The Freedom to Change My Mind

Ellen and I are with the kids in Sedona for a few days hiking as they both have spring break. It is a beautiful place…

I am so lucky I get to invest for a living.

One of the biggest differences of my life as an early stage private investor and an active public market investor is the ability to change my mind.

When we (Social Leverage) wire money into a private company we can’t unwire. We are in. It is definitely not for everyone.

I might not love seed investing as much as I do if I could not exercise my right to change my mind so often as a public markets investor.

As just one example…I have flip flopped on Twitter 50 times since it came public. Luckily I have been long and vocal for this great run of late


Yesterday I sent the daily email ‘Passive My Ass‘ and left out a very important word.

What I meant to say was…bull markets do NOT end because of time. There are no time limits on bull markets.

Too many people are hung up on how long a good market can last.

Take a look at this bull market compared to others.

Following price will make you more profits than following headlines and opinions.

By the way…if you have Instagram…the Stocktwits account is light, fun and informative.

Have a great day.

Passive My Ass!

I read today that Vanguard now owns seven percent of the S&P 500.

No doubt it is a huge chunk, but I thought it would be higher by now.

One thing that may keep Vanguard at bay a few more years is that active managers are actually doing a better job this year and last.

Your problem and mine is obviously predicting when that might happen.

On this blog though, I take any good data on active management as a positive because I believe EVERY person should be active and there is no such thing as passive investing.

I have put my money where my mouth is the last 12 years on this blog offering up ideas and lists to help people trounce the market.

Last year I started the very inexpensive monthly ‘Peloton‘ ($79/year) to outline a favorite single idea per month of that could trounce the markets. In just the first seven months each ideas has beat the S&P and five of the ideas have been massive winners ranging from 800 percent down to 30 percent.

In 2013 I wrote ‘Stock PIcking – Just Do It!’

In 2017 I explained once again ‘Why I Invest in Stocks

Bull markets do NOT end because of time

I hope millions more millennials can get a taste of this bull market with the fantastic products and networks at their fingertips to learn the power of saving, investing and compounding.

Catching a Public Markets Trend – Pay Attention to the Venture Capitalists

One of the biggest benefits I get from reading and talking to Venture Capitalists is applying their need to live in the future to the stock markets.

Fred Wilson had a great post up yesterday about venture investing and timing. The gist:

My point is that technologies present themselves as interesting investment opportunities long before they go mainstream and figuring out when they are going to go mainstream is a lot about looking for the right packaging.

I would argue that a lot of the time, existing public companies have the right packaging. It may not even be the right actual product, but the packaging is that they are public and just act as a proxy for large hedge funds and money managers to invest in them as a proxy for the technology trend itself.

Some of the best hedge fund investors have been doing this for years. Read this piece on Philippe Laffont

Coatue Management has been ahead of the A.I. revolution, owning large holdings in the industry’s most innovative early adopters like chipmaker Nvidia, search giant Google (Alphabet) and Equinix. Laffont wants over 20% of Coatue’s portfolio weighted to A.I. companies and A.I.-related infrastructure such as data centers and semiconductors. Contrarian ways of playing this A.I. revolution come from companies like Intel, Twitter and AMD who’ve all recently emerged from long bouts of market underperformace.

Since the early 2000s Intel has “been a dog of a stock” with it shares barely budging, but Laffont believes a subtle transformation is taking hold. Some 50% of the chipmaker’s revenues come from data center businesses and soon just a minority of its earnings will be derived from the personal computer market it once dominated. Though Intel’s business mix has changed for the better, its stock is only just beginning to get credit for the transformation.

A.I. may also solve some of Twitter’s biggest problems since it went public in 2012. While Facebook has surged to an over $500 billion market capitlization in the wake of its IPO, Twitter has stagnated at a valuation below $25 billion because the randomness of the Twitter stream has limited its appeal. Laffont believes co-founder and CEO Jack Dorsey is beginning to harness A.I. at the social network to curate relevant content for users. That may solve the randomness issues at Twitter, which may have undermined the broader adoption by users and advertisers.

“This is a multiyear story with a very interesting founder who completely views A.I in the way we do,” Laffont said. “In five or ten years from now could Twitter be a $100 billion or $200 billion company? Absolutely.” AMD, another industry laggard, may fit companies’ interest in owning their semiconductor technology, Laffont added. A crucial piece to his bullishness on A.I. comes from infrastructure that has made algorithm-based insights valuable.

“How can you run an algorithm if you don’t have the data?” Laffont noted of its adoption curve. Now, data centers, archives of data, rising computational power and better memory all mean companies can actually put A.I to good use. Laffont expects data centers to be one of the great growth businesses in technology, citing as evidence Facebook’s recently disclosed plans to spend more than half of its capital expenditures on data centers.

In Coatue’s most recent quarterly filings it owns Twitter shares worth well over $500 million. Coatue didn’t disclose holdings in AMD or Intel as of the year-end 2017 filing. A.I. giants Nvidia and Alphabet, and rising tech platforms Alibaba, Amazon, Apple, Facebook, and Netflix are among top holdings at $17 billion in assets Coatue, filings show. It is also a top holder of Broadcom.

Philipe makes it sound easy. That’s what makes him so good at his job.

Back to Fred’s piece…the current packaging problem in the venture capital industry is the blockchain and crypto markets. I read that 46 percent of the ICO’s launched in 2017 have already failed. Per Fred:

Blockchain and crypto is in a similar state. Today, other than buying and selling crypto tokens, blockchain applications are clunky and hard to use. Centralized applications are way better than their decentralized cousins. When entrepreneurs figure out how to package up blockchain applications so that they are fun and easy to use, I think we will see them take off. My guess is that it will happen first in gaming and collectibles.

My point is that it is one thing to develop a technology that is superior to the current offerings, but entirely another thing to make it usable by most people. The first part is, in some ways, the more important thing (like Satoshi’s white paper) but the second thing is often where the investment leverage happens.

This problem will get solved but there is also a lot of money positioning itself today (Bitcoin, Ethereum, Nvidia) to ride the trend on the back of the early winners that Fred and other venture capitalists are paid to spot.


Before I get started ….I have signed up for Hulu again. I will pay to watch Jeff Daniels and he does not disappoint in The Looming Tower. Sadly, Hulu still insists on time releasing shows because they suck.

Next up…It’s never been a better time to be an Economist and have a Twitter account. I don’t have much to say about the tariff fever sweeping the White House, but it seems Fat Nixon does have an old tweet that contradicts everything. This one from 2011 is a beauty:

This week should be volatile in the markets because the Italian elections happen today and the Italians seem hell bent on electing their own Trump. This John Oliver piece from last week does a great job of handicapping the lunacy.

Finally…remember Blackberry?

I had almost forgotten about them, but the stock is perking again. Geeks have been buzzing about their QNX operating system. It was a Blackberry acquisition in 2010.

Here is the chart that caught my eye.

Have a great Sunday.

More Proud Dad Twitter Please

Yesterday Twitter asked the public to measure how toxic it is.

(smacks forehead for the millionth time).

The company knows the answer, what to do to show they know and whose heads to cut, but still acts like we do not. They have an unfixable problem at this point but will never sound sincere asking the question in 2018.

Luckily, I live on Venture and silly Twitter and avoid the hateful conversations.

I saw this Tweet the other day from Jim Oshaugnessy that made me smile:

Jim points out a great article about Patrick OShaugnassey that we should read.

Patrick is Jim’s 32 year old son who has recently taken over as CEO of Jim’s $6 billion asset management firm.

I chimed in to the conversation with ‘Proud dad Twitter is cool’.

I have not met Patrick, but recently met Jim at Josh Brown’s office party in New York.

I was out of costume wearing a three piece suit and not my regular jeans and t-shirt, so when I walked up to Jim, I am sure he thought we would have a regular chat about the markets and strategy and money. Josh introduced us and Jim mentioned that he knew who I was and followed me on Twitter.

It made no difference, as I was in that mood that was going to say obscure things off subject to try and get Jim to laugh and or shake his head and walk away from me. Jim stood in there and laughed at all my shtick. Most of my questions were about his family. Turns out OShaugnessy is an Irish name!

Anyways, Jim is a hell of a cool dad and proud to have his son as CEO.

Patrick started as an intern at 22 years of age and obviously got the bug and loves the markets. I have not met him, but have listened to his fast growing podcast that are inspired by his curiousity and passion for early stage investing and of course the markets.

His ‘invest with the best podcast‘ is something I have linked to before. I highly recommend you spend some time going through the archives.

I look forward to hanging with Jim again one day and eventually meeting Patrick.

There is No Such Thing as an Overnight Success…The Story of Ring

Before I get into it…yesterday Spotify ($SPOT) filed for an IPO. I love Spotify. The product was kind of overnight success but for the founders and the Company, the road to this IPO was long and brutal. It was fun to see the founders and employees celebrating the company and the IPO on Twitter.

It was especially nice to see founding team member Magnus Hult use $SPOT for Spotify because at Stocktwits, Soren and I created/invented the $ (Cashtag) for stock talk back in 2007. The $SPOT stream was created years ago on Stocktwits knowing the IPO would happen one day (now over 4,300 subscribers and likely 20,000 by IPO day).

Congratulations team $SPOT.

Now to the ‘overnight success’ story of this blog post – RING and Jamie Siminoff.

A couple of days ago Amazon bought Ring. I had many friends that had invested early and along the way including Joanne Wilson, to Adam at True Ventures, Latif at Virgin and Greg at Upfront. I just saw each of them in Los Angeles last month at Upfront and we were talking about how fast the company was growing. One of Social Leverage’s portfolio companies Kustomer helps them manage the customer experience.

The backstory to RING is incredible. Fred Wilson has a must read blog post that gives it the gory details and context it needs.

Here is Jamie with an ‘Open Letter to Shark Tank‘ back in 2015 that thanks them even though the sharks did not invest.

Now Amazon, the poster child Company of the internet era for ‘there is no such thing as an overnight success’ has acquired them. This is a great acquisition for Amazon and to break it down I thought Semil did a great job with this post…so read it.

As always…long Amazon.

Catching up On The Markets – What Have You Done for Me Lately!

I am heading home to Phoenix today from Palm Beach. I was meeting with some of our fund LP’s and not really following the markets. I am excited to have Max and Rachel coming home for Spring Break

Catching up early this morning on what’s working so I thought I would share some interesting charts and articles.

Last week I shared the spring cleaning I was doing.

The four major bullish themes so far this year are shaping up to be: enterprise software, cybersecurity, regional banks, Brazil.

In a tour around the world there are NO countries in a bear market.

The TOP NINE country ETF’s are ALL emerging markets.

The BIGGEST technology sector ETF is now back at all-time highs. Hopefully we hold above these levels as it crosses 1999 highs and momentum investors stay with it. These levels are interesting.

Ivanhoff points out that despite the price wars in brokerage commissions and the new entrants like Robinhood and Coinbase, the ‘boomer’ brokerages are hitting all time highs again. (I own Schwab)

Ivanhoff also points out the gene editing stocks that are acting well.

While I have not talked much about cryptocurrency much of late on this blog (I remain long some Ethereum and Bitcoin), the blockchain remains all the rage amongst venture capitalists and large corporations. My friend Mike Dudas pointed out that Rakuten – one of the largest global consumer technology companies – is moving their $9B points system onto a blockchain, rebranding them as Rakuten Coins.

Finally…a big argument in my streams was about all the buybacks that were going to come from the corporate tax breaks.

This week, I reread a great piece on stock buybacks with some great charts from Urban. The gist…stocks with the most buybacks have heavily underperformed the S&P. There’s a lot more to equity performance than ‘financial engineering.

Hope this helps keep you focused on the areas that matter right now in the markets.

Pattern Recognition

Before I start…One of the funniest comedians working right now is Sebastian Maniscola. This clip will make your day:


The biggest argument when it comes to public market investing is the usefulness of charts.

I use them for pattern recognition. For example, these large cap stocks closed at all-time highs yesterday.

For some it may be the first day, for others – Like Amazon, Netflix, Mastercard and Salesforce it’s been a daily, monthly and yearly occurrence.

I like to shop for all my stocks on the different all-time high lists. Looking at thousands of these charts of stocks a month you start to see patterns that go beyond the names.

The argument over pattern recognition (and chart reading) happens in the early stage investing world as well.

I don’t think it works well. It is almost the opposite of my public market investing style when it comes to pattern recognition.

This post on the ‘Case Against Pattern Recognition‘ sums it up really well (at least for me).

The Market Does Not Care

The market did not care about the murder and sadness last week in Florida.

While the parents and teens were mourning, the markets were ripping higher.

This free blog went off topic last week to talk about my own feelings and I should not have been surprised that a few people chimed in with their disappointment at not getting a free idea and told me they would unsubscribe.

This week I am in Palm Beach working.

I think the markets did surprise most last week by continuing a march higher.

One stock that continues to impress is Netflix which is now just 20 percent less in market capitalization than Disney (founded in 1923). Disney really needs to launch their streaming movie and content channel yesterday.

Amazon hit $1,500 and is now expected to challenge UPS and Fedex.

An 8-80 candidate Domino’s ($DPZ) hit more all time highs as well. I picked the wrong food company for my list in Starbucks (which I have recently removed).

Enterprise stocks which I mentioned on this blog last week, had another great week.

While Snapchat may be doomed, they did team up with two of my favorite companies and holdings Nike and my Shopify to launch an e-commerce store that sold out really quickly.

Goldman Sachs is back within a few percent of all time highs but JP Morgan is already there. That crash/correction of a few weeks ago was just a rash.

JC says that Emerging Markets are leading the way here so it may be worth having a read and seeing if anything interests you.

Happy Monday and have a great week.

I Love You …I Hate You…Snapchat Twitter and Facebook

This Matt Levine post about Snapchat made me laugh today:

I don’t really understand Snapchat. I sort of understood it for five minutes back when Snap Inc. went public and its prospectus explained how to use it — turns out, the way I learn best is by having things explained to me by securities lawyers — but apparently since then the product has been revamped and now nothing is where it used to be. But my limited understanding is that the basic point of Snapchat is that you open up the app and somehow a Kardashian is there, and then you consume Kardashian content in some way, and your life is, one assumes, better for it. Now however the Kardashians might be leaving


Now Kylie does not like Snapchat anymore and her Tweet might have toughed off a wave of selling that has so far wiped $1.3 billon off Snapchat’s valuation.

It’s not just Snapchat…

This piece from Om chronicles how Jonah Peretti, the founder of Buzzfeed, used to love Fabeook. Now…not so much:

OMG! Facebook is amazing!

On Facebook media is just another way to express your feelings and more importantly a way to do something with your friends. On Facebook you share things that define you. Think of your social content not as information you want to get into people’s heads, but as an excuse for people to react. The content matters, but [what matters] more importantly the ability to share a laugh with friend. Techcrunch 2011

Content is for connections, LOL

Facebook is much more tied to broad human emotion and things that everyone can relate to, and things that connect people with the people in their lives. It’s not so much about the information in the content; it’s about how that content allows you to connect with other people in your life. Fortune 2013

Let’s go fishing for eyeballs in the stream.

Social has really become the starting point — the Facebook newsfeed, the Twitter stream — where most people are finding their news and information now. Fortune 2013

Social media has helped us build a unique brand.

The emergence of social media initiated the convergence of content and communication. Content wasn’t just being consumed for informational value; it became a way for people to connect with other people in their lives. This opened up the possibility of building a more intimate connection with audiences. December 2016.

Pay me, waaah!

Google and Facebook are taking the vast majority of ad revenue, and paying content creators far too little for the

value they deliver to users. This puts high-quality creators at a financial disadvantage, and favors publishers of cheap media December 2017

Oh damn, I got played by Zuck!

“I don’t think they fully understand the perspective of media or content or other industries. Or, on occasion, they interact with people at media companies and they don’t think they’re that smart.” Feb 2018

The End.

I think Facebook will be fine.

But, after this week, I think that Twitter stood out as the most important so far in 2018