What a time to be alive and have some capital and a network.
If you do not have capital you should be building domain experience and a network because I don’t see the capital flows slowing down or the printing ending anytime soon.
My friend JC has a good post up titled ‘What Bubble’. The gist:
You see, stocks have been correcting for most of 2021. If you’re still waiting for a correction, it must be because you’re looking at your charts with your eyes closed. The average nasdaq stock fell 30% this year. Half the nasdaq stocks fell 20% this year. Over 20% of nasdaq stocks got cut in half this year. If you’re waiting for a correction, where have you been?
This chart from JC that further hammers home the ‘what bubble’ thesis is great:
Investors and traders around the world have incredible tools to go with the $11 trillion in fresh printed money to make speculation their entertainment for decades.
The froth in SPAC’s quickly turned into a bear market and the fast money and the ‘youts’ have long moved to crypto and NFT’s.
What makes this money flow stop is the trillion dollar question. I stopped looking for the answers to these ‘macro’ questions after 2005 when I started my blog and became a much better investor.
Other great reads and listens on this weeks theme include:
Trillions: The Rise of Passive: How The Asset Management Industry Got Disrupted. It is a great read about passive investing and the stock market.
My friend Brian sent me this post titled ‘Those Deals Don’t Exist Anymore:What to do in a world awash in capital‘ and it was an excellent read. I love this riff:
The great tidal wave of cash has made the market efficient. All the easy stuff is gone. Those deals don’t exist anymore. The wave of cash finally breaks, though, when it comes to the hardest thing: creating assets. The market is still not efficient in the creation of assets. Even with Tiger’s blanket investing strategy, there is still an insatiable need for more assets. Everyone wants them but very few people want to do or are capable of doing the hard work to make them. As the champion bodybuilder Ronnie Coleman said: “Everybody wants to be a bodybuilder but nobody wants to lift no heavy-ass weights.” Get your weight belt out of the closet and get some chalk on your hands because we are going to go deadlift 500lbs.
This inefficiency in the creation of assets has created the greatest asset speculation of the last 30 years… in Crypto and NFT’s. This latest boom in the sector is much different than 2017 and for those willing to truly focus and do the hard work the gains have been staggering.
I’ll wrap this weeks longer than usual post with India’s start up ecosystem and stock markets. Talk about a nation creating assets that is now awash in capital!! India is on fire with new investment, especially in the venture space. I follow my friend Shiv (who did some work for me and Social Leverage when he lived in San Diego and attended college) and have invested alongside him in a few Indian startups. My over simplified bullish theme for now on India is that we share a common technology enemy…China. India has gone so far as to kick TikTok out of India. If you want an easy way to follow the fast growing venture scene, follow Shiv at his 1947 tech site and on Twitter.
Have a great Sunday.
PS – One great listen on all things investing is Patrick’s podcast this week with Sam Hinkie.