Steve Jobs on asking for help

I've never found anyone who said no or hung up the phone when I called.  I just asked.  And when people ask me, I try to be as responsive to pay that debt of gratitude back.  Most people never pick up the phone and call.  Most people never ask.  And that's what separates sometimes, the people who do things from the people who just dream about them. 

~ Steve Jobs, "Just Ask"

Dan Ferris on the takeaway from Robinhood frenzy

Robinhood was always a sign of growing excess in the stock market.  It was always a sign that people will believe a good story and think there's easy money in it for them.  And it just falls into the category of things that happen near big market tops. 

~ Dan Ferris, interview of Mark Camillo, Stansberry Investor Hour, 3:30 mark

Winston Churchill on the South Sea bubble

The mania for speculation broke loose.  Stock soared in three months from 128 to 300, and within a few months more to 500.  Amid the resounding cries of jobbers and speculators a multitude of companies, some genuine and some bogus, was hatched.  By June 1721 the South Sea stock stood at 1050.  Robert Walpole himself had the luck to make a handsome profit on his quiet investment.  At every coffeehouse in London men and women were investing their savings in any enterprise that would take their money.  There was no limit to the credulity of the public.  One promoter floated a company to manufacture an invention known as Puckle's Machine Gun, "which was to discharge round and square cannon-balls and bullets and make a total revolution in the art of war," the round missiles being intended for use against Christians and the square against the Turk.  Other promoters invited subscriptions for making salt water fresh, for constructing a wheel of perpetual motion, for importing large jackasses from Spain to improve the breed of English mules, and the boldest of all was the advertisement for "a company for carrying on an undertaking of Great Advantage, but no one to know what it is."  This amiable swindler set up a shop in Cornhill to receive subscriptions.  His office was besieged by eager investors, and after collecting £2,000 in cash he prudently absconded.

The Government took alarm, and the process of suppressing these minor companies began.  The South Sea Company was only too anxious to exterminate its rivals, but the pricking of the minor bubbles quickened and precipitated the slump.  An orgy of selling began, and by October the South Sea stock stood at 150.

~ Winston S. Churchill, The Age of Revolution, pp. 110-111

Gavin Nascimento on democracy

Democracy is popular because of the illusion of choice and participation it provides, but when you live in a society in which most people’s knowledge of the world extends as far as sports, sitcoms, reality shows, and celebrity gossip, democracy becomes a very dangerous idea.  Until people are properly educated and informed, instead of indoctrinated to be ignorant mindless consumers, democracy is nothing more than a clever tool used by the ruling class to subjugate the rest of us.

~ Gavin Nascimento, South African anti-government activist

(As cited by Marc Faber in The Gloom, Boom & Doom Report, March 1, 2021.)

Charlie Munger on early 2021 speculative frenzy

The frenzy is fed by people getting commissions and other revenues out of this new bunch of gamblers, and, of course, when things get extreme, you have things like that short squeeze … and it’s really stupid to have a culture which encourages [so] much gambling in stocks by people who have the mindset of racetrack bettors and, of course, it will create trouble, as it did.

~ Charlie Munger, "Charlie Munger says it’s ‘really stupid to have a culture which encourages [so] much gambling in stocks’," MarketWatch, February 25, 2021

Anthony Esolen on civilization

... Goodness and beauty spring from a care for the small and the local, and not from a fascination with grand political and social abstractions.

~ Anthony Esolen, The Politically Incorrect Guide to Western Civilization, p. 268

Cathie Wood buys the dip in Tesla

We love the liquidity that this provides us, we think it’s very healthy, a very healthy shakeout.  All I know is we are keeping our eyes on the prize and the prize just got a little bit more interesting.  Corrections are good, they keep us all humble.  The strongest bull markets I’ve been in are built on walls of worry.

~ Cathie Wood, "Cathie Wood Buys the 13% Dip in Tesla as ARKK Slips Again," Bloomberg, February 23, 2021

(Wood’s main fund, the $27 billion ARK Innovation ETF (ARKK), notched its worst back-to-back rout since September, falling as much as 11.8% and ending the day down 3.3%. A record $4.96 billion worth of shares changed hands in total, more than double the previous high just a day prior.  ARKK closed down 11.2% from its all-time high set February 12)

Alexis de Tocqueville on democracy and equality

Democratic nations are so enamored of equality, they would rather be equal in slavery than unequal in freedom. 

~ Alexis de Tocqueville

Alexis de Tocqueville on equality and envy

Equality is a slogan based on envy.

~ Alexis de Tocqueville

Alexis de Tocqueville on man's passion for equality

There is, in fact, a manly and lawful passion for equality that incites men to wish all to be powerful and honored. This passion tends to elevate the humble to the rank of the great; but there exists also in the human heart a depraved taste for equality, which impels the weak to attempt to lower the powerful to their own level and reduces men to prefer equality in slavery to inequality with freedom.

~ Alexis de Tocqueville, Democracy in America
 

(Cited by Anthony Esolen in The Politically Incorrect Guide to Western Civilization, p. 229.)

Humphrey Neil financial markets and IQ

 Never confuse brains with a bull market.

~ Humphrey Neill

Kevin Duffy on value investing

Value is subjective and all investing is taking a stab in the dark as to what consumers (and investors) will value in the future.  Honestly, all investing and speculating is “value investing.”  Look at how the “value investor” has evolved since Benjamin Graham from searching for cigarette butts to focusing on high quality businesses with durable competitive advantages.  I suppose this might even change over the next 100 years.  Those who understand this adapt and thrive.  The traditional value investor risks missing opportunities due to a rearview mirror/present profitability bias.  Amazon.com in the mid-2000s was a classic example.  It was clear that a) e-commerce would take significant share from traditional retailers over time and b) Amazon was the clear winner.  Yet I passed because it looked “pricey” at 75 x current earnings.  Stupid!!!  Biggest, and dumbest, mistake of my career.

~ Kevin Duffy, February 23, 2021

Kevin Duffy's bond advice in The Coffee Can Portfolio

February 18, 2020 

30-year T-bond yield = 2.01%

My advice: Reduce your bond exposure and shorten the maturities of your bonds. You should not be holding 30-year bonds for, example. 

May 26, 2020 

30-year T-bond yield = 1.43%

Where this leads is anyone’s guess, but it can’t end well… not for the economy and certainly not for bond investors. 

August 11, 2020 

30-year T-bond yield = 1.37%

Bonds are an especially dubious choice. The interest they pay is the lowest in 5,000 years of recorded history (and in many cases negative), so their future cash flows are of little value. The best outcome is to get your money back 10, 20 or 30 years from now, that is assuming the borrower has survived that long and has the ability to pay. Even if that balloon payment is delivered in full, its value will be ravaged by inflation. 

January 24, 2021 

30-year T-bond yield = 1.86%

U.S. Treasury bonds have one of the worst risk/reward characteristics of any investment I’ve seen in my 35-year career.

February 23, 2021

30-year T-bond yield = 2.20%

~ Kevin Duffy, The Coffee Can Portfolio, Feb. 18 2020 - Jan. 24, 2021

Kevin Duffy explains the casino effect

1/ Bubbles go parabolic - that's what they do. At the end, the average Joe gets an invitation, the crowd is unleashed (higher prices attract more buying), and risk amps up. The gambling analogy is apropos: the financial markets have been turned into a casino. 

2/ Casinos attract gamblers and worse, compulsive gamblers. Compulsive gambling is a progressive disease: the gambler is addicted and will increase his recklessness until he is wiped out. The speculator has progressed from Apple to Tesla, and now to GameStop. 

3/ He has gone from bidding up a real company (Apple) to absurd heights to a profitless dream (Tesla), making Elon Musk the richest man in the world, to wildly speculating in companies like GameStop and AMC in clear decline. 

4/ The casino is now packed. There is no one left to suck into the game. Those inside are trapped. They've been winning so long, they can't leave. They're hooked. You'll have to take them out in bodybags. 

5/ As tables start to lose, the gamblers will simply move to the remaining winning tables. This is why you'll see wild rotation at the top - speculators looking to gamble on any stock going up. 

6/ Eventually all of the tables are losers. The fate of the speculators is sealed. 

Btw, this compulsive gambler analogy also applies to central bankers. They're all-in on the Great Monetary Experiment since 1971. They'll never cry 'uncle,' and will be taken out in bodybags.

~ Kevin Duffy, tweet, February 23, 2021

Kevin Duffy on Tesla being added to the S&P 500

Tesla, which gained club membership on December 21, may turn out to be the canary in the coal mine.  It entered the index with a #6 ranking and about a 1.6% weighting, which means the remaining 499 or so holdings had to be trimmed by essentially 1.6% to make room. 

As it turns out, Tesla has rallied 30% since being anointed a “blue chip,” bringing its valuation to an eye-popping 193 times gross profit.  Without the benefit of auto credits (i.e. government subsidies), Tesla unlikely would have cleared the profit hurdle.

~ Kevin Duffy, The Coffee Can Portfolio, January 24, 2021

Warren Buffett on the value of patience in investing

Wall Streets makes its money on activity, you make your money on inactivity.

~ Warren Buffett

Kevin Duffy on speculative manias and IQ

IQ is cyclical.  Mine always goes down during speculative manias.  After a 12-yr bull market, I'm now a moron, dangerously close to an idiot.

~ Kevin Duffy, tweet, February 22, 2021

Felix Zulauf on Bitcoin mania

I don’t believe that Bitcoin will ever make it as money used in daily payments.  It is too complicated, the price is too volatile, and “mining” it requires too much energy.  But as long as people think of Bitcoin as a safe store of value, the price could go higher, and it could become a mania.  At the peak of the tulip-bulb mania [in the 1630s], the most expensive tulip bulb cost as much as a house.  That suggests Bitcoin could reach $1 million someday.  But tulip bulbs trade today at only $10 a dozen.

~ Felix Zulauf, "The View From Europe," Barron's, February 20, 2021

Felix Zulauf on economic stimulus and government spending

The government share of the economy will continue to rise.  The more government is involved in the economy, the less productive and efficient the economy becomes.  If productivity falls, prosperity declines.  An ever-larger percentage of the population falls into poverty or near-poverty, and society takes on a bigger role in caring for those people.  We are slipping into planned economies and greater socialism. In the long term, it is the wrong recipe.

~ Felix Zulauf, "The View From Europe," Barron's, February 20, 2021

Tom Bernhardt on progressivism

The progressive movement has been a continual blight on mankind for way too long.  It's brought us Prohibition, eugenics, Federal Reserve, income taxation, WW I, and so many other horrors.  It stems from some theological-type notion of human plasticity and perfectibility to be molded by enlightened central planners.  It appeals to the hubris of the intellectual classes in academia, journalism, law, politics and now Big Tech.

~ Tom Bernhardt, Facebook post, February 18, 2021

Cathie Wood predicts $250,000 Bitcoin price if companies step up (2021)

If all corporations in the U.S. were to put 10% of their cash into bitcoin that alone would add $200,000 to the bitcoin price.

~ Cathie Wood, "Bitcoin could hit $250,000 if U.S. companies opt to do this, says Cathie Wood," MarketWatch, February 17, 2021

(Bitcoin closed at $51,376.)

Bill Bonner on George Gilder as pied piper of the 2000 dot-com bubble

Of all those who "got it," few got it as good as George Gilder.  Gilder's role in the Information Revolution was to justify the dreams of the masses.  Like Marx, Engels, or Lenin, he helped convince the lumpeninvestoriat that they could get rich without working by buying into technology they did not understand and stock in companies they did not know with money they did not have.  What was talk of gigabits of photons flying over glass fiber and multiplexing, pulsating transits other than the information revolution's answer to Marxist claptrap about dialectical materialism?  To the average investor, it was all weird and unfathomable.  But if it made him rich, why ask questions?

~ Bill Bonner, Financial Reckoning Day (2003), p. 17

Jon Miltimore on Venezuelan "privatization"

It seems that after much pain and suffering, even socialist leaders in Venezuela have conceded that they cannot run an economy with enough efficiency to avoid economic ruin. But while returning enterprises to private owners is a step in the right direction, it’s hardly accurate to call Maduro's strategy “capitalism.” 

The Maduro government is still using everything from price controls on food to minimum wage hikes to currency manipulation to manage its economy, not to mention selecting which businesses get to participate in its privatization efforts (and who gets to invest). In terms of overall economic freedom, Venezuela ranked 179 out of 180 countries in 2020—one place ahead of North Korea and one behind Cuba. 

At best, Venezuela’s current economic system is a form of fascism, which Sheldon Richman once described as “socialism with a capitalist veneer.” 

So while applauding Venezuela’s small but important step, we should not lose sight of an observation from Nobel Laureate economist Vernon Smith, who in 2018 noted that prosperity would return almost at once to Venezuela if politicians repealed their harmful policies and unleashed the power of markets.

~ Jon Miltimore, "Bloomberg: Venezuela Turns to Privatization After Being Bankrupted by Socialism," FEE.org, February 16, 2021

G.K. Chesterton on compulsory education

The purpose of Compulsory Education is to deprive the common people of their commonsense.

~ G.K. Chesterton

The Economist on Reddit traders and GameStop frenzy

Events on Wall Street have become so strange that Netflix is said to be planning a show to immortalise them. But what should be the plot?  One story is of an anti-establishment movement causing chaos in high finance, just as it has in politics.  Another is how volatile shares, strutting online traders and cash-crunches at brokerage firms signal that a toppy market is poised to crash.  Both gloss over what is really going on. Information technology is being used to make trading free, shift information flows and catalyse new business models, transforming how markets work.  And, despite the clamour of recent weeks, this promises to bring big long-term benefits.

~ The Economist, "The real revolution on Wall Street," February 6, 2021

Cathie Wood on Bitcoin as a portfolio diversifier

If you look at the correlation of Bitcoin's performance relative to any other asset class, it has the lowest correlation.  Meaning, if you buy some Bitcoin you will further diversify your portfolio and increase your returns with lower risk, right?  So that's why institutions look for that low correlation.  Bitcoin has it.  And so that's clear; we have 10 years of history now. 

~ Cathie Wood, "A typical day for Ark Invest's star stock picker Cathie Wood," Yahoo!Finance, 17:50 mark, February 6, 2021

(Bitcoin closed at $39,267 on Feb. 6.)

Cathie Wood: "We've never seen this amount of change at the same time in history"

What's fascinating about this period is that now we're seeing a flood of IPOs, a flood of secondaries, we've seen SPACs, which really are liquidity events earlier than otherwise might have taken place, because I think there's a collective understanding that the future is here.  And if we don't invest now, we're going to lose out...  So we've got five platforms, 14 different technologies.  We've never seen this amount of change at the same time in history.

~ Cathie Wood, "A typical day for Ark Invest's star stock picker Cathie Wood," Yahoo!Finance, 3:10 mark, February 6, 2021

Bill Bonner: takeaways from the GameStop frenzy

So what was that all about, we wonder?  All the sturm and drang?  All the huffing and puffing on the part of bystanders?  Everybody seemed to get worked up about it. 

The shorts thought they were doing God’s work – helping Mr. Market find the appropriate price for GameStop shares.  The longs all wore white, too, confident that they were on a crusade to stop the rich from taking over the world. 

The only “takeaways” for us from the whole saga were that the Fed’s bubble must be getting ready to pop (the madness of the gaming crowd is reaching a fever pitch)… and that hatred towards “the rich” is running high – and growing.

~ Bill Bonner, "The Aftermath of the GameStop Short Squeeze," Rogue Economics, February 3, 2021

Tim Price on investing and trust

We don’t trust politicians.  We don’t trust overvalued ‘meme’ stocks.  We value committed free market capitalist entrepreneurs, we trust in price discovery as far as central banks will allow it, and we trust gold.

~ Tim Price, "A Question of Trust," Price Value Partners, February 15, 2021

Steve Phelps on NASCAR and social justice activism

What we do in the areas of social justice and diversity equity inclusion is going to be authentic to who we are.  May not be the right thing for the NBA, but it’s going to be the right thing for us.

~ Steve Phelps, NASCAR President, "Forget ‘Go woke, go broke,’ NASCAR claims social justice is at forefront as new season begins," MarketWatch.com, February 13, 2021

Drive Bubba Wallace

Andy Serwer on the boom in SPACs

The growth has been wack. In 2019, according to SPACInsider, 59 SPACs worth $13 billion were created.  Last year there were 248 worth $83 billion.  And already, just six weeks into this year, there are 135 SPACs which have raised $40 billion.  Many more are on tap.

~ Andy Serwer with Max Zahn, "What the SPAC frenzy tells us about the market and ourselves," Yahoo!Finance, February 13, 2021

Alan Abelson: "Facebook is overpriced" (2012)

Assuming profit margins stay around the same as they are currently, and assuming, too, that the P/E will match that sported by Google last we checked, according to Mark Hulbert's calculations, Facebook's shares should be changing hands at $16.66 each...  Anyway he looks at it, Facebook is overpriced.

~ Alan Abelson, Up & Down Wall Street column, Barron's, May 28, 2012

(Facebook closed at $31.91 on May 25, 16% below its IPO price of $38 set on May 17.)

Hugh Hendry on his investment philosophy

I am an existentialist.  To my mind, the three most important principles when it comes to investing are Albert Camus's principles of ethics: God is dead, life is absurd and there are no rules.  Of course, that's a doctrine of promoting the individual.  You own your own decisions.

~ Hugh Hendry, CIO of Eclectica Asset Management, "Keeping An Eye on Wealth Creation," Barron's, February 20, 2012

David Novack on the success of KFC and Pizza Hut in China

Not everybody in China can come to the United States; it's a very expensive thing to do. But you can experience what is a part of the U.S.  The power of the brand is immense. 

When I first went to China in 1997, you would see the parents in line, and they would buy food for their kids.  But they couldn't afford to necessarily buy anything for themselves.  [That's no longer the case.]  The consuming class is growing so rapidly.  People say it's about 300 million people now, and in eight years, it will be 600 million.

~ David Novack, CEO of Yum! Brands, "How Do You Say Yum in Chinese," Barron's, January 30, 2012

Janet Yellen on fighting inflation (2021)

I've spent many years studying inflation and worrying about inflation.  And I can tell you we have the tools to deal with that risk if it materializes.

~ Janet Yellen, Treasury Secretary, virtually roundtable in Washington, DC, February 5, 2021

Jeff Bezos on expectation

Given a 10% chance of a 100 times payoff, you should take that bet every time.

~ Jeff Bezos

Tony Deden on investing in resource companies

I believe we are witnessing the beginning of the end of the age of financialization and, if I’m right, then owning commodities is going to be essential.  But how do we do that in the best way possible? 

It is not so easy as you might think.

Finding exceptional companies with first-class management and exposure to the right commodities is difficult.  But if you are prepared to look in places where others are either discouraged from investing or which are simply overlooked, you can find exceptional things.  Valuable things.

~ Tony Deden, "Two Men in a Boat," Things That Make You Go Hmm..., September 27, 2020, p. 11

Dan Ives on Tesla's $1.5 billion bitcoin bet

[W]e do not want the bitcoin mania to overshadow the underlying EV hyper growth story taking place at Tesla.  Herein lies the fundamental driver of the stock’s value.

~ Dan Ives, Wedbush analyst, "Tesla’s big bitcoin bet could come back to bite the EV maker," Yahoo!Finance, February 10, 2021

Grant Williams on incivility

There's nothing that cuts me to my core deeper than incivility...  You just get so much more out of a conversation when both sides are listening to each other... 

~ Grant Williams, interview with Jesse Felder, 32:20 mark, February 10, 2021

Levrentiy Beria on justice during the Stalin era

Show me the man and I'll find you the crime. 

~ Levrentiy Beria, Deputy Premier under Stalin

Joe Rogan on kindness

The one thing I know for a fact is that the nicer we are to our fellow human beings, the nicer the universe is to us.

~ Joe Rogan

Thucydides on Athenian imperialism toward Melos neutrality

"Do not talk to us of justice," say the Athenian ambassadors to the rulers of the neutral island of Melos.  "You will submit to us, or we will destroy you; justice is merely the will of the powerful."

~ Thucydides

Safa Rashtchy on Amazon's investment projects, including AWS (2006)

I have yet to see how these investments are producing any profit.  They're probably more of a distraction than anything else.

~ Safa Rashtchy, Piper Jaffray & Co. analyst, "Jeff Bezos' Risky Bets," BusinessWeek, November 13, 2006

Scott Devitt on Amazon's investment projects (including AWS)

There's not going to be any economic return from any of these projects for the foreseeable future.

~ Scott W. Devitt, Stifel Nicolaus & Co. analyst, "Jeff Bezos' Risky Bet," BusinessWeek, November 13, 2006

Jeff Bezos on investments in AWS

We think it's going to be a very meaningful business for us one day.  What we've historically seen is that the seeds we plant can take anywhere from three, five, seven years.

~ Jeff Bezos, "Jeff Bezos' Risky Bet," BusinessWeek, November 13, 2006

BusinessWeek on Amazon Web Services (2006)

Yes, Amazon founder and Chief Executive Jeffrey P. Bezos, the onetime Internet poster boy who quickly became a post-dot-com piñata, is back with yet another new idea.  Many people continue to wonder if the world's largest online store will ever fulfill its original promise to revolutionize retailing.  But now Bezos is plotting another new direction for his 12-year-old company, which he will lay out on Nov. 8 at San Francisco's Web 2.0 Conference, the annual gathering of the digerati crème.  Judging from an advance look he gave BusinessWeek on one recent gray day at Amazon's Seattle headquarters, it's so far from Amazon's retail core that you may well wonder if he has finally slipped off the deep end.

~ Robert D. Hof, "Jeff Bezos' Risky Bet," BusinessWeek, November 13, 2006

Nate Geraci on the speculative mania in "Reddit stocks"

The speculative mania in ‘Reddit stocks’ has simply overshadowed Ark Invest and pretty much everything else in the markets.  It’s a fascinating dichotomy right now with investors pumping money into companies of the past versus companies of the future. 

~ Nate Geraci, president of the ETF Store, "ARK Mania Finally Fading After GameStop Fever Sweeps Wall Street," WealthManagement.com, January 29, 2021

Jeff Deist on price discovery

The purpose of capital markets is price discovery.  They help investors and businesses allocate capital to its best and highest uses, however imperfectly and haphazardly.  Short traders, long traders, so-called insider traders, futures traders, derivative contracts, speculators, gamblers, colluders, and even naked short sellers all serve this imperfect process.

~ Jeff Deist, "The GameStop Saga Unravels Stakeholder Theory," Mises.org, February 3, 2021

Dwight D. Murphey on the multicultural threat to the West (1987)

So the future, as always, is problematical. The issue as framed for the future becomes one of whether Europe and America will continue to lead or even to exist as such. In part this is question of whether the majority within the West has become so effete and so immobilized by the existence of the alienated intellectual culture within it that it is prepared to see itself displaced and its influence seep away. From all appearances, the current American majority, which rarely asserts its own prerogatives in either ideology or politics, is willing to acquiesce in this transformation. 

Stated another way, the new struggle that today's "multiculturalism" poses will be about whether America and Europe are to dissolve into the Third World, or whether all of mankind will rise to a new level under the leadership of positive forces that will include, as one of their primary ingredients, the heritage of the West. There will be very little "heritage of the West" involved in it if the alienated intellectual culture - the driving force behind "liberalism in contemporary America" - has its way.

~ Dwight D. Murphey, Liberalism in Contemporary America (1987), p. 301

Steve Goldstein on the investment experience of GameStop and AMC speculators

And those traders are inexperienced. Cardify, a consumer-data firm, did a survey of 1,600 self-directed investors in GameStop and cinema chain AMC Entertainment, and found that most were inexperienced investors having less than 12 months of experience, and another quarter with one to two years’ experience. Nearly half made their biggest-ever do-it-yourself trading investment in the last four weeks, according to the survey that ended on Monday. 

Why? Of these overwhelmingly young and male investors, 45% said for quick financial profits. Nearly 20% said it was part of a long-term investing strategy, and 16% said to spite big hedge funds and institutional investors, according to Cardify.

~ Steve Goldstein, "GameStop’s meteoric gains have almost entirely disappeared — here’s advice for those who didn’t get out in time," MarketWatch, February 5, 2021