Diversification is a Hedge Against a Lack of Knowledge and the Snapchat IPO

Yes…Stocktoberfest. Get your tickets and come network with others trying to beat the markets and build great fintech companies.


I love this from Naval:

The Consumer packaged goods companies like Proctor and Gamble used the ‘diversification’ trick against consumers by offering 100 choices of shampoo and bandaids. It has been great for their stock price. In an era of the social/mobile web it has also been great for disruptors like ‘Dollar Shave Club’ who know that a shave is a shave for 99 percent of men. They built a billion dollar business pretty quickly by unbundling all the nonsense marketing and just getting you a freaking razor and a laugh.

We are seeing the same thing happen to the financial industry. Vanguard had great intentions by taking out the ridiculous fees and now Blackrock is reaping most of the rewards (check their stock price) as Wall Street gets religion about selling passive investing to America.

I think everyone should invest so this trend is mostly good.

I just don’t think every investor should own the same 500 stocks.

Like I always say…it has never been a better time to learn the language of the markets and read financial statements.

I can’t end the week without some chit chat about Snapchat ($SNAP). As Snapchat prepares to go public, I read a lot of S1 tear downs. This is a good one. This one too.

It’s fitting that in an era of Trump as President, Ev Spiegel will control Snapchat 9 months after his death and that public shareholders have no say at all in how the company is run. Right now, no big is too big and if you want to own the S&P blindly you will own more Snapchat like structured companies. To the victors go the spoils.

PS – I love that Stocktwits has had a $SNAP stream for a few years.

Also published on Medium.