Never Short Fun.
Surf Report, Issue 5 (Free Edition)
INTRODUCTION
November 2, 2020
Hi everyone! I’m so glad to have you here. What a week.
On Tuesday the creator of the great newsletter Investment Talk released the article I wrote after he asked me to write about anything. Check it out!
And on Friday I finally released my ebook called Surfing the Markets. It’s part trading system, part personal finance, and part applied philosophy, all about how I try to use markets to my advantage and have fun doing it. Check it out!
Some people have asked what the deal is with all my surfing talk in a newsletter about biz & brands & bitcoin. The reason: surfing is fun, and it’s by playing with things—waves, ideas, or material—that we have the best chance of doing something new.
Too many business-y things out there in The Real World™ are performed with formal stiffness. Not that business and finance and investing aren’t important topics, they are. They just don’t need to be rigid ones. In fact, I think that treating subjects with more gravitas than glee can put you at an informational and professional disadvantage. People want to work with, for, and around people who are having fun, especially when such a large percentage of our waking hours are spent working or thinking about working. Even reading becomes fun when it’s seen as exploration instead of intake, which makes you want to do more of it and for longer. Fun is a competitive advantage.
Yvon Chouinard, founder of Patagonia and author of Let My People Go Surfing, knew this:
“Our policy has always allowed employees to work flexible hours, as long as the work gets done with no negative impacts on others. A serious surfer doesn’t plan to go surfing next Tuesday at two o’clock. You go surfing when there are waves and the tide and wind are right.”
This is also why I keep an eye on gaming related businesses too, and 2020 has been great for gaming. YTD sales are up 21% from last year, and each gaming category has seen a spike in sales too: hardware up 22%, accessories up 26%, and content up 20%. Corsair (peripherals) and Unity (3D game engine) both went public this summer, Logitech blew away earnings, and the Nintendo Switch has been the top selling console in the US for 22 straight months.
The business of fun is lucrative and playful—a magic formula to apply when surfing sectors and industries for insights and opportunities, cruising down supply chains and adjacent industries to find hidden correlations or associations. If your eye isn’t tuned to having fun your mind won’t be open enough to connections it hasn’t made yet.
Yes, gaming stocks are rising because people are stuck at home and bored. But they’ve been rising for the past decade because people are human and like to have fun.
Never short fun.
—Mark
“Human nature is constant, technology is change.” —Naval Ravikant
Breaking 🌊
Microsoft Teams just passed $115 million DAU, up 53% from April. It’s been Microsoft’s fastest-growing business app ever, even before Covid. Some are already declaring Teams to be the victor as “operating system of the cloud.” So What?: The internet is the new office, so native teleconference software that is bundled with the defacto PC OS is sure to have an advantage over time.
Inspire Brands may acquire Dunking Donuts, which would take the iced coffee pioneers from public back to private (They IPO’d in 2011). They’re not the only M&A going down these days: Over the past three months, ~118 deals have been announced worth ~$570B. (This time last year: only ~88 deals worth ~$334B.) So What?: This highlights how the pandemic is hitting Wall St. vs. Main St. differently. Super low interest rates are only good news for those with plenty of money looking to buy large valuable assets like companies and homes.
Harley-Davidson is getting into the electric bicycle business. The market for e-bikes is projected to grow at an annual rate of more than 6% from 2020 to 2025, according to H-D. So What?: Covid. Interest in riding bikes has been on the rise since lockdowns began, and brands that have a loyal enough following can usually expand to meet new demand.
Esports Entertainment Group has acquired Helix eSports and GGCircuit for $43 million in its quest to become an esports and betting powerhouse. The publicly traded company is trying to own the industry across games, tournaments, and gambling. The CEO expects competitive gaming to become as big as traditional sports. So What?: It might sound silly to you as a concept but institutional investors are bullish, pouring 1 billion dollars a year into the industry. ETFs like $NERD (Roundhill BITKRAFT Esports & Digital Entertainment ETF) are an easy way to bet on the trend yourself.
TikTok partners with Shopify on social commerce. “The deal aims to make it easier for Shopify’s over 1 million merchants to reach TikTok’s younger audience and drive sales.” So What? We’re seeing a shift from social platforms as ad-supported to becoming more direct-to-consumer, cutting out the need for a click entirely. Facebook Marketplace was an early entrant, but expect to see more of this move toward “social commerce.”
JP Morgan creates a new unit for blockchain projects, and said it used its own “JP Coin” commercially this week for the first time. So What?: While not a move toward widespread adoption of native digital currency for the masses like Bitcoin, it does further validate the concept and give other large firms evidence that they should have more exposure to the digital asset space.
7-day average of Covid cases hit a new high in the U.S. on Tuesday, and just saw a new record in daily case count. France and Germany have locked down again. The U.S. presidential election is this week. Dow futures are down ~500 points as we saw the worst one-week selloff since March. Even tech stocks, which are currently propping up the entire economy, are starting to run out of gas. So What?: What do you mean so what, that is what.
From the Tweetbox 🐦
🔗 Problems are profitable to a producer. Problems are costly to a consumer.
🔗 “We think the future of coding is no coding at all.” —Github CEO
For The Pros 😎
Cold email examples to sell your services. Selling services can be tough in times like these and you can't always rely on inbound/referrals. Cold emails, done right, can definitely help. 🔗 (Link available to Pro subscribers)
Tips ☝
Harry’s Marketing Examples is back with more great before-after copy revamps, this time for landing pages. Great copy can make all the difference, and brevity isn’t always everything:
Think about tracking of your “anti-portfolio,” like Bessemer Venture Partners does. It’s not just humbling, it encourages reflection and remedies blind spots that might need improving.
“Whatever the reason, we would like to honor these companies – our “anti-portfolio” – whose phenomenal success inspires us in our ongoing endeavors to build growing businesses. Or, to put it another way: if we had invested in any of these companies, we might not still be working.”
Mailbag ✉️
Wherein I read a newsletter and share with you my highlight. Here’s a snippet where Morgan Housel points out the difficulty in spotting innovation while you’re in the middle of its occurrence:
“Show me a new technology that was immediately recognized for its full potential and instantly adopted by the masses. It doesn’t exist. A lot of pessimism is fueled by the fact that it often looks like we haven’t innovated in a decade because it takes a decade to notice innovations.”
Insights 🔎
🔗 “You can see time as your enemy, or time as your friend” On the power of deadlines and using time scarcity to drive urgency.
🔗 When we have a thesis, we should ask ourselves how we could find out if our thesis is wrong.
“If that’s not the way you are thinking you will not be successful, except by accident.” —Annie Duke
Here’s An Idea 💡
Grounded airline planes in Singapore turned into pop-up restaurants and sell out in 30 minutes. An echo of the companies who, back in August, started selling unused airplane food directly to customers.
Lesson: Just do what you can do, with what you have, where you are.
PNGs 🖼
How To Market Yourself: “Personal Brand + Domain + Coding Skills/Business Value => Market Yourself in Public + at Work” —@swyx
Ceiling height matters, via @PaulSkallas:
“The beginnings of all things are small.” —Cicero
Groms 🐣
🔗 Lightweight, link-centric user profiles.
Zaccaria said that he and his co-founders created Linktree to solve a problem they were facing at their digital marketing agency Bolster. Instagram doesn’t allow users to include links in posts — all you get is a single link in your profile, prompting the constant “link in bio” reminder when someone wants to promote something.
“Don’t tell me what you think, tell me what you have in your portfolio.” —Nassim Nicholas Taleb
Drop Ins 🏄
My latest investments & trades
Buy & Hold Investments (I will hold these forever)
This section is only available for contributing subscribers. If you’d like to trade and invest along with me, consider one of the paid tiers!
Swing Trades (1-3 month time horizon)
This section is only available for contributing subscribers. If you’d like to trade and invest along with me, consider one of the paid tiers!
Barrels 🎯
Portfolio Highlights
📈 This week Bitcoin was trading near 3-year highs. This year it is outpacing stocks, gold and other assets.
Pods & Schools 🐬🐠
Podcast Reco: Capital University #4: Josh Richards and Bryce Hall talk with Kat Cole about Ani Energy.
“The moment of magic between a brand and its audience is when the audience feels like you get them”
Book Reco: Built to Sell: Creating a Business That Can Thrive Without You by John Warrillow
“Don’t be afraid to say no to projects. Prove that you’re serious about specialization by turning down work that falls outside your area of expertise. The more people you say no to, the more referrals you’ll get to people who need your product or service.”
Tools of the Trade ⚒
Products I use to make money
Wealthfront. ~25% of my portfolio is in Wealthfront, which since 2016 has netted me a time-weighted return of ~39% (~35% money-weighted) at the time of this writing, all while harvesting tax losses like the pros do.
Use this special link to get your first $5,000 managed for free: https://wlth.fr/2ephpyb
StockCharts. I easily make back the small monthly subscription fee with the superpowers it gives me.
Carrd. Use this link or referral code 892PYX69 to start your own web empire.
Cointracker. Track your coins like you track your stocks.
Hypefury. Easily the best tool out their for growing a quality Twitter following.
Validate Your Business Idea: Includes everything from researching, writing, getting attention, and engaging with people, plus a spreadsheet template for tracking subs. Surf Report subscribers get $5 off with the code: surfreport
SPONSOR
Sforzo Audace is my own company—lifestyle brand for renaissance men and creator of the Original Renaissance Bag. “One can do much.” Surf Report subscribers get an extra 20% off with the discount code SURFREPORT at checkout. 🔗 Get Yours
(I’m an advocate of ‘being your own sponsor,’ but if you want to advertise on here instead my DMs are open)
Disclaimer
Nothing in this email is intended to serve as financial advice. Do your own research.