decided only to serve wine and beer. No hard liquor. Could we make more money serving liquor? Absolutely. But it's not how we run. People want to come there for the experience and we do just fine on the food as well. And what kind of food is it? Think of Saint-Tropez-Meet's Cape Cod. Okay. 70% of it is some form of lobster, which of course I don't eat, but that's a whole other story. And the chef is French? My partner is French and my partner and the key chef who's overseeing all the culinary experience is French as well. And what if you learned about design by having three restaurants in Long Island? Each one is different. So Montauk, as I've suggested, is a very traditional Cape Cod style. Orient Point mixes a North Fork style with tidbits of Mykonos and what's been done there. And Lulu could be on the main drag in Tel Aviv. And last question, what is the next thing you want to learn? Well, language-wise, I'm 1,200 days into Spanish. And so I now need to go spend 30 days someplace where people just talk to me in Spanish and I think I have a chance. Where will you go? There's many candidate places, right? Latin America, the English proficiency is not that funny. I think sunny Spain. Sunny Spain. I can bring my mountain bike as well. So Spanish is the next thing you want to learn. Spanish is the next thing I want to learn. Mark Rowan, thank you very much. Absolute pleasure, thank you.


Good morning, everyone. Can you hear me in the room, Teresa? Good, thumbs up, good. So I am just hopping in an Uber heading to Washington DC for the mid-year forum meeting, but I did want to give a relatively proper introduction to Teresa Long. So Teresa Long is one of our residents. She came to us by way of University of Missouri, medical school originally from central Missouri. Teresa took a bit of a brave path, stepping a little bit outside of what I call the path of least resistance and exploring a new pathway and really a new specialty in ophthalmology, and that is as an inpatient ophthalmologist. Now, along the way as well, Teresa's really shown some education chops, and I am personally elated that the rest of you get to see some of what you can expect from Teresa in the future as one of our faculty. She's someone who will have a significant impact on our training of residents, training of medical students, but particularly the early mentoring of our residents as they go through the consult service and really learn how to become a thoughtful thinking ophthalmologist. So I can't speak highly enough of Teresa, and again, I'm elated that you get a little glimpse into some of the things that she's going to bring to the Miranda Center. All right, take it away, Teresa. All right, so good morning, everyone. I'm really excited to talk with you about some of the things that I have been brewing on for a long time now. So the title of my talk is Andragaji at the Patient Bedside, so Adult Learning Theory and Improving the Resident Consult Experience. I never thought that I would be an ophthalmic hospitalist, but this is the career that I have fallen into and I've come to love, and so I'm so excited to really think about how our consult service can be a jumping board for resident education and the best service on the entire ophthalmology department. So I think Dr. Petty told you a little bit about me, but I think pictures are probably the best way. So I grew up in rural Southwestern Missouri. My hometown has a population of less than 2,000 people. I went to undergrad in medical school at the University of Missouri in Columbia, and so you can see Doc Truman, as he known. So Truman the Tiger is our mascot of the University of Missouri, because Harry S. Truman is from Missouri. And I grew up in the beautiful kind of backwards of Stockton Lake. And so there's a photo. It's actually one of the premier sailing lakes in the Midwest. So a lot of people will go out on the lake for the weekend and it's deep in the Ozark, we call the Ozark Mountains, but really you can kind of see that there's Ozark Hills. So there's these rolling oak and hickory forests. So it was a beautiful place. And I really think my mom and my dad were really my first teachers in life. My dad teaching me about wildflowers and all the animals, the flora, the fauna. And my mom was a second grade teacher and were my first educators. So fast forward, we moved to Utah. Utah has just been really wonderful for me with all the outdoor activities. But the best part I would say about Utah is actually finding this guy. And so this is Logan Turra. He's my fiance. He's originally from Atlanta, but he loves skiing. That was the first thing that I heard about Logan when I first met him from my friends. They were like, oh yeah, Logan, he really loves skiing. And that is true. So this is a picture on the lower left of him on the top of the grand. And he loves ski mountaineering. So he's been really fun. We go on a lot of adventures together. And this is up in the West Hatch Mountains on a hike. So I have no financial disclosures. So today I really wanna reflect on knowledge and learning. I wanna reflect on how we learn in residency and learning in general in residency. And I want to discuss adult learning theories. Talk about a really helpful teaching technique that I find called the one minute preceptor. And then last, we're gonna touch on everyone's favorite topic, feedback. So knowledge versus learning. So from the audience, what is knowledge? How would you define knowledge? Anybody? You can shout it from the back and I'll repeat it. So is there anybody in the chat? Our audience is feeling shy. Rachel. So knowledge is a base of things that you have acquired and you can draw on for different situations. So what is it composed of? Do you think it's just, is it facts? Is it just information or does it go beyond that? So I really think that knowledge goes beyond that. It's facts, information and skills, right? You have the skills and the training. And so technically when we're learning surgery, you have to learn those skills with your hands. And then you also have to have the book knowledge and kind of integrate everything together. And this is really different from learning. And so you could say that learning is the acquisition of knowledge. So has anyone read Make It Stick? If you haven't, it's a really wonderful book. I think we think that we know a lot about learning and knowledge, but this book really kind of puts it in a new perspective, especially for adult learners. So for all the residents out there, I would recommend it. So in Make It Stick, they talk about acquiring knowledge and skills and having them readily available from memory so you can make sense of future problems and opportunities. So they really say that learning requires really three main things that requires memory. You need to keep the learning and remember and you need to keep learning and remembering all of our lives. And this is really important for mastery of job skills at work. And you think about you were in school, for elementary school, but you don't stop learning as an adult. That's a lot of the reason why maybe many of us chose medicine, we're lifelong learners. And learning is an acquired skill. You can get better at learning over time. So this slide credit has to go to Dr. Sravakunta and Dr. Rachel Patel, who I think about two years ago started revamping our curriculum. And so think about a time that you had to learn something new. And I think they asked the same question and I really loved it. What were you trying to learn and what was it like? Anyone share an experience with me? There's some laughing from the residents back there. Were they trying to learn something new recently? So Tony says that he was joking with Brandon, but he said, scleral depression, that was a really tough skill to learn. And they were really struggling with it. And now has it gotten better? You can find your depressor. But what was it like in the beginning? You thought you could find your depressor in the beginning and then you realized you're actually like not posterior enough, right? So absolutely. So I think learning is hard. And I think in adult learning, it's really challenging. So how do you learn in residency? Really thinking about this. I love these photos of us that they take every spring and your cohort. And is it kind of like this? Is it kind of like this? Kind of like this. So it's really interesting. All three of these people are kind of in totally different situations. Like the first one's like, I'm actually drowning and I'm really drowning. The second one looks like they're doing okay, but is actually like, help, help. I really need some help. And the third one is terror, like terrified.  And he's like, I'm fine. I'm fine, I'm actually okay. So I think we've all had experiences like this in the middle of residency as well. Or is it like this? Or like this? Who can figure out which resident is the bulldog? So I sat down and I was like, I wanted to make a list of everything that we have to learn in residency and to kind of think about it. And there's a lot. If you think there's, in addition to just the major topics, glaucoma, plastics, retina, uveitis, we have to learn how to interpret imaging, OCTs, visual fields, MRIs. We have to learn how to triage phone calls. We have to learn surgical skills. We have to learn how to be efficient. We have to work on our interpersonal skills. So there's a ton that is happening in these four years. And switching gears now to go to pedagogy and androgogy. So this slide credit also goes to Dr. Shrava Gupta. But pedagogy gives the instructor the main responsibility for making decisions about learning content method and evaluation. And androgogy was a theory that started in the 1950s. In Germany, but Malcolm Knowles, I think, is the person who described this the best. And he has six theories of adult learners. And this was really refined through the 1970s and 1990s. So to compare and contrast these two, in pedagogy, the learner's dependent on the teacher. The teacher is the one who evaluates progress. They assume full responsibility. The learner, the learner comes to the table with a little bit of life experience, but the child's like a blank state. And students advance once they have completed the next step. And learning is, you know, the instructor is the one that's responsible. And they're motivated by external sources. So parents, teachers, whereas androgogy or adult learning, the learner's dependent on self. So in residency, I feel like so much of our learning and our learning in our adult life is really something that we want to do. It requires self-evaluation and the self takes responsibility for the process. The learner has a lot more life experiences in contrast to a child. And adults learn from an instructor, but they also learn from one another, the entire environment is different. Learning is triggered by any number of life experiences, not necessarily led by an instructor. And the learners identify a problem and they see a knowledge gap and they seek to work to remedy that gap. And then in contrast, learners are motivated by intrinsic means. So their quality of life, problem solving, quest for recognition, and then topics are completed as they master them. So adult learning theory, Malcolm Knowles isn't the only one who's tried to describe how people learn. There are experiential learning, self-directed learning, situated learning, transformative learning, and they're really all pieces of the puzzle that try to describe this process of how adults acquire knowledge. Really big slide and lots of things, but I really just wanted to point out a few. So other theories of adult learning, so we could start thinking about this a little more. So a reflective practice. So new information is interpreted in light of past knowledge and experience. So for example, fourth year resident breaks bag because they fake out deep while they were trying to get out a piece and they learn, oh, I shouldn't fake out in the bag anymore, right? That's a great example of experiential learning. And so that reflection on what happened and what caused the problem allows them to make changes in the future. It's very similar to transformative learning. And then I think it's really interesting if you look at learning in communities of practice. So learners move from peripheral participation into full participation, embracing the values and experiences within the community. I think this is a really interesting idea to describe maybe how when you join a new practice or you join a new academic institution, you kind of are out of the periphery and then you become more and more involved and you become a leader in the department and then you embrace the values and experiences within the community that you have. And then we've all heard of self-directed learning, which is also really great. So Malcolm knows six assumptions of adult learners. So I really love thinking about these and so I wanna take some time and go through them. So adult learners have self-concept. They're capable, they're self-directed and they have their own set of beliefs of what they want to accomplish. They may have clinical, sorry, clinical experiences and unique backgrounds and approaches to education. So the conversation that you would have with someone who has a PhD in an area that you're like, say in an area of the eye and they're on a particular rotation would be very different than maybe a PGY1 resident. They're ready to learn. They're eager to know what they need to learn to achieve X, Y and Z. And learning should help them perform tasks or deal with the problem. And they have a strong internal motivation. They wanna have job satisfaction and more opportunities. And then my favorite is they need to know why. So I absolutely love, and I ask all the residents all the time, why am I asking you that question? When I ask you a question, what you think about the why? And the adult learners need to know the why. Why is this important? Why do you feel like I need to have the skill? So how can we apply this to resident teaching? And I think a lot of this is theory. And I think, how do we put this actually into clinical practice? So because adult learners need to know the why, you wanna assess the learner's needs at the outset and their outcomes after teaching. So maybe at the beginning of the rotation, you say, what are your goals for this rotation? What do you want to accomplish? You foster a climate of learning and inquiry and accept formative feedback from the learners to retailer your teaching. So it's really more of a two-way street. And then also providing constructive feedback that encourages accurate self-assessment and self-reflection. So we're gonna talk about feedback today as part of this. To help support the adult learner self-concept, you have to motivate their autonomy and respect in a relationship of respect, rough respect, and seek their input. So that way they feel valued as an adult learner and can and feel like a valued member of the team. With regards to past learning experiences, you wanna adjust the teaching to different contexts, cultures, and levels of prior knowledge. And you can also establish rapport with learners and use examples that are familiar to them.  If the concept of health literacy, which we all learned in medical school, it's very different talking to someone about diabetes management when they've maybe had type one diabetes for a long, long time. And you're seeing them in clinic for a retina exam. And the amount of knowledge that they have on how to measure their blood sugars over time since they've done it for so long versus someone maybe who's a type two diabetic and has a lower health literacy level. How you tailor that information to them is really important. Evaluate evidence of learning to determine readiness for new roles. I think this is a classic thing that happens in residency. As you get better at surgery, you get more cases, right? And so you have to be ready for the next steps. Be a positive role model, provide supervision and advocacy appropriate to the learner level. And then last, recognize the practical reasons that the adult learner has to learn. So summarize teaching and to take home points, what's the most relevant information and capitalize on teachable moments, which is my favorite. So how do you do that in practice? You're like, oh, that's nice, Teresa. That's a lot of ideas. But how can I have a really busy clinic? We have like 50 patients today. I have a patient that comes back that needs, you know, 25 minutes of my time or an hour of my time. So has anyone heard of this, the concept of the one minute preceptor? It was actually something that was published at the, or it was not originally published, but they had a pulse article on it recently, which is where this came from. So a teaching method that was originally described in 1992 by a group of family physicians at the University of Washington. Their goal was to provide clinical preceptors the tools necessary to teach a general principle in five minutes or less, which is great. You have a busy clinic, you need to get a teachable concept and then you need to move on with seeing patients. So you're adult learners, so I have to tell you why. Why is this important? Learners rely on interactions with clinical preceptors to learn how to practice the art and science of medicine. That clinical experience reinforces that classroom learning and it gives trainees the opportunities to practice medical decision making in a safe and supportive environment. It's effective and a rapid teaching method that optimizes patient care. So you can teach and you can stay on time. So how do you do it? So here are your learning objectives. So after this lesson, I want you to be able to describe the five micro skills of the one minute preceptor and I want you to apply this approach, educating learners and busy clinical settings. So I'll give you kind of an example of this as we go through it. Here are the five micro skills. Get a commitment, probe for supporting evidence, teach a general principle, reinforce what was done well and correct mistakes. You're like, how does this all happen within five minutes? I can't believe it. So Dr. Kennedy comes to me, he has a patient in the ER and he is worried about, like we were consulted for an open globe. And so he's telling me about the story.  He works construction. He was roofing and the nail gun ricocheted and hit him in the eye. And so for example, they give you this story and you could say, okay, well, his vision is hand motion. I didn't check the pressure because I was worried about an open globe but I looked at his cornea and it looks weird. Say it's really early on in PGY one year. His cornea looks weird. And you say, oh, okay. And I think that he has an open globe injury. So then I would say, okay, Brandon, how did you arrive? So how did you arrive at conclusion and say, okay, Brandon, you said his cornea looks weird and you think that he has an open globe. So what makes you think that he has an open globe? And you'll say, well, I see this brown tissue that's coming out of the cornea. And it's like there and the cornea doesn't look normally shaped, right? And so this would give me a kind of a level to an ability to kind of assess the knowledge of that learner. So then you can teach a general principle. So for example, you could say, you go see the patient together and you say, Brandon, this patient actually has a positive Seidel sign, which is why you know that he has an open globe. So we can talk about the Seidel sign. Seidel sign is where we will test for an open globe. We use a fluorescein strip. We look for egress fluid from the inside of the eye. And so this brown tissue that you saw was UVA and there's actually a corneal laceration. So you can provide your clinical pearl and you can reinforce what was done well. So for example, you could say, really good. You identify that there was an open globe. We talked about the CT scan and you realize that he needed a CT scan because it was a male gun injury and CT scans are really important in evaluating patients for open globes, especially with high velocity metallic foreign body type injuries. And then you can correct mistakes. So then I would say, Brandon, I wanna work on your description of the patient's clinical exam findings. So here we identified a corneal laceration.  So that's just kind of a quick example of how you can do all of these things in less than five minutes. And by the way, Brandon definitely knew there was a corneal laceration and had a way better description. So I took it back to a PGY1, pre-PGY1 level because I've been working with our current PGY1s.  So how does it actually work? So here's a randomized controlled trial on teaching the one minute preceptor. So the one minute preceptor model is widely used to improve teaching but its effect on teaching behavior has not been assessed. So this is an inpatient teaching service at a tertiary care hospital and a VA medical center affiliated with the University Medical Center at the University of Michigan. They had 57 second and third year internal medicine residents randomized to the intervention or control. And the intervention was a one hour session incorporating lecture group discussion and role play on how to utilize the one minute preceptor. And turns out it works fairly well. So the residents self-reported and learn the outcomes where the resident self-report and learner ratings of resident performance of the one minute preceptor teaching behaviors. The residents assigned to the intervention group reported a statistically significant changes in all behaviors. And 87% of residents rated the intervention as useful or very useful. Let's see. So learners in the residents in the intervention group reported increased motivation to do outside reading when compared to learners and residents in the control group. Wouldn't you love it if all the residents all with the outside reading? So overall, it was brief and easy to administer that provides modest improvements in resident teaching skills. So switching gears to our last topic. So this is a common phrase, but Dr. Petty, I want more feedback. So I found this graph in an article somewhere and it talks about how there are generational differences between feedbacks and feedback preferences. And I thought this was really interesting. So if those of you who are listening are in the baby boomer generation, you would say feedback should be provided once a year with lots of documentation and that's it. And then transitioning to our gen X and gen Yers, a feedback whenever I want it at the push of a button, right? Which I think has become the trend in our residency and that's why we're hearing these things. So recognizing that your learner and whoever you're working with may have a different opinion of how often or how you should give feedback is really important. So feedback is a dynamic process and to confirm positive behaviors and correct performance. Why do we need to provide feedback to learners? It's a really interesting question. It's essential for personal and professional growth. It's required from all sources, our educators, our colleagues and yes, even our patients. When learners don't get feedback, they can mistakenly assume they're doing well when they aren't or they may learn about shortcomings too late to have the opportunity to form meaningful improvement. And unfortunately, feedback often breaks down under the rigor and the pressure of clinical activity. We are just too busy, right? We're just too busy. So in general, what not to do? Good job or work harder are really not specific. You wanna set up for feedback. You wanna find a private location. So you can let the learner know that you're providing feedback but one of my favorite things to do is say, hey, is now a good time where we can, I can give you some feedback. So a really great example of this is that Dr. Hu and I finished a glow very late in the evening or early in the morning. And usually I like to debrief about the case after we finished the surgery. And I said, hey, Catherine, I wanna talk about the case and debrief is now a good time for me to give you some feedback and for us to talk about the case. And she said, you know what? It's really late. I have a lot of notes to do. She's like, tomorrow would be better. And I was like, no problem. We'll give you, I'll give you a call tomorrow, right? So feedback should be timely, specific, relevant, objective and provides opportunity for improvement. If this is something that they can't really improve, should you be giving feedback on it? So here are my 10 pearls for learners. So residents, this is for you. The most important critical part is to complete a quality self-assessment. Reflection is essential. You have to think about realistically, what are you struggling with? What are you doing well? And then when you elicit that feedback, it's kind of like a test, right? Remember that we all have blind spots. No one is perfect. We, even I have blind spots. I realized this last night, Logan and I are trying to plan our wedding. And I said, Logan, we talked about suits two months ago and there still are no clothes for you to wear for the wedding. I don't wanna nag you. But then I realized, maybe I didn't communicate efficiently enough or effectively enough for him to realize that he's an architect, he needs a deadline or I needed to communicate that this was more of his responsibility than mine, right? So we all have blind spots. So in that space, my communication and my lack of communicating exactly what I wanted was an example of a blind spot. Develop a relationship with the person you are seeking feedback from. I think this is key. If that person knows you care about them, it's a lot easier to have hard conversations if you know they're invested. Okay, they asked for it. So this is part of our feedback Fridays. We have every month, there's a one cheater. It doesn't go in the residents files, but we are kind of doing this with our mall committee. So we're excited for all of our faculty. And just a pro tip, instead of asking for feedback, shift your vocabulary and say, I'm asking for advice. So Dr. Warner, I want your advice on what I should do with the situation and patient that I saw on call. Very different situation than saying, hey, I want some feedback on my performance in clinic. Be confident in positive feedback. You do things well. Imposter syndrome is very real. Think the person who's giving you feedback and be attentive to the details of the positive as well as the constructive. So sometimes people are like or say, oh, you did a really nice job with that patient. No, no, no, I was okay. I was just doing my job. You did a really nice job with that patient. Thank you, I appreciate that. Yes, control your feelings. I think the growth mindset is really big here. If you're having a moment where you're having feelings, put them away for a minute and reevaluate and have that conversation when it's a time when you can not have your feelings involved. Take an action plan. Acknowledge the generations. So you remember the table. And be specific about your questions. So remember that instructors don't get a lot of teaching on how to give good feedback, but for now. And last, be ready. It can be given at any time. Sometimes this is a hard thing. You're like, oh, you just gave me feedback on that. And I really wasn't in the headspace to hear that. But I'm gonna focus on the content and trust that you have a good heart. And this can be really hard, not the way that it was said, but the content. Okay, so our one minute preceptor. I want you to describe the five micro skills and apply this approach when educating learners in busy clinical settings. So we can kind of go back to review that. Maybe. So get a commitment. Probe for supporting evidence. Teach a general principle. Reinforce all of this unwell and correct mistakes. And with that, I'll take any questions. Thanks, Dr. Ramlis. I'm assuming the folks online wouldn't probably wouldn't be able to hear the wonderful comment that Dr. Ramlis just made, but he was reflecting on the generational differences first between how different generations view feedback and saying that that's a very real thing. And then he said that he was also reflecting on how it is really important that we hear from the residents on how the teachers are doing, and how the faculty are doing, and the residents provide feedback to the faculty as well. And then the second thing was kind of commenting on the stereotypes of the Gen Xers and the Gen Ys that were all snowflakes, and we melt with hard conversations. So which I think is interesting that comes from somewhere. And so maybe thinking about the way that the information was given or the context or what the content was, I think looking at all those things are really important. Any questions from online? Dr. Dardeen. Absolutely, so for those of you who are online, Dr. Dardeen was reflecting that sometimes teaching the thought process and teaching the application of clinical skills rather than just the knowledge can be really challenging in a busy clinical setting. And so I think that that's very true. I will say though, you have to have the foundational building blocks and kind of the book knowledge before you can start applying things and drawing conclusions and integrating things. But yes, that process of teaching critical thinking skills is really challenging. Dr. Warner. Yes, absolutely. Thank you. So for those of you online, Dr. Warner commented that she saw a play called Fireflies last night. And one of the characters in the play was a lifelong teacher and she made the distinction between pupils and students. So being that pupils are someone to just kind of fill the seat, be there, go through the process where students are more self-directed, self-motivated learners. And that as teachers, our job is really not to kind of point out, factoids and hope that someone observes it, but to really help develop and mentor those critical thinking skills. And she is hopeful that we have lifelong learners and students of ophthalmology here at the Moran. Absolutely, I think that's a great point, Austin. Thank you. That is something that actually hasn't come up. So I really appreciate that. So Dr. Nakasuka said that it's also important to take into account cultural differences when you are teaching or learning and that he's reflecting on kind of growing up with an Asian tiger mom. And so scoldings were like a normal part of his life and then even cultural differences between the East Coast and the West Coast and how sometimes it's related or so how it should be different from ethnicity because there's so many different things that make up a person and where they come from. Dr. Kennedy. Yeah, absolutely. So I actually haven't run into any literature. So the question was, have I come across any literature or information about how to develop coachability, I guess you would say, in the learner? He said that Dr. Kennedy was kind of reflecting on his experiences coaching. And he said, some kids or peers that you have or students are more coachable than others. And so what really makes that the case? I actually haven't, that's a really interesting area. And I think looking into the coaching literature would be really interesting. So Dr. Jardine said there's actually a great book that covers this, it's called Thank You for the Feedback and then he gave a little story about a married couple that are friends of theirs where the husband and wife were not communicating in a way where they really understood what the other one was saying. Oh wow, there are a lot of comments in the chat. Let me see if I can pull it up. So actually I have it on my computer so I can read it. Rob Treft, thank you for your comment. Knowledge is the awareness of things as they are and were. Technically the learning is the acquisition of knowledge. And Dr. Olson's comment with our field's knowledge base changing about 50% every five years. We have to be lifelong learners or we will be left behind. And then Dr. Petty, one comment of the preceptor model is that any systemic approach will be superior in a randomized trial than the fluid status quo. Was there something unique to this that would make it superior or other feedback models or anything systematic is better? So Dr. Petty with respect to your question, I think doing something and being intentional about it is better than nothing. And so really thinking about how we teach as educators, that's where we're in the business here in residency is really critical. But I appreciate your point about the randomized control trial scientifically. I think that's it. Let's end early and have a good morning.


We're really excited to offer the endurance lab services here at the Kaiser Permanente Sports Medicine Center in downtown Sacramento. Our goals here are to use your time more effectively by training in targets that are specific for your goals. Our testing will allow any athlete that's engaging in an endurance event to really tailor their training more specifically. This is not testing that's just for people that are on the sort of elite end of the fitness spectrum. This is testing that can really be useful for anybody because it gives you metrics as to where you are, how your body is using the things it needs to use to turn into energy and how you might be able to change your training to make that more efficient over time. We're excited to work with Julie Young who has really excellent experience in all of these fields and really knows how to apply this information. We're really excited to have the VO2 and Lactate Threshold Testing. Obviously we know these work really well for elite athletes but we think those numbers are also very beneficial for people that are getting ready for half marathons, 10 k's, endurance runners with a 50 k event, with our basal metabolic rate testing. This is really helpful for a patient to understand how many calories they're burning at baseline, how many calories they may be burning with additional components of exercise and how that factors into their goals overall. We're also very excited to offer video, gait and bike fit analysis again to provide really specific information as we try to fine tune the technique for runners and the best position on the bike to draw the most power to get the best out of your event. What this testing allows us to do is integrate our sports consultant with our medical team and it also then integrates the results back within our system so that you can make any adjustments in your training, medications or anything else that might be affecting what you're getting out of your exercise program. People often ask what the goal of this type of testing is and that honestly depends on your own personal goals. If your goal is to make the most efficient use of the 20 minutes four times a week you can squeeze an exercise, this can help you get those measurements. If it's something where you're training at such an elite level and you need a tiny percentage point of improvement, it can also help potentially find ways to do that. It's by no means anything that we have to reserve for just the most elite athletes with the most experience. It's for anybody who wants to get better at what they're doing or even make more efficient use of the time they do have to exercise.