Good Things Happening to Good People

I loved this tweet from Gumroad founder Sahil Lavingia that he surfaced from 5 years ago – when he was struggling to build his company:

It really is much easier to write about failure once you are ‘successful’.
also really enjoyed this piece titled ‘Underrated‘ by Stephen Curry.

I love when good things happen to good people.

Yesterday Max told me that one of his best pals and mine Jackson Moss committed to San Diego State’s golf team. It is a great golf school – Xander Schaufelle is a famous recent golf team alumni. I have played a hundred plus rounds with Jackson the last 10 years at our home course at San Diego Country Club. I gave him a beer last year and tried to sign him to a contract and he signed it ‘Fat Nixon’ (ok I made that up). I am so proud of Jackson and he is already a legend to me.

I saw this great Twitter post from Jeff Morris, now the head of product and revenue at Tinder, about missed chances:

As Stephen wrote in is piece about the pep talk his parents gave to him in high school:

NO ONE gets to write your story but you. Not some scouts. Not some tournament. Not these other kids, who might do this better or that better. And not EVER your last name. None of those people, and none of those things, gets to be the author of your story. Just you. So think real hard about it. Take your time. And then you go and write what you want to write. But just know that this story — it’s yours.

Momentum Monday…Some Stocks are Perking

I hope everyone had a great weekend.

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.

Here is this weeks episode of Momentum Monday:

This is an interesting moment in the markets. I figured I would share a couple extra posts that I thought did a good job of describing the current tape.

I really like this from ‘The Fat Pitch‘:

The S&P has now gained 13% since Christmas Eve, while the Nasdaq is up 16%. After the recent plunge, it would be normal for the indices to give up most of their gains and retest the lows again. That’s been a consistent pattern over the past 40 years. But when a plunge is followed by exceptional breadth like we have witnessed in the past month, a low retest has been unlikely.

Rapid plunges when the economy is still expanding – like now – are typically followed by strong forward returns. Moreover, it is encouraging that emerging markets, which have been the hardest hit by the threat of a trade war, reached a 4 month high this week. Those markets originally bottomed in October and retested those lows in December (a possible basing pattern).

It’s certainly possible that some of the rapid gains since Christmas will be given back before SPX moves materially higher. A period of consolidation and retrenchment in the weeks ahead would not be surprising. The trade war isn’t the only thing driving the market, but it has clearly been important and further deescalation will likely drive SPX to the top of its October-December range, just as reescalation could plunge it back towards its Christmas low.

The Northman Trader had an excellent market update titled ‘The Neutral Zone‘.

I hope you enjoy.

Have a great week.

Thank Goodness Theranos Never Threw a Music Festival…and Resistance Looms

Ellen and I watched Fyre Festival on Netflix.

The documentary was good, made possible by all the footage Billy MacFarland wanted taken.

If you have not been part of a fraud or worked alongside a sociopath you are lucky. Odds are you will.

Watching the movie might help you spot a fraud. Sociopaths are much harder to spot.

To the markets…

The S&P has moved right into a chuck of meaty resistance and the 200 day moving average is directly overhead:

The semiconductor index was wrecked in the fall, but last Thursday had their best day in 10 years. The index rose again Friday, despite Intel weakness. Despite the gains you can clearly see the technical road ahead is thick with underwater sellers:

I think Tesla will be the big earnings story of the week on Wednesday and it might get wild. I am only concerned about the big picture here which would mean a close below $240 (oh oh) or a breakout above $400 (profitability seems sustainable) and I doubt this specific earnings is the one that gets us either:

For laughs…I thought this Bill Maher ‘new rule’ of #adulting was really funny with a lot of truthiness:

Bill Ackman may think he’s cool and knows how to use Twitter, but he walked right into this one and I loved it:

And finally the economy…the economy has been great to me since forever. I have no complaints. I know that this boom in startups will end, but I am not paid to time it. I am paid to find great founders and teams with great products and invest. I encourage those great founders and teams to find customers and not think too hard about the ‘macro’. I encourage them to act like the financing we are able to provide might just be the last.

The economy on my Twitter feed (since the government shutdown) is filled with stories of people that don’t have one paycheck of wiggle room.

The economy that worries me most is the global one that counts private equity as one of the world’s largest employers:

PE firms are slashers of jobs, not growers…please keep that in mind.

The Federal government is like one giant Fyre Festival when it comes to talking to the population about the economy.

Billionaires Are Not Happier Than Millionaires… and Enough!

With a long and frigid east coast trip behind me, it is good to be back home in Phoenix with Ellen. I am going to get back on the bike today and Max is going to come visit from University for the night. I am looking forward to seeing a lot of friends at my favorite conference (outside my own of course) at Upfront in Los Angeles.

I gathered some great content to share today. The theme today is success, luck, money, wealth and happiness.

In the interview coming up below on NPR with professor Galloway, he mentions that billionaires are not happier than millionaires.

Phew!

I am not sure I can be much happier than I am today at 53.

I know how fragile my happiness is of course because of accidents and health.

We are all one text away from chaos.

Watch the whole interview right here.

Bloomberg has a story on how ‘The Super Young Rich are Getting Older and Multiplying‘. It is a good read.

This post from Sam Altman on ‘How To Be Successful‘ is excellent. Forward it to your kids and make sure you read it.

You can follow all Sam’s rules, but luck can still matter. This post from Marc Andreessen in 2007 titled ‘The Four Kinds of Luck‘ is a great read on luck.

Finally, Morgan Housel talks about efficiency in this awesome post titled ‘The Biggest Returns‘.

As Ken Griffin spends $1 billion on homes around the US, this snippet from Morgan’s post stands out:

Vanguard founder Jack Bogle, who passed away last week, began his book Enough with the following paragraphs. From an investor who improved the financial wellbeing of tens of millions of people through cost efficiency, not outperformance, this is invaluable:

At a party given by a billionaire on Shelter Island, Kurt Vonnegut informs his pal, Joseph Heller, that their host, a hedge fund manager, had made more money in a single day than Heller had earned from his wildly popular novel Catch-22 over its whole history. Heller responds,“Yes, but I have something he will never have . . . enough.”

Have a great Saturday.

Kustomer and The People First Enterprise

Yesterday, Kustomer announced a $35 million Series ‘C’ round of capital to go with their 500 percent year over year growth.


We are proud angel investors at Social Leverage (from 2016) and continued to invest in this round. I explained how excited we were (and the reasoning) back in 2017.

Customers using Kustomer software include Ring, Rent the Runway, Glossier, Away Travel, UNTUCKit and Sweetgreen.

Tomasz at Redpoint Ventures summed up the value proposition and mission well with this:

There’s a category of businesses who deeply value the relationship with their customer. They don’t call their customer support agents by that name, but by other words: ambassador, relationship manager, guide, friend, and many other words that better capture the idea that commerce happens between two people. Not one person and a company.

It’s those companies that we strive to serve at Kustomer. By unifying all the information about a customer in one place and providing a platform to act faster, with more knowledge, Kustomer empowers those businesses to fulfill their brand promises.

That segment of companies who value support and customer engagement are underserved by existing platforms and they constitute a very large and growing segment.

I talk about enterprise software public companies a lot on this blog because I have owned many of them for years. The SAAS ecosystem is exploding. Tomasz has the perfect explanation with this chart. Getting to 1% of Salesforce revenue makes your company a Unicorn.

The simplest way for hedge funds and public market investors to be long this customer support category has been Zendesk.

That won’t change tomorrow, but I am sure it will someday soon.

Rolling Stone Interview With Twitter CEO Jack Dorsey

I don’t own Twitter stock right now.

Jack Dorsey – their CEO – is out on the interview trail. I think this interview with the Rolling Stone was a good one. I learned a lot about how Jack is thinking and about the product itself.

How did it all connect to Twitter for you?

One of the joys of Twitter, actually, unlike most of my programming, was that I wrote a line of code, and it made Biz [Stone’s] phone buzz. It was physical. That was my one joy within Twitter in the first two weeks. I was programming something that made an object move. I would tweet something, and Biz’s pocket would buzz. Then he would be thinking of me. That made it really tangible. That’s when I was really hooked on this balance between the physical and the software world. Programming is an amazing field. I like painting, I like drawing and I like programming, because those are the arts where you literally start from absolutely nothing and suddenly something can emerge.

What did you initially respond to in punk?

The fact that you would have these bands of three people get up onstage who were absolutely terrible. They would get booed. People would throw things at them. They would keep playing. Then they came back in two weeks, and they were a little bit better. Then they came back in two weeks, and they were much better. Then they came back in four weeks, and they were amazing.

I’m fascinated by this concept of working in public and allowing people to see you get better and better as time goes on. To me, it’s what the world needs. To me, that’s one of the greatest benefits Twitter provides. Elon does it so well. He works in public. He thinks in public. He ideates in public. I got that from punk. Hip-hop has a little bit of it as well. Kanye, Life of Pablo, was that in the streaming age. “I’m gonna fix ‘Wolves.’ ”

How do you define your spirituality?

Not to any particular religion. Anything that builds self-awareness feels spiritual to me. I guess I feel a sense of spirituality when I feel a connection to, like, global consciousness. What I love about walking around New York is it just feels so electric and I feel connected to everything. Even though I’m not talking to anyone, it feels like I’m in a moment that’s super-dense and very, very connected. I think Twitter has some of that potential to show at least the closest thing we have to a global consciousness. Being able to tap into what people think. What the vibe is around whatever’s happening in the world. That’s how I wanna be able to use it. It’s like, what do people think about what I just did? And that’s where I think text matters over video, over images. Text is so quick to the neurons. It’s just so quick to consume. It’s so much more raw in terms of expression, where it makes you feel the feeling in it.

When I started Stocktwits, a lot of what Jack is talking about in this paragraph rings true. I wanted people to be able to tap into what people think about the markets or a stock. I also believe that text matters over video and images. A human ticker is something I thought would be unique and I believe it remains unique even today.

Good News…You Do Not Manage $27 Billion

At some point in the next 24 months Slack, Uber, Lyft, Pinterest, Palantir, WeWork, AirBnB and Stripe should be public…liquidity is coming! (for the public markets…lot’s of supply).

According to Seth Klarman (passing notes to his Rich friends at Davos and The New York Times) a Sovereign Debt crisis is coming.

I am lucky because I focus on all the interesting trends that should happen as 10,000 plus, newly minted millionaires hit the streets looking to spend, invest, build products and start companies.

There is street level money and there is macro level money.

There is street level analysis and macro level macro analysis.

I like reading about both, but I deploy capital based on what is happening on the streets.

I’m glad I do not manage $27 billion.

Momentum Monday – I Had a Nightmare…

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.

We are entering month TWO of the government shutdown. The markets enjoyed the first month gaining 10.5 percent…a shutdown record.

Using my fingers and toes I have extrapolated a gain of 125 percent for the markets this year if the government remains shutdown.

Just in case my simple formula does not work, Ivanhoff and I decided to make this episode of ‘Momentum Monday’ (click to watch). I made Ivanhoff prove to me he is actually in Bulgaria and he explains his upcoming long journey home to the United States.

I’m waiting for the markets to regain their 200-day moving averages to put more money back into the market but won’t be shy about trying a few breakouts we covered in the episode with smaller position sizes.

Have a great Monday.

Scaling a Startup

Before I get into it…yesterday I had a Sunday Brunch at a favorite spot in SOHO – 12 Chairs – an Israeli restaurant. The food is so fresh and fantastic, and the energy of the small restaurant was high. I was really surprised by the fresh cheesecake for dessert which was delicious.

Onward..

Everyone wants to scale a startup or break 70 in their diapers….

Kids today!

View this post on Instagram

A star in the making ⛳👀 #StartEmYoung #GolfStarz

A post shared by Golf Starz (@golf_starz) on

The Thumbtack founder shared a great post yesterday (8 lessons) on scaling/growing a startup to $1B. Read it all.

Because I have seeded a few $1B companies at Social Leverage, lesson #4 stood out The best companies win on product innovation AND business model innovation:

We talk a lot about product innovation, for good reason. But business model innovation is sometimes even more important to your company’s success. Why? Very few companies grow virally, so most startups succeed or fail based on their ability to acquire customers. Growth hacks are effective at subscale but to reach meaningful scale most startups need to unlock paid acquisition. Paid acquisition is effectively a business model competition: the company who can pay the most for an impression, click or call wins. This is true whether you acquire customers programmatically (Google/Facebook) or via sales. That is why business model innovation is so crucial. If you can invent a new business model that monetizes better than your competitors, you will win.

Takeaways: 1) Acquisition is a business model competition 2) Early-stage founders should spend more time thinking about business model innovation and acquisition strategy.

In our portfolio – Robinhood and Lifelock stand out. Both companies executed creatively and almost perfectly, but most importantly they created a new business model to go with their genius at acquiring customers.

PS – This is a great podcast/interview of Keith Rabois with Kara Swisher on all things Venture Capital. Keith has invested in and operated multiple billion dollar startups so I know any founder and investor will learn a lot.

Sunday in SOHO

I have been working this week in New York visiting portfolio companies and talking to investors.

On Friday I was over at the Vice HQ in Brooklyn brainstorming and sharing some show ideas I have for a financial vertical shows. For Vice, it is their job. For me it was just fun to share the ideas I have been fleshing out for years.

Today, I am just going to go through the markets, read pitch decks, return mail and grab some food at my favorite spots in the neighborhood. Here is the view from my lobby at 60 Thompson…

The markets are doing better than I expected which has helped a lot of growth stocks regain their 50 and 200 day moving averages. That is very constructive.

Four weeks ago I was deep in Apple, Facebook and The Nasdaq as the panic peaked. This week I sold the balance of my Facebook and Nasdaq which ended up being great trades. Apple is starting to firm a little but I am still a bit underwater on the trade. If only I had focused on Netflix.

Facebook will continue to be under scrutiny no matter what happens next in the markets good or bad.

There are some new names breaking out to all-time highs which is nice to see. I will go over them in tomorrow’s Momentum Monday.

This piece on Nike’s self lacing shoe is really interesting.

The first (legal) weed billionaire is an excellent story.

This breakthrough on Alzheimer’s was a great read.

I started watching True Detective Season 3 last night and it is great.

Have a great Sunday.