Business & Money

BTFD, or “buy the fu*!#$ dip,” is a term used in investing when you buy a stock that has precipitously dropped in value, believing it will soon bounce back. I think it was coined by the team at StockTwits (Twitter for investors).

Take Facebook for example:

The stock fell off a cliff recently, falling 20% on the Cambridge Analytica news. That said, as I wrote in VIC 113, the business is stronger than ever (posting gangbuster growth, margin expansion, etc). So I bought the fu$!*#$ dip, and the stock has already recovered all of the losses.

Match Group (MTCH) is another BFTD I recently made.

It dropped 26% on the news that Facebook would be launching a competing dating product. I believe that to be a dramatic overreaction. Match owns Match.com, Tinder, OkCupid, PlentyOfFish, BlackPeopleMeet, and a whole host of other demographically targeted dating services. From a technology perspective, they have a 23-year head start in online dating and their algorithms are trained for one thing, matching people (as opposed to surfacing content that drives engagement and feeds into confirmation bias). As such, I’d imagine it will take a long time for Facebook to get this right (they’ve tried before).

From the chart above, you can see the stock has already regained 17% of the losses and I’d say there’s more room to run. That is to say that, in the near-to-medium term, I don’t believe that Facebook poses a material threat.

Now Facebook is a fierce competitor (SnapChat currently in the crosshairs) so it would be foolish to write them off in the long term.

Yea yea I know, I always write on VIC about being a long-term buy-and-hold investor. But I also believe that you cannot hold beliefs so strongly as to miss out on fantastic short-term opportunities. And this feels like one to me. Time will tell.

Human Progress

Around 40 years ago, the Voyager spacecraft took off from Earth carrying a golden record. The record holds an amalgamation of artifacts representing life on earth. It contains hit songs, a recording of a kiss, greetings in 55 languages, a map of our interstellar position, a diagram of DNA, and many other things.

Everything about the golden record is mesmerizing.

Humanity is equally mesmerizing. You might think of your physical self as your window to the universe. Everything that you ever perceive is in relation to you.

It took 13.8 billion years for a group of atoms to come together to form your window to the universe. If you go all the way back to the beginning, you have this immense explosion of energy. That eventually leads to simple matter, and over time, you got increasing levels of complexity.

Then 4.5 billion years ago you get earth, and eventually microbes. Then you have perhaps the most important event in the history of life on earth, the merger of a bacteria and an archaea to form a eucaryote, which eventually leads to us (and the rest of the complex life forms we see today).

That picture and its sheer impossibility is astounding. And now we have spacecraft zooming through space some 13 billion miles away carrying all of our greatest discoveries and creations. And while the chance of the Golden Record being discovered by some other intelligent life form is some fraction of a fraction of a fraction of a percent, it’s no more or less likely than the probability that you are sitting there reading this newsletter.

It’s all simply amazing!

Philosophy

I briefly referenced the Church of AI in VIC 98. The tone was a bit facetious, but perhaps I should return to the subject from a more serious perspective.

Atheism is not a word I subscribe to. It feels a bit stubborn and dogmatic. That said, I don’t subscribe to any particular religion.

All the while, I work at a software company where machine learning lies at the core of everything we do. We use various ML techniques to model marketing/advertising data and surface insights therein.

ML is a set of techniques from within the larger field of AI. Today we have narrow AI that works well within specific domains. But the goal seems to be a more general purpose AI; one that will match the flexibility and plasticity of the human mind (and eventually surpass it).

Another way to say that would be to say that we’re trying to create life. And if we do that, one might say that we’re playing the celestial role of a “god.” And you don’t have to use words like faith and religion, but this seems to be a religious pursuit in everything, but name.

My Latest Discovery

While I’ve heard great things, I’ve yet to read Ray Dalio’s recent book Principles. But he’s done us a solid and distilled the 600-page book down into a mini-series of short videos totaling 30 minutes.

Definitely worth the watch!