What to do?

in a time of SPAC's, Subreddits and bubble talk

Economists, TV Anchors, investors, analysts and, ahem, bloggers all have their own view and expectation on what they think is likely to occur. Each of them have a compelling case supported by data, graphs and historical reports. 

The problem is. They contradict each other; we are about to have inflation not seen in the last decade, others argue the opposite. What about all the bubble talk?  Are we at the end of the bubble-ish market, or is it just starting? Should we double down on tech stocks. What about commodities? 

Following the business channels for an hour will leave you more confused than informed…So, what can we do?

First, filter out the noise and try to get rid of your fear to miss out, FOMO, on the next Tesla.

Followed by starting to be comfortable with doing nothing and waiting, which is a difficult thing to do. I struggle with it. I fear making mistakes of omission. Not pulling the trigger and missing out on the next best thing, and I missed many, many investment opportunities that turned into 10 baggers. 

That still leaves my question unanswered. What to do?

Let’s start of what we know for sure:

  • Markets are frothy, based on historical measures. However they can still easily double from here, or crash 30%. 

  • There is still lot’s of uncertainty regarding resuming normal life as pre Covid-19. Vaccine roll out is slow and won’t be completed by the end of the summer, best case scenario. This means that countries will remain in some form of lockdown until then. 

  • Governments and Central banks will continue to support the economy. Rates will remain low, with funding for struggling SME’s and unemployed. 

  • Retail, travel, and entertainment venues will remain mostly closed.

In summary, we have an uncertain future with potential extreme outcomes. 

When things get messy and unclear, it’s time to get back to basics. Therefore, I will start with some spring cleaning:

  • Clear out small and unnecessary positions:

    • Option trades

    • Low and medium conviction equity positions

  • Keep portfolio turnover to a minimum:

    • No trades, only a handful of put options as a hedge 

  • Focus on quality:

    • Low debt, high return with competitive edge, investments that can weather any storm. 

When everything has been cleaned and organized, I can start to read, study and build up my watchlist of high quality companies. When I find one that is reasonably priced and it checks all the boxes. Great, another addition to the portfolio. 

Doesn't sound as exciting as looking for the next electric car company, it sounds even a bit boring. But maybe boring is what I need in a time of SPAC’s and WSB’s subreddits pumping stocks to the moon and beyond. 

To close off:

Scott’s Galloway newsletter:

Focus on what matters. Be a Stoic in the face of temptation. Use Time to your advantage. Diversify your investments. 

In any economic climate, how do we build economic security, foster love, and find joy? How do we get rich? 


Quote from Charlie Munger:

"Another thing you have to do, of course, is to have a lot of assiduity. I like that word because it means: sit down on your ass until you do it."

NICK TRAIN: “The principles underlying [Buffett’s ideas] remain relevant. The two dominant and differentiating aspects of what we’ve done – both of which are absolutely, unapologetically copied directly from Buffett’s advice – have been number one: run concentrated portfolios. I think you look at everything we do, that’s the first thing that strikes people. It’s a concentrated portfolio. The other Buffett derived behavior is to discipline ourselves to try and transact as rarely as we possibly can, to keep portfolio turnover as low as we can. That is emotionally difficult, psychologically difficult, intellectually difficult, and sometimes plain wrong. It can be plain wrong not to do anything. But, in our experience observing other successful practitioners, it does seem to us that you at least tilt in your favor the possibilities of doing well if you know what you’re doing and you’re prepared to ride the emotion. Because it is an emotional arena.” YouTube - January 18, 2021 source: https://santangelsreview.com/ newsletter

Path dependence:

Weekly Kaizen – September 22nd – The Repo market, VC’s and Slack VS Microsoft

The Repo market, one of the hot topics of the past week, what is it and do we need to worry? We will look at different view points. Further in this Weekly Kaizen, another great analysis from Aswath Damodaran on VC’s role in start’up funding and valuation.

Finally, Scott Galloway’s video and great take on the challenges that Slack faces fighting of Microsoft.

Have a great week ahead!

The Repo market

The Repo market… The FED had to step in 4 days this week due to a shortage in USD in the overnight lending market. The last time the FED had to step in was after Lehman Brothers collapsed, do we need to worry?

What do VCs prize and price? Lessons from Peloton, Uber and WeWork IPOs

Once again, another great analysis and video upload from Aswath Damodaran.

Slack VS Microsoft

Is the market overreacting with the recent slump in Slack’s share price or is there some merit in their anxiety in Slack’s growth prospect?

Scott Galloway’s short and still very detailed analysis below:

Book Recommendation:

Former Secretary of State, Timothy Geithner, account on the financial crisis in 2007 and 2008. Recommend reading if you are looking to learn more on the FED’s, Treasury and banks role. Read (listen) for free on Audible or order online Stress Test: Reflections on Financial Crises:

Further Reading:

Weekly Kaizen – September 15th – Porsche vs Tesla & valuing Growth companies.

It took Porsche almost 5 years to release their first fully electric sports car after their announcement back in 2015. Is it enough to take on Tesla? No, I don’t think so. It will mainly appeal to current Porsche owners who are looking to get a fully electric car.

Not a single day goes by without a new WeWork article, and after this weeks news that they are going to half their IPO valuation (still not enough) an analysis by Aswath Damodaran, NYU Finance Professor, and his process on valuing growth.

Don’t forget to check the links in the Further reading section.

Have a great week ahead!

Porsche vs Tesla

Last week Porsche released their new fully electric car, the Taycan. It was first unveiled at the 2015 Frankfurt Motor Show, does it have what it takes to take on Tesla?

Aswath Damodaran – WeWork & Growth

More on WeWork, this time from Aswath Damodaran analysis on his blog and YouTube channel, interesting slides are slide 20 on growth and margin expectations (24min) and slide 23 (26min) The Runaway story.

Slides: http://www.stern.nyu.edu/~adamodar/pd… Blog Post: https://bit.ly/2lHFlVY

Pitchbook published an article on WeWork’s acquisitions (20+) over the last 4 years.


Growth is one of the main narratives and drivers for valuations at startups/ Unicorn’s. How do you determine a reasonable growth rate and deal with negative earnings?Aswath on growth: http://people.stern.nyu.edu/adamodar/podcasts/valfall16/valsession9.pdf

Further Reading:

Weekly Kaizen – September 8th – What is a tech company, Argentina & Michael Burry

Another week another S1 filling from a ‘Tech company’ that is looking to raise capital at a tech sector valuation for their upcoming IPO, is this just? Ben Thomson posted a great article on what a Tech company is.

Furthermore a deeper look into Argentina which once again is restructuring it’s debt, and lastly one of the best known investors, Michael Burry, on two of his long bet’s and his worries on passive investing.

What is a Tech Company?

Following the post from two weeks ago from Ben Thompson’s view on WeWork and Peloton’s upcoming IPO, what is a Tech company.

Argentina’s debt:

Argentina’s has already defaulted 8th default times and twice in the last 20 years, this week President Mauricio started with a debt restructuring plan(Financial Times) It’s a pity to see a country which was once one of the world wealthiest struggle with corruption and poor governance from current and past governments.

FT video: Argentina prepares next steps to tackle debt crisis

Michael Burry’s letter’s:

Lot’s of articles this week on Michael Burry:

Recommended: Read The Big Short by Michael Lewis or watch the movie.

Further Reading:

Weekly Kaizen – August 25th – China, WeWork and Caesar…

What have Trump, Adam Neumann and Julius Caesar in common?


In this weekly Kaizen, we will firstly take a look at China from two different view points. The first is from Ray Dalio, discussing the Impact of China’s Growth on the World Economy in the second video Kyle Bass, a hedge fund manager, interviews Steve Bannon.

Bridgewater’s Ray Dalio Discusses the Impact of China’s Growth on the World Economy

Over the last 40 years, China’s rapid economic expansion has altered the world’s geopolitical and economic landscape. Bridgewater’s Founder, Co-CIO and co-Chairman Ray Dalio joins Bridgewater’s Senior Portfolio Strategist Jim Haskel to discuss the historical arc of this growth and why the portfolio characteristics of China’s markets are attractive and diversifying despite escalating global tensions. To learn more visit: https://www.bridgewater.com/china/

Steve Bannon, former White House Chief Strategist, sits down with hedge fund giant Kyle Bass to discuss America’s current geopolitical landscape regarding China. Bannon and Bass take a deep dive into Chinese infiltration in U.S. institutions, China’s aggressiveness in the South China sea, and the potential for global conflict in the next few years. Filmed on October 5, 2018 at an undisclosed location.

Great video on the final year of Caesar:

Before getting into WeWork, let’s look back into history to get a better understanding of the last year of Caesar, arguably one of the most accomplished humans in history.

Source: Historia Civilis

Views on WeWork:

Ben Thomson’s Stratechery view on WeWork: The WeWork IPO

Alternative, and entertaining read:

Prof.Scott Galloway on WeWork in his No Mercy/No Malice blog

Also, recommended to read the S1 filling:

Read here We Work’s S1

Extra reading:

Softbank Will Succeed Even If Its WeWork Investment Doesn’t Work Out

So, what do I think of WeWork? My prediction is that in 20 years students will try to make sense of how, a heavily indebted real estate company, got valued at 26x revenue. Similar to how students currently look back on the Dot-Com bubble.

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