The Difference Between Amateurs and Professionals

I had my first long day of face to face meetings yesterday in New York (SOHO to be exact).

It was delightful to be back in action the way I like to do business and meetings. Most were planned but as I always allow for in New York, I took a couple meetings with people/friends that pinged me randomly knowing I was in the city.

Of course, I had one Larry David moment early as my Uber driver tattled on me to HQ for not wearing a mask (because asking me to put it on would have been rude?!) so I got a letter from $UBER letting me know I was on double secret probation. My big city pandemic game is definitely slow after being maskless in Phoenix for too long.

I was up early to meet with Jamby’s founder Jack Ambrose. I am not the target audience but use the product. They are the $LULU of laziness or as they call the product line – ‘Performance Inactivewear’.

I ended the day over dinner with my friend @JohnStreetCapital (Justin), who I met for the first time. Justin’s wife Elizabeth also joined and she is also a fintech VC.

This morning I am working on some content projects near and dear to my heart.

For lunch, I am seeing old friends for lunch at one of my fave spots in midtown ‘L’Entrecote‘.

Dinner with my pal Jim O’Shaughnessy will be a laughfest.

The new normal will be a mix of Zoom and Face to Face. I am 55 so as much as Zoom has been great for business, I am thrilled to report that face to face is not dead.

My gut is that Manhattan will be full throttle (for the type of meetings I like to do) by the fall. By full throttle, I mean that the New Yorkers will be here and not just me asking them to come into the city to meet me while I am here.

I will never be a ‘professional’ at Zoom as it relates to the business of VC and investing.

Speaking of ‘professional’ I really liked this Shane Parrish tweetstorm on the difference between ‘amateurs’ and ‘professionals’

Have a great day.

Momentum Monday – Traders Have A Lot To Choose From

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Good morning everyone. Momentum Monday is a day late as the markets were closed for Memorial Day.

As you know, I start each week looking through The Stocktwits 25 which is free and anyone can quickly sign up.

Ivanhoff and I get together Sunday to rip through the markets and see if there is anything we are excited about or worried about in the markets as we look at the leaders and momentum.

You can watch this weeks episode here. I have embedded it below on my blog…

Ivanhoff’s thoughts are below…

The S&P 500 is consolidating in a tight range near its all-time highs. The Nasdaq 100 is not too far behind. The small-cap index, Russell 2000 is back above its 50-day moving average. In other words, the market is hitting on all cylinders. For the most part, everything is rising. This is a notable change of pace compared to the last two months which were characterized by frequent sector rotations – when basic material and financial stocks went up, tech suffered, and vice versa. The one thing that has remained the same is the short-term nature of most moves. We continue to see a lot of intraday fading. It seems institutions are still not interested in chasing breakouts but they eagerly scoop up pullbacks.

The most shorted stocks were the big gainers of in the past week or so. The so-called meme stocks that went crazy in late January, had a second round. Some of them even exceeded their January levels. AMC, for example, went from $10 to $35 in two weeks. All other meme runners were also on fire – GME, DDD, SPCE, FUBO, etc.

The U.S. Dollar’s weakness is reincarnating interest in emerging market stocks. Brazil and other Latin American ETFs had major breakouts last week. Quite a few Chinese tech, biotech, and financial stocks are perking up and setting up. There’s notable strength in other areas of the market as well – industrial metals, gold, silver, oil, semis, medical devices, cannabis, even some software stocks are trying to push higher.

What I have noticed…

Car parts and auto stocks looking good (not for my taste but pointing it out).

Some Chinese stocks starting to wake up with the Renminbi hitting new 3yr highs against the U.S. Dollar.

Only 24% of the world population is COVID vaccinated. I don’t know how much of that is priced in but both $BNTX
and $MRNA (the vaccine creators) are acting constructively.

Financial stocks like $GS and $JPM continue to trend higher near all time highs.

Retail investors will not go away quietly…they have not been scared by the crypto crash…they have came right back for the silly stocks like $GME and $AMC

Here is Charlie’s 5 chart Friday.

Finally, Nikita has been working at Social Leverage from Vancouver since January. We finally got her over the border to meet the team in Phoenix. She has been following the SPAC markets for Social Leverage and we both agreed that the premiums that were silly just a few months ago have become discounts that may offer opportunities. Have a read of her latest newsletter. She put together a list of SPAC’s that she would consider purchasing here for at least a trade.

Have a great week.

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

Rachel’s First Manhattan Apartment

The markets are closed today so I will share ‘Momentum Monday’ tomorrow AM on the blog and this afternoon on the streams.

Onwards…

It is Memorial day weekend so New York City was quiet and as I mentioned yesterday, the weather was cold and rainy which kept the streets empty.

I shared yesterday that SOHO made me sad and New Yorkers were quick to point out I was wrong and how busy the streets and restaurants seem to them. I have no doubt that by the fall New York will be a bit closer to its pre COVID self, and nobody is rooting for it more than me, but the city is not remotely close today.

The streets seem dominated by CVS and Walgreens and ‘Space For Lease’.

With the rain and quiet streets, it was a perfect day to move Rachel into her first apartment.

My friend Jorge (a Manhattan real estate agent and a reader of my blog) hit me up on Twitter because he knew we were looking for Rachel. Jorge did a great job picking a place for Rachel without her physically seeing the apartment.

Obviously a lot of trust was in Jorge, but between text, Facetime (video) and a few phone calls, Rachel had her first NYC lease.

Yesterday we decided to move Rachel in as best we could for a holiday Sunday.

First we hit my favorite Sunday brunch spot in SOHO – 12 Chairs – which not only survived but thrived with the extra outdoor space.

We were nervous heading over to Kip’s Bay neighborhood to see her apartment for the first time, but Rachel was happy with the choice. She and her roommate (headed to Columbia) should be just fine. I think having a doorman 24/7 was a must.

It is really amazing what Casper, Amazon and Target (around the blog) can do to ease modern move in life.

The most difficult thing will be getting internet which really should be the easiest thing…no wonder everyone hates Time Warner, AT&T and Verizon who spend all their free cash flow acquiring bad media and not creating any customer delight.

We are open to suggestions on the best and most efficient way for Rachel to buy and have delivered a couch and chairs and desk in a fast manner…fire away your favorite sites for that.

Thanks everyone.

Sunday Reads and A Quiet Dare I Say Sad SOHO in Manhattan

I am finally back in New York. The last time I was here was February 2020.

It feels great to be back, but it sure is different.

Unfortunately it is cold. Too cold for the end of May.

I was walking around SOHO late yesterday and it feels like more than 50 percent of the storefronts are gone/empty.

The streets are very quiet for a Saturday but like I mentioned…it is cold.

It seems impossible that SOHO will not bounce back completely and some smart retail entrepreneurs and brands will take advantage of the changes. I know my brain is buzzing with ideas.

Onwards…

A couple of reads that I really enjoyed and got me thinking this week …

Ben Thompson – ‘Market Making On The Internet‘ was fantastic. This subject is near and dear to my heart as a longtime Twitter product die hard who worries that Twitter will blow it and leave me with no audience.

Ben takes a look at how Twitter, Shopify and Spotify (three companies in my 8-80 portfolio that I own myself) are trying to fulfill a promise of web 2.0 by offering interoperability. It is not perfect of course because of the centralization of web 2.0 leaders, but it is possible. As Ben points out:

What is neat about markets is that they create the conditions for win-win outcomes; Spotify aligning with creators doesn’t hurt Spotify’s core business, it enhances it by making sure Spotify’s podcast service is as complete as it can be. Critically, it does this not by fighting over users, but rather by linking them.

This is the part that Web 2.0 got wrong; much like the Facebook model of social networking emphasized being your whole self, Web 2.0 assumed that your one identity would connect together the different pieces of your web existence. However, just as the future of social networking is about different identities for different contexts, interoperability via markets is about linking together distinct user bases in a way that is appropriate for different services, all under the control of the user who is paying for the privilege.

I know that Rishi at Stocktwits and team (me included) are thinking and doing the same things.

Have a read.

With Ben’s post in mind it is good to go back and Read Chris Dixon’s piece in January 2019 titled ‘Who Will Control The Software That Powers The Internet‘. No wonder Chris Dixon is so successful as an investor.

Anyhoo…there are probably hundreds of software companies now birthed that will be taking on the web 2.0 leaders because of the work done by VC’s like Chris Dixon who are backing founders wanting to power the internet in a more decentralized way.

One more for good measure is technology crossover fund manager Ram’s quarterly letter titled ‘A Few Things We Learned‘. I am a limited partner in Ram’s fund and am a big fan of how he thinks about technology and markets.

This stat about business starts in 2021 really stood out, especially in light of the half full SOHO storefronts I walked past last night…

Have a great Sunday.

PS – One podcast I plan on listening too is my friend Barry’s interview of Bill Gurley.

The Podcast Hell Week

I took the day off the blog yesterday.

It has been a long week of podcast recording for Knut, Nikita and I.

Knut will be heading off to Norway and I am on the road so we taped 15 episodes of ‘Panic With Friends’ to get us through August.

Talking at length with so many smart founders and investors in such a short period of time about the future and the markets was exhilarating and exhausting.

Because of the crypto crash and the chop in the technology markets I was focused on friends that could help me get a feel for what we might expect.

Jeff Richards, Yoni Assia (Etoro CEO), Nick Adler (Cashmere Digital and Snoop Dogg partner) Sam (FTX founder), Raoul Pal, Ben Hunt, Charlie Bilello, JC Parets, Michael Sonnenshein (CEO Grayscale) and others did not disappoint.

The creators with huge audiences (like Snoop) are thrilled about NFT’s and the creator economy on the blockchain. Every guest this week was in the ‘Buy the Crypto dip mode’ but had unique takes on how the next phase will play out as the narratives have changed and might change ahead.

Of course inflation was a big topic of discussion, but my favorite take (I am biased by my own optimism) was from Raoul Pal who thinks we have reached ‘peak inflation’. That said, Charlie and Ben believe that inflation is here to stay a while.

Jeff Richards of GGV has been my go to guest for discussions on technology stocks because he has been right. Jeff sees nothing to worry about in the $QQQ chop and pullback in his internet and cloud favorites.

The only person looking close enough at the markets to comment on the short to mid term was JC and he believes 2021 is par for the course for a second year of a secular bull market that started in April of 2020. Historically, the second year of these markets has been choppy to down.

Of course, as each of my guests and I harped on in each conversation, it always comes down to risk management and asset allocation as you try to stay invested through these more volatile markets.

I will keep posting a new podcast each Thursday and if you are subscribed at Apple, Google or Spotify you will just continue to get alerts each week.

Have a great weekend.

Dan McMurtrie, Founder of Tyro Partners LLC, Joins Me on Panic with Friends to Discuss Information Overload and Behavioral Investing (EP.151)

Dan is a funny guy and he is also very smart.

If you like investing you enjoy love this podcast. If you like silly banter you will enjoy this podcast.

You can listen here on Spotify or Apple.

For more background on Dan and the discussion read on below…

Guest: Dan McMurtie

Profile: Founder of Tyro Partners LLC

Where to Find Him: LinkedIn, Twitter

What’s the Panic About:

Dan McMurtrie is a 28-year-old founder, portfolio manager, and Twitter phenom more commonly known to his nearly 60,000 followers as @SuperMugatu. He’s an insanely funny, original and inspiring person who knows a lot about social media, maintaining an audience and the behavioral side of investing. Dan’s New York-based hedge fund, Tyro Partners LLC, focuses on trends and supply chains driving technology, healthcare, industrial, and consumer markets. In this episode, we cover a lot of topics: Dan’s big social media break, Wall Street culture, crypto, information overload, the 90% rule, Warren Buffett’s cult-like branding, the markets, and more. Enjoy!

The Takeaway:

Dan covered a lot of great points on the podcast, but here were the main three insights:

It’s the best time to be an investor when it’s a weird time to be an investor.

Tech is programming people.

With all of this information overload online, people are starting to equate experience with betrayal.

Favorite Quote:

“What you want in a joke is something everyone believes is true, but no one wants to say.”

“Technology right now is being used to program people, not the other way around.”

“Do you look at the network as a mob of people to manipulate, or a contributive ecosystem?”

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 Entrepreneur’s Weekly Nietzsche – Brad Feld Winning In His Fifties

My good friend and mentor Brad Feld is the same age as me and he continues into his mid fifties as a prolific author on the subject of entrepreneurship.

His latest book is titled’ The Entrepreneur’s Weekly Nietzsche’ – you can buy it here.

I just ordered the book to read myself so best I just share Brad’s blog post on the style and strategy of the book.

Here is Brad’s quick summary…

The book contains 52 individual chapters (hence the “Weekly” in the title) and is divided into five major sections (Strategy, Culture, Free Spirits, Leadership, and Tactics). Each chapter begins with a quote from one of Nietzsche’s works, using a public domain translation, followed by our own adaptation of the quote to 21st-century English. Next is a brief essay applying the quote to entrepreneurship. About two-thirds of the chapters include a narrative by or about an entrepreneur we know (or know of), telling a concrete story from their personal experience as it applies to the quote, the essay, or both.

Our goal with this book is to make you think, rather than try to tell you the answers.

Congrats Brad.

Busy Summer..And Winning In Your Fifties

I am really excited about this summer.

We are helping Rachel with her move to Manhattan this weekend. Rachel works at Rally Rd which has an HQ in SOHO. Rachel has been working from home (our home) and like every young adult that has had to do that it has been grueling. Not for Ellen and I of course.

From all my friends reports living in Manhattan, the city is quickly coming back. My personal opinion is that the summer and fall of 2021 will be one of the best times ever to start your life and career in New York City.

This week I am in the studio taping two months worth of ‘Panic With Friends’ podcasts so that both Knut and I can travel and ignore the studio work for 2-3 months. Nikita took her first flight in 16 months (Vancouver to Phoenix) to be in the studio and mix it up.

In crowding together so many smart guests from my founder and investor network, I am already getting some themes and trends that should stand out in the post COVID world. I will share them this weekend from the road.

This past weekend watching Phil Mickelson win the PGA at 51 years of age was exciting. I was doing my MBA at Arizona State University when Phil joined the ASU golf team. Knut, Tom (my partner) and I – all classmates – shared the ASU Karsten golf course with Phil and his teammates. Phil was already famous and so was Tiger Woods who came down from Stanford to play ASU often. The first Taylor Made metal drivers were the rage and I remember the angles Phil would play shots that boggled our minds.

I make old man jokes about myself all day now that I am 55, but of course I am channeling some Phil towards my career as an investor.

As investing legend Fred Wilson (also over 55) wrote today on his blog:

I think us “old timers” can take some lessons from Phil and other athletes who are outperforming well beyond their prime. We can stay in the game to start. We can figure out what our version of learning how to hit the ball as far as the youngsters is. And we can take comfort in the fact that we have been in this moment before and know how to take a breath, calm down, and make the right decision. And win again!

.

Off to pee because you know…my prostate.

Have a great day.

Momentum Monday – Down Goes Crypto…Up Goes The Gap?

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.

Good morning everyone.

Gravity won another battle this week….with crypto.

This week we will see if the markets care.

As always, Ivanhoff and I Zoomed an episode of Momentum Monday. You can watch/listen right here. I have embedded it below:

Here are Ivanhoff’s notes…

The main stock indexes – S&P 500, Nasdaq 1000, Russell 2k finished last week where they started. In between, they had a hiccup and several mini sector rotations.

Many of the best-performing stocks from 2020 have been major laggards in 2021 – solar, EVs, SPACs, software, etc. Those same 2021 laggards finally woke up last week and started to perk up. The most shorted stocks shone the brightest which is a sign of returning risk appetite. Curiously, it coincided with a rout in the crypto space. It’ll be interesting to see if this development will continue. In the meantime, many of the leaders of 2021 – homebuilders, metals (copper, steel, aluminum, gold, silver, etc.), retailers, financial, oil stocks pulled back, mostly to their rising 20 and 50-day moving averages.

To conclude, last week was a mean-reversion week and the choppy range-bound action is still dominating. One positive development is the emerging markets in several growth stocks like RBLX, UPST, PATH. The list is not long but at least it is not non-existent. The tech sector has stabilized and we are starting to see some positive consolidations in the space – FB, GOOGL, AMAT, ASML, NVDA, etc.

Charlie’s 6 chart Saturday was most excellent this week.

The Stocktwits 25 tracks the current momentum in the markets and while the yoots have been mesmerized by crypto and meme stocks, the elders have been printing money with energy and the retailers that don’t do e-commerce very well. As always, the markets move in mysterious ways and it pays to follow the prices, not the news.

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

Tiny Bubbles…Seed Stage Edition and Sunday Reads

Yesterday I caught up on the ‘tiny bubbles’ that have been rolling through the markets.

Today I wanted to talk about the ‘tiny bubble’ that has shown up in early stage seed investing.

I have been consistently writing seed stage checks since 2005 so I trust my eyes and ears to tell you that prices are absolutely silly right now. The ascent to silliness seems to have happened overnight as until recently I only believed Y Combinator backed company prices to be silly.

I am seeing way too many startups without a full team or finished product raising 4 and 5 million rounds at $20 million.

Like all ‘tiny bubbles’ I have no idea how and when this will end.

There is A LOT of money chasing deals – thank you FED.

There are A LOT Of venture capitalists (new and old) flush with capital and A LOT of new seed investors flush with cash from exits and stock market gains from their employment of a $QQQ company eager to put money to work.

With the pullback in growth stocks and the crash in SPAC prices and now crypto, I imagine we will see a reset in seed stage pricing at some point soon, but this is all anecdotal through my eyes and ears.

Chasing/pushing prices higher at the seed stage puts so much pressure on the founders and companies to deliver immediately. It is really disappointing to see this sloppy behavior so early in the company life cycle.

In the meantime, I have just focused even more on my narrow domain experience until prices cool.

As for Sunday reads…

Ben Thompson has a good one titled ‘Distribution and Demand

Strip is the BIG fintech company that few have heard of because of their plumbing focus. This is a good read on how they build products.

Have a great Sunday. I am off for my long ride.