Surf Report: The unexpected upside of rabbit holes
Issue 11: 12.13.2020 (Free Version)
INTRODUCTION
December 13, 2020
Hey everyone—I’m so glad to have you here. What a week.
Anthony Pompliano recently told a powerful story about a conversation he had with a 32-year old Canadian construction worker who heard about cryptocurrencies & Bitcoin at a friend’s house watching football back in 2016:
“What that set him off on though for 4 years was basically: he went down the rabbit hole. He learned about ‘what is money?,’ financial infrastructure, monetary policy, all the financial inclusion stuff… all the things that once you’ve spent a lot of time time looking at you think ‘hey, this stuff’s important, I wish more people knew about it.’
He said this one line to me that was really powerful, he said: “I’m not trying to take over the world. I just want to provide a better life for my family.”
Talk of global institutional disruption and cypherpunk speculation is fun and all but we forget that the point of all this is in the end is to improve the lives of everyday people, and make it easier for everyone to make a living and put food on the table.
But there’s another insight in there: Learning about bitcoin educates you to such an extent that even if it goes to zero it still leaves you better off in life. The same thing goes for business, investing, and the stock market. For example, billionaire angel investor Naval Ravikant is a proponent of reading widely about whatever you find interesting in order to do well in business:
“There is no skill called “business.” Avoid business magazines and business classes.”
Jim O’Shaughnessy is one of the greatest investors of all time. You know what he reads about the most? Philosophy, evolutionary biology, psychology...
“If you do not have an understanding human nature you're probably going to fail as an investor.”
Business and investing is about individuals, society, and culture. Focusing on human emotions, lifestyles, and behaviors is how you succeed.
The more empathy you have for customers the better your product, service, and marketing will be
The more you understand the dynamics of fear, greed, and social influence the better an investor you will be
Business leaders the world over know the two questions you should be asking yourself if you want to start a successful company: “Who can I help?” and “What’s a problem that needs solving?”
The more you pay attention to how capital and commerce work the more interesting they will reveal themselves to be and the more you’ll learn about life in general. You start to see participation in the game of markets & marketing not as an obligation but as a creative outlet to make new things, help people, and solve problems.
As Alice quickly learned: there’s a lot more down the rabbit hole than just rabbits ✨
—Mark
“Attention has been held to be the distinguishing mark of genius. The cultivation of attention depends upon practice.” —Charles F. Haanel
Breaking 🌊
The FTC and 46 state attorneys have sued Facebook, filing antitrust charges that accuse the company of “a systematic strategy” to eliminate competitive threats to what it considers to be an illegal monopoly. So What?: The crux of the lawsuit has to do with Facebook’s acquisition of Instagram (2012) & WhatsApp (2014), which had posed threats to Facebook’s dominance. The filing states “No company should have this much unchecked power over our personal information and our social interactions.” and called to break off those two services.
Twitter has made it easier to run profitable ads by adding “frequency caps” (they also integrated with Snapchat and acquired a video chat startup… 👀), while Reddit finally released its own statistics (52 million daily users!) and stated they’re committed to scaling their advertising business. So What?: As Facebook faces a government lawsuit and is being urged to break off hugely successful business units, rival platforms are strengthening their offerings to press at the seams and provide compelling advertising alternatives to businesses. (Reddit’s ad revenue is on track to rise by more than 70% this year!)
Palantir won a three-year deal with the FDA worth $44.4 million to provide the data analysis software for future drug approvals. So What?: It’s a huge win for the recently-public company, and may include testing of possible Covid-19 treatments. Government work like this makes up 50% of Palantir’s revenues, led by the U.S. but also includes global contracts.
Stripe is teaming up with Goldman Sachs Group and Citibank Group to begin offering business-banking services like checking, in a continued effort to become “the internet economy’s financial supermarket.” Shopify will be their first customer early next year. So What?: Stripe is becoming more of a competitor with Square, whose Cash App was created in conjunction with Chime Financial to provide an alternative to checking accounts. Given Square’s massive success in the public markets, it could be a key piece of Stripe’s longer-term IPO valuation strategy.
Airbnb’s market debut was up 112% on its first day of trading giving it a market cap of $86.5 billion—more than paying for all the rest of seed-round backer Y Combinator’s investments combined including: Stripe, Coinbase, Doordash, Instacart, Reddit, Dropbox, and Twitch. Some think the huge price jump is more a sign of a mis-managed IPO than its success. So What?: AirBNB quickly shifted its strategy to longer-term residential listings in April as travelers stayed closer to home and stays lengthened to more than just a few days, leading to a profit of $219 million in Q3 2020. One analyst suggested they’re actually the ideal solution for social distancing and quarantining.
Uber is selling its self-driving development unit—once part of its long-term strategy—to focus instead on controlling costs, stemming losses, and growing its delivery business during a stay-at-home year. So What?: Strategic shifts like this are often signs of a healthy company demonstrating a willingness to adapt and focus for the sake of sustainable growth, trying to strike the right balance between innovation and a strong balance sheet.
From The Tweetbox 🐦
🔗 “Surfing and life have so much in common…”
🔗 Once you sell a stock, learn to detach
🔗 Start with a problem, not your product
🔗 Social media is microwaved fast food. SEO is farming
For The Pros 😎
An essential article for understanding Stripe—the leading platform powering the internet’s leading platforms. 🔗 (Link available to contributing subscribers)
How one founder bootstrapped his SaaS product from 0 to $145,000 per year in a competitive industry 🔗 (Link available to contributing subscribers)
What makes consumer staple stocks unique in their appeal, and the characteristics of the 'perfect investment.’ 🔗 (Link available to contributing subscribers)
Worthwhile Read ☕️
Want another way to cash in on the ecomm boom? Try industrial real estate. That’s what Blackstone ($BX) and other private equity companies are doing.
Since 2010, Blackstone has acquired more than 1 billion square feet of property in over 200 transactions around the globe.
[…] “This is not just COVID. Industrial real estate has been the best performing core real estate type in the last decade, driven particularly by shifting consumer behavior toward the convenience of ecommerce”
Check This Out 👀
Gather (gather.town) is a video game-like video chat platform that simulates a top-down office (or classroom, or party) environment. As you approach your virtual colleagues their voices become louder and their video feed appears, so you can walk in and out of conversations as naturally as in real life. 👾
PNG 🖼
The biggest categories of growth globally this year were games, business, finance on Google Play; games, business, and utilities on iOS. [Source: Venture Beat]
“The beginnings of all things are small.” —Cicero
Groms 🐣
ListenLater.fm. “A read-it-later service for your ears.” 🎧
Send articles, stories, and essays to ListenLater.fm.
We'll turn them into a spoken audio podcast just for you.
Listen in your podcast player whenever you want.
Salt Lake City-based Salad Technologies raised $3.2M for its platform that uses computer idle time to mine cryptocurrency that customers can exchange for games, subscriptions, and gift cards.
“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
Winning Trade of the Week: $GRPN (Groupon), initiated at the end of October. Carved out some profits for an 81% return
Pods & Schools 🐬🐠
(I clip all my favorite podcasts excerpts on the Bitcast.fm app. Give it a try! You can follow me @markmulvey)
🔊 There are diminishing returns to learning all day every day
🔊 Here’s an idea: a year-long office lease OR: one yearly Bali retreat? 🤔
🔊 A fantastic business lesson that Danny Meyer learned while fly fishing
🔊 Jerry Seinfeld on the hilarious (true) difference between the mind and the brain
Books: I found this list of 31 amazing audiobooks for entrepreneurs. I’ve read a lot of them and it includes some of my all-time favs. If you’d like a personal recommendation let me know!
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 ~53% (~50% 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
Disclaimer
Nothing in this email is intended to serve as financial advice. Do your own research.