On the hunt for 10x Stocks | Follow me to learn about the best small and mid cap stocks | Author of The Growth Curve Investment Newsletter | Subscribe: FREE 👇
Legendary investor Howard Marks just released a new memo.
“In my 53 years in the investment world, I’ve seen economic cycles, manias and panics, bubbles and crashes, but I remember only two real sea changes. I think we may be in the midst of a third one today.”
My Notes…
This weekend was an opportunity for people to learn that
@Jason
and
@DavidSacks
are out of their minds.
At best they panicked and at worst they intentionally tried to spread FUD.
Either way your mental health and $$ is better off without their nonsense in your feed.
The speed at which
@elonmusk
cut costs, exponentially increased DAUs, and aligned everyone toward the company's top 3 priorities is remarkable.
This will be the best business case study of the next decade.
Twitter is already thriving.
Brookfield Asset Management has $750B in assets under management & 100+ yrs experience investing in the backbone of the economy
They call this “a hinge moment in history” w/profound implications for inflation, interest rates, & investing
Their macro update & investment plan…
Snowflake CFO Mike Scarpelli recently spoke at a Barclays Global Tech conference
Here's what he had to say about the state of Snowflake's business and how the weakening economy is impacting cloud vendors
I'm a shareholder, so I've included a basic DCF analysis at the end
$SNOW
I love having a diversified portfolio of stocks and crypto.
My stocks go down during the day and my crypto goes down at night and all weekend.
Diversifying my losses across all hours and time zones.
Dad’s health has deteriorated so fast as cancer has spread aggressively through is body.
He’s now at the point where he doesn’t want to be alive any more. Too much pain and he feels like he’s a burden to us (he’s not).
Going to say goodbye to him tomorrow.
Cancer sucks.
Snowflake CEO when asked about macro:
"I've removed the word macro from my dictionary. I believe we're at risk of a media-induced recession and people reducing spend because they're nervous not because of data"
"We're seeing enormous demand for $SNOW by co dealing w/inflation
I'm having a tough day mentally. No thoughts of hurting myself, but struggling with some things
I'll be fine because through 10 yr of experience in my military job I've learned to cope physically/mentally
Talking about your mental health is not a sign of weakness. Remember that
Here's what $1,000 invested in the top 10 performing S&P 500 stocks since 2000 is worth today
1. $MNST $1.4M
2. $TSCO $1M
3. $ODFL $319K
4. $NVDA $190k
5. $AAPL $160k
6. $IDXX $120k
7. $ANSS $92k
8. $UNH $89k
9. $POOL $88k
10. $ORLY $76k
How can you find stocks like these early?
Someone shared this with me about $AMZN today... Had no idea
"Despite being up 28x and 35x over the last 11 years, $AMZN and $NFLX have only beaten the market 6 of those 11 years"
Win of the day. Locked in a 2.875% 30 year mortgage rate to refinance our home.
We locked our mortgage in 2019 for 3.875%.
This will save us ~$150/month and ~$80k over the life of the loan.
Might be worth looking into if you’re a homeowner!
I'm a bit emotional right now... money isn't everything and I know I'm VERY lucky
But we work VERY hard and have been through some tough times.
My wife wants to go back to school and I was just able to tell her. "Don't worry about paying for school."
That's why we invest.
@Jason
@DavidSacks
You literally had 0 influence over the fed.
The only thing you potentially did was scare the shit out of tech twitter and possibly incite the beginnings of a bank run.
Genuine question, did you lend to any companies this weekend and if so on what terms?
Marks believes declining interest rates might have played the greatest role of all in investors' success over the last 40 years.
Kind of a scary thought as we exit that environment.
Incredibly humbled and excited for this opportunity. There are so, so many people to thank so I'm not going to call people out individually, but THANK YOU.
Also... let's go
Please meet the Social Capital Emerging Managers Class of 2021
This cohort will be focused on public US equities and their strategies range from growth, tech, value, climate, YOLO and all have 💎🙌🏽!
Two things I’ll always remember about my dad.
1. He was always there for me physically and emotionally
2. He never made me feel like I had to live up to some expectation he had for me.
Two things I’ll try to do for my kids.
Howard believes it is likely that the investment strategies that worked over the last 13 and 40 years likely won't be the ones that outperform in the years ahead.
So the question investors should be asking themselves is how should they adjust their strategy given these changes?
Today is my last day as an Emerging Manager
@socialcapital
.
Monday is my first day at
@JoinCommonstock
.
Here are all the juicy details you're dying to know about my experience working for
@chamath
Thanks everyone for the kind words and encouragement today. Some people have asked if I'll still be active on
#fintwit
/able to share insights about investing.
The answer is YES. Probably more than ever before.
For the first time ever, investing is my full-time job 🙏🏽
The price you pay for a stock matters.
If you bought the Nifty Fifty in 1969 and held until 1974, you were sitting on losses of more than 90% . . . from owning pieces of the best companies in America.
"The S&P 500 Index rose from a low of 102 in August 1982 to 4,796 at the beginning of 2022, for a compound annual return of 10.3% per year. What a period! There can be no greater financial and investment career luck than to have participated in it."
Today is our 11th anniversary.
When people ask me how it feels to be married to such a thoughtful, loving, wonderful person I always say the same thing…
“Ask my wife”
Howard thinks we're in for a "less rosy" period in the years ahead:
- Recession in the next 12 - 18 months
- Deterioration of corporate earnings and investor psychology
- Default rate will rise
- Interest rates WILL NOT decline by 2,000 basis points from here
I’d much rather make $85,000 and be able to workout daily + have dinner with my family than make $300k and have to sacrifice my health while working until dark every day
Some unfortunate personal news...
I lost my job yesterday. There are so many people that have it so much harder than I do. I fully realize that.
But it’s also okay to acknowledge when things are tough.
February of this year was one of the best and worst months of my life.
I'm pausing all billing for my newsletter and providing full transparency (trades, portfolio, research) for free until further notice.
People are hurting financially and I want to provide free access to what I'm doing for those who are interested.
I try to show up every day because I genuinely want to help people discover the power of investing.
But today, I have no energy and nothing to give.
My wife Sarah discovered a small painful lump in her breast and as much as I want to stay positive, it's just so damn hard right
Mid-Year Review: The Price of Overactivity
Hot take: If I would have left my portfolio alone completely I would be up roughly 91% since January 27th. Instead, I’m up 2% since then.
How declining interest rates impact investors and the economy.
They're basically an easy-pill for consumers to buy on credit and companies to invest in growth. But they can't stay low forever...
I was just let go from
@LambdaSchool
. Friends who are still there, I love ya'll. Stay student obsessed.
Students. Keep rocking it. You all will help build the future.
Friends who were also let go today, I feel your pain. Let's create a list of awesome potential new hires.
Whether you agree with
@saxena_puru
or not, the guy has NAILED his calls lately (especially on
#crypto
) and been very public with his opinions + taken a lot of heat from trolls.
Props to you Puru. Thanks for sharing and teaching publicly despite the heat.
Here's what Howard thinks will happen with inflation and rates over the next few years.
Basically.. it's going to take extended aggressive policy from the fed to keep inflation in check. The fed has no reason to lower rates anytime soon (still historically low)
Overwhelmed with gratitude.
We have a healthy baby and momma, two healthy siblings, I joined a team of incredible people, and so many people have been so kind/thoughtful in Twitter land.
“New babies make everyday brighter (and the market go up)”
Ty
@chamath
&
@socialcapital
Amazon is a screaming buy imo (I’m buying more tomorrow morning)
AWS alone did $67B over the last 12 months/growing at 37%
Say that grows to $80B over next 12 months. Slap a P/S of 15 on AWS alone and it’s $1.2T
Rest of the biz is basically free 🤷♂️
Long $AMZN
Sea Change
#1
during Howard’s career came in the 1970s when legislation made High Yield bonds more accessible to investors.
The biggest change with this shift was a new investor mentality. Risk didn’t have to be avoided.
Sea Change
#2
The Fed Funds rate dropped to high-single digits in the late ‘80s then to mid-single digits in the ‘90s.
This started a four-decade declining interest rate environment which led us to where we were today
The OPEC oil embargo of ‘73-‘74 sparked massive inflation. Oil jumped from $24 to $64 a barrel in a year.
CPI went from 3.2% to 11% from ‘72 - ‘74. By 1980, inflation was still 13.5%
Paul Volcker raised the fed funds rate to 20% in ‘80 and inflation dropped to 3.2% by ‘83
Marks believes inflation and interest rates "are likely to remain the dominant considerations influencing the investment environment for the next several years."
We have two beautiful and healthy kids. But we just had our second miscarriage and it hurts really bad.
If you're in a similar situation please know you're not alone and it's not your fault.
Life is beautiful. It's also really hard sometimes.
Okay, so what happens in a higher interest rate environment?
It all comes down to higher demanded returns which means that the fair value of stocks decreases as interest rates increase.
Jeff Bezos believes that stock prices are most closely correlated with cash flow. "It's such a straightforward number. Cash flow is what will drive shareholder returns"
Here are 5 market-beating companies trading at or below their historical free cash flow multiples
@kedlinco
@Jason
@DavidSacks
They had 0 influence on the outcome. Please don’t inflate their egos by giving them any shred of credit for this.
It’s literally the fed’s job.
Brother in-law and young kids were just involved in a head on collision. Please pray for all involved.
Another reminder to cherish your loved ones and your health.
Don’t take it for granted.
Probably an unpopular opinion, but $NVDA is still wildly overvalued.
Not shorting and would love to own part of this great business but it’s far too pricey given growth expectations.
The period between the end of the Global Financial Crisis in late 2009 and the onset of the pandemic in early 2020 was marked by ultra-low interest rates, and the macroeconomic environment. The effects were dramatic:
Marks' summary:
"In many ways, conditions at this moment are overwhelmingly different from – and mostly less favorable than – those of the post-GFC climate described above. We’re unlikely to quickly see the same optimism and ease that marked the post-GFC period."
Portfolio yields 3.1% and provides $5,000 in annual dividend income with dividend growth of 7.6% per year for the last 5 years.
With dividends reinvested, that's roughly 10% annual dividend income growth.
If I contribute $36k/year at that growth rate, I'll earn $105k in
Inspired by
@chamath
here's my one-pager on $BLFS.
I really like this as an early step in my investment process. Great way to clearly capture an initial thesis and can be built on for deeper research or higher allocation positions.
Would love feedback. What am I missing?
I would love for $GOOGL to keep dropping so I can do the same thing with Google that I did with $META in 2022.
Short term over reactions present long term opportunities
Edge computing is changing the way companies serve their applications to customers — and it's creating new opportunities for large-scale video delivery.
Join us for an insider view into innovative video technologies at the edge.
👉
People certainly have personal accountability for their decisions.
But
@RobinhoodApp
built their entire model around ENCOURAGING people to trade and enticing them with stocks like $GME
Then today, they trapped everyone they lured in. Seems brutal.
Kinda crazy how hated $PYPL is right now. Trading down to fair value Currently at a P/E of 21. Its Avg PE since 2014 is 35. (Image 1)
Earnings are expected to grow 16% annually through 2024. If it trades at a PE of 20 in 2024 its a 14.5% CAGR.
Anyone have any bull/bear takes?
This has been a tough week. 4-Year-old daughter tested pos for covid on Saturday. Today we found out my 78-year-old dad has cancer in his liver & spine.
He has had some health issues in the past which make treatment high-risk.
He likely has ~1 month left to live.
4 tools every investor should know about (saves hundreds of hours):
1.
@Quartr_App
: listen to earnings calls like a podcast
2.
@FASTGraphs
: the fastest way to analyze a stock
3.
@stratosphere_io
: KPI tracking
4.
@blackmagic_so
: Network & Engage with your favorite investors
Up 40% YTD because I was buying at peak fear.
Market is celebrating weakening economic data because it means less rate hikes. That won’t last.
Will likely raise 10%-15% cash because I can’t find anything I’m excited to buy. Multiples are getting too high.
$FSLY has all the makings of a future $250B company.
Ambitious thinking? Maybe... but that’s how I invest. No price targets. I look for companies with great products and great management teams, in industries that will be bigger in the future than they are today.
I own shares
Very impressive quarter by $FSLY given all the uncertainty.
Show me another company (this early) that can lose most of its revenue from its largest customer, still grow 42% YoY, guide for 39% YoY growth, and have as many exciting innovations (Compute
@Edge
& Secure &Edge) coming
I'm sorry but if you're a professional athlete, getting paid in crypto is about the silliest thing you can do. Why take that risk when you could get paid in cash and then buy some crypto afterward if you wanted?
When Covid-19 caused the world’s economy to shut down, the Fed supercharged the economy by implementing a jumbo version of the GFC rescue plan in weeks instead of months
My dad never made more than $40,000 a year. I remember wishing we had more money and being embarrassed that he drove old beat-up cars and never had more than a quarter tank of gas.
As I've made career decisions, I've found myself striving to make more money. I've convinced
Zoom, Shopify, Square, Twilio, Instacart, DoorDash, and Uber Eats have saved more businesses than stimulus (this year).
Not a prediction or recommendation for these businesses, just an observation $ZM $SHOP $SQ $TWLO $DASH $UBER
This is a sad day for me. I just sold my shares of $ZM.
It was a beautiful ride and I’m a huge fan of the company. I think it will still outperform the S&P500 from here.
But >$150B valuation and after incredible tailwinds, I think there are better places for my $$
It's interesting to me that people are so critical of $FSLY management and "poor" guidance.
They are managing a usage-based business in the middle of a pandemic and one of their largest customers is smack in the middle of geopolitical poker.
I am incredibly impressed. Long
Jim Cramer says $KO is a buy.
It’s at a blended PE of 28 (25% above its average P/E since 2010) and expected to grow earnings 6% per year for the next 3 years.
$GOOGL is trading at a blended PE of 21 and expected to grow earnings at 11% for 3 yrs.
Coke is in a bubble 😂
$FSLY has all the makings of a future $250B company.
Ambitious thinking? Maybe... but that’s how I invest. No price targets. I look for companies with great products and great management teams, in industries that will be bigger in the future than they are today.
I own shares