Shalom From Tel Aviv

I am in Israel for the week with a group of friends from the Phoenix Federation.

The weather is warmer than normal for November. I spent a few hours on my own walking Tel Aviv and enjoying the beach.

Last night I had dinner with Yoni and Ronen Assia the founders of Etoro (I am an investor) and we caught up on the global brokerage landscape. They are now doing business in over 140 countries.

This morning our group met with Alon Ben David who is a senior defense correspondent. It was interesting to get his points of views on the battles waged today in the middle east.

I love my yearly visits to Israel. This week is much less about investing and startups and more about education and charity.

I am excited to soak it in.

PS – So far I have had just 1 falafel but it was outstanding.

PSS – I was traveling yesterday so Ivanhoff and I completed our Momentum Monday episode last night. Here it is for you to watch or listen.

Momentum Monday – Stock Market Hits All-Time Highs As Nancy Pelosi Creeps Closer To Presidency

I love owning my blog. I can make up whatever headline I want regarding the markets and it is likely to be closer to the truth than any in financial media.

NOBODY knows why the market is at all-time highs. I do know that when I was buying last November and December and becoming the Apple fund as the government shut down and Orange Julius was in meltdown number 700, I liked my odds of higher prices a year out.

I does help that Colonel Klink has spent $3 trillion on a base of $20 trillion over three years as President and he picked a Fed chair that could be whipped and bullied.

I have no idea what happens next, but this piece of data from Sentiment Trader was interesting:

Some other relevant stats and thoughts on the current market…

Software was eating the world for the last decade until this past summer. It’s been a different story the last three months.

biology is eating the world is the new ‘software is eating the world, according to A16z founded by Marc Andreesen who gave us the term ‘software is eating the world’.

Amgen, one of the largest biotechs has busted through to all-time highs. Have a look at the stock since the 1980’s:

Remember all that ‘inverted yield curve’ chatter over the summer….well that’s gone now too. .

The Dow is on the verge of all time highs. Apple, Microsoft, JP Morgan, WalMart and Procter and Gamble continue to lead the Dow.

On a broader level, the Russell 3000 is back at all-time highs.

Being invested is what continues to matter in a low interest rate, easy money world.

Let’s continue to try and enjoy it while it lasts.

Has Apple Ever Been In A Better Position?

I sold some Apple last week and the week before. It still is my largest stock holding.

This weekend I am having a little remorse wondering if Apple has ever been in a stronger position.

Just last December Apple was being written off by most as the stock plummeted 30 percent over the course of a couple months.

Today…technically, the stock is very strong and cruising at all-time highs.

They have more cash in the bank than ever.

The market and stock have fully priced in the decline of the iPhone. Nobody should be surprised about iPhone results unless the iPhone actually surprises to the upside.

The market is not fully giving Apple credit for the potential of wearables, the iCamera (iPhone) and services.

Apple was supposed to be the company most hurt by China Tariffs so they must have a plan by now and Tim Apple has played Orange Julius like a master.

They convinced Goldman to take most of the risk on the credit card lending and buried their name in the process. For that they may have created the ultimate lock in to their iOS. The Bank of Apple is open without all the regular banking headaches.

It has been an impressive 2019 by team Apple.

Lindzanity – Internet Community Building Legend Phil Pearlman

There are just a few people that have spent a lot of time with me when Wallstrip, Social Leverage and Stocktwits were created and the social finance revolution got underway.

Phil Pearlman was/is one of them. Phil is a doctor of and a master at investing and behavioral psychology although he will tend to blame most of anyone’s problems on their mothers.

I’ve had so much fun discussing life and the markets over the years with Phil.

Today, Phil sits dow with me on my podcast to talk about the roots of social finance and trading, the 1999 and 2008 crisis/crashes/bubbles and the art of community building. Phil set the rules back in 2008 and he and I began welcoming (and tossing) people from the Stocktwits community.

Today we talk about the origins of social finance and trading as well as the start of Stocktwits and how he is back to help build another financial social network around the new Stocktwits Trade App.

Here is this weeks episode to watch and or listen.

Please hit the subscribe button on YouTube to get an alert each time an episode is live. You can do the same on Apple or Spotify by searching ‘Lindzanity’ and listening anytime.

Some Writing Tips

On my last trip through New York I pinged David Perell to meet for lunch.

He’s just 25 and one of my new fave thinkers who writes about writing and creativity. We met at a fave SOHO brunch spot of mine called ’12 chairs’ which is fantastic Israeli food and especially fun place on Sundays.

Dave has a great weekly email you can sign up for on his blog. This week he covered writers block (here is his blog post) and some creativity tips which I have cut and pasted below:

​Writer’s block is easy to fix. You need a note-taking system and people to talk about ideas with.

Our most successful writing students write every day and publish every week.

Our best students become community leaders. Some manage local meetups, and others become coaches. All great communities depend on their members to step up and take leadership positions.

The internet will incentivize two kinds of courses: niche and mass-produced. Niche courses will explode because the internet does such a good job of matching people with obscure interests. I envision a future with courses like “The Physics of Baseball” and “The Economics of Star Wars.” On the flip side, basic courses like Economics 101 and Personal Finance will be mass-produced. For example, I taught myself economics by watching Tyler Cowen’s YouTube videos whenever I had extra time.

Universities waste resources by teaching the same courses over and over again, when they should be pooling resources to create basic, big-budget lectures with Hollywood-level production standards.
The best teachers will teach hundreds of thousands of students per year.

Online education will move towards live instruction. Self-paced courses don’t work for the majority of subjects.

Most people don’t write because they lack structure, accountability, and community. Students sign up for the information and stay for the people in the course.

Student satisfaction increases as they pay more.

Great writers have a nose for interesting ideas. In a world of limitless information, taste is a competitive advantage.

Education isn’t only about teaching. It’s about community. Great schools give people friends and mentors.

Online courses aren’t about grades, memorization, or test scores. Students take responsibility for their own learning. Real-world impact is the true measure of success. The school system is the opposite. I told this to a sophomore in high school recently, and she said: “Wait… people take your course because they actually want to learn something?” Or, as Neil deGrasse Tyson once said: “When students cheat on exams it’s because our school system values grades more than students value learning.”

Online courses shouldn’t be a passive experience. They should be active and social. Using platforms like Zoom, students can feel close to their teachers, chat with other students 1-on-1, and get instant feedback — all within a 90-minute session. Over time, online education will be more scalable and more intimate than most in-person learning experiences.

Learning is a social experience. You can’t just download information. You have to wrestle with ideas and make them your own.

People want high-leverage skills and high-paying jobs, but don’t want to pay a fortune for them.

Online education is for everybody now — not just tech geeks and early adopters. Substack, Wikipedia, Unsplash, WordPress, Zoom, Keynote. Professional tools are easy to use now. By publishing online, everybody can build their own credentials. A gift from Silicon Valley.

If you want to write well, stop trying to write like your favorite novelist. Do this instead: write short sentences, use simple words, and write like you’re talking to a friend at a bar.

Have a great Friday.

Oh Well…

We are off to Toronto today for my niece’s wedding.

I was planning on being San Francisco for a board meeting yesterday which was cancelled at the last minute.

That left me with a pretty open day in Phoenix which I was planning to spend at home catching up on bills and paperwork and maybe a long ride.

Nope.

I took Max to breakfast and noticed that a couple of my front teeth were loose and cracked. Since 2012 I have had crowns on most of my teeth from decades of grinding. The grinding continues and the biteplate I wear at night only helps a little.

I have no idea how it happened as I was eating pancakes and eggs, but at 54, shit just breaks.

My dentist is luckily a great friend and I called to see if they could fit me in.

They did and by 7 pm I had three new perfectly matched and 3d printed front teeth installed.

I am always amazed at the technology in my dentist – Dr. Enrico Divito’s office. I dread going, but once I am in the seat he shows me all the new toys he uses to perform the complicated surgeries he makes each and every day.

I won’t show you the real picture because I look like a fat jewish ex hockey player, but here is what my mouth looked like at one point in the afternoon…

A few hours later I walked out with these…

No wonder the Nasdaq is at all-time highs.

Google Maps for Money and Investing

Before I get started, have a quick watch of this hilarious Etoro ad campaign launched yesterday to promote Crypto copy trading. You can open an account now in the USA to buy and sell crypto and do copytrading. I am excited to be Tel Aviv next week for work and play and look forward to spending time with Yoni and Ronen the founders.

Onwards…

For years I have been sharing a thesis that as Robinhood and free trading caught on with the next generation the next wave of active investing would need a ‘Google Maps of Investing‘. If you can trade for free 24/7/365 and the whole world is connected, the products and companies that build trust, differentiated product and platform offerings and the right ‘right turn, left turn‘ (mapping) advice would be important.

For years nobody really cared because few thought Robinhood would catch on.

Now that Schwab and the rest of the online brokerages have gone to free commission and transacting is a commodity, a next generation of investors will be looking to ‘beat the indexes’ or just create their own indexes to invest, trade, follow and share.

It sets the stage for a slew of growth in products and companies that I have been focused on for years and will continue to hunt down. Of course, please do reach out to me if you think you have such a product and vision.

A few weeks ago Angela Strange who is a partner at A16z wrote about ‘The Google Maps for Money‘ which sounds a lot like what I talk about above but is actually all about autonomoud finance. I like how she thinks:

When you enter your desired destination into Google Maps, the app plots out the fastest, most efficient route, even adjusting for traffic and coffee stops along the way. You don’t even need to enter your current location—Google Maps already knows where you are. What if that same predictive software existed for our finances? Imagine a future where you could outline your goals as a student—say, graduate, move to your dream city, save for a house, plan for kids—and an app would execute your optimal financial plan, rerouting and adjusting for “traffic” along the way.

For many consumers, the financial services industry is intimidatingly complex. Sure, we’d all be better off if we understood its intricacies, but most of us are already preoccupied by the practicalities: Can we refinance our credit card debt, student loans, or mortgages, and which should we prioritize? Could we save more? How should we think about investing?

Many well-intentioned startups and incumbents have ramped up their educational efforts to help answer those questions in recent years. But while having a strong basic understanding is important, I believe that the best way to cut through financial confusion and needless complexity is with software. Software is very, very good at distilling the key points we need to make decisions—and, in some cases, even making those decisions for us. Welcome to the era of autonomous finance.

While the media and pundits are focused on the headlines and ‘where the puck is’ (free trading, free banking, free budgeting), I am trying to invest in ‘where the puck is headed’.

Disclosure – I am an investor in Etoro and Robinhood

Bears In Turmoil

This made me laugh yesterday:

I had to ask Ivan if it was real because I do not watch CNBC and he responded ‘lol,no‘.

It is really too bad because there is a saying that ‘they don’t ring a bell at the bottom or the top’ and CNBC has actually figured out how to ring a bell at the bottom by airing ‘Markets in Turmoil‘. Don’t believe me?…Charlie has the stats.

Seeing that CNBC people read this blog, I imagine that Ivan’s ‘Bears in Turmoil’ idea will air sometime soon when we least expect it and are in a good mood constantly checking our brokerage balances. Thanks Ivan.

In the meantime, here we are with the S&P at all time highs and the bears are actually everywhere. Michael Batnick write about it today in a post titled ‘The Most Bullish Signal In The World‘.

According to Barron’s latest Big Money Poll, only 27% of money managers are bullish on the stock market over the next 12 months, which is the lowest reading in 20 years.

The bears always sound very smart when they sound off negatively about stocks and markets. I hear them all the time because I talk to smart people. But as Michael points out in his piece: The average 1-year return is 10.2%. The average 1-year return following an all-time high is 11.5%. This does not include dividends.

The line will not likely be straight, but bears are in need of some help from CNBC.

PS – This WSJ piece Twilight of the Stock Pickers: Hedge Fund Kings Face a Reckoning is a good read.

Today, clients have withdrawn money for three straight years from hedge funds that pick stocks, either betting for or against, according to research firm HFR Inc. That is the longest stretch of net outflows from such funds, once the growth engine of the industry, since HFR began tracking the data in 1990.

The reason isn’t hard to find: They’re no longer especially good at picking stocks.

Turns out, the highest people in the world, just are not having ‘fun’ anymore. This era can’t end soon enough.

Hedge Funds Are in Turmoil….For Realz!

Momentum Monday – Earnings Earnings Earnings

Happy Momentum Monday Everyone

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.

Last week was a big one for the bulls, but this week earnings are coming in droves including Apple, Google and Facebook. I plan to mostly watch.

Apple, JP Morgan, Microsoft and Walmart continue to lead the S&P higher.

The big changes that seem to favor the bulls…

Another rate cut is very likely this Wednesday

Tesla exploded higher which few expected.

Twitter imploded, but the market did not care. I think Twitter has seen their best days as political ads explode and they still managed to miss. Tik Tok and a slew of new social networks will continue to eat away at the attention paid to all the social media darlings for the forseeable future. Sometimes the best product is not enough.

Softbank cleaned up their own mess at WeWork, eating a $10 billion loss and pumping in another $5-$6 billion into WeWork. They fell on their sword which financially sounds crazy risky, but for the markets it was a good thing.

Amazon gapped down big on earnings on Friday, but recovered most of the losses. While the stock still looks vulnerable, the recovery is a good sign for the bulls.

Semiconductor stocks like Intel, Nvidia and Teradyne broke out and the index itself hit all time highs.

Iavnhoff and I toured the markets like we always do and looked for some new ideas. You can watch or listen here.