Momentum Monday – Live From Amsterdam

Sunday was very wet here in Amsterdam. Ellen and I did not get a chance to do much.

The streets were quiet.

The rain finally stopped early eve and I grabbed this photo on the way to my Secfi board dinner…

While it poured rain I called up Ivanhoff from the room and today’s Momentum Monday was born. As usual, there are 5-10 new momentum ideas discussed as well as a tour around the markets. Click here to watch or listen.

Our momentum list of 50 stocks (marketwisdom.com) is full of a lot of 1-10 billion market cap names right now that most households have never heard of.

I 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.

My Week in Pictures

It has been a whirlwind week of travel, work and good times as I went from Phoenix to San Diego to LA to San Diego to SF and Palo Alto back to San Diego and now to Amsterdam (via London).

I am not much of a photo person but looking back on the week the photos captured it best.

First it was the kids home for Spring break in Coronado. I got to see Max for the first time in a while…

I settled back into my home office in Coronado as a base for the next 3 months and it feels so good…

The weather in San Diego has been wet and cold all winter and spring, but Coronado is a spectacular place for a beach run on any day…

I had some last minute meetings in Los Angeles Monday and Tuesday and asked Fred Wilson if he happened to be around for a round of golf at Riviera. As luck would have it he did and he also was nice enough to invite my son Max and his pal Jackson Moss join so off we went.

Monday night I sent the kids to see ‘Free Solo’ and I went off to the Comedy Store for open mic night with Claude Shires. Claude is a long time comedian and comedy producer and he showed me all the back doors and comic hiding places. Claude worked the door for 14 years, does stand up, produces comedy specials for Amazon and is also the founder of ‘Laugh Lounge‘ – a Netflix like streaming comedy app. Here we are next to his own photo and signature on the Comedy Store wall…

Tuesday afternoon was golf. I love the tee box on the first hole which is a tease because it is the easiest hole on the course (I made a par)…

Here is Fred, Max and Jackson walking off the amazing par 4, 10th tee after perfect drives. Jackson (on the right) drove the green (he is just 17 years old)…

On the par 3 16th hole, Fred made a comment about my ‘janky’ swing’ setting up perfectly for a hole in one. I proceeded to hit an absolute pure 7 iron that cleared the front bunker by three feet and settled behind the hole by 2 inches. That would have been my first hole in one. I did grind out an 82 with a 38 on the back.

On the walk up 18, I grabbed a selfie with Fred…

On Wednesday, I hung out at home with the kids and our dog Lindzee. Rachel put together my new Tinder profile page…

Thursday and Friday were San Fran and the Etoro event I wrote about yesterday.

I came back through San Diego Friday to pick up Ellen and grab a quick run on Coronado beach. It was a perfect chilly afternoon…

Ellen and I are headed to Europe tonight for a week of work and fun…Amsterdam and Tuscany…ambien secured…

Life is good.

Etoro – Finally In The USA

Way back in 2010, Social Leverage invested in Etoro. Here is what I wrote in early 2010:

In Israel I met with Yoni Assia, the founder and CEO of eToro. Since meeting him, I have seen the Forex light. This company seems like an unstoppable force of nature. If you don’t believe me, log on, open an account in a few seconds, and place your bets on your parents Visa card (not you Max!).

In 5 years, your 20-year-old kid will be quoting the Yuan, Dollar, Yen and Euro (maybe) in the same way they talk about social gaming and photo sharing. They will be trading during class. There will be a million Jim Cramer’s. Though Jim Cramer seems tired and old to us ‘professionals’, the circus has just begun.

If you add Bitcoin which Yoni was actually talking about in his pitch to me back in 2010 (which obviously flew right over my head), all of the above has come true.

I have been pestering the founder Yoni Assia to launch in America ever since.

Today they did. The gist:

The social investing and trading platform eToro announced that it will finally be launching its platform in the U.S. The platform, which already operates in more than 140 countries, will be available in 30 states and two territories with plans to expand elsewhere in the U.S. after receiving the necessary regulatory sign-offs.

I had lunch with Yoni today catching up on the markets and talking crypto. Yoni continues to be very bullish on Bitcoin and the blockchain.

Tonight at their launch event I did a fireside chat with Anthony Pompliano and we had a blast. I’ve known ‘Pomp’ for a while and been on his podcast (click here to listen), but never met in person…

Here I am with Yoni (left), Pomp and Tal (the amazing head of product):

Pre-Wealth is Real…A Side Effect of Golden Handcuffs

As even the biggest and fastest growing Companies stay private longer, all kinds of new financial issues, problems and opportunities have been created.

Fred Wilson has an excellent post up on the subject of ‘Golden Handcuffs‘ that gets into the biggest problem which is a ‘pre-wealth’ problem as much as a policy problem for governments and companies. These three points stick out:

4/ I would like to see a market emerge for financing of option exercises. There are companies actively working on this. I believe that departing employees ought to be able to borrow against their valuable equity at no recourse to them, so that they can exercise and pay the taxes. This would solve part of the problem, where employees can’t leave because they can’t afford the taxes (and, in some cases, the exercise price).

5/ I do not believe that the option programs are the problem here. I do think the taxation at exercise is bad public policy and I wish the US government would move taxation to a liquidity event, but I also think we can use the capital markets to address this problem.

6/ I think in the vast majority of cases, the golden handcuff problem is a result of poor management and a leadership team that is unwilling to address this issue head on and make unpopular and difficult decisions about people.

Last year we made a seed investment in Secfi whose founder, Wouter, was attacking all of the above. It is a complicated problem with no easy solution. I can’t delve into all the intricacies so as not to reveal the roadmap of the company. Here is what I wrote at the time.

Today, Secfi is growing really fast. I will be there next week for a board meeting and am really excited to continue to help plot strategy.

We Have Never Been More Comfortable and Less Creative

I cringe at ‘business’ headlines all day.

Last week this beauty hit the tape:

‘PICKS’ ?????

Goldman and JP Morgan are the only two banks left that can lead an IPO like Peloton.

Here is the conversation at the Peloton (any upcoming company IPO) Board Meeting:

CEO – It’s time to go public

Board Member – Ok call Goldman

CEO – Yes I knew that …they lent us money against our stock months ago…meeting adjourned.

Peloton’s fate of choosing Goldman and JP Morgan was chosen a long time ago. The media is lazy and barfs out headlines like the one above all day.

The public is left to decide if Peloton is Goldman’s next Blue Apron (yes Goldman was ‘picked’ to lead that too)…

At this point, old Wall Street business is so easy for Goldman that they have decided casual attire (likely just $LULU) is acceptable.

The CEO has a problem with his employees coming to see him DJ at Silicon Valley parties in suits.

I can’t wait for the day when companies like Carta, Robinhood (biased investor) and Secfi (biased investor) and Click IPO can work their way into the process along with direct listings, but we seem as far away from that as ever.

Where Were You On March 9, 2009

I love having a blog.

It gives me a timeline into how I was thinking.

By March 2009, I was exhausted by the markets and I hardly owned any stocks. On March 6, I titled my post ‘All I Need Is A Gun and A Working ATM Card‘. It was raw, but mostly dead on as to how stock market investors felt.

It felt like a bottom to me, but as I wrote that day:

I owned International Game Technology and took a large loss last year in the 20’s. It’s 8.

I have traded Federal Express the last year as it was poleaxed, but gave up a few months ago in the 60’s. It’s now under $40 and the government is threatening to unionize.

I was a buyer of American Express at $28 and every few points down and took a loss at $20. It’s $10.

The bottom was to come just a few days later on March 9, 2009. I made so many mistakes leading up and since March 2009, but at least I was buying stocks that day (from the beach). Holding would have been the real move.

There is a Seinfled clip called ‘The Car Reservation‘ which just pops into my head every time I think about the crash, the bottom in 2008/2009 and my failure to hold the Netflix, Amazon and Salesforce I was buying March 9th.

Momentum Monday…Biotech Rush

On March 1, 2000 (19 years ago) Palm Pilot went public and was valued at $53 billion. The market peaked that week…

I loved my Palm Pilot!

Today, Apple has FIVE Palm Pilots in cash mostly profits from their ‘smart’ Palm Pilot.

While the iPhone may be the next Palm Pilot, good luck betting against machines and technology.

It is Monday, which means Ivanhoff and I are talking Momentum.

This weeks episode covers a lot of ground and fresh ideas. Click here to watch or listen.

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.

Where Software Eats The World Lives…

A few weeks back I was in Silicon Valley and went by A16z offices for a quick hello with Chris Dixon. We chatted about angel investing, fintech and crypto for a bit. The valley is a small and pretty peaceful place but the offices of A16z were jam packed. I did not really think that much more about it until Ellen sent me this New Yorker article from 2015 about Marc Andreesen and his firm. It is a GREAT read on Marc, the firm and Venture Capital itself.

I loved how the article got started:

Marc Andreessen, the firm’s co-founder, fixed his gaze on Doshi as he disinfected his germless hands with a sanitizing wipe. Andreessen is forty-three years old and six feet five inches tall, with a cranium so large, bald, and oblong that you can’t help but think of words like “jumbo” and “Grade A.” Two decades ago, he was the animating spirit of Netscape, the Web browser that launched the Internet boom. In many respects, he is the quintessential Silicon Valley venture capitalist: an imposing, fortyish, long-celebrated white man. (Forbes’s Midas List of the top hundred V.C.s includes just five women.) But, whereas most V.C.s maintain a casual-Friday vibe, Andreessen seethes with beliefs. He’s an evangelist for the church of technology, afire to reorder life as we know it. He believes that tech products will soon erase such primitive behaviors as paying cash (Bitcoin), eating cooked food (Soylent), and enduring a world unimproved by virtual reality (Oculus VR). He believes that Silicon Valley is mission control for mankind, which is therefore on a steep trajectory toward perfection. And when he so argues, fire-hosing you with syllogisms and data points and pre-refuting every potential rebuttal, he’s very persuasive.

Doshi, lean and quizzical in a maroon T-shirt and jeans, began his pitch by declaring, “Most of the world will make decisions by either guessing or using their gut. They will be either lucky or wrong.” Far better to apply Mixpanel’s analytics, which enable mobile-based companies to know exactly who their customers are and how they use their apps. Doshi rapidly escalated to rhetoric—“We want to do data science for every single market in the world”—that would sound bumptious anywhere but on Sand Hill Road, where the young guy in jeans is obligated to astound the middle-aged guys in cashmere V-necks. “Mediocre V.C.s want to see that your company has traction,” Doshi told me. “The top V.C.s want you to show them you can invent the future.”

If you have a crackerjack idea, one of your stops on Sand Hill Road will be Andreessen Horowitz, often referred to by its alphanumeric URL, a16z. (There are sixteen letters between the “a” in Andreessen and the “z” in Horowitz.) Since the firm was launched, six years ago, it has vaulted into the top echelon of venture concerns. Competing V.C.s, disturbed by its speed and its power and the lavish prices it paid for deals, gave it another nickname: AHo. Each year, three thousand startups approach a16z with a “warm intro” from someone the firm knows. A16z invests in fifteen. Of those, at least ten will fold, three or four will prosper, and one might soar to be worth more than a billion dollars—a “unicorn,” in the local parlance. With great luck, once a decade that unicorn will become a Google or a Facebook and return the V.C.’s money a thousand times over: the storied 1,000x. There are eight hundred and three V.C. firms in the U.S., and last year they spent forty-eight billion dollars chasing that dream.

This paragraph about successful venture capitalists was dead on:

Venture capitalists with a knack for the 1,000x know that true innovations don’t follow a pattern. The future is always stranger than we expect: mobile phones and the Internet, not flying cars. Doug Leone, one of the leaders of Sequoia Capital, by consensus Silicon Valley’s top firm, said, “The biggest outcomes come when you break your previous mental model. The black-swan events of the past forty years—the PC, the router, the Internet, the iPhone—nobody had theses around those. So what’s useful to us is having Dumbo ears.”* A great V.C. keeps his ears pricked for a disturbing story with the elements of a fairy tale. This tale begins in another age (which happens to be the future), and features a lowborn hero who knows a secret from his hardscrabble experience. The hero encounters royalty (the V.C.s) who test him, and he harnesses magic (technology) to prevail. The tale ends in heaping treasure chests for all, borne home on the unicorn’s back.

I am so lucky to be able to invest for a living. Don’t let your kids become lawyers.

Have a great Sunday.

Killer Vees…

I can’t believe it is already March.

It seems like just yesterday (December) we were in a bear market and we would all go down the tubes together and forever.

But…the S&P 500 turned on a dime after Christmas and has rocketed 18% higher in only 44 days.

Michael Batnick had a great post titled ‘Keller Vees‘ that puts this ‘V’ shaped rally into historical perspective.

This is the ninth time stocks have experienced a killer vee bottom since 1970. I refer to them as killer vees because they suck for everyone. It makes buy and hold investors sweat and it makes mincemeat of most tactical investors.

Months like December make me appreciate seed investing. Before anyone could flinch, the markets got back to ‘normal’.

I hope everyone has a killer ‘W’eekend.