Stocktwits Rooms – Who I Pay For

Last November, I wrote a detailed post titled ‘What I Read, What I Pay For, Who I Follow and How to Get Started Investing‘.

I noted at the end…

Now that Stocktwits has launched premium Rooms (group chats) I plan on spending $150/month for my favorite traders that set up there.

I am spending $80/month so far (here is a link to the premium rooms page), but love the different ideas I am seeing and how I am easily able to stay up on the markets from different viewpoints. The people that I pay for right now include:

Zortrades – Swing Trading ($39/month)

Ophir Gottlieb – Option Pattern Recognition ($9.99/month)

John Markman – Intermediate Term Trades ($5/month)

Mark Newton – Technical Trade Setups ($25/month)

The Stocktwits rooms are easy to sign up for because of Stripe payments. You pay monthly. The email alerts are the perfect way for me to stay on top of things because I might not check into the rooms on a daily basis.

Here is a sample of an email alert you get from a premium room owner:

This is a very tailored way to use Stocktwits for many that demand a simple way to check markets, get ideas and quality mentoring.

If you want to set up a ‘premium’ room, just hit me up and I will put you in touch with the team.

You can also set up a free room and invite your friends to have a great mobile and desktop group chat experience about stocks and markets.

Software Ate A Lot Of The World Since December… Relative Strength Primer

Back in December as the market was crashing, I shared some software stock ideas in this post titled ‘which software is eating the world relatively best’. The specific stocks I mentioned included:

$SMAR
$PLAN
$AYX
$TEAM
$MDB
$ESTC

Because the market has now reversed course and crashed to the upside I wanted to check back in.

As you can see from the graph, the six stocks have had monster gains over the 90 so days.

Using Koyfin, tracking my research posts like this has been really easy. You can track the peer group I used in this Koyfin Dashboard. You can update the dashboard with different metrics, and share with your friends.

It feels good to be right.

December was a mess, but I knew there was opportunity.

Even better…everyone has the same free tools that I use to do this. Software is eating the world and feeding the people that use it well.

The trend is now our friend again, but my guess is this would be a good time to panic first and take some profits.

JP Morgan and Goldman Sachs – Drifiting Down

Apple is back above $190, Microsoft is at all-time highs and Google is running higher (I think it may be the largest company in the world – for a point in time in 2019).

The FAANG’s are under attack by the government these days, with Tweets from Fat Nixon and breakup plans by Democrats, but it is Goldman and JP Morgan whose stocks remain in the toilet.

It should be a perfect storm for the banks. No oversight, no competition, lot’s of IPO’s. From one look at the chart, we see it is not.

I look for relative strength when markets are weak. I want to own the strongest stocks, the stocks that hold up best when the markets have dropped.

I want to avoid the weakest relative strength stocks when the market has been rising.

If I were to speculate, other than IPO’s the banks are under assault for growth and margins by technology companies everywhere.

They also seem to have lost their mojo.

My fave read on the world of banking is from Matt Levine at Bloomberg. You can subscribe right here.

In the March 8th piece titled ‘You Have to Pay The Right Person‘, Matt riffs on Goldman’s SSG (Special Situations Group) that printed money for the bank and now wants to raise outside capital. From Matt:

But they all have an end-of-an-era feel to them. There is a real pre-crisis feel to Goldman Sachs running a business investing its own money in strange and risky and unconstrained ways. SSG has always had a certain mystique, and you would not have described it as a “steady, low-risk businesses like money management.” But that seems to be its future.

Boohoo.

Dear College Students and Parents…Continued.

My post yesterday struck a chord. The feedback was 100 percent positive. That makes me nervous in a Larry David sort of way.

I really liked my friend Ian Sigalow’s comment on my post:

Technology has commoditized access to information. It will soon commoditize access to people. When the door opens you better know how to communicate.

My daughter Rachel is a great communicator. She is a great listener. I want Max to be a better communicator and as I mentioned a few months back on this blog I set up a Google document for him to write about his daily college life. He has taken it seriously and continues to impress. I love getting a text from him each day that he has finished his writing for the day.

I have no friends in high places but my networks do. My networks can open doors for my kids, but that does not guarantee success. As Ian says, when the door opens, they better know how to communicate.

PS – Ben Hunt and Scott Galloway have excellent posts about the college admission scandals.

Here is Ben’s take titled ‘The Ministry of Rotes and The Compassionate Man‘.

Scott’s post is titled ‘How I Got Here‘.

Dear College Students (and Parents)

If you can’t code, write.

If you can code…don’t forget to write.

Salesforce is the new IBM.

The language of the markets and investing are the new Chinese.

If you can’t code, write, or sell…you will be being paid by the hour or be billing for your hours…yuck.

There is no retirement anymore. Pace yourself.

Selling today is about building the network. Kids today have strong networks forming in their teens. Every CEO in the world has an Instagram account and can be reached. Kids speak that language by the age of eleven. What an unbelievable edge.

Your network is your education. Invest in it. Always.

Learn to give to your network, make deposits…push off asking for anything as long as possible. Social Networks are the new banks. Less fees but sadly just as confusing these days.

If you are going to sell, like I said earlier – Salesforce (what I really mean an entry level job at a great enterprise company) is the new IBM. You will get all the training you need at a good enterprise company.

Once working, LinkedIn does all the work on the backend as your work anniversary dates are the chum that feeds the sharks that recruit for the next great company in need of your newfound experience.

A good use of time is to stay current with all enterprise companies that have raised series C or D venture rounds. They have cash, they have growth and they have money to train you with the latest tools.

You are not paid to be a hero. Work for a company whose product is already flying off the shelf!

Treat your time in college like a cash lottery windfall. You can take a few fliers (partying, sleeping in, bad diet), but respect it enough to position yourself properly for the decades ahead.

Hopefully this cheat sheet helps a bit.

Momentum Monday – Sneaky Good Market Action

Tuscany-Florence-Frankfurt-Denver-Phoenix

Long day.

I did catch up on email and looked at hundreds of charts to catch up on the markets.

Nothing gets in the way of Momentum Monday, so when I got home to Phoenix, Ivanhoff and I took our weekly tour of the markets. It looks pretty damn good if you own technology stocks. Click here to watch or listen.

Hope you enjoy.

As a reminder, Marketsmith (by Investor’s Business Daily) is now a sponsor of the weekly show. All the charts you have been seeing in the videos and will continue to see are from Marketsmith. They are offering my readers a three week trial for $19.95. Click this link if you would like to try it out.

After Life and Television’s Rebirth

Ellen and I have a long day ahead of us flying home from Florence to Phoenix.

I have some Netflix shows loaded. One that was loaded that we all watched together in Tuscany is ‘After Life’ which was written, produced and starred in by Rickey Gervais.

It was hysterical. He says it is his best work.

The actors were cast perfect. The simple story was excellent and tight.

The darkness was believable.

Set aside three hours and binge watch the six episodes.

Since this post is about creativity …have a listen to this podcast between Brian Koppelman and Marc Andreesen titled ‘For The Billions Of Creatives Out There‘.

Have a great Sunday…until Monday in Phoenix!

Shedding Some Apple and Crazy Investment Facts

Wouter snapped this photo of me writing this morning’s blog post from the fireplace at Casetta in Tuscany.

I love writing in Tuscany because of the time difference. I can have a morning espresso, go for a bike ride and sit down to write while America is asleep.

My bike ride this morning was just 20 miles but it had two good climbs with a bunch of 9 and 10 percent grades:

To the markets…

Apple closed this week at $185.

When I last checked in here on my oversized Apple position, the stock crossed $165 to the upside and I wrote ‘Apple Survived‘. A month earlier I was buying the Apple crash too early and it looked like Apple would never stop going down.

This week I sold some Apple. There are many other technology stocks I could have bought last November and December that have done better that Apple in the rally from the December bottom.

That is just the nature of picking stocks.

Now, it is time to take my oversized position back to normal.

The market strength in technology is pretty broad and I want to spread the profits from the Apple trade into some emerging leaders.

In Tuscany, the $VIX (measure of volatility) is always 4, but in the United States a $VIX reading of 12 is one of the reasons I feel like selling some Apple stock right now feels prudent. In December the $VIX exploded past 30 as Apple crashed to $150. This chart really captures how bad December got.

All in all, this week was a much better time to panic and sell some stock.

Finally, Michael Batnick has a great post up this week titled ‘The Twenty Craziest Investment Facts Ever‘. These three were my favorites:

1. Since 1916, the Dow has made new all-time highs less than 5% of all days, but over that time it’s up 25,568%.
95% of the time you are underwater. The less you look the better off you’ll be.

2. The Dow has compounded at less than 3 basis points a day since 1970. Since then its up more than 3,000%.
Compounding really is magic.

18. 96% of U.S. stocks generated a life-time return that match one-month treasury bills.
The reason why so many mutual funds fail to beat the market is because so many stocks fail to beat the market.

Investing is really easy and really hard.

Have a great weekend.

Here Comes The Next Wave of Angels and Founders

Before I get started…forgive me for my optimistic viewpoints below as this is my view as I started my ride into the hills of Tuscany this morning:

Ok onwards…

Tom Tunguz has a good post titled ‘Where Have All The Angels Gone‘. The gist:

Startup investing is no longer a cottage industry. It’s formalized, a standalone asset class deploying $100B a year. And the earliest stages are no exception.

As one of my partners told me recently, venture investing in the valley started with six men who would lunch on Thursdays and syndicate investing because none could write a big enough check to cover a round on their own. We’re a long way from a white linen tablecloth lunch at a San Francisco oyster bar.

And the implications for startups? It means that angels, while still an important part of the ecosystem, represent a small and shrinking share of investors who will lead your first round. You’re 20x more likely to raise your seed round from an institutional seed than an angel syndicate.

I am living this data out with my partners Tom and Gary as ‘institutional angel/seed investors’ ourselves at Social Leverage.

Good founders with good ideas, need great seed stage investing leads. As Fred Wilson says, a ‘diverse syndicate‘ can follow. In that spirit, all three of us have been independent angels to companies outside the fund scope that have strong teams with good lead seed investors, and we have also backed seed/angel funds of first time managers.

We started out as individual seed investors and our first fund of $6 million was too small to have us lead rounds. We never liked the ‘social proof’ era and party rounds that started in 2010 and mostly died in 2014. They are not good for the founder or investors. Now we lead rounds out of our third fund and look to help founders build ‘diverse syndicates’ as Fred describes.

We are thrilled about the timing as this explosion of activity in entrepreneurship and angel investing begins. Uber, Lyft, Slack, Pinterest, Airbnb, WeWork, Stripe, Robinhood are coming for public markets (conservatively $300 billion in next two years).

Last month at the Upfront summit I was talking to Erin Griffith (a reporter for the New York Times) on this subject.

She agreed it was a big trend and thought it could be a story worth working on. A few days back she dropped the story for The Times titled ‘‘We Know Them. We Trust Them.’ Uber and Airbnb Alumni Fuel Tech’s Next Wave‘. Erin quoted me for the story…

Decades later, early employees of PayPal, known as the PayPal Mafia, are more famous for their successes after leaving the company — many of which they collaborated on with one another — than for their initial breakthrough in digital payments. The group includes Elon Musk and Peter Thiel, as well as the creators of YouTube, Yelp and LinkedIn.

Silicon Valley is now anticipating new mafias connected to Uber, Airbnb and their brethren after the companies go public.

“It’s going to trigger a massive explosion in entrepreneurship,” said Howard Lindzon, an entrepreneur in Phoenix who invests in five to 10 venture capital funds a year. He said he particularly wanted to put money into funds with connections to the Uber and Airbnb networks.

The talent AND money coming out of these companies to solve both unique problems and opportunities created by this wave and hopefully bigger problems is staggering. This next wave of wealth is not going to sit back, buy Porsches, quietly vest and trade stocks or dollar cost average into ETF’s.

They will invest in more startups and take big risk. It will be glorious and it will be messy.

I tell my friends that angel investing is the new stock market.

It is definitely not for everyone, but it should be open to everyone.

It’s easy to be bearish. It’s even easy to sound smart being bearish.

Loonie politicians, cheating banks, mean Facebook, peak California, horrible Verizon, expensive healthcare, student debt etc…

These are distractions to everyone but great founders and great investors.

It’s hard to be nice, ignore, the headlines, hit the streets, make your calls, build your network, hustle, hop on planes, and say no a lot, but if you do, you and your kids will find endless opportunities.