Business & Money

I’ve been working through Howard Marks’ Memos over the last few weeks, and I couldn’t be more thankful for the recommendation from a close friend. The memos are wonderful.
As a result of reading a few, I realize that I have been falling into one of the traps that so many investors fall in to, getting far too confident during a bull cycle. You start making bets than you otherwise wouldn’t. It’s so easy to fall into this trap thinking everything that you touch will turn to gold. Luckily I read a few of these memos before anything bad happened.
And hey, who knows? Maybe the market continues to rally for another year. Or maybe 5 or 10 years.
But I also know the law of large numbers. I know that over long periods of time, things will regress to the mean. I know that this time is NOT different.
So here’s what I’m doing to protect my downside:
There are a group of stocks known as the dividend aristocrats. These are stocks that return money to shareholders on a consistent basis in the form of dividends. And the great thing is that these stocks generally perform better than the market during a downturn as compared to the S&P 500. I’m shifting a higher percentage to these assets.
I’m decreasing my positions in companies that are not profitable and shifting towards those with extremely healthy balance sheets and lots of cash on the books.
I’m selling off some crypto to rebalance the portfolio and reduce risk.
I’m tightening up some of my stop losses.
I’m planning to keep 10-15% of the portfolio in cash to be opportunistic.
Buffet always says you have to be greedy when others are fearful and fearful when others are greedy. Let’s just say I see a lot of greedy MFers running around naked in the streets!

Human Progress

I regularly read a blog called Stratechery. It’s author, Ben Thompson, is an incredible journalist, business strategist, and technologist. He goes deep into the companies and topics he writes about. I have no idea how much money he makes, but at $100 per year for the annual subscription, I’d imagine he makes a few hundred thousand dollars per year just with the blog, if not more.
I’ve also recently kicked off a virtual meditation retreat led by David Cohn. David writes another of my favorite blogs called Raptitude. He built a significant following on the blog writing about meditation and mindfulness, then parlayed that into running these virtual retreats. Again, no idea about his financial success, but Imagine he does well. After day 3 of the retreat, there are hundreds of comments and likes on the meditation forum. At $67 for the 30-day retreat, it only takes 1500 participants to crack $100,000 in revenue.
I’m currently reading a book called The Sovereign Individual (highly highly recommend it). It’s about how individuals will have increasing sovereignty as we transition into the information age, and old paradigms of power and control (i.e. nations, corporations, political affiliations, financial institutions, etc) will have less control over us.
The internet is an incredible means to individual sovereignty. A single person with a passion, a WordPress site, and a bit of work ethic have the ability to make a life for themselves. And a good life. And it doesn’t matter where you live, what you look like, or who you choose to have sex with. There is absolutely nothing holding you back and no reason you shouldn’t exercise your sovereignty.

Philosophy

I’ve noticed this thing I sometimes do when reading content online. I quickly scroll to the bottom of the page to get a sense of the length of the article. I basically refuse to start reading, if I cannot first set my expectations about length and duration.
The interesting thing is that I even do this when reading my favorite authors and blogs. Despite the fact that I’ve already established a fondness for the writer and subject matter, I still have to set proper expectations before diving in.
I’m not sure if this is a good thing or a bad thing. Or perhaps it’s just a thing. But I noticed it. And I think it’s worth thinking about.
I think a lot of “suffering” in life is due to this constant expectation setting. You often hear about how someone is so disappointed about the outcome of a particular situation. But, of course, there would be no disappointment were it not for expectations.
Don’t get me wrong. Setting goals and having aspirations is an important exercise. After all, without a target, how does one set their aim?
But sometimes it’s also important to just dive in, to stop asking questions, and go with the flow. To try something new. To step outside of your comfort zone.

My Latest Discovery

Apparently this past week was “Golden Week” in China. It’s a 7-day national holiday to celebrate the founding of the PRC.
It’s estimated that nearly 700 million people were traveling this year during Golden Week, which is a 10% increase over last year. 700 million?!?!? That’s half of China’s population and 10% of all humans on the planet. That’s 🍌🍌🍌🍌!! (been a while since the 🍌s made an appearance here on VIC – feels good to bring em back 😉 )
Apologies, for bringing this one full circle back to the finance section, but I can’t help it. Everyone’s already aware of the rapidly growing middle class in China, which means the traveler numbers will likely keep going up. And most of these people are booking their flights and accommodations on Ctrip.com (CTRP). Ctrip is basically the Priceline of China. Have you seen the Priceline stock chart over the last 10 years? I’ve owned CTRP for a while now, and will likely keep adding to the position. Don’t sleep!
Of course, the health of the markets will have an impact on discretionary spending in the short term, but from a long-term perspective, China appears to be going up and to the right.