On The Road Again…

I am heading out on a major east coast swing having spent the last month comfortably in Phoenix.

I will by New York, Baltimore, Philly, Boston and North Carolina.

I have really gotten into a good routine working and biking in the desert the last month, so will miss it. My bike circuit (I share it on Strava) has this great steep climb that I have been obsessed with. I also have three of my favorite restaurants within a 2 minute drive, one a stone throw actually. My food circuit is Pizzeria Bianco, Tarbell’s and Steak 44. Truly world class food in the heart of Phoenix. When I do eat breakfast, I generally go big in Phoenix at The Pancake House and get the 49’ers. The one food Phoenix sorely lacks is Chinese food so I plan on binging on the east coast.

Speaking of Chinese, this piece from Andreesen Horowitz on ‘Trends in China‘ is excellent. Watch it.

Finally, I was given the perfect setup by my Twitter friend Tren Griffin (a strategist for Microsoft):

Everyone Should Index…More Opportunity for Me

I think indexing is great. It’s what most people should do and probably will do. No more alpha, beta, gamma, fibonacci, theta or earnings calls to worry about.

BUT, as niche as it may sound, do-it-yourself investing is bigger than ever.

For those that like being in the batters box swinging…some fun facts that give me goosebumps:

1. Last year Robinhood did $30 billion in trade executions. In 2015 they did $2 billion. Read closely you will see I was quoted in the ‘failing‘ New York Times.

2. Bitcoin was a bubble too at $1,100 a few years ago. Now not a peep from the bubble callers as Bitcoin crosses $1,200 today.

3. The best performing stocks of the last 10 years were all easy to discover and buy if you check the all-time high list even once a month. If you had a pulse, Netflix and Amazon were on your radar.

I love this from Ivanhoff:

What do all of the above stocks have in common, other than being able to grow their earnings and sales in an impressive manner? They spend a lot of time on the 52-week highs list and set up multiple times.

The U.S. stock market indexes bottomed on March 9th, 2009. A couple days later, two stocks broke out to new all-time highs. Both of them went up more than 10x after their breakouts. One was Green Mountain Coffee Roasters, which was acquired in 2015. The other one was Netflix. Netflix went up 44X in the past decade and today it is a 62-billion dollar company. In 2000, Blockbuster refused to buy Netflix for $50 million, because “it was a very small niche business”.

4. Some pretty regular people were seed investors in Uber and Snapchat. Indirectly even I did.

How great a sport is active investing when you can have shitty eyes, no strength, no speed, a bad diet, and yet have a long career.

I would argue that the more people index today, the greater the swing back one day we will see towards active.

Go Vanguard go.

I Survived The BULL Market of 2017

Charlie Munger says this about investing:

It’s not supposed to be easy. Anyone who finds it easy is stupid.

Classic.

Personally, I believe we are in a Vanilla ETF clowncar headed off a cliff!

It does not matter though what I think or feel. I have been following prices and getting dragged along. I feed the gods some stock along the way because I know it’s not easy and respect what the market has given me.

JC shared this great chart today of the Global Stock Market Index breaking out to all-time highs. Good luck bears.

We live in a world where Jack Dorsey is CEO of a public Company most have never heard of called Square ($SQ) trading tonight at all-time highs – and also the CEO of Twitter, which most of the world has heard of and trading near all-time lows.

Michael Batnick wrote this great piece and hypothesizes that all of us invested right now might just be’handcuff volunteers‘.

As fun and profitable as this boom has been for so many, it is not easy to make money investing. The hardest part of this last boom has been getting and staying invested. For those that did, you are smart, if even for just ignoring all the headlines that have scared most out along the way.

The Ginormous and The Niche …and The Ambien Stock Market of 2017

Longish post…I will make the rest of the week lighter I promise….here goes…

Pre internet the world was all ‘ball bearings’. While the biggest and best ball bearing companies continue to thrive, the internet has created a dizzying pace of digital ‘bundling and unbundling’.

There is no rest in this era. You must continue to bundle, unbundle, build, buy, bet it all and hoard if you want to rule the web for more than a moment.

The Snapchat S1 and IPO amplify the discussion once again. Even at $25 billion, one can use the word ‘demise’ and make good sense . The Instagram attack/strangle move on Snapchat makes me appreciate the giant real-time and weird niche of Twitter. As big as Twitter is, it’s still niche. They have not come to terms with it from a cost perspective, but the market is forcing them to focus. The new Twitter search and explore button is good. The content within the tab is underwhelming, but as an addict, we hope they get it right and feed my addiction bigly and betterly! All said, at $10 billion today, Twitter seems like a better relative value stock than Snapchat and I hold some shares to keep me feeling alive.

So, in this Facebook/Google/Tencent world of 2017, I got nostalgic and was looking back at some old blog posts on the magic of the niche and the vertical over the horizontal.

I live in the niche and the deep verticals. Most of Social Leverage’s angel investments that get me most excited started as niche products solving a personal pain point – Robinhood, Chart IQ, Lifelock, GolfNow to name a few. My own Wallstrip was super niche (a video show about stocks at all-time highs), yet if I was to start a web video company in 2017, I would attack it the same way. Stocktwits is niche. My favorite blogs, Stocktwits follows and Twitter follows are masters of their niches and have a’special purpose‘.

Speaking of niche, the internet, and ‘special purpose’ – I bring you Ben Thompson who says ..’we all underestimate the scale of the internet’. I am a huge fan (everyone here knows) of Ben Thompson. He understands strategy and the internet in a way that makes me think the markets could be undervalued (this post was from 2013).

Ben just gave a great talk on the subject of media and the big tech giants. Peter Kafka followed up with a great interview of Ben. Ben is doing something magical and inspiring in an era of the ginormous. Because the ginormous entities tend to swallow the niche, it is fun to watch Ben stay true to the power of his passion while leveraging the internet. I urge you to watch it all. Ben speaks fast so 30 minutes feels like 12. He offers a fantastic roadmap on how to build a niche yet bigly publishing business.

Market Footnotes

The market is not scared of Donald Trump. I won’t argue with the market. This is not a Trump rally or a Fed rally or a boating accident…it is the ‘Ambien’ stock market of 2017. Not even an invasion of Sweden could wake it.

S&P 500: 45 Trading days without a 1% intraday move, the most peaceful market in history. $SPX #Serenity

— Charlie Bilello, CMT (@charliebilello) Feb. 21 at 08:21 PM

To give you some perspective on the size, glory, opportunity and good fortune Donald Trump inherited – here is a chart of the relative size of stock markets around the world in 1899 and 2016:

The all-time high list for stocks is really a wide array of huge companies and household names at the moment. Like I said …ginormous is in!

Carl Quintanilla gathers a few of the all-time highs here:

Seeing the continued domination by Costco, Home Depot and Ebay – Amazon still has a lot of winning and markets to take. Or maybe they never do stop these great remaining retailers (Autozone could be lumped in here too though it has struggled of late).

It’s fitting that CONagra is at all time high, same as tobacco, Goldman and chemicals.

This was a funny screen grab of a CNBC euphoria moment today:

It was only a few months ago that CNBC trotted out their punching bag and always wrong Dennis Gartman with this beauty:

@howardlindzon Here's a screencap. Next will post motherload for future reference https://archive.org/details/CNBC_20161122_220000_Fast_Money/start/893/end/953?q=sell+everything

— HalfwayToMemphis (@HalfwayToMemphis) Feb. 21 at 05:03 PM

The internet is awesome.

The Cashtag Awards (Live in NYC March 30th) – From Stocktwits

Stocktwits has tens of thousands of contributors and hundreds of thousands of active users.

I have long wanted to celebrate the good, the bad, the funny and the ugly of the social financial web (blogs, mainstream financial media and Twitter too). We will finally do that at Stocktoberfest this March 30th.

Our community and a wide group of trusted friends in the financial industry have helped us put together the award categories that I share for the first time publicly now:

Stocktoberfest East Cashtag Awards

Awards celebrating the stock market, the social financial web, and the people who make the financial community entertaining and fun.

Awards

Below are the final categories. The panel of judges and community have selected 8 to 12 finalists for each category. We will be sharing the finalists in the next few days and let the fun and bragging rights begin. No Stocktwits employee or people involved in the show (like Josh Brown have been included in the awards). The categories are:

The Greatest chart of 2016

Chart Artist of 2016

The Most Talked About Market story of 2016

The Best Financial Blog

The Financial Twitter account of the Year

The Stocktwits Person of the Year

Best Use of Social by an Investment Advisor

Stocktwits Rising Star of the Year

The Best Bots of Stocktwits

The most Outrageous Market Call of the Year

The Market Meme of the Year

The Best use of Social Data for Investment Research

The Best Stock Market Coverage

Security, Security, Security

I added some security stocks to my portfolio over the last year – Checkpoint $CHKP, Palo Alto Networks $PANW and Akamai $AKAM. All three are volatile. I am down on my Akamai  position (I journal all these ideas on Stocktwits in real time).

Over $5 billion has poured into security startups the last two years. The hedge funds know this and their proxies are the public stocks. Owning the right basket should continue to pay dividends as dips get bought for now. 

My friend Ed Sim penned this great post on the state of the startup security market. It is worth the read. Ed has a fantastic blog and has been investing in early stage enterprise software for 20 years. 

The markets are connected and so you can expect a lot of volatility, growth and continued M&A as the cycle moves along. 

What a Mess…

Great news…that sweet taste of coal waste will be back in American streams starting Monday:

Unfortunately, I hear it from a very reliable source that other than the coal industry, everything is a mess.

My son Max watched the Trump press conference and now blames me for the total mess of genes he inherited. I agreed and changed the Netflix and Uber passwords.

Last week I got robbed. The thieves smashed the window of my car and took my golf clubs. They left a mess. Freaking Obamacare.

At least we don’t live in the terrorist filled nation of Sweden.

Global stock markets are a mess. I mean just look at The Global Dow (equal weighted index of the world’s 150 largest companies) at 9 year highs:

Global Stocks Score Another Key Breakout? $GDOW $DGTPost: https://lyonssharepro.com/2017/02/global-stocks-score-another-key-breakout-2/

— Dana Lyons (@JLyonsFundMgmt) Feb. 18 at 07:37 AM

The S&P is in turmoil and now at the highest P/E of the last 13 years:

Highest Forward 12-Month P/E Ratio for $spy $spx $es_f Since 2004 via @FactSet

— brendon_chan (@brendon_chan) Feb. 18 at 10:35 AM

Ok, so not everything is a mess.

Let’s be honest that if you are reading this blog, things are way better than they were in 2004. I know they are better for me because I actually have this blog.

In 2004, there was no Youtube, iPhone, Amazon Prime or Amazon Web Services, no Uber, no Tesla, no Starbucks inside a Starbucks inside a Starbucks and my taxi driver was my mortgage broker.

The markets continue to rise because trends are powerful phenomenons and the boom that started out of the ashes of the financial crisis in 2008 won’t be that easy to stop.

Software will not stop eating the world and machines can’t be turned off.

Airlines and Apple are the new Geico Insurance.

Coffee cups have pocket cookies…

I hear the word mess, but I will continue listening to the markets (and cringe a lot).

Vanguard and Amazon

Yesterday Vanguard crossed $4 trillon in assets for the first time:

If Vanguard was a public company the stock would be at all time highs today. Every hedge fund would be short declaring it was a great business with crappy margins. Analysts would have called Vanguard overvalued the last 10 years.

Vanguard is the AWS (Amazon) of gathering assets.

Tonight though, Vanguard’s website is down:

Just one more reason to own Amazon.

Disclosure – Long $AMZN and $SCHW (Schwab has long been my proxy for Vanguard).

The Customer and Kustomer

Last night this link of Jeff Bezos being interviewed by Charlie Rose in 1999 was being passed around.

You must watch it. Jeff lays out a guide to profit by focusing on customers that is just as fresh today.

I have been investing in customer support for a long time.

I love customers.

Last year my partner Gary led our Social Leverage investment in Kustomer.com which came out of stealth in September.

It’s perfect that the company is called Kustomer.com …with our new education leadership, the legal spelling of customer might get changed to Kustomer.

I have a lot more to say about Kustomer and customers over the next few weeks. I am also excited that Brad will be fireside chatting with me in NYC next month at Stocktoberfest .

In the meantime, my post from May of last year – ‘The Death of Retail is the Birth of Retail‘ is just as relevant today and has some great links worth rereading. Per the blog post, I remain long Amazon, Shopify and Apple but have since sold Paypal.

The Anatomy of a Bull Market and Bubbles

We are in a rare ‘stock market and chill’ mode where all news is no news or good news.

This analysis of bull markets from ThinkNewFound is a bookmark and great resource for any student of the markets.

As the inconceivable boom continues we should start hearing bubble talk by the weekend.

Don’t get me started.

But, if you must discuss bubbles, people in Palo Alto are spending 75 percent of their income on mortgages.

This research piece from Alpha Architect is also a bookmark on bubble investing (learning from history).

There are bubbles, bear markets and bull markets going on all the time. You just have to know where to look.