The Joy of Participating – When Everything That Counts Can’t Be Counted

This tweet made me LOL the other day:

Son, when I was your age, straws were made of plastic, burgers were made of meat, and bonds paid interest.

In the financial crisis of 2008 if someone told you the S&P would cross 3,000 and the President would have an orange face you might have said I’ll make book in that. Throw in straw wars, negative interest rates and fake meat being 2019’s hot IPO though and you would have said GTFO.

I have had the joy of participating in this wild, weird and fantastic boom of the last 10 plus years and I have been trying to frame it and explain it. I can’t.

I know why I loved Robinhood when I met the founders and invested on the spot at an $8 million valuation in 2013/2014. I can’t explain how in 2019 Robinhood just raised $300 more million at a value of nearly $8 billion just SIX years later. I am not going to argue over it, take credit for it, or explain it. I am just enjoying the ride and not trying not to confuse a bull market with brains.

When all is said in done, I was in the right place at the right time with the right domain experience to recognize the opportunity and have had the great joy of participating.

Josh Brown penned this fantastic piece today titled ‘When Everything That Counts Can’t Be Counted‘ and I hope you take the time to read it. Over the next few days I will refer back to it as I dig deeper into some of the points made.

I really loved this riff on what really would have been the killer investing strategy coming out of the financial crisis:

There are no asset managers who represent their strategy to clients as “We buy the most expensive assets, and add to them as they rise in price and valuation.” That’s unfortunate, because this is the only strategy that could have possibly enabled an asset manager to outperform in the modern era. It’s one of those things you could never advertise, but had you done it, you’d have beaten everyone over the ten-year period since the market’s generational low.

I imagine $LOL would be the perfect ticker for this ETF.

The joke has been on the people that made us all feel stupid trying to learn a language that died during the financial crisis.

Josh ends his piece with the following:

In the battle for capital right now, the brands and intangibles and user bases and networks are winning by a landslide against the things that used to be important. And the companies that are rich in those old fashioned things, like Walmart, Disney and McDonalds, are spending all of their time and attention to transform themselves into the spitting image of their upstart competitors. Disney wants to look like Netflix, Walmart wants to retail like Amazon, McDonalds wants to be as habit-forming and celebrated for its freshness as its former protege Chipotle is. Goldman Sachs wants to grow up to be BlackRock. And in emulating these younger models, they hope, their multiples will soon be following suit.

And as for those stodgy old stalwarts of the 20th century that aren’t pursuing this transformation…it remains to be seen whether the rusty old assets they do possess will ever matter to investors ever again.

Pretty much!