Software is Eating The World but Weed and Wagering Will Feed It…And Shoulda Coulda Part 2

I don’t gamble.

In an era of Draft Kings being a public company that has actually cost me.

If I was a sports bettor I likely would be long Draft Kings. I have friends that work there and I have followed the company for years as it went through the highs and lows of being a startup.

Here is the chart since it went public though a reverse merger at $10

When Draft Kings first appeared trading after completing a reverse merger (SPAC) I wrote that ‘Draft Kings is to gambling, what Virgin Galactic ($SPCE) was to Space. Virgin Galactic came public at $10 and quickly went to $40.

Should, coulda…

The marijuana stocks have also been perking since COVID-19 began. Here is a chart of the Marijuana index ($MJ).

Post Covid – weed and wagering will likely be front and center for states that need revenue from you know…taxes

Marc Andreessen was correct when he said software would eat the world but it might just be in the coming years that weed and wagering feed the world.

Coronado Life …And Paige Craig Joins Me Om ‘Panic With Friends’

I’m settling into my Coronado, COVID life for the summer. Ellen is back in Phoenix working this week so I am home alone.

I spend a few hours every day after the market closes on the porch reading, writing, smoking a cigar and drinking Corona…

I have replaced my ‘sent from iPhone’ with ‘I am in Coronado for the summer. I only say this because I like saying this.’

Onwards…

A few weeks back I had Paige Craig on the podcast. My daughter Rachel was my cohost. Paige now lives in Atlanta, but he has lived all over the world as a marine and building a private military company.

We focused on his post 2008 angel investing career in San Francisco and Los Angeles. Paige shares his $1 billion lesson regarding his Airbnb investment that was not to be (read it later here as well). We all have ‘shoulda coulda’ investment stories but Paige has one of my favorites. Paige was also an early investor in Lyft and Bird. I think everyone can learn a lot from this interview. Paige has a great sense of humor.

Rachel was a good sport as many ‘colorful’ topics were discussed. I think she learned a few new words.

You can listen to the episode here.

There are now 72 ‘Panic With Friends’ podcasts. They are evergreen discussions about investing and panic and wins and losses.

Don’t forget to ‘subscribe/follow’ to the podcast by clicking here on Spotify or Apple podcasts so you can get notified when a new podcast drops.

The Shoulda Coulda’s…

I am hearing a lot of ‘Shoulda Coulda’s’ from my friends and people on Stocktwits.

That will happen when the markets drop 30-40 percent and bounce back like they have. Charlie Bilello has a great post looking at the economic data and admits to being dazed and confused.

I remember buying Zillow in March at $34 after it had dropped quickly from the 60’s because of COVID-19. The next day I bought some at $28. That same day it dropped to $20.

I was not freaked out, but I was confused. It did not seem possible and I stopped buying more.

A few days later it was $40. A couple of days later it was back to $30. Yesterday back over $60.

I sold at $40 and made a few bucks, but of course I have the ‘shoulda, coulda’s’.

Between March and May the monthly bars had Zillow at an all-time high, an all-time low and back at all-time highs.

Here is the chart:

That move took the company from $13 billion to $4 billion to $13 billion.

I’ll throw in a chart of the entire Homebuilder’s Index to really make you scratch your head:

Bonkers.

The ‘shoulda coulda’s’ will continue to register all-time highs in 2020.

Pace yourself.

Welcoming Ross Hoffman – Venture Partner at Social Leverage

We are excited to announce our newest partner at Social Leverage – Ross Hoffman (@hoff on Twitter).

Ross and I met in person a year ago in Phoenix, but knew each other from Twitter conversations.

We hit it off immediately over steaks at my favorite Phoenix restaurant Steak 44. I asked him to come on my podcast the next day and we had a great conversation about his career, interests and the future.

Ross makes great decisions. He has spotted and attached himself to rocketships. He went from the mail room at William Morris to very early employee at YouTube, to spending seven great years at Twitter, to Chief Business Officer at Headspace.

When Ross decided that he wanted to invest full time, I said come work with us at Social Leverage. He got to know Gary and Tom and the next thing you know…Social Leverage had a new partner. We are now four people (we run a lean startup ourselves).

Tom, Gary and I pride ourselves on making good decisions just like Ross. We have more than 80 active portfolio companies and we want/need to help our companies accelerate and grow so Ross’s skills are a great compliment to ours. Ross has not just spotted spectacular growth opportunities, he has dug in early at great companies and executed on that growth. Our portfolio founders are as thrilled as we are.

Ross now calls Los Angeles home, so based on his track record of spotting and riding trends, LA’s tech boom will continue.

Ross wrote something up himself which you can read here.

As always, hit us up if you have a seed stage start up. We give good Zoom.

Deglobalization Is Not An Excuse for Slowing Global Expansion In The Cloud Era – A Panic With Friends With InCountry Founder Peter Yared

A few weeks back I had my friend Peter Yared, founder of InCountry, on ‘Panic With Friends’. We had an incredible conversation about technology, the clou and the future.

Peter has founded six enterprise software companies that were acquired by Sun, Citrix, VMware and Oracle. I met Peter when he was CTO of CBS Interactive where he brought CBS into the cloud.

Peter knows a lot about the cloud!

He could not have timed his new company any better as the world begins to push towards deglobalization.

InCountry, now operational in 80 countries, allows companies to grow faster by setting up local data residency.

You can listen to the podcast here or head to Spotify or Apple and search my name.

There are now 71 episodes of ‘Panic With Friends’ and you can find them here or Spotify and Apple.

Momentum Monday – Flatten The Nasdaq Curve?

Happy Memorial Day Everyone.

I’m lucky to be in Coronado with Ellen for the holiday weekend.

I am hoping the worst of the pandemic is behind us as the curve has been flattened in so many places.

For the markets, the big question will be whether the economy will flatten the Nasdaq curve.

Ivanhoff and I don’t stop for holidays so we have a fresh Momentum Monday that dove deep on the names and sectors that are working.

You can watch the show right here.

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.

Disclaimer: All information provided is for educational purposes only and does not constitute investment, legal or tax advice, or an offer to buy or sell any security. For full disclosures, click here.  

Working From Home

I’m working from home in Coronado for as long as I can this summer.

This is what that looks like on a Saturday…

I have worked from home for the better part of a decade and I love it.

It is one of the perks of my career as a venture capitalist.

The Pandemic has now accelerated ‘work from home’ for most of America and the technology giants seem to enjoy announcing that ‘work from home’ will be extended to ‘whenever’ and’forever’. When I read the announcements each day it feels like they are rubbing salt in the wounds of the rest of the old economy.

My friend Om (our ‘Panic With Friends’ podcast is here) says if you ‘follow the money‘ you get the real reason the technology giants are doing it now. The gist:

This is a great opportunity for companies to shift the costs of operations to employees. And technology companies are no different, except they have public relations armies to polish up their dollars-first thinking with the veneer of ideological transformation. Working from home is a good and easy get out of jail card for Facebook and the new converts. It not only removes any legal liabilities, but it also shifts the “operational expenses” to the employee.

Gitlab built the largest remote only company in the world, so who better to hear from on the subject than the CEO Sid Sijbrandij. His Twitter thread on the subject is a must read. Every CEO and founder and venture capitalist should read it and share it.

A lot of employees think work from home is a perk, but do remember this:

Stay woke!

Have a great Sunday.

One Chart To Catch You Up On 2020….And The Economy

The only place I use ‘if’ more than the golf course is when I talk about the stock market.

In that vein…

If the last 3 months are telling us anything this chart from JC sums it up …

That money Mango Mussolini pissed away on ‘defense’ and ‘space wars’..poof..it’s gone. The virus does not care how much we spend on weapons.

The money we used to save the banks…Wells put it in the ‘stagecoach’ and the robbers (management) took it.

The money is speaking/flowing…

The Stocktwits, Etoro and Robinhood kids want cures for COVID and cancer and they want their internet.

Makes sense to me.

What does not make sense to me is the continued disconnect from the economy…which is shit by the way.

I’m at our home in Coronado.

I’m wearing my mask. I’m washing my hands a lot. I went hiking with my partner Gary and our pals Alex and Russell and we wore masks and socially distanced.

We talked about a lot of things, but mainly that the economy is for shit.

On the way home I went to stop by my favorite sushi place in the city. I chatted with my friend, the owner and chef and he can’t get a break from the landlord and he is at 20 percent of his regular business going on 3 months. Tomorrow he gets to open under some stringent rules that should allow his to be at 40 percent for a month or so.

We chatted about the local economy and how broken it is. He’s a good entrepreneur and will make it through the other side one way or another, but he had that look in his eye when we talked about Downtown San Diego economy.

At my golf course (I pay an out of state membership), almost 20 percent of the members have quit. I thought people that joined golf courses could survive 60 days of a closed course. Nope.

Our leaders can huff and puff and send random checks in the mail. They can push back tax dates (I don’t think that was a good idea) and they can blather on social media, but this economy is a mess.

Every company is figuring out how to do more with less. Once they figure it out, those jobs are not coming back.

This stock market is not the economy.

Shopify and Spotify…Handsome Couple

At the beginning if the year I just had one stock pick. I thought Shopify would reach $100 billion. Here is the blog post. Re Shopify:

To be honest, the market has not played ball and a pandemic came along, but the stock is still brushing up against $100 billion. The “Shopify Miracle’! I sold a little stock today as it came within a few percent. Here is the chart…’Pandemic or not, here we come $100,000,000′:

Keeping with the S’s, if I were to pick a stock a long way from $100,000,000,000 that could reach that mark in the years ahead it would be Spotify. A couple weeks ago I shared that on Stocktwits and I was buying the stock as it crossed $160. I had no idea they would be announcing a deal with Joe Rogan or that the market would LOVE the move. I love Spotify because it is a very rare asset in a highly inflationary world for rare assets (as with Shopify, I will have to assume the markets play ball).

Here is the chart and the massive breakout taking place above $160 when I started buying:

A few days later with the Joe Rogan News digested:

I could link to 100 articles that will explain that the markets are overvalued and the economy is wrecked. I won’t because they are all correct. I concede. The economy is for shit.

Don’t buy Spotify tomorrow because I own it at $160 and shared my simple insights into why it could reach $100,000,000 market capitalization.

Do buy the 20-30 percent dips in Spotify that will eventually come.

PS – A couple great reads on Spotify strategy, pitfalls and opportunity…

Spotify’s Podcast Aggregation Play

Spotify’s New Customer

Have a great Friday

The Three Sides Of Risk

Morgan Housel wrote a very personal piece that I loved titled ‘The Three Sides of Risk‘. If you can’t read it now quickly, do bookmark it. Everyone should take the time to read and share.

Morgan tells his story as an answer to a question regarding how ‘all his time skiing as a young man taught him about investing’.

I won’t wreck the story….but the investing lesson he learned was there are ‘three sides of risk’:

The odds you will get hit.

The average consequences of getting hit.

The tail-end consequences of getting hit.

The first two are easy to grasp. It’s the third that’s hardest to learn, and can often only be learned through experience.

In investing, the average consequences of risk make up most of the daily news headlines. But the tail-end consequences of risk – like pandemics, and depressions – are what make the pages of history books. They’re all that matter. They’re all you should focus on. We spent the last decade debating whether economic risk meant the Federal Reserve set interest rates at 0.25% or 0.5%. Then 36 million people lost their jobs in two months because of a virus. It’s absurd.

Tail-end events are all that matter.

Once you experience it, you’ll never think otherwise.

Much truth. Thanks Morgan.