Another great week of content and discussion - check out the links and recaps below. It’s become increasingly clear that the mainstream media outlets are simply biased *political machines* - we need facts and *better, more informed decision making. The growth of this community is the *beginning…
*“Capitalism without bankruptcy is like Christianity without hell” *- Frank Borman
Translation: If there are no negative repercussionsfor your actions, you’re likely to take bigger risks and bend / break the rules.
Recap: Great discussion around resources that lay out a framework to analyze businesses. From Helmer’s 7 Powers to Collins’ Good to Great, the below resources help build on a lot of the business strategy fundamentals with new, critical concepts. Thanks to @jlm278 for the recommendation + review.
Comment: These frameworks are critical to making good business and investment decisions. In particular, counter-positioning / disrupting yourself (short term pain, long term gain) is a KEY point in analysis that many overlook - and often leads to investing in value-traps and/or missing the big winners in new spaces. Just ask* Scott Galloway* - the famous NYU professor/strategist - who pitched Long Macy’s (M), short Amazon (AMZN) on 5/1/2015 (source here)...
How has that gone? Don’t see any headlines or trackers around this?*AMZN is up 537%, M is down 91%. His spread is NEGATIVE 628% on this trade. That’s the risk of investing in value traps (e.g. M) vs. ignoring/shorting winners (e.g. AMZN)*
*We have put together a list of winners and losers (company views) - check it out here, and throw in your list of winners/losers. IGNORE current stock prices - first we want to identify companies that embody/embrace the framework. Valuation analysis is the next step. *
Recap: Great interview that provides a backdrop for the state of the economy going into the coronavirus crisis, and the most likely path forward
Comment: Worth the 1-hour listen. Act 1: Coronavirus shocks late cycle market with building legacy issues. Intermission: rate of change data gets better off of the bottom, risk assets go crazy. Act 2: legacy issues remain unresolved (corporate credit, etc.), expect downdraft in risk assets. We posted a similar framework recently (see here), and believe we are currently ~late Intermission. Now is NOT the time for complacency - expect a serious pick up in volatility into September+
Recap: Article on the growth of the DeFi ecosystem
Comment: This may not be everyone's cup of tea right now (still nascent), but if you're interested in looking into what the world of finance might look like in ~5 years, this is worth a read. And if you are looking to put a little money into something a bit further out on the risk spectrum, there are some pretty interesting yield opportunities
Recap: FB team is launching an app called Forecast - looking to build a community around predictions. The app will allow users to ask questions and then use in-app points to make predictions about what might happen in the future
Comment: This is similar to what the CrowdCent community is focused on, with CC focused primarily on market predictions (given the cleaner "Oracle" that is the stock market - ability to track reality vs. prediction). In addition, CC offers community discussion and machine-learning model feedback on predictions. Overall, this should help push forward the idea of transparency and accountability - and help remove the fake, sensationalist news that permeates the world today. As this broader concept rolls out, the days of repercussion-less old media predictions with no tracking (e.g. Jim Cramer's daily BS stock picks) will be numbered. This is part of the 4th Turning. Wouldn’t it be nice to know how accurate your weatherman is? Or better yet, the clowns on CNBC?
CrowdCent *Thoughts & Predictions*
Revamped site, along with a new section + tracker coming in early July