Back in Toronto

I grew up in Toronto.

I went to school at The University of Western Ontario.

Yesterday I flew home for the first time in almost two years. I got to see my mom and sister, one is off living in Florida now, and had a late dinner with all my best friends (still from high school).

Toronto keeps progressing.

I flew in on Porter Airlines (prop plane) from Boston and landed at the island airpot which was a fantastic little twist to enter Toronto. I was through customs in minutes and in meetings downtown in another 10. I dread Toronto’s Pearson airport and it’s a major reason I don’t like to make the trek.

For VC’s and bankers in Boston or Toronto wanting to get in and out of Toronto to do business, Porter air is a great service.

Our fund has a few investments up in Toronto – Street Cntxt and Joist. I will be back in a few weeks to spend some time with them as Ellen and I spend the fall in New York city.

My gut from this brief visit back to my hometown is Toronto is primed to become a top five technology startup city. Expanding the island airport would be something that would make it happen yesterday.

Mein Volatility…Is Germany in Trouble? and Should You Care?

This GIF made me laugh this morning – especially tied to the Stocktwits headline on investing

There is a first sign of trouble in European markets as the German DAX just started trading below it’s 200 day moving average.

The German weakness (and the French markets have the same pattern by the way) have not slowed US markets.

I don’t expect anyone of my readers to care and maybe they do not need to.

Why?

The Nasdaq is back within one percent of it’s all time high.

Look at this cash hoard from Apple …note the cash growing overseas:

Warren Buffett now owns 16 percent of Bank of America. You can (and should) hate the bank…but the bank is in the right hands financially.

Apple, Facebook, Netflix, Google, Amazon, Alibaba, Tencent, Berkshire Hathaway – the new continents.

When the charts of these continents start looking like that of the German Dax, things would get a little nerve wracking. For now, the coast is clear.

Premium Mediocre

I read this great post today by Venkatesh Rao called ‘The Premium Mediocre Life of Maya Millennial‘ and it made me laugh out loud. It also made me sad. There is much truthiness in it and I think it is worth 15 minutes of your time to read.

This riff was poetry:

At a more macro-sociological level, as my opening graphic illustrates, premium mediocre is a kind of modern proto middle class, born of a vanishing old middle class, and attempting to fake it while waiting for a replacement to appear under their feet while they tread water. It is a class sandwiched between the crypotobourgeoisie above and the API below.

Why this particular class sandwich? It has to do with mobility options.

About the only path to wealth-building available to the average premium mediocre young person in the developed world today, absent any special technical skills or entrepreneurial bent, is cryptocurrencies.

The traditional wealth-building strategy in the US, home ownership, has turned into a mix of a mug’s game and unassailable NIMBY rentierism.

The public markets are no longer reliable wealth builders, while the private markets exclude almost everybody who isn’t already wealthy.

And the tech-startup options lottery and media-celebrity games are not open to those who can’t program at world-eating levels or shitpost at election-winning levels.

That leaves the cryptocurrency lottery as the only documented way up open to all, regardless of skills. Like many other denizens of the premium mediocre class, I too am aspiring cryptobourgeoisie, awaiting The Flippening.

Fantastic.

As an investor I read it and have hundreds of ideas and a determination to better understand Maya Millennial. In the future, every time I eat a Chipotle burrito, which I still plan on doing, I will be a little sad about my choosing premium mediocrity. It’s better than fast casual though.

Momentum Monday…Make America Gold Again

Before I get started…as a follow up to my ode to $UBER yesterday, Ben Thompson dove deep on the new CEO and what he thinks. I am glad we agree.

Ok…

The bad news …there is no Momentum Monday video this week.

I do have this great picture of my view as I write this in Kennebunkport overlooking the Bush compound:

The rest of this momentum post is good news.

The S&P 500 has not had 3% drawdown since the election last November, 2nd longest run in history (thanks Charlie Bilello for that factoid).

The S&P has chopped around for the last few months. The Stocktwits social crew shared this funny GIF of the action as late:

Despite the S&P chop, many stocks continue to run.

I had been counting on a bank breakout which has not materialized. The financials that do continue to run include Visa, Paypal and Mastercard (been long them all).

The payment theme extends to China with Alibaba and Tencent continuing to hit all-time highs (been long Tencent). The Tencent/Alibaba payments battles has been going all Tencent’s way of late (TenPay).

The exchanges also continue to do well including the Nasdaq, ICE and the CME. I do not own them but $CME looks poised for a continued run to more all-time highs. CME Group is the world’s leading and most diverse derivatives marketplace offering the widest range of futures and options products for risk management. The hedgies are probably chasing the momentum here as a poor man’s way to play the future of Bitcoin (hedging and futures) and digital currencies.

The most interesting discussions of momentum I have seen the last week though are centered on Gold.

It was trending on Stocktwits today as well.

Technically, it is strong. Here is the breakout.

Michael Batnick wrote a good piece discussion the position he might took and why.

I checked in on the streams of my global macro friends to see what they were chatting about.

Fundamentally things could be ripe for a gold bull run. Millennials and geeks only have eyes from cryptro, but gold is the original store of value and I have to think many trading desks and hedgies could be taking some cryptro profits and swapping into it.

Why?

As Charlie Bilello points out:

Even at 0% Gold has a HIGHER two year yield than 13 countries.

Every developed country central bank in the world is maintaining negative real interest rates (I would add a holy shit to that).

The US dollar is at it’s lowest level since the election…gold now at it’s highest. The confidence that Trump talks about is a huge lie.

After the volatility of the last few weeks the odds of a FED interest rate cut are higher than a raise.

What a time to be alive and covered in gold.

Uber the IPO

I love Uber…I mean $UBER

Uber has been very very good to me.

My friend David Cohen invested in Uber in the very first angel round (through his fund). I was/am lucky enough to be an LP (investor) in David’s fund that invested in Uber. The valuation was $4 million pre money. Way back in 1964…I mean 2009.

I know all the reasons why I am supposed to dislike Uber the Company, the people and their tactics…but I want to blog about the miracle of Uber, API’s, mapping, the speed of growth, the product and the reach.

In 2009 Uber was founded and I was an early adopter.

When we moved to Coronado in 2009, we took just one car. I was determined to walk everywhere and use Uber when I had to leave the island.

There was no Uber X!

I remember pulling up Uber and having to wait 40 minutes for a town car to make it’s way from Del Mar. I still thought it was magical.

I might have been the first user on Coronado for all I know. Uber spread quickly from Coronado because of The Hotel Del. The Del is a very international hotel and the taxi’s in San Diego might be the worst in the USA. I doubt Uber planned that so I like to believe I did my fair share helping Uber grown on Coronado and San Diego.

I am loyal to the brand and the Company. It’s impossible for me to consider the competition.

I do have my armchair quarterback opinions that I have shared publicly over the years. I believe UBER should have done an IPO by 2012-13. Not for my own liquidity (there has been plenty of liquidity for early investors that wanted to sell). I think the stock would have already traded well north of $80 billion as a public company (maybe we will never know). I also have to think Travis would still be CEO if they had IPO’d in 2012. Furthermore, I am pretty sure LYFT would not be as strongly in the picture if Uber had IPO’s earlier. LYFT was caught up in a financial game of chicken that to investors credit, they ponied up.

Tonight Uber has named a new CEO…at least the board has named one. His credentials look impeccable. It’s 2017 and Trump is President so of course he’s an Iranian immigrant to boot.

I hope Uber files for an IPO tomorrow. Valuations be damned. Let the public (I mean Blackrock and Vanguard) trade the stock.

TTID…This Time It’s Different

I am in Maine this week with Ellen and Max. I have never been to the coast of Maine and it is beautiful.

Today was a big day as we dropped Max off at school. Ellen and I are officially empty nesters.

Our first empty nest run together was in Kennebunkport (which has cornered the market in pastel cardigans).

I took a picture of this yacht today while jogging on the beach and shared it on Twitter asking people to name it for me.

The answers are as usual…hilarious. Scroll through them. My favorite was from Raju who said I should call her:

TTID (This Time It’s Different)
.

Sir John Templeton wrote “16 Rules for Investment Success” in 1993. The most quoted passage over the years since:

The investor who says, ‘This time is different,’ when in fact it’s virtually a repeat of an earlier situation, has uttered among the four most costly words in the annals of investing.

I am hearing a LOT of TTID these days.

We have not had a big correction in the S&P (other than election night) for ages.

We have the crypto and token boom.

We have liquidity up the wazoo.

This time is NOT different, but it sure has been enjoyable.

I am grateful to have a wide community of people to enjoy this boom with me.

Momentum is a Hell of a Drug

It seems everyone has discovered ‘momentum’ investing and trading.

As a one man shop for my own money, I am a trend follower and believe in momentum.

As Newton said (not the fig) an object in motion stays in motion.

A great quant follow on Stocktwits is Quantocracy. Yesterday they shared a link to ‘The Definitive Guide To Momentum Investing and Trading.

Momentum is based on the empirical observation that there is persistence in an asset’s performance. An asset that has performed well in the past tends to perform well in the future, and an asset that has performed poorly in the past tends to perform poorly in the future. It’s a simple but powerful idea confirmed by hundreds of studies.

It is a fantastic piece to immerse yourself the subject.

The Cashtag Turns Nine

This tweet from Josh made me laugh out loud today:

Afghanistan is going to pay for the tax cuts.

What makes Twitter magical is snark like that bursting on my iPhone screen. The tweet needed no hashtag.

The hashtag on Twitter turned 10 years old yesterday.

What made Twitter special in the early years was the open API that allowed people to build things into Twitter.

If the hashtag is 10 years old, the Cashtag and Stocktwits is now 9.

In the summer of 2008 I thought Twitter for finance would be a great idea. Today the cool kids call it FinTwit.

I started Stocktwits with Soren Macbeth to get financial Twitter going. In 2009 we moved off Twitter when we realized there would be no way to control our destiny on Twitter.

The unique idea we had was to put a $ in front of tickers instead of a # so as to create a stream of intent for people that wanted to talk about stocks and markets.

I remember pinging Fred Wilson (Blackberry to Blackberry) that $RIMM was the way to organize discussion and content around Blackberry, not #Blackberry.

He loved the idea and we started chatting about $RIMM and $AAPL back and forth on Twitter.

Today, hundreds of thousands of messages are shared each day on Stocktwits using $ like $AAPL. I don’t have the numbers for Twitter.

Chris Corriveau (our original CTO at Stocktwits) coined the word cashtag.

For years I would get upset if I saw people using the $ on Twitter and not using Stocktwits.

Today, I just get a sense of pride knowing we added this bit of language to the social web.

Peloton … My New Newsletter Service

I am always trying to move faster and more efficiently. It is why the Peloton continues to fascinate me.

I have spent decades watching, writing about, trading and investing in all types of public and private markets. As I have chronicled here for more than 11 years, following the leaders and the giant flows of money is highly effective, efficient and profitable.

This picture of a peloton is a favorite of mine, especially as it applies to my system and style of investing:

I do not need to wear the yellow jersey to win at investing. I can make outsized returns drafting within the peloton. Of course, it is imperative to keep the leaders in site.

For years now I have had thousands of daily subscribers to this blog, on Stocktwits and Twitter. The audience grows, but for all the hard work and positive feedback I receive, it should be bigger.

For years, Shannon Sands and Harry Cornelius have approached me to help broaden the audience of my ‘Investing For Profit and Joy’ message. Shannon runs Charles Street Research a division of Agora, one of, if not the, largest financial publishers in the world.

Late last year we agreed to build a newsletter research and idea generation product. Today it ships.

It is simply called ‘Peloton’.

If you like my stock market ideas and philosophy on the markets, I encourage you to subscribe today.

It is $79/year.

You can do so right here.

There are many extra tools offered in this subscription, including a new book that Ivanhoff helped write titled ‘8 to 80 – The Next 1000% Stocks and Trends Everyone Can Ride’.

As for the core new newsletter, every month, I’ll send a streamlined intelligence briefing based on my experience as an angel investor and active public market investor. As well as insights from my network of contacts I’ve developed over 30 years.

In 1970, John Kenneth Galbraith said ‘Genius is a rising market’.

Indeed.

For those that want that extra help managing their portfolio on the other side of a rising market, I promise you will appreciate this new service and support that comes with it even more.

As for my daily habit writing on this blog…

Nothing will change. I will continue to write here everyday.

But, as Bob Lefsetz says ‘We Live in a Marketing Economy‘.

I want a marketing partner like Charles Street to help grow my audience. Charles Street also affords me professional copywriters and editors to help organize my research, tell the stories, and deliver a crisp monthly newsletter with my favorite trend ideas.

This partnership will allow me to spend more time reading, writing, networking and investing in startups (with my partners Tom and Gary at Social Leverage).

The expanded audience from this partnership will also help all the companies Social Leverage invests in tap a larger network of users and customers. I believe this is a win/win/win.

Thanks for the continued support.

We Live in a Marketing Economy

This post from Bob Lefsetz really resonated with me the last week. I read Bob daily and if you read this blog you know that (subscribe to Bob here). I don’t think Bob fully practices what he preaches about branding and marketing, but who does? Who really can?

This riff from Bob about product excellence, the great consolidation and the marketing economy blew me away.

So what this means is we are in the great consolidation, where fewer players have more power. I’m not saying you can’t eke out a living on the bottom, but that’s where you’re going to reside. Either you’re a winner or a loser, the middle class of art projects has failed, just like the middle class of life.

So we live in a marketing economy.

First and foremost your wares must be excellent. Shy of that, forget about it. This is an absolute rule, especially in an open marketplace. Theatrical distribution is a closed world, there is not an unlimited number of cinemas. But there is unlimited real estate online. And when that is the case, the public flocks to the winners. And even in limited marketplaces it’s a winner-take-all economy. Usually only one, maybe two of the films of the thirty released every week succeed.

So the powers-that-be are getting more powerful.

This is a byproduct of the age of clutter.

And it’s no different in entertainment than it is in tech.

You’ve got to gain traction as an individual. But once your project has legs, you’ve got to make a deal with the devil to push it over the top. Otherwise, you stumble, you plateau, because you just don’t have the muscle and reach to get your message heard.

Look at it from the customer’s perspective. Who has time to listen to all this dreck? You expect me to wade through millions of songs, scores of playlists, to find what I like? No, I gravitate to the winners, that which is known.

So, you want to sell out.

There, I said it.

The internet promised independence.

But today independence is death. Because you’re just another jerk with a megaphone and even if your product is great it’s being drowned out by the hype for that which is not.

So you need someone who can huff and can puff and can blow the house down.

And that’s a major movie studio, a major record label, a major book publisher, a major tech company.

So much truthiness.

Bob sure knows how to bum out a founder!