The below is an exclusive excerpt from A Multi Colored Coat, my autobiography. It has been adapted for TalkMarkets.

My great-grandfather was a second son who had an allowance from his family back in England. He had moved to Kansas and owned a money-losing farm there. Actually, farming was beneath him, so he didn’t want the place to make money. He decided to invest the money he had in currency. It was the 1920s. Figuring the German Mark couldn’t keep going down, he invested everything he had in it. And he lost everything he had. From a very early age we were taught: “never, ever, speculate in currency.” It was the first of our many intergenerational economic lessons.

His own son, my grandfather, went in the opposite direction. He became an insurance salesman. Not a very good insurance salesman, but at least he wasn’t involved in currency speculation. My father picked a third path. After deciding on the path of industrialist, my father ended up going to college at Oregon’s not-quite-illustrious Willamette University. There, outside the long shadow of a childhood test that had categorized him as mentally retarded (getting a 68 on an IQ test will do that), he was recognized as a national math scholar. He even won an award from the Dow Jones Foundation itself. It earned him a full-ride scholarship to Carnegie Mellon.

While he was in Pittsburgh, my father’s unconventional analysis of business and social history almost landed him in very hot water. He’d examined the ‘business’ history of poor Jewish, Italian and other immigrant communities. Kind of like how Karl Marx analyzed class history to produce his ‘science’. My father’s conclusions were a bit different than Marx’s though. He deduced that these various communities rose out of poverty through organized crime. Then they got their children out of the business, and they cleaned up nicely.

My father saw the poor black community of Pittsburgh and figured what they really needed was to follow a similar path up and out. Instead of just being customers, employees and victims of organized crime networks, they needed their own organized rackets. They needed to run their own numbers and prostitution rackets. They needed their own ‘families.’ They needed to stop the subservient or disorganized crime and step things up a level.

He apparently met with and presented this argument to a prominent Pastor in the city.

Their meeting didn’t go well.

After graduation my father was, for a brief time, a management consultant to a criminal. He worked for the famous Jimmy Hoffa, helping run a legitimate little side business for his organization. The big checks were nice, but my mother managed to convince him it wasn’t a wise long-term career choice. He left that world long before Jimmy did.

I’m convinced that what really converted my father to a new way of life were the Saints Graham and Dodd. Their concept of value investing inspired him. He believed you could consistently find value; value the market was missing. Tied in with Value investing was the intrinsic concept that there actually was value. Not just the transference of money, but the creation of wealth. This sort of wealth creation required what my mother would call mercantile ethics – the most important being trustworthiness and honor. My father ended up doing very well as a value investor, although he was the never the kind of investor whose ideas could scale to the institutional level. His eventual Ph.D. from Columbia University was the first counterproof to the famous Random Walk Hypothesis.

Despite his full ride, my father ended up being kicked out of Carnegie Mellon. Not for any dark reason. Well, not really dark. He was a Graduate Assistant for a professor who later won a prominent award in economics. My father, at this time, was an economist. At least an economist in training. He realized this professor was picking the years in his models. This means he picked beginning and end dates to make a case that isn’t preserved if you shift the years around. For example, you might read in the news today that temperatures have increased X degrees since 1850. Well, the late 1840s were particularly cold years. They helped lead to the massive European social unrest in 1848. 1850 was the end of the Little Ice Age, which started in 1500. If you use 1850 as a baseline, you’re picking your years. It doesn’t mean you are wrong, but it does bring the honesty of your argument into question. Going back to my dad’s case: he realized shifting a month in either direction would have made this economist’s grand model fall apart.

Grand models were always falling apart. Growing up, we often discussed the reasons for this sort of failure. Essentially, it came down to this: there are many different kinds of things that fit under the rubric of “model.” A model based on a very simple concept – often a scientific concept boiled down to controlled circumstances – is indeed very predictive. The metal ball will roll down the table at just such a speed. But as you pour more real world in, the model becomes more and more speculative. How fast will the feather fall? It depends a lot on many highly complex factors. When you then add elements that respond to conditions around them you end up with a seriously difficult model. The speed at which a feather falls when it is attached to a bird is quite difficult to determine. As my mother used to put it, we can predict what a pool ball will do when hit with a cue. But try playing pool with kittens instead of balls. Unless you hit them really hard, it suddenly isn’t so straight-forward.

We can use rules of thumbs/principles on a micro scale, but on a macro-scale predictive models tend to be, well, b-llshit. And the fact that you might fit a curve to past data doesn’t mean it will fit to future data. Thus, there are no investors who have predictably made billions on the market but there are some investors (my father included) who were pretty good at valuing individual small companies or even predicting the failure of individual larger companies.

We’ve seen more of this reality with the coronavirus. It is a mutating virus that responds to surrounding conditions. It is being responded to by communities, scientists and governments that also adapt. Models aren’t terribly useful. ‘Science’, in terms of medical advancement, has done a magnificent job of fighting back. But ‘public health’, based on large-scale models of what will happen, has been crap. If the virus had a more predictable pattern (say a high death rate) we’d reliably strike back with clumsier tools. The world of modelling would be simplified on both sides. But coronavirus was not simple. In the initial rounds of the virus, those US states that adhered most closely to public health directives also suffered the most deaths. I’m not blaming the public health directives. All I’m saying is that anybody who claims their complex, real-world, model is going to give you overwhelmingly useful and accurate answers is probably far too full of themselves.

Getting back to my father... rather than quietly report this professor’s academic fraud, my father decided to print and hand out pamphlets. Nobody could understand them, though. Remember, he was a retarded genius. Nonetheless, his activities drew the ire of the university’s administration. They sat him in a room and asked him what he wanted, what he really wanted.

The upfront purpose was to pay my father to shut up. But, as my father saw it, the unstated purpose was to blackmail him. There was a small committee of interrogators. At first, my father insisted he couldn’t tell them what he wanted. Then he insisted it was too embarrassing. Then he told them he could tell them, but under no circumstances could it leave the room.

My father has a way of speaking more quietly when he really wants you to pay attention. He dragged his interrogators on – getting quieter and quieter until he’d wasted more than a half an hour of their time.

Finally, he told them he’d reveal his innermost desire.

My dad insists the doors to the room moved as those outside were so eager to hear what he had to say. I don’t doubt it. I’ve seen him tell the story; I’m sure he had interrogators on a leash.

Before I tell you what he really wanted, there’s one more pertinent fact. My dad was 6’4” and massive. When I was 16, he easily picked me up with one arm and tossed me 5 feet.

With the audience primed and ready, my massive dad looked down at his belly and said, “I wanna’ have a baby.”

That was his last day at Carnegie Mellon.

The University actually mailed him his Master’s Degree (due to a clerical error). But they also sent a black letter to every school they thought he might apply to for his Ph.D. Wharton had kicked out a very prominent student not that long before. That student had gone on to be hugely successful. He badmouthed Wharton at every possibly opportunity. Apparently, the standard policy of the day was to destroy anybody who might make them look bad.

My dad knew about the black letter because it was mailed to Columbia University’s School of Business. The dean of that school, Julius Pontecorvo, invited my father to his apartment. He showed him the letter. My dad read it and asked one question, “After reading this letter, how could you possibly admit me?”

The dean, who became a lifelong friend, answered, “After reading that letter, how could we resist?”

And that’s how my parents ended up meeting at Columbia University.