Income rules everything around me | Investing myths

Myths are a waste of time. They prevent progression.

Barbra Streisand

It’s still GameStop week out here in markets-land with the senate hearings last week. It’s time to bust some myths with regards to retail investing and investment products.

Myth 1 – If only everybody had access

Credit: Scott Adams
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Go Vote | A tour through the real economy

We take a break from our regular programming to remind everybody to go vote. This election is important, y’all know that. Just vote if you haven’t already. I don’t care who you vote for, just vote.

Another question that I have been pondering is – We know the stock market is up and to the right, but it’s not the real economy. How is the real economy doing? How bad is it – Is there another shoe to drop? As I dug into some indicators, color me pleasantly surprised.

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Bear market thoughts – COVID is going to change everything

Gavin Baker has a phenomenal chat on the Invest Like the Best podcast. I highly recommend listening to the entire podcast. Three things that stood out for me.

At the start of the bear market just do the obvious

Gavin’s insight is that – don’t fall into the trap that if the idea is so obvious, it must be priced in and you don’t have an edge. Don’t try to be too smart for your own good. Just execute on the idea as most people don’t execute on these ideas at the start of the bear Continue reading “Bear market thoughts – COVID is going to change everything”

Investor psychology in times of crisis | Lessons learned

“Fearful when others are greedy and greedy when others are fearful.” – Warren Buffet

The last week has been an interesting view on my own psychology, on how all the best-made plans aren’t worth anything if you don’t have conviction and resolve. Fintwit talked about keeping a trading diary and here is my attempt to keep myself intellectually honest!

I am not a trader. I strongly believe that on a really long term horizon stocks will outperform every asset class. I also believe that the best opportunity to purchase assets is when everyone else is scared. In my lifetime I’ve seen two recessions – dotcom and GFC. I had just started my career during the dotcom boom and didn’t know anything and right before the GFC, we bought a house (great timing right :). So never had any cash to capitalize on the downswings in markets. I’d always thought that in the next downswing, I will be prepared and buy in-size! Continue reading “Investor psychology in times of crisis | Lessons learned”

Fear and loathing on Wall Street

Warning: Stream of consciousness follows! This week has been wild in the markets and I wanted to put my thoughts on paper and #timestamp my thinking. Standard disclaimer applies; none of this should be taken as investment advice!

RIP good times again?

Sequoia published version 2.0 of its RIP good times memo, catchily titled Coronavirus black swan of 2020. Taleb is furiously deadlifting somewhere right now 🙂 What was public stock performance since RIP good times? Looking back it looks like the S&P ripped up since its publication in October ’08. Is this the ultimate contrarian indicator? Are VC’s the last group to point at markets crashing? Is it all upside from here? Continue reading “Fear and loathing on Wall Street”

The traumas that define us

The brilliant odd lots podcast had Richard Koo on to discuss his theory of a balance sheet recession. The central idea is that when a credit bubble bursts and the private sector and consumers both start to deleverage it causes the economy to go into a demand loss spiral, which is a counterintuitive result. If excess leverage caused the bubble then deleveraging and repairing your balance sheet is the most rational individual choice, but this de-levering in aggregate is the wrong choice for the economy as a whole. I would highly recommend reading this paper that goes into some details and also reading his book.

130829jobless

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Investment products are counter-intutive| do conventional engagement metrics matter?

Product engagement is a hot topic. As a product person, you are always looking for the quantifiable metrics that indicate that your product is solving your user’s problem and that you are on your way to product market fit.

The conventional metrics for product market fit usually sound like the below with the trend line going up and to the right

  • User engagement measured by DAU MAU
  • Time spent on your product (Session time)
  • Core loop (# of times your core customer value transaction is executed)

An area which I’m deeply interested in is – do these same metrics hold true when we are dealing with anything related with money? Our relationship with money is very complicated. In silicon valley we see everything as a technology problem, is that true with money? is the success of digital products that deal with money more of a behavioral finance problem than a technology problem?
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