Some talk about going to the gym at 5 AM. Or running 10 miles daily. Or doing yoga while listening to a podcast at 2x speed.
Others drink super powered coffee with coconut infusions and brain power additives.
The power! The energy! The bio hacks!
I just started putting my socks on standing up. You should try it. Seriously, next time you find yourself sitting down to put on your socks, even your shoes, stop! Remember this.
But why? What type of sorcery is this? Why would you drop such profound confusion on us @scheplick?
If you put your socks on standing up for the next year your balance might see a slight benefit. Or maybe your flexibility. Try it yourself. I really don’t know. But I’m going to try with the theory that something will improve compared to always sitting down.
I like this idea of doing realistic things that are far below any idea of over achieving or over reaching, the things that take not much time, that potentially add up over a lifetime. Put your socks on standing up. For example.
The little things. The incremental daily activities that potentially add up, little by little, over time. Here and there. Less than two minutes.
I think anyone who works in markets gets more jaded and more skeptical at a faster rate than those who don’t. Like old man jaded. A get-off-my-lawn-grandpa kind of way.
Lately, I’ve taken a new approach to all the things people say in markets. The adages and phrases that have been passed down for generation after generation. Netflix is down and Disney is up. Obviously that’s a big money rotation from Netflix’s streaming service to Disney’s streaming service.
“Just wait until the institutions start buying Bitcoin.”
That’s my favorite. “tHe InStItUtiOnS.” As if a little ferry dances around markets and taps her wand on an asset and suddenly the magical institutions start buying.
There are countless examples. Even a trendline break in technical analysis comes to mind. I am a chartist myself and regularly mark down levels I see as important on a chart. But I’m never not amused when people see a trendline break and suddenly, “it’s going to ZERO.”
As if it were that easy.
There is no easy saying that always makes money. There is no phrase that even outperforms just 51% of the time. Buy the rumor, sell the news. I love that phrase and joke about it all the time with friends. But really? I have seen people sell the rumor and sell the news. Or buy the rumor AND buy the news.
“Sell in may and go away!” Another classic.
The other day I was chatting with a few friends about the recent rise in gold. Gold is breaking out of a five year base. Meaning it has essentially gone nowhere for five years. Now, today, it’s nearing its highest price in five years. We’re taught through adages and phrases that gold is a safe haven asset. If it’s moving we must be worried. Someone must know something scary we don’t.
That’s what we hear. And somehow it just becomes believed. Maybe because it sounds good, it rings in the ears. So we take it as truth without much scrutiny. But the market does not work like that. It is not that easy. I am often reminded of an Abe Lincoln quote,
“You can fool all the people some of the time and some of the people all the time, but you cannot fool all the people all the time.”
Abe Lincoln
I think Abe had that right in terms of inspiration. It’s great for such a figure to say that you cannot fool all the people all the time. But after the financial crisis, hedge fund overlord David Einhorn wrote a book. He titled it, Fooling Some of the People All of the Time. That’s more like it. That’s what markets do. They just fool people all of the time, day after day, week after week. Abe can ditch the rest of his quote.
For the recent run in gold, what if it has nothing to do with an impending bear market. Or recession worries. What if it’s entirely based on inflation fears. Maybe inflation is about to turn the f up and people want to preserve their money in an asset like gold. One that isn’t dependent on the Fed. Well, in that case, technically you could have rising stocks and rising gold. Voila.
I guess what I’m trying to say is that phrases and adages are fun, but they are also lazy. There is so much more analysis and thought to be had. Every time I hear a generic phrase related to markets or investing, I visualize all the reasons why that phrase is wrong in that moment. There are so many ways to spin a story, a correlation, a connection. Forgetting that is how you get fooled.
The other day a friend and I were talking. We were walking outside Bryant Park in New York City. The humidity was high. Imagine stretching your hand out and grabbing warm lake water out of thin air. That’s what it felt like.
While talking with my friend, a cool dude with artist style vibes and a burlap bag, I noticed something in the middle of our conversation. He was borderline obsessed with the wrong in the world. Wealth inequality! Exploitation! Greed! Politics! What else am I missing?
I tried to explain.
Over the years, I have noticed an increasing number of people like him. Nothing will ever be good enough. Nothing will be right.
But what I’ve come to learn is that he is actually helping. I’ve come to learn that this is what progresses things forward. Things progress because of his discontent.
The discontent leads to criticism, the criticism leads to feedback, and the feedback is what pushes the do’ers to build better and work harder. Your outrage, your dislike, and your pushback is what actually feeds the progress.
Thank you.
In financial markets, I was reminded that, “bull markets climb the wall of worry.”
And so while many have complained this entire time, the stock market, by which you could buy with a few Dollars and a mobile app, has been doing this:
Virtual reality in its retail form is 7 years old. Or less.
Autonomous driving on a mass appeal is barely 5.
It’s easy to lose sight of how young these products really are. We see emerging tech daily in the news or in conversation with friends. Their constant presence makes it feel like it was always this way. But the reality is they have been around for less time than almost 80% of the world’s population.
Coca-Cola is 127 years old.
Multiple generations have consumed it. Grandma, grandpa, Uncle Joe and little Timmy.
Most have not thought anything of this. Sure the dangers of sugar in excess are becoming more prevalent on today’s national stage, but for the last 75 years, it’s been somewhat smooth sailing for the overlords of soda. Produce the drink, sell it, go about your day.
It wasn’t always like that, though.
In 1909, when Coca-Cola was still a young company, boisterous, successful, and breaking onto the scene like nothing anyone had seen, the United States seized 40 barrels and twenty kegs of it. Men in suits with badges and guns stormed in. They seized all the soda they could find.
But why? How could a fizzy drink cause such outrage?
Everyone was worried about a mysterious added ingredient: caffeine. It was suspected to cause serious health problems. Could it be a drug? Should it be legal? Why is everyone drinking and raving about this new drink?
This happened more than 100 years ago. Imagine armed guards today storming into a building and seizing soda. “Everybody down!”
Today, the trial is known as United States v. Forty Barrels & Twenty Kegs of Coca-Cola. That is really the name of the trial. Newspaper headlines everywhere, outrage, and suspicion. Must sound familiar. At Thanksgiving, families gathered.
Grandma: “They need to get that off our streets!”
Grandson: “I can feel the boost! This is the future!”
The characters in this story are different, but the theme seems to repeat itself. Autonomous driving, crypto, social media, the list goes on. Still in debate, still quick to form an opinion even with only a few years of real history or data to work with. Steve Ballmer, the co-founder of Microsoft, once fell victim to such rushed judgement.
“Ha!”
“Who would use such an expensive product without a keyboard.”
“People want to email!”
That’s what Ballmer first said about the iPhone. Before he had yet to truly use it, study it, or give it time to unfold. Imagine how different the world would be if he instead slowed down and actually studied it. He probably would have built one similar. We probably would have Microsoft phone.
— Pessimists Archive Podcast (@PessimistsArc) June 29, 2019
There’s a reason why quotes like, “history favors the bold” are widely cited and why quotes like, “history favors the critics” or “history favors the pessimists” do not exist. Bold inventions have repeatedly pushed forward productivity and standards of living. There aren’t many examples in history where the opposite is true – stop building, keep doing the same, and that will lead to better lives for all.
In 1950, only 2% of people had a dishwasher. Today, nearly 80% have a dishwasher. In 1970, only 31% of people had a color TV. Today, more than 90% have a smartphone that does 100x more than that color TV. If autonomous driving becomes a thing, an estimated 80 million people will have an extra two hours in their day to read, watch, write, or sleep while their car drives them from point A to point B.
The rate of technology is increasing. It’s compounding. It will only get more uncomfortable as we race to understand its progress. But before the pitchforks and torches come out, whether right or wrong, remember we’ve been here, in some fashion, and there are lessons to help to make the right decisions that go as far back as United States vs Forty Barrels & Twenty Kegs of Coca-Cola.
The greatest hoax of all-time is certain industries, professions or fields of work telling everyone else they’re not smart enough to do what they do. The greatest hoax is making certain professions or fields of work appear massive and unbreakable. Or making them look complex, hard to see through, or impossible to go over. This is what Wall Street does on a daily basis. It’s what tech firms do today.
“You work at Google? You must be so smart.”
I want to tell you a secret.
Literally everyone on planet Earth can learn to code just like the people at Google. It’s all on the Internet and it’s nearly all free. Sometimes it’s only about following documentation that’s already provided to you by a company or a forum. Or it’s who you follow on Twitter and the free instructional videos you find around the web.
“You work at that investment firm? You must be so smart.”
Anyone out there can learn about the investing world right now. It’s not about any specific school or upbringing. If there’s an internet connection, there’s opportunity. Some of the smartest investors I know have blogs entirely devoted to financial markets. They’re all free to read.
If you’re interested in something today, there’s nothing stopping you from learning about it tomorrow. The next great wave of human capitalism, in my opinion, will come from this profound understanding. It will change everything. It will happen slowly, and then it will simply be. At our finger tips we have access to any concept, equation, thought, or philosophy ever recorded. Yes, you might have to look at an ad for 30 seconds, but after that, welcome to your new line of study. I am definitely not the first person to say this, but it’s worth repeating.
The time it takes an average person to access any source of random information is at its lowest point. Think about that. It took Bobby the Roman four days to get a book on herbs when he was living in Ancient Rome. Joey from the Bronx gets that in four seconds.
The next great wave of achievement is the mass adoption of this realization. That everyone is capable. And that anyone can literally learn anything at a fraction of the cost compared to another point in time.
I can’t think of another moment when something of this magnitude was possible. I find myself thinking of Leonardo Da Vinci, the most well known polymath. He was refined in various domains of art, math, and science. His contributions alone sparked what we now know as a, “Renaissance Man.” But when you step back and realize what’s available to us right now, the massive amounts of information and knowledge online, a question is posed. Why is everyone not a Renaissance Man? Or maybe it looks a little different…
Today, there’s no reason or excuse to not have a strong understanding of anything you’re interested in. You can download a language app on your phone and for 30 minutes a night become proficient at that language. You can find how-to videos on everything. My best friend rode a motorcycle from Alaska to Argentina. He had never rode a motorcycle before. He learned watching and then training by way of YouTube videos.
The greatest hoax of all-time continues to be a wall that does not exist. I believe the last 100 years, while proficient and effective for society, were also some of the most secretive and deceptive. What I mean by that is the mystery, image, and perception of certain industries and titans were built on the back of being mysterious, secretive, and almost mythical.
That has all changed.
Today, the game is as flat and equal as ever, potentially more than ever.
I hope you enjoyed this, and I hope you use it to focus, learn, or appreciate a new field that you previously thought wasn’t possible for yourself. I’m still learning and taking in as much education as I can.
I think there’s nothing more important than perspective. Perspective is how you learn to embrace the long grind of change. Who you were a month ago and who you are today are not very different. Who you were 10 years ago and who you are today are extremely different.
After 10+ years managing my own portfolio, this has been the single greatest lesson. You come to realize that all of those “moments,” the ones that felt most important, were, in the greater vision you have for yourself or the domain you work in, not really as big as they seemed now that you reflect on them. Maintaining that perspective is a challenge, but you have to do it. I think back to the Euro Crisis sell-off, the Flash crash, the late 2018 crash, Facebook’s plunge, BP, Boeing… The list goes on. Blips in a bigger vision.
The other day, while driving through a rough area in the Bronx, I learned about the SEBCO housing development. What a fascinating and beautiful thing to learn about. A group of churches, missionaries, non-profits, and local organizations banded together in the early 70s to build massive homes for the homeless, elderly, and those who can’t afford high price rents. From the highway, you can see their towering shelters with names like Sister Thomas Apartments, Father Smith Residence, and Maria Estela. I think they now have 15 of them. Maybe more. Very few talk about SEBCO today, but I imagine their time is coming. The grind will be rewarded for people like Sister Thomas (shown below).
The greats, the best, the people who change things for the better, are built over many years. Sometimes, long after they’re gone. Most great artists turn out to be 100x bigger after they’ve passed on. Sadly, it took that long for their work to spread. But that’s part of the commitment they made when they followed their passion into the profession.
On Twitter, a picture of Steph Curry is getting passed around. Basketball fans out there will get it. Most people who enjoy sports will feel it. The other night, for their last game at Oracle in Oakland, the Warriors wore a throwback jersey from another era, a jersey from Curry’s rookie year. The picture shows Curry then and Curry now wearing his old uniform once again. A you vs. the guy she told you not to worry about.
The before and after pictures of Curry are separated by about 10 years. I see this and am instantly reminded about the process of change and the timeframe it exists on. Your awareness of the journey must always extend beyond a day, a week, and a month. This process is going to take years.
I never thought I would be tying this together, back to my portfolio, and to a moment I had in the Bronx, but here I am. I can’t wait to look back at this in 10 years and see how far I’ve come. I hope you’ll join me in doing the same.
I’ve now spent 10 years in the stock market. And I’ve spent seven working directly with the people who make it what it is at StockTwits.
There have been ups.
There have been downs.
But that is true with anything. You will never find a perfect “thing” that has no ups or downs. What you’ll do instead, if it really matters to you, is fight your way out of the downs and strive to remain in the ups. There will always be down moments. While they can brutal, it’s also where you discover what really matters.
In most major sports, whether it’s football or baseball, only a small percentage of the game is a moment of action. Most of the time, it’s a steady slog, timeout or commercial until… WHAM! Something big happens. A must-watch moment. Then, the cycle repeats. In life, it can be the same. You go through the routine and then… WHAM! Something happens. It’s almost as if 1% of moments determine 99% of the rest.
Warren Buffett famously said he, “tap dances to work.” He is a sage investor and he also happens to be a sage at one-liners. I assure you that when he wrote down several billion dollars in his Kraft-Heinz investment, there was no tap dance. WHAM. Yet despite that setback, we both know there will be another act. And he will win again. Because this is what he cares about.
Working in the stock market all these years, I have seen quite a bit. Plenty of WHAMs – even to my own portfolio. I admire the rise of the stock market anti-hero. The one who overcomes setback after setback when by traditional norms they were not supposed to. The ones who do what traditional systems tell you not to do. The ones who did not get a world class education or pass an examination. The ones who have a day job completely different from markets. Instead, they’ve found their own way, and it works for them.
I have seen the portfolios of my friends on StockTwits. In the words of Owen Wilson, “wow” is what I would tell you. I remember the first few times I met a few in person. There was no flashy suit or Mercedes Benz. It was the opposite.
Their humility is probably why they’ve grown such impressive portfolios. The right amount of humility can cure any setback. Because maybe it means you were preparing yourself the entire time. I’ve learned to admire an adage that goes something along the lines of, “hiding wealth is a sign of wealth.”
In my time in the market I’ve noticed how a select few can dominate the conversation. Generally, it is for their cause. The hedge fund gurus go on TV after they’ve put a position on. The great thinkers tell you why their industry is right because, well, that’s the industry they work in. But the anti-hero rarely has anyone ever speaking for them.
In the early days, I was told we had to go punk rock on the world of finance. The “Wall” would have to be torn down. I think about that today, and believe it more than ever. I hear about the trading desks at big banks where everyone sits silently, insanely self-consciousness, glued to their Bloomberg terminal, trapped in a vortex of worry.
The do-it-yourself investor is coming for that old line of work. If the launch of e*Trade and other trading services in the 90s was a glimpse, today we are on the cusp of a revolution. Low-cost ETFs, mobile apps, social networks to test ideas, and the list goes on. Your Uncle’s wife’s brother’s kid, Bobby, is building a position in Bitcoin as we speak and there’s no manager, adviser, or bank sitting between him and his actions.
There’s an obsession with the rotation of active funds vs. passive funds. You know who you are. But what’s missing is the growing education and interest of the DIY investor. Last I checked, TD Ameritrade had record net new client assets, near record trades per day, and revenue. Should I say any more?
In the words of Marc Andreessen, this is a community of nights and weekend people. They’re getting no credit. They also don’t care. Their returns are all they need to know.
Today, I’m taking their side, and I’m swinging for the fences with them. Because it’s what we care about. Foremost, I believe StockTwits is on the cusp of something massive. Secondly, as someone who manages my own portfolio, I have taken a few big bets related to my core beliefs. Some have won, some have lost. But they’re always something I believe in.
My most recent bet is Twitter, and I think it’s insanely misunderstood and incorrectly valued. More on that soon. The point is it’s where the anti-heroes spend their time and everyone has an equal voice. Including the ones who do it themselves. And those who were told they shouldn’t ever get involved, but did.
