In-Person vs On-Screen

We had our monthly founder Zoom this week and discussed policies for employees coming back to the office.

The question is going to be asked more and more as we head into the summer.

All the venture firms are asking the same question.

Fred Wilson wrote about it well here.

Many of my ‘in-person’ habits related to work have changed forever, but I am 55 and was mostly a remote worker before COVID. I liked this part from Fred on the subject of raising capital…

For certain things, like raising capital and investing capital, on-screen works pretty well. Founders have figured out that they can raise capital from their kitchens, bedrooms, and offices in weeks vs roadshows that lasted months. I don’t think we will see founders going back on the road in any material way ever again. And founders in Singapore can access capital markets in NYC with ease. And investors in NYC can access investments in Singapore with ease. These are all important and disruptive changes to the startup, tech, and business sectors.

For the company itself it is much different and I agree with Fred…

Each company needs to figure this out in a way that works for their team and culture and I believe that there is no “right way” for everyone. But I also believe that in-person interactions remain critical to making better decisions, better products, better cultures, and better companies and so I would encourage everyone, including the fully remote teams, to figure out how to make in-person interactions happen on some regular cadence.

Have a great Friday.

Nithin Kamath, Founder and CEO of Zerodha, Joins Me on Panic with Friends to Discuss India’s Growing Market Opportunities (EP.149)

Of course there is a ‘Robinhood’ of India.

Today’s guest started and built Zerodha which is a fast growing, profitable brokerage in India.

I know you will really enjoy the conversation. For more details read on below.

You can listen to the full podcast on Spotify or Apple.

Guest: Nithin Kamath

Profile: Founder and CEO of Zerodha

Where to Find Him: LinkedIn, Twitter, Website

What’s the Panic About:

Not only are we on the heels of our 150th episode, but we’re bringing in a new face (or rather voice) to join Knut and me in hosting Panic with Friends – Nikita Arora. Nikita is a fellow Canadian working at Social Leverage from Vancouver. In this episode of Panic, entrepreneur, founder, and CEO of Zerodha Nithin Kamath calls in and joins us all the way from Bengaluru, india. Nithin has been trading the markets for a living since he was 17 years old. After feeling the fatigue of day trading, Nithin started his company Zerodha with the intention of being a catalyst for change and started a modern brokerage firm, the first in India. Zerodha focuses on building the best tools and services for traders. On top of the amazing work Nithin does at Zerodha, he’s also a great person to look to for thought leadership. You can check out his views and insights in building businesses and trading the markets through his podcasts, social media, and blog posts over on his website. In this episode, Nikita and I talk with Nithin about trading the Indian markets, entrepreneurship, his company and their overall strategy, crypto, India’s handling of the COVID crisis and more.

And a big thank you to Masterworks for sponsoring this episode of Panic with Friends. I spoke with their founder, Scott Lynn, in a past podcast episode. You can check it out here.

PS – I am now doing one ‘Panic With Friends’ podcast per week. Thanks for listening and make sure you subscribe over on Spotify or Apple.

$QQQ VS $SPY

I have been leaning heavily on $QQQ over $SPY for a very long time on this blog. It worked.

Here are two charts that offer up some short term and long term perspective of how that ratio is changing right now:

Technology is more pervasive right now so I doubt we see a crash the likes of 2001, but cycles happen and the money that is not leaving the market is rotating (as I have covered in Momentum Monday’s) into housing, commodities, energy, retail and financials.

These charts DO NOT take into account crypto or defi to hot areas of technology investing that I have been writing about here and allocating capital the last few years.

It will be interesting to see if these new hot areas of technology will hold up if the $QQQ vs $SPY trade continues to underperform.

Hopefully this gives everyone some perspective on what has been going on.

So many people this blip down in technology stocks has been brutal, but it is possible that it can get much worse.

Momentum Monday – Technology Shmecknology

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.

Happy Monday everyone.

Back to the grind.

As always, Ivanhoff and I got together on Sunday to make our ‘Momentum Monday’. You can watch/listen right here on YouTube. I have embedded the show below:

I am long-term overweighted software and technology, but if I had no crypto exposure, 2021 would be off to a rough start. Google, Facebook and McDonald’s have been my best stocks in my 8-80 portfolio this year. A lot of my stocks are in 30-40 percent pullbacks, including Zillow.

AS FOR CRYPTO…EVERYTHING IS WORKING. I have been talking about this on my blog for months and this weekend was no different.

Here is what Ivanhoff had to say:

Markets are cyclical. It feels like it’s 2006 all over again. Crocs is at all-time highs and basic material stocks are one of the hottest assets to own right now. If NFTs, doge coin and other cryptos didn’t exist, people would be talking about steel stocks all day long.
Lumber is up 130% year-to-date, lean hogs are up 60%, corn is up 50%. The list goes on and on. Inflation expectations continue to rise and as we all know very well, expectations can impact the reality. Soros defines that as reflexivity. The Fed keeps saying that inflation is not a threat right now but at some point (usually when it’s too late), the market action will force its hand. There’s a reason the market is called a leading indicator.

The S&P 500 and the Dow Jones closed the week at another new all-time high. In the meantime, many former tech and biotech darlings are severely underperforming. Some are even down 40-50% from their 52-week highs. If you haven’t invested or traded before 2009, you have never seen a market like this. Tech was the undisputed leader for more than a decade while commodities and emerging markets were perennial dogs with a bad reputation. It seems the tables have turned this year. There is a clear paradigm shift. And while it might not mean that tech stocks will be dogs for the next few years, the price action alludes that the market might not be willing to pay 30-50x Sales for Saas companies anymore just because of their impressive sales growth.

All the hot money from tech has moved into crypto now. There are over 5000 different cryptocurrencies right now and more popping up every day, so it’s funny to think that they are a hedge against the Fed and deficits. Bitcoin is the OG and it’s here to stay as a rare asset. 99.9% of the altcoins though are worthless or will become so at some point, so treat them as pure speculation and have an exit strategy. In the meantime, I don’t see why Ethereum’s market cannot exceed Bitcoin’s at some point in the foreseeable future. All interesting apps and use cases are built on Ethereum right now.

Back to the boring, old stock market. The leaders remain the same. They are all related to rising inflation expectations (metals, oil, gold, silver, potash) or the recovery trade (retailers, car markets, infrastructure, auto parts, etc.). Semis are also trying to bounce. If SMH retakes its 20dEMA, we might see some hot action in AMAT, LRCX, NVDA, etc.

On Saturday, Stocktwits shares the Top 25 from each Index and it is free. Here is this weeks lists.

Nikita at Social Leverage summarizes the SPAC world each Sunday as well and it is free. Here is her latest.

Charlie B’s 5 chart Friday is always good.

This has been a tough year for many darlings of last year that boomed as COVID closed the economy. Etsy, Teledoc and Stitchfix all closed below their 200 day moving averages. Zoom looks weak as well. The sports gambling leaders $PENN and $DKNG are also now below their 200 day moving averages. I will be keeping an eye on them as this would be a place they need to find buyers.

The surprise stock of the year is CROCS which I have not worn in forever (I rode the trend in 2006 here on the blog) and is back at all-time highs.

There you have it. Have a great week everyone.

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

Some Sunday Reads

Good morning…and happy mothers day to all the wonderful mothers who read my blog, especially the mom who keep our house in order Ellen.

The eve of Mothers day 2021 might be remembered for the night Dogecoin topped. Last night Elon Musk was on SNL and it was streamed to Mars. Dogecoin is down 36 percent this morning.

Many kids will be buying cheaper gifts and meals for their moms today. Thanks Elon.

This morning I have some reads backed up I wanted to share…

Why We’ll Look Back At Our Smartphones Like Cigarettes

Founding Versus Inheriting

Creator DAO’s …an OS for Participation

Market Making On The Internet

The Roaring Twenties – History Will Remember The Candustrial (cannabis) Revolution

Have a great Sunday everyone.

Katherine Rosa, Former JP Morgan Global Head of Alternative Investments, Joins Me on Panic with Friends to Discuss Navigating Risk in the Growing World of Alternative Investments (EP.148)

Happy Saturday everyone.

My guest on this weeks ‘Panic With Friends’ is Katherine Rosa. Katherine spent 25 years at JP Morgan and was the Global Head of Alternative Investments before recently stepping out. Katherine is now investing on her own and a board member at our SPAC Social Leverage Acquisition Corp ($SLAC). I was introduced to her by Mike Lazerow and we became quick friends, despite reading my tweets and blogs about the banks.

Anyhoo, Katherine has MUCH wisdom to drop and I was excited to have her share some of it on my podcast.

You can listen to it here on Spotify or Apple.

For more background on have a read below…

Guest: Katherine Rosa

Profile: Social Leverage Acquisition Corp. Board Member ($SLAC); former JP Morgan Global Head of Alternative Investments

Where to Find Her: LinkedIn

What’s the Panic About:

This is Katherine’s first podcast! In this episode, we talk about the world of alternative investments, retail and institutional investors, her time working at JP Morgan, the best and worst parts of her work, risk, her first great investment, what trends she’s excited about and more.

The Takeaway:

Katherine touches on a lot of great points on navigating the world of alternative investments, including to stay curious, leave room for risk, and have a long-term perspective. But overall, the key to alternatives is liquidity. At the end of the day – whether you’re an institutional or retail investor – behavior is behavior.

Favorite Quotes:

“It’s amazing how much does or doesn’t happen because of fear.”
“Everyone who is doing this is in the business of taking risk.”
“I want to look at something and think: Where is this going to be in three to eight years?”

PS – I am now doing one ‘Panic With Friends’ podcast per week. Thanks for listening and make sure you subscribe over on Spotify or Apple.

The Flippening Continues and Investing in 2021 Is Weird

Yesterday I riffed about Dogecoin.

To further, confuse people try this prediction on for size….”Olaf Carlson-Wee and Balaji Srinivasan estimate that at a price of $200,000 per Bitcoin, more than half the world’s billionaires will be from cryptocurrency”

The flippening that has taken place in my portfolio seems to be happening to a lot of people in a lot of different parts of the world.

My friend Doug sums up how many investors and bankers feel:

Investing in 2021 is wierd no doubt, but wierd is good. Wierd is opportunity.

I really liked Packy’s post ‘Who Disrupts The Disruptors‘.

FAANG stocks continue to do well, but a lot of change is happening underneath the surface.

In terms of momentum and strength, the technology sector is the lowest ranked in the last ten years.

Measuring Everything In Dogecoin

I have no idea what a Dogecoin is but they are valuable.

If you open Stocktwits or Twitter you are told that Dogecoins ($DOGE.X) are a meme.

$DOGE.x has 200,000 followers on Stocktwits probably making it a top 20 followed ticker on Stockwits.

A today’s price of 60 cents, the Dogecoin marketcap is 77 billion:

I have had many WTF moments the last few years as the ‘yoots’ have flooded into the markets (AMC, Gamestop, Wall St Bets), but $DOGE.x is the new WTF leader.

I was buying some Peloton ($PTON) yesterday and mentioned that at $24 billion in market cap, it was likely attractive to all of Apple, Amazon, Netflix Facebook and Microsoft, if not 100 private equity firms…in Dogecoin terms.

Charlie put the numbers in context here:

Everything seems cheap if Dogecoin is $77 billion.

The New Builders

My friend Seth Levine has a book out that I just ordered titled ‘The New Builders‘.

I did get to read parts of the book early in PDF form and I like this overview about the books message from the Amazon page:

Despite popular belief to the contrary, entrepreneurship in the United States is dying. It has been since before the Great Recession of 2008, and the negative trend in American entrepreneurship has been accelerated by the Covid pandemic. New firms are being started at a slower rate, are employing fewer workers, and are being formed disproportionately in just a few major cities in the U.S. At the same time, large chains are opening more locations. Companies such as Amazon with their “deliver everything and anything” are rapidly displacing Main Street businesses.

In The New Builders, we tell the stories of the next generation of entrepreneurs — and argue for the future of American entrepreneurship. That future lies in surprising places — and will in particular rely on the success of women, black and brown entrepreneurs. Our country hasn’t yet even recognized the identities of the New Builders, let alone developed strategies to support them.

Our misunderstanding is driven by a core misperception. Consider a “typical” American entrepreneur. Think about the entrepreneur who appears on TV, the business leader making headlines during the pandemic. Think of the type of businesses she or he is building, the college or business school they attended, the place they grew up.

The image you probably conjured is that of a young, white male starting a technology business. He’s likely in Silicon Valley. Possibly New York or Boston. He’s self-confident, versed in the ins and outs of business funding and has an extensive (Ivy League?) network of peers and mentors eager to help his business thrive, grow and make millions, if not billions.

You’d think entrepreneurship is thriving, and helping the United States maintain its economic power.

You’d be almost completely wrong.

The dominant image of an entrepreneur as a young white man starting a tech business on the coasts isn’t correct at all. Today’s American entrepreneurs, the people who drive critical parts of our economy, are more likely to be female and non-white. In fact, the number of women-owned businesses has increased 31 times between 1972 and 2018 according to the Kauffman Foundation (in 1972, women-owned businesses accounted for just 4.6% of all firms; in 2018 that figure was 40%). The fastest-growing group of female entrepreneurs are women of color, who are responsible for 64% of new women-owned businesses being created.

In a few years, we believe women will make up more than half of the entrepreneurs in America.

The age of the average American entrepreneur also belies conventional wisdom: It’s 42. The average age of the most successful entrepreneurs — those in the top .01% in terms of their company’s growth in the first five years — is 45.

These are the New Builders. Women, people of color, immigrants and people over 40.

We’re failing them. And by doing so, we are failing ourselves.

The book will inspire many so hopefully you will order a copy and/or gift it to someone you want to inspire…you can order it here.

The Future of Live Events – Introvoke

My partner Gary recently led a seed investment in a Techstars husband and wife company called Introvoke.

Oana and Andrei met at Coventry University in the UK. Oana quickly found a marketing role with HP, first in the UK and then moved to the US as the Americas Marketing Strategy Lead. Andrei started his career with Intel in the UK and then moved over to Microsoft in various engineering roles. Andrei took on numerous projects including leading a team working on the WebRTC networking layer and spoke on the main stage at GTC NVIDIA conference about large scale streaming projects . Oana founded the company in Jan 2019 and Andrei joined one year later. Together they’ve built a terrific product and the start of a special company.

Introvoke is the world’s only embeddable solution for live branded experiences.

Introvoke is not just another virtual platform. They provide companies/customers with powerful pre-built live building blocks to give your audience an experience right where they are, on your site.

Using Introvoke, companies can build virtual communication plans for the entire organization using one technology. With the right mix of modules — you can power any use case, for any audience. Let your imagination run wild including conferences, career fairs, employee networking and fundraisers.

Early customer reviews are excellent:

Gary shared his investment thoughts on the Social Leverage blog.