• Mike Zapata
  • May 29, 2018
    Read, recorded or researched
Mike is the founder of Sententia Capital Management, a long-only US small-cap fund, having been a Navy SEAL for the best part of a decade in the aftermath of 9/11.

The Best Points

Mike Zapata
Invest Like the Best


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SEAL grade failure

BUD/S (Basic Underwater Demolition/SEAL Training) tests you to the nth degree, and it’s really just a proving ground to show whether you can actually be part of that environment, and you can put up with it.

The fascinating thing with BUD/S is that most people, when they look at careers of guys who have done what we have done, they assume that we’ve never failed. Their idea is that we’ve never failed at anything because you have to be good to get through that, but BUD/S is designed for every single person to fail, and it’s not about failure, it’s about mettle and grit and being able to get up and keep pursuing the mission no matter how you feel, no matter how tired you are, no matter how mentally fatigued you are, get the job done.

There are three phases to the course:

  1. First phase is; are you dumb enough? Are you hard enough to put up with the pain that you’re about to feel and not quit? Really, we lose most of our guys in that first phase.
  2. Second phase is; are you smart enough? Can you stay calm in duress situations? It’s a lot of pool competency, where you have to stay calm when you’re nine feet underwater and you feel like you’re going to drown. Can you follow directions in very high-pressure situations?
  3. Third phase is; are you safe enough? Can you shoot and move with a team and do it in the safe way, using explosives?

Once you get through that six-month period, you graduate BUD/S, and then you have another six weeks of advanced training. So after about a year of training, you become an official SEAL.

Be a quiet professional

Your job is to be the best, not to be recognised as the best.

Preparation, patience, then darkness

There’s always risk, no matter what, no matter how much you know about a company, no matter how much you know about a target you’re going after, when you do something, there’s always going to be risk that you cannot control.

Let’s say that we’re tracking a high value target in my former life, and we find that person in Pakistan. Well, you already have operational risk that’s embedded in every operation, but now you’ve added a sense of political risk. If something goes wrong, then you have a much higher chance of political risk happening, and there being blow-back. So that adds a level of complexity to it.

So what do you do? You wait. You wait, and that high value target happens to present himself in Afghanistan. That gives us a much cleaner picture. We take away the political risk, because we have more control of the area.

But now let’s say you found this person in a valley with the moon full. Well, now you, again, you’ve increased your operational risk. We can’t take advantage of our night vision. We’re levelling the playing ground by having a full moon, having us be able to see in that night. So we wait, and we wait till that darkest nightmoment, where there’s no moon, it’s really scary, people don’t want to go out, and that’s when we go and we do our best work.

But all that is contingent on having done your preparation, having studied the target, having mapped out the risks, having mitigated them to the best of your ability, and yet still having the humility to know that things could go wrong.

The value of experience

How do you know when to violate the general ideas of risk taking and preparation, when the perfect opportunity may never present itself? Experience, and I’m learning that even now. We’re always learning that, I forgot the quote but it’s something like this. “It’s the young man who understands the rules, and the wiser, experienced man that understands when to break the rules.” And that’s very true.