I have a couple of charts to show you today…

First is a chart of the price of coffee:

Coffee prices are down 70 percent since 2010…no wonder Starbucks is back at all-time highs. Imagine if they sold weed…

Charlie Bilello posted this market statistic on bear markets that caught me by suprise…

From its intraday low on Dec 26, the S&P 500 has rallied over 18%. It needs another 6% to hit new highs and make the 2018 Bear Market one of the shortest in history.

Prepare yourself for Fat Nixon gloating if the shortest bear market unfolds…

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.

Onwards…

Weekends are a very important time for me to catch up on markets. I like seeing weekly charts and not having the distractions of the work week to digest the prices.

Ivanhoff and I have started to make our Momentum Monday shows on Sunday in the spirit of being ready for the week and I like the subtle change.

I will get right to this weeks episode, which is a great one if I do say so myself. There are a lot of interesting setups (outside of just software) from healthcare to old economy stocks and biotech.

Click here to watch it.

At this point, December never mattered if you were off the grid. Stocks have gone from ‘just shred the December statement’ into ‘checking my statement every hour’.

The Dow is up 11.4% in 2019 with 27 out of 30 members positive. Boeing leading all Dow stocks at +30% YTD and another all-time high.

The biggest change for now seems to be the move away from FAANG to smaller stocks and old economy drug, energy and industrial stocks.

This equal weighted chart of the Nasdaq 100 shows how much broader this rally is becoming over just the same old FAANG of 2012-2018…

Before you get too excited and chase every idea in today’s episode, take a look at how other years with great starts have ended.

I am off to New York today but will end the week skiing with my ‘charting pals‘ in Breckenridge.

Have a great week.

Ben Hunt started a good conversation today about stock market returns and alpha. It started with this:

Alpha = private information. Period. Full stop.

It continued:

I understand that we’d like to think that smarts + process + time = alpha. It’s one of the little lies that we tell ourselves to get through the day. Here’s the 10-year chart of Berkshire vs. S&P total return. Without private information (and often with it) THERE IS NO ALPHA.

Next:

And if you’re hoping for an active management renaissance … as passive, price-insensitive investing grows as a % of flows, alpha becomes *harder* to achieve, not easier. Alpha creation is not a mean-reverting phenomenon.

And finally:

When did fundamental active management begin to die? In August 2000, when Reg FD made it illegal to get private information from public companies. If Reg FD dated back to 1980, you would have never heard of Peter Lynch and Warren Buffett.

People have been arguing the thread and the definition of the words ‘private information’ all day long and will argue this until the end of time, but I am in agreement with Ben as to alpha.

I was crazy/silly enough to start a hedge fund in 1998, especially without an edge in private information. I am glad that I don’t have to compete against the S&P anymore.

Picking stocks is a really fun hobby, and if you can afford it…lifestyle, but it was a terrible career decision.

I love my life as a founder and angel.

The alpha seems endless and indexing is still years away (though it is coming).

Back in 2013 I wrote that ‘Alpha Was In Your Eyes and Your Feet‘. The post is still timely and relevant.

Building private information…with your own eyes, ears and feet…through your global social networks and passionate pursuit of domain experience is how you ‘out’ Warren Buffett all the wannabe Warren Buffett’s.

I see crazy memes of people doing stupid things all day on social media and I will tag them with ‘Not Jewish’ every once in a while.

Today’s winner.

The death of retail has been an endless meme of smartypant venture capitalists and analysts and they have been mostly right the last 4 years:

That has not stopped Autozone:

It still pays to walk the malls and check the stores if you like investing in stocks.

Have a great weekend.

We went from a stock market ‘glitch’ in December to a National Emergency in February.

All the while, the S&P has moved about 40 percent to be in the same place.

This turbulence has definitely shaken out some weak hands in the stock market.

On the eve of this national emergency I checked the all-time high list to see what investors are clamoring for. Here is a list of the largest companies on that list.

Starbucks
Autozone
Waste Management
Union Pacific
Salesforce

One thing not working is FAANG (Facebook, Apple, Amazon, Netflix and Google).

Warren Buffett has been selling some Apple and Amazon walked away from a New York headquarters.

I remember the ‘pundits’ saying the markets would crater without FAANG leadership and Jamie Dimon saying Bitcoin/Crypto was a fraud.

All of this nonsense is really just a reminder to turn off your television, spend more time looking around you not down at your phone, and as always punch a banker.

If the railroads like Union Pacific can be at all-time highs 140 years after their initial bubble, imagine where the modern railroads (internet leadership) will be in 140 years.

FAANG in some form or another will be back real soon. They are resting and licking some wounds but their spending will pay dividends .

In America it pays to be bullish 80 percent of the time. Nasdaq 10,000 here we come.

I am really struggling with my writing. The rest of my life is fantastic… so only the daily readers are suffering with my struggle. I do feel your pain.

I have always assumed that by writing something every day on this blog, my writing habit would just get stronger and writing would just be easy.

El wrongo!

When I started Wallstrip back in 2006 I would be crazy about every aspect of the daily show, not just the company. Each episode had to be great because if even one show was weak, the next show would have to be even better so why relent for even a minute.

While many episodes were of course bad, it was the attitude that most mattered.

That pace was ridiculous on the budget we had so it was great that CBS came along and acquired us.

Things are a little different today in blogtown USA. Nobody is coming to buy my blog, though a few ex CBS’ers do read this…so I just have to grind it out and take my daily swings.

Thanks for stopping in while I ride out the slump.

PS – Someone not in a slump is Dave Chapelle. Dave had his slump, but lately Google/Youtube serve nothing but Dave to me because I recently went down a Chapelle rabbit hole. Those damn AI robots have me in a perpetual Chapelle rabbit hole for the time being.

My gift to readers today is minute 19 of this Dave Chapelle interview on Sway where he talks about what he would do now if he was seated in the front row of Macworld when Steve Jobs announced the Smartphone. Very ‘Dead Zone‘.

I gave my son Max an extra ‘work’ assignment for his second semester of college…three paragraphs about his daily life.

I set up a Google document and told him not to stress about grammar and just let it flow.

The blank page is a daunting beast each and every day. I was not sure what to expect.

I figured worst case Max would become a better storyteller, but if he embraced the spirit of the assignment he would hone a skill that would make him a better employee/leader/citizen.

We are now six weeks into the experiment. Yesterday Max wrote that he ‘loves writing’ (at least in this format) and I certainly feel I have a great look into how he is managing life.

I hope one day he turns this inside out and just blogs. He is really funny as he spills his guts on the digital blank canvas.

It has never been easier to write…too many don’t even try.

This weekend, Ellen and I binged on the hysterical season 2 of Netflix show ‘Friends from College‘. Season 1 is great as well.

I think Fred Savage steals every scene he is in, but the whole cast rocks.

At the end of each show, Ellen and I would just look at each other and laugh each time the name ‘Nat Faxon’ scrolled by in the credits. Was it an inside joke on Fat Nixon?

Turns out no.

Nat Faxon is an actor in the show who also crushes it.

I can’t wait for season 3.

One more…

Hot Wings with Gordon Ramsey was an instant classic. Watch it here.

Good Monday morning everyone.

I am off to SF and the Valley for a few days of work.

The markets are continuing to grind through the negativity and resistance and many new names are at or near all-time highs.

The December meltdown combined with the January melt-up has some fresh leadership. The familiar names continue to be enterprise stock leaders.

Click here is this week’s episode.

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.

I say this every year it seems, but this time I really mean it.

It has NEVER been a better time to be an entrepreneur.

Bessemer Ventures ‘State of The Cloud‘ got me thinking about this topic I see to write about every year on this blog.

A decade ago there weren’t any private cloud companies valued at $1 billion. Today, there are 55 private cloud unicorns. If we include the additional 44 public cloud companies, there are 99 cloud players valued over $1 billion. What’s truly remarkable about the cloud ecosystem isn’t just the sheer size of the market, but also its interdependence.

The cloud, combined with ‘software eating the world’, combined with smartphones, combined with a mobile, global, socially connected world has created an era where entrepreneurs – at any age – can strike it big.

Of course, it is also a great time to be an employee number 2, 3, 4, 5 10 or 100 if you have the right skills.

When I was a kid in Toronto, I thought I had to be a lawyer, doctor, or CPA.

I bolted for the USA at 21 and while I did my MBA at Arizona State University (Harvard of the west) and MIM at Thunderbird, I never took a ‘professional’ job.

The rotary phone was the technology of the day when I started making sales calls in 1991 and the mentorship was hard to find.

It is not just that the mentorship and the tools are endless for today’s entrepreneur…they are endless for today’s angel investors and venture capitalists as well.

If you want to be in the business of investing in the next great entrepreneurs, it has never been a better time to start.

I was listening to this great Harry Stebbings interview of Josh Kopelman and reminded how just this series alone is a great place to start.

Have a great Sunday.