#83 - Jay Z Sells Tidal To @Jack, the Bull Case For Stocks and Managing Personal FOMO
In this week's episode of Reformed Millennials, Broc and Joel talk about Jay Z selling Tidal to @Jack and what it means to $SPOT and $AAPL. Joel also gives some real world context to handling FOMO in the face of crazy market bubbles and discusses what it takes to invest in tech while also avoiding blowing yourself up.
This market is CRAZY and the top of the episode is a must listen if you’re having a tough time figuring out what you should do short to medium term.
Listen on Apple, Spotify, or Google Podcasts.
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👉 For specific investment questions or advice contact Joel @ Gold Investment Management.
Welcome back to the grand casino!! 🎰
Stop listening to what these people (Chamath) say and watch what they do.
Over a full cycle, everyone looks smart and everyone looks stupid.
Your ability to deal with looking stupid, and looking smart, is what counts.
"The stock market is a device for transferring money from the impatient to the patient." - The GOAT (Warren Buffet)
Thirty years ago the best investors had the biggest funnels of information. Today the best investors have the best filters of information. Filter out the noise and find the signal.
What is the signal in this market?
Risk Free Rate
David Tepper - one of my favorite HF managers got incredibly bullish last Friday "Basically I think rates have temporarily made the most of the move and should be more stable in the next few months, which makes it safer to be in stocks for now”.
Combined w/ $1.9T stimulus he doesn't think you can be bearish here but said that modestly. He points out that for more than 5 years the Japanese were net sellers of UST but at 1.6% (see above chart) they are likely to be net buyers.
He thinks the 10Y remains range bound in the 1.3%-1.7%.
If Tepper is right and rates are range bound here it really is tough to be bearish equities in the short-to-intermediate term with that macro stimmie backdrop.
Growth to Value (Boomer Stonks) Rotation - In terms of the magnitude of the move over the past 9 trading sessions we’ve had a ~3 sigma move in “Lockdown/WFH winners vs. Reopening stocks” – the 2nd worst period in the past year for tech.
Tech Cap Ex is BOOMING. GOOG, AAPL, AMZN and FB are spending huge sums of money on innovation. More than ever before. (See below for more)
🌊Tidal sold to @Jack💡
Galaxy brain: @jack and $SQ will use NFT to monetize exclusive music on Tidal. NFT will create scarcity for the media and the proceeds will be used to pay creators. Tidal’s exclusivity will create differentiation from other streaming services from $AAPL and $SPOT.
$SPOT is trying to create exclusivity around podcast content. Tidal contains exclusive concerts and videos. I’m not sure what $AAPL is doing to create exclusivity. Probably why Jimmy Iovine bounced 🤷♂️
Listen to the pod for more context.
Exclusivity is the only way to differentiate. Otherwise anyone can negotiate with the major labels and get access to the music catalogs.
We’ll be watching how the Kings of Leon NFT Album Drop performs - here
🧰Some Personal Thoughts on FOMO🛠
Personal discipline vs. FOMO - recent experience. (Joel Shackleton)
Staying disciplined at all times is the hardest part of investing. You can "be aware" of your investment philosophy/rules but if you don't regularly *revisit* & *internalize*, you will make mistakes.
Avoiding big mistakes > getting everything right all the time.
staying within your circle of competence,
deploying research resources according to your best return on time,
emphasis on building knowledge vs compulsion to trade/buy,
ability to think rationally during volatility & stay calm
KEEPING IT SIMPLE & STICKING TO WHAT YOU KNOW ARE NEVER BAD IDEAS.
I can't tell you how much $money & time has been lost by smart investors chasing ideas or forcing investment in complex industries/ideas.
The investment business attracts high achievers, with very high academic pedigrees who have never known true loss. Proving an intellectual debate through an investment idea sounds attractive. But it also creates big holes in performance when they go wrong, which invariably they do.
MY SPAC EXPERIENCE IS QUITE LIMITED BUT HAS SUCKED SO FAR - $OPEN
And it has reinforced for me that one doesn’t need to invest in everything. There might be some wonderful opportunities in that group of SPACs. But I don't need to invest in them to do well.
And neither do you.￼
Especially during a time when the highest conviction ideas are going through a big drawdown, your sole focus must be on testing conviction & re-underwriting as needed.
Asking where the extra $ should go among existing ideas can be a much better ROI than finding new ideas.
SO THE LESSON FOR ME:
Don't chase "bright shiny objects" unless you need to...and no one ever really *needs* to.
🧐More Thoughts on $FB🚀
Continued to be impressed by their product velocity in e-commerce despite the pandemic.
Facebook will be a lot more than a social network. If you believe that AR/VR is the next platform (or dont) follow his every move. Facebook is spending $15B a year on capex alone...
Check this out:
Some of our notes on $FB:
🌊Best Links of The Week☔
Shopify - Consumers spent $120bn on Shopify in 2020 - double the figure for 2019 and over 40% of Amazon’s competing business. What does that tell us about competing with Amazon? Problems that were already solved? And most of all, about brands and consumers going direct? Link
India’s push to control social media is escalating, with Facebook and Twitter getting threats (as per the WSJ) that their employees will be imprisoned if they don't block some accounts and hand over data: their objection is that they don't have any clarity of criteria or due process. Reminder: India has 450m smartphone users. Meanwhile, the NYT reports that power blackouts in Mumbai last summer while Indian and Chinese troops were skirmishing in the Himalayas were probably caused by Chinese hackers (very Gibsonian). And Huawei's handset production will apparently be down by half this year as a result of US component sanctions (this is why China's push for semiconductor sovereignty is a rather bigger deal than hype about an AI race). Software ate the world, so all the world's issues get expressed in software.
How to Read a 10k efficiently from Valuewalk - link.
Super relevant for anyone concerned about the deprecation of cookies. Via a KBCM report this AM.
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