Morgan has another great post out titled ‘Tails You Win‘.
The gist…’long tails drive everything‘.
…no matter what you’re doing, you should be comfortable with a lot of stuff not working. It’s normal. This is true for companies, which need to learn how to fail well. It’s true for investors, who need to understand both the normal tail mechanics of diversification and the importance of time horizon, since long-term returns accrue in bunches. And it’s important to realize that jobs and even entire careers might take a few attempts before you find a winning groove That’s how these things work.
And remember, reading this means you belong to the only species out of 8.7 million on this planet that can read. And our planet is the only one out of 100 billion in our galaxy that we know has life. So just reading this article is the result of the longest tail you can imagine.
I really liked the ‘New Rules’ this week from Bill Maher. He has definitely put himself in the crosshairs of his haters and I enjoy how he takes down the ‘snowflakes’ on Fox and Fringe:
Recessions happen and they are survivable events.
Also this week…the Bitcoin crash continues. I refer back to this Jameson Lopp tweet about Bitcoin which is as true today as it was last year when Bitcoin was in the middle of it’s ridiculous rise…
I dragged Rachel along so that we could use the ‘Carpool’ lane and we did the three hour drive up and back from Coronado. Very Larry David.
I have tried not to comment much on the ‘Scooter’ boom that seems to have swept the country until I at least tried one. I did today. I chose ‘Bird’ scooters because I have friends that are investors.
I loved the experience and so did Rachel. She scootered around Venice and Santa Monica and enjoyed the ability to cover a lot of ground.
I apologize if this scooter ride is indeed the ‘top’ for the Nasdaq…
Next up…
A special shout out to Jack Randall who celebrated his 4th year at Robinhood today. He dropped out of college to join the 13 person team. I remember meeting him in his first few days and really being impressed. I called him the Doogie Howser of communications. Here is his great tweet on his milestone:
4️⃣ years ago, I dropped out of college & joined a 13-person startup w/$3M seed, promising to “democratize the stock market.”
In college, I remember setting my alarm at 6am for earnings & getting ripped off by ETrade, so when I read about Robinhood’s mission, I sent this DM.. pic.twitter.com/hBP8VHtfMp
Ted Knight had one of my favorite line’s ever in a movie (Caddyshack) when he said ‘…the world needs ditch diggers too’. In an era of founder glamor and celebrity, it is a reminder that we can’t and don’t all need to be founders.
My friend Josh Elman who now leads product and growth at Robinhood said this and it is gold: ‘Find the company you love. Reach out. Have a huge impact. Be like Jack!‘
Watching Elon Musk argue with shortsellers on Twitter is pretty damn entertaining.
It reminds me of this scene from a top 10 favorite movie of mine ‘The Princess Bride’…the battle of wits
Depending on the day I have no idea which character Elon Musk is.
I have a record number of half written blog posts right now. I am not sure what that means.
I am back in Coronado which is an inspiring place for me. It used to be we lived here ten months and left for the summer and made fun of the ‘Zonie’s’ (Arizona summer escapees). I am now that ‘Zonie’.
All the cool kids wants to break up Google and Facebook, meanwhile Comcast and AT&T are on the verge of being the two most indebted companies in the world. The old saying ‘I would rather pay interest on debt than taxes on income’ makes no sense anymore because old tech is paying interest on debt and new tech figures out how to never pay taxes!
Meanwhile my Verizon and AT&T bills are 11 pages each even though I am on their ‘simple’ unlimited data plan.
It used to be cool to compare Apple’s cash balance to every other asset or country or GDP in the world, but this year it’s all about Netflix.
Here are a few from the last few days:
Netflix passed Shittybank (Citibank) in market capitalization today. Netflix has 5,400 employees and Shittybank 209,000.
Netflix was up more in value today that what the entire company was worth just six years ago.
In that case…let’s all ever up our homes and buy the breakout of the week…biotechs:
Everyone is long large cap technology stocks, biotech stocks and crypto’s which might explain why defensive stocks (utilities, consumer staples, telecom and pharmaceuticals) have NEVER been so out of favor:
(I like adding to my one 8 to 80 defensive company Johnson and Johnson when things look this bleak).
I wanted to finally get some thoughts out from my two days at The Money Conference in Dublin.
It was fun to be on stage with my friend Yoni Assia, the founder of Etoro (I am an investor) talking about trading and investing. Etoro is a social brokerage that has over 10 million accounts in 140 countries.
The social team from the Money Conference shared this tweet about my riffs which is a good start:
I would never have guessed that Portuguese is the 7th most spoken language, but that is not the point of this post.
There is one language across all these languages that is universal and that is the language of investing/trading.
I talk about this trend often but it is till so early.
Over just the last four years global markets have grown, market data is abundant and most of what you need to start investing is free. In addition, social networks have proliferated and crypto (at least Bitcoin) is in every corner of the world. Bitcoin might already have more brand recognition than Nike or Coke.
We are all holding a smartphone easily connected to markets and our small or large groups on our favorite networks and we can dial in with ‘experts’ and mentors 24/7/365.
I have linked to Morgan’s piece titled ‘The Psychology of Money‘ before, but I keep coming back to this part of it:
In what other field does someone with no education, no relevant experience, no resources, and no connections vastly outperform someone with the best education, the most relevant experiences, the best resources and the best connections? There will never be a story of a Grace Groner performing heart surgery better than a Harvard-trained cardiologist. Or building a faster chip than Apple’s engineers. Unthinkable.
But these stories happen in investing.
That’s because investing is not the study of finance. It’s the study of how people behave with money. And behavior is hard to teach, even to really smart people. You can’t sum up behavior with formulas to memorize or spreadsheet models to follow. Behavior is inborn, varies by person, is hard to measure, changes over time, and people are prone to deny its existence, especially when describing themselves.
Grace and Richard show that managing money isn’t necessarily about what you know; it’s how you behave. But that’s not how finance is typically taught or discussed. The finance industry talks too much about what to do, and not enough about what happens in your head when you try to do it.
Do your kids a favor and start them on the path to learning the language of investing.
On today’s Momentum Monday we do our usual tour of the markets and momentum and discuss a few new ideas.
Google, Apple, Amazon, Facebook, and Netflix are at or near their all-time highs. In the meantime, emerging and most foreign markets continue to struggle below their 200-day moving averages. The divergence between U.S.and foreign stocks in 2018 is bigly.
The big question is will the emerging flu spread to US markets?
The chart that stood out to me most was from Sentiment Trader. Small options traders are in a speculative bullish frenzy:
The very smallest of options traders are gorging on speculative call options to the greatest extent since the 2009 low. pic.twitter.com/9c4Nz5IqOg
I think these signals work better when it is the fear that is spiking. That said, the last time this indicator got this speculative the markets went sideway for more than a year.
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 oand will continue to see are from Marketsmith. They are offering my readers a three week trial for $19.95. Click this link if you would like to try it out.
Dive a little deeper and you see that Bill is mostly a legend in marketing…
Here's Bill Miller's flagship fund (Legg Mason Value Trust) in white and S&P 500 in green, from 1994 thru Miller leaving fund in 2012. Over 18 yr period, Miller underperformed S&P, but because of timing of returns, he's a Legendary Investor and a REALLY rich guy. pic.twitter.com/8koOkGo5TE
I am on my way home today so Ellen and the kids had to handle her last day by themselves.
She was 14. She lived a good life I think by dog standards.
Bagel was a happy dog and we loved her. My in-laws gave Rachel the dog when she was 6 and Rachel chose the name. Here is Bagel in her favorite spot…sleeping with Rachel:
Redpoint led the round and Tom Tunguz of Redpoint summed up the product and investment reasons below:
Kustomer is the software I wish I had when supporting customers. Brad, Jeremy and the rest of the Kustomer team have operated in the space for more than a decade. They were founders of Assistly (with our partner Alex Bard), and became executives at Salesforce’s Service Cloud after Salesforce bought their business.
They have seen companies of all types and sizes struggle to find the right way to support their customers. The product of all that experience and knowledge is Kustomer.
Kustomer has a flexible data model to ingest all relevant data to a customer interaction, from web visits to mobile interactions, from transactions to event attendance.
Kustomer couples this data store to a powerful process engine that enables orchestration and automation of other systems. For example, customer support reps can process a return and create a new order at the click of a button.
This is a powerful combination. It’s the reason companies like Ring, Slice, Glossier, SmugMug and others trust their most important relationships – those with their customers – to Kustomer.
When we invested in Kustomer in 2015, Zendesk ($ZEN) was a $2 billion company and a stock I wanted to own. Despite Kustomer eventually competing with them, I knew that owning Zendesk was a great public proxy for owning the growth ahead for the sector and industry. Today the stock has more than doubled and is worth $6.1 billion.
I last covered Kustomer back in early 2017. It is amazing to see the growth in the team, the product and sales. Thankfully we have been right about the growth in Ecommerce as well.
Congrats to my partner Gary who has led the investment on our behalf and to Brad and the fast growing team at Kustomer.
Please hit me up if you think Kustomer can help your company or you know the Director of Support or Customer Experience at high growth Business to Consumer companies.
