Politics matter but can they be a distraction for investors? We discuss the way to handle political complexity in the context of Trump’s criminal trial.
There are over 50 million US crypto wallets. Monkey thinks crypto philosophy runs deep and that crypto policies will strongly influence the upcoming US elections. Badger is sceptical.
50% or more invested in one holding: we revisit the principles of risk allocation, and how life context matters when making these decisions.
Being an early adopter can spell huge returns or notable losses. This week, we dissect whether jumping into an investment trend at the outset is a savvy strategy or a risky gamble, and explore how our different experiences with early investments have shaped our approach and outlook.
Badger uses Palantir $PLTR as an example of the difficulty of changing one’s mind whereas Monkey can’t shake its 1984 Orwellian vibes. If technology and science are neutral, why was Oppenheimer so worried about humans blowing up the planet?
If you learned something about investing and enjoy our conversations, please leave us a review on Apple Podcasts and Spotify — it will really make a difference to us.
$TSLA $PLTR $BTC
00:00:00 Intro
00:00:59 How much exposure is too much exposure?
00:06:59 Should politics impact your thinking as an investor?
00:24:30 Is being an early adopter investor dangerous?
00:35:15 The ability to change your mind is an investing superpower
WSW 30
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Woo, woo, woo, woo.
Intro
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[00:00:02] Luke: Hey, and welcome to the latest episode of Wall Street Wildlife with Krzysztof and Luke. This week, we’re going to tackle the topic of can being an early adopter help or damage your investing returns? Are you an early adopter?
[00:00:17] Krzysztof: I am an early adopter for better and for worse, buddy, and I suspect you are a little bit of one, too.
[00:00:25] Luke: Yeah, but maybe we’ve both had different experiences with that. Anyway, we’ll pick that up in our headline topic. Got a bunch of other stuff to talk about before we get there, though.
[00:00:34] Krzysztof: One of which is that there are major political news here in the United States and your humble pal, monkey and badger were talking about how do we talk about this on an investing podcast? And so we’d like to share with you our views on Whether big political headwinds, tailwinds, or chaos should, or how does it affect your mindset as an investor?
How much exposure is too much exposure?
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[00:00:59] Luke: Before we even go there, I’ve got a quick reflection on last week’s discussion, I did a Twitter poll to ask my Twitter followers how much exposure to one company is too much exposure because you remember last week’s episode, we talked about my buddy who now has 55 percent of his net worth in Nvidia stock, and he’s like my age, like he’s nearly in retirement.
It’s insanity. But it’s gone very well for him so far. Anyway, I don’t know that Twitter is particularly indicative of reality, but 20 percent of my followers said 50 percent in one company is okay.
[00:01:34] Krzysztof: Is
okay.
[00:01:35] Luke: percent yeah. But the majority of people, the majority of people were with a 10 percent max and a third of people were 20 percent max, but definitely some people think it’s.
All right, to be 50 percent actually two people, I think, no, maybe three or four people said, screw it. I’m happy to go all in on one stock. I guess, hopefully, hopefully if you voted all in your young early in your investing career, and if you blow yourself up, you can just start over. No big deal.
[00:02:03] Krzysztof: Hmm. I see so many biases in, in this kind of thinking. I mean, the age thing is important though. You could blow yourself up a bunch if you’re not risking and losing a lot to start with. So, I mean, there’s something to be said for that. I suppose what that’s what your twenties are for in a way.
[00:02:23] Luke: Yep.
[00:02:24] Krzysztof: I did that once, unfortunately in 2008. So live and learn
[00:02:30] Luke: And it’s not even like, it’s all sorts of things, right? It’s your life circumstances. And like, you might be 20, but you might have like three kids, right? And you know, you’re spending almost every dollar you have. And so if you do have some investing money squirreled away, that’s really important money for you.
Or you might be about to buy a house or something, you know, major purchase. Every investor is different. And that’s why if anybody tells you how to invest, then. You know, you need to, you need to take the lesson and then internalize it and figure out whether it’s right for you and what’s right for one investor could be completely wrong for another.
And then this is why like a stock market exists, because there could be lots of people with very different approaches and strategies and they could all be right. They could all be right for their own circumstances. But you get a market because, because people’s situations dictate different actions.
[00:03:20] Krzysztof: right in the, in the value of money is different for different people. I mean, there’s on the, you know like you were saying, losing a lot of money for some people will be devastating, not just for themselves, but for their family, another person, losing 50 percent of one’s portfolio might actually not change that much for them as shocking as that is, but those are some people’s realities. So it’s hard to generalize, right? Always know the context. And that tends to be true. about everything. But that said, that said, you know, if we’re whittling towards principles, like generalized principles, I would not start with saying, yeah, any amount in any stock is correct. And overallocation does not seem to be a good starting principle. Too much can go wrong, too many unknowns that are then hard to recover from.
[00:04:17] Luke: I agree, but I can, I can imagine circumstances where it’s okay to do that. I think it’s okay to be a hundred percent in one company. If you’re high conviction, you’re young and you can take a few knockbacks. So yeah, you know, it is, we’re saying the same thing, It’s individual in general, you should be diversified.
[00:04:37] Krzysztof: Right, then we go into how do we define diversified,
[00:04:41] Luke: Sure.
[00:04:41] Krzysztof: too, too much of that is also an error.
[00:04:43] Luke: Yep. Yep. Absolutely. Yeah. I think, I think received wisdom is you need at least 12, maybe 15 stocks to be diversified, but they have to be like diversified stocks. I own say 15 different things, but they’re all really like deep tech. So they’re not very diversified at all
[00:05:01] Krzysztof: I, I’m definitely going to, reject the notion that going all in on one company is sound for anybody. And the basic reason has to do with actually one of the errors that I’ve, I’ve been guilty of. You think you could know everything. And the more you know, the greater your confidence in the thing. And it turns out you never know what you don’t know. So, you know, some popular test cases, Enron, right? Like on the, on the surface, one of the world’s most strongest businesses, and then behind the curtains, a bunch of cockroaches, right? And fraud from whatever the valuation was to zero overnight. And there’s no way of you knowing that. Another example that I think is interesting in this moment. know a lot of smart people in the investing community that kind of have taken this approach with Tesla. I buy that story. I, it’s, it’s the only great company that I own in this moment. But despite all the arguments I can make for it, who the hell knows? Like if Elon does some completely insane thing tomorrow.
[00:06:13] Luke: or, or, you know, literally, you know, his private jet crashes or something, you know, shit happens, right. And there’s, you know, there are very few companies that have such a key man risk as Like most of the Musk portfolio companies.
[00:06:27] Krzysztof: Yeah. So this is just, I mean, this goes back to, I think the topic I’m going to start diving in more and more in the coming months is, is really understanding Life as a game of managing risk because of probabilities, right? So it’s like on extremes, you have casinos and then you have like completely risk averse people, but there’s no such thing as no risk.
So it’s all about, so any bet that’s a hundred percent in on something I think is fundamentally misunderstanding the reground reality we walk on.
Should politics impact your thinking as an investor?
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[00:06:59] Luke: Well, so our ground reality is changing and is up in the air right now with the headline news the other day that the Donald Trump court case has come to a conclusion. Obviously it’s still sentencing and like a whole rounds of appeals. I think we probably shouldn’t get into the case itself, but it does put politics back on the agenda.
And so this week you wanted to have a chat about How should politics impact your thinking as an investor? So where do you want to take us with this one, Krzysztof?
[00:07:31] Krzysztof: Yeah, well, maybe not how should or how do, but what was interesting in our pre chat. We were discussing, you know, do we talk about this or don’t we talk about this, which is, I think, a really good question because the focus of this podcast is to teach and develop good investing principles and politics can often be Thank you. a source of confusion and alienation and polarization and all kinds of complex things that could, I think to your point, take us away from what we’re doing here. And, but simultaneously, politicians make the laws, and laws affect businesses, and the results of businesses are directly impacted by whoever gets to office.
So how do you square this moment where Something unprecedented in the history of the United States just happened. Do we talk about that or do we pretend it didn’t happen? And, you know, there’s all these complexities. So I, I think you were wanting us to be more cautious and circumspect in terms of, you know, let’s not get too far down that rabbit hole. I think I was saying, well there’s certain particular things about. Trump’s policies that are important to me. And how does that complicate, you know, my view of this court case? And here we are. So what did we talk about?
[00:08:55] Luke: Well, you know, unless you were one of the 12 jurors, you have no influence over the court case itself, right? But I guess the result of the case is making you think about the election. So, yeah, and how do you want to tackle this topic? I, this is an investing podcast, not a politics podcast. I’m going to hold us to that
[00:09:12] Krzysztof: I think it’s to simply pretend that this current moment in, in United States history, politics. Is like any other and we could ignore it. I think Trump in general is perceived as being more pro business. And certainly is now based on events of the last couple of days in which Biden vetoed certain uh, crypto policy. We now know. So let me take this on this tangent that there’s approximately 50 million Americans that are pro crypto. That’s about, call it 20 percent of the population. So it’s still early, but that’s a huge, huge number. So a question I have both in general and for myself is. Let’s say I am pro crypto because I think down the road, crypto is the kind of technology which will save humanity from a lot of wars. And the reason that would be is because You can’t, under crypto politics, you can’t just print money at a whim. And justifying wars is harder when you actually can’t fund them. And there’s more transparency in the military industrial complex from. A particular perspective is harder to guess fund when everything is in the open.
So there are a lot of deep, I think, philosophically sound reasons why crypto people like just for sure are not just, you know, self interested grifters and, and kind of things that are, that are unsavory. So let’s say for argument’s sake, that some of the stuff that I’m seeing about crypto. Being more wholesome than, than not is true, are true. And all of a sudden I have a candidate that is legally compromised up for election. And now I have an issue where, Oh man, like to what extent, if I want to vote for a pro crypto candidate, do I vote for Trump versus now do I not vote for him because he was found guilty and it just starts becoming this complex You know, calculus, which I’m not sure what the answer is, but I can’t ignore it, right?
I can’t ignore an important new resume item on this candidates.
[00:11:31] Luke: I don’t know if we want to go there, but I like I would be surprised if crypto policies were really a very important part of which way you’ll vote. Surely there’s bigger issues at stake.
[00:11:43] Krzysztof: I think you are underestimating the crypto. It’s not just a community. I mean, it’s not, think about it this way. There are a lot of important issues. Like, I mean, women’s rights and the state of democracy itself and free speech, right? But for many people, taxes have always been a fundamental issue that makes them decide which candidate they want. Right. Crypto is a direct has a direct correlation with taxation and money in general, like what is money and how do you treat and understand money responsibly versus irresponsibly. So when we think about something like 50 million in the US, which is 20 percent of the population. If half of them decide to vote because their whole livelihood depends around crypto, right?
There’s, I mean, this is an industry now. It’s not this subaltern stuff. These are policies that will potentially swing the election, especially with so many swing states.
[00:12:52] Luke: I’m, I mean, I’m, you need to give me a schooling. I’m probably, there’s a few things I’m unclear of, like, in, in how, how is crypto going to prevent wars and save the world? I’m skeptical about that. If I believe that to be the case, is that, do 50 million people really hold those beliefs and that’s like a swing policy for them?
And three, so which party do I vote for? Like if I’m, if crypto is the number one thing,
[00:13:19] Krzysztof: Yeah. Well, the first question, well, I mean, this will take us pretty, pretty far away from investing. The.
[00:13:26] Luke: I do want to, I do want to sort of, I want to say to sort of protect you a little bit, like I know you do hold some beliefs that have nothing to do with money and crypto around how a good society should operate and maybe we’ll caveat this discussion and say, That we’re talking about one particular aspect here, and we’re, we’re not going to talk about all the other bigger politics and why you might vote one way or the other.
So, yeah, so don’t think, don’t come away from this thinking Christoph is driven by the dollar, or the BTC and ignores everything else.
[00:14:01] Krzysztof: I
think there’s a good analogy here and it’s one, it’s just so easy, but, but I have, find myself having these kinds of conversations with a lot of people here in Austin. Musk is, is, operates from my perspective on many different, call it planes or depths of reality. And if you take seriously his missions, the big missions, the high level missions of, say, reducing global warming and, let’s say, creating a safe place for human consciousness on Mars, meaning avoiding existential risk from a meteor, right? These are kinds of policies that many people actually believe in and are passionate about. But then when you drill down on, let’s say, his local politics Let’s say he is, for argument’s sake so pro or in favor of free speech that he hangs out with people on the right or far right and that leads to hate speech. So you have in one candidate. Local policies that your own political, my own political ideologies or beliefs might not agree with, but I simultaneously agree with some of the higher level stuff in one person. How do you deal with that? That’s, I think, analogous to my views on crypto, like crypto Is working toward solving a lot of financial issues that create all these other problems, including problems of wars, being able to be fought at whims of governments because they simply can print more money. Crypto solves a lot of that or will or potentially will down the road. So it’s almost
[00:15:44] Luke: don’t, I don’t, I don’t buy that. You have to convince me. How does that really work? I can see if, if you were super bullish Bitcoin in particular, let’s say, and if you really believe that was going to become like the reserve currency of the world or replace gold, I could see how that would maybe destabilize the US’s dominance to some extent, but how does that stop the US like being a warmonger?
Because they can still do that because you know, that creates like stimulus in their own economy.
[00:16:16] Krzysztof: This goes back to the problem of going off the gold standard. it’s the principle of money that is important. You can’t just make more of it at a whim. That’s why we were, that’s why the world was on it. It forces budgetary discipline onto countries because you’re limited to how much reserve gold reserves you have, right? Once the U. S. got off the gold standard and became the gold standard, essentially the U. S. dollar is the world standard, that means the U. S. is in this envious position of now creating as much of It’s own units as it wants. So that was a whole cross of gold speech, right? Like allowing governments to print money when they want allows for capitalism to accelerate, move faster, right?
So there’s benefits to it, but the cost is all of a sudden you have and debts that continue going up and up. And when there’s another war you want to fight ideologically, you believe in it. You say, sure, why not? Because we’ll just. You know, create greater debt that does not happen when your budget is actually restrained by something scarcity. That’s kind of the crypto is sort of crypto advocates want to return to those kinds of policies, which are more austere and say, you, it’s limited. You’re not, you, you can’t fight this war because you just. Don’t have the funds for it. So you have to figure out a problem, you know, solution to this problem some other way,
[00:17:46] Luke: The U. S. has a significant government debt now, far higher than it’s ever been as a proportion of GDP perhaps, or at least in the last few years. But that doesn’t mean the U.
S. can just ignore that and carry on and keep printing money and keep doing that forever. Even if U. S. dollar remains a reserve currency of the world, like that’s going to come back and haunt the country Because its currency will devalue versus the rest of the world. Because it’s, you know, if you, if you 10X the number of US dollars in circulation, then every other currency will become stronger.
[00:18:16] Krzysztof: right? I mean, this is why I’ve been so for the first time in my investing career, so cautious, so overly cautious and afraid and skeptical because of these debt amounts. And I don’t know how you get out from under it, but the only solution that’s been proposed so far is. You stimulate even further, which just make creates the accelerates the spiral to greater inflation.
And then, of course, under capitalism, right? The people that have assets will get even richer, but everybody else becomes even poor. So it’s a real. It’s a real dangerous moment. But, you know, but now we’ve sort of drifted far afield to our intended topic. I think the point is that there are many serious minded and committed people to something like An off ramp from the current financial system.
And all of a sudden you have a candidate that supports those policies and that candidate is now a felon. Like to what extent are people going to be motivated to vote for him even more, less, and these kinds of decisions will affect the world, you know, in, I think, drastic ways in the, in the coming months. So I don’t know if I have any insights. Like what now other other than to say from this specific crypto angle, there are 50 million Americans, I think are closely watching the this political moment. And I would not be surprised. We’ll see what happens in November. That this, this does, this becomes a headline issue.
[00:19:55] Luke: It’s not a bet we could resolve, but if there was some way to be objective, to objectively measure that, I’d take the, I’ll take the opposite side of that. I don’t think crypto is relevant in any way to the way the election gets resolved. I think there’s much more important uh, factors at stake. I’m sure you’ll be able to find a bunch of niche articles on your Like dubious discords that you’re up to.
[00:20:16] Krzysztof: Uh, Be good enough evidence for me.
I don’t think it’s a binary thing necessarily. Some people do vote, you know, one issue is the thing that they care about and nothing else, but I don’t know how you, how you discount the numbers that I believe, you know, like Based on the number of wallets because that’s the whole thing about crypto is transparency So you could see how many holders there are that that number so large and that people in particular around this topic Are quite passionate because it does involve philosophical ideas
so
[00:20:54] Luke: try, let’s try again to bring it back to like, well, the conversation we, I think we intended to have, which in my mind was kind of like last week we did does macro matter. And maybe the topic this week in some ways was like, does, should politics matter as an investor? Clearly. You know, if the Republicans or the Democrats win, like whichever way that goes, that is going to have an impact on investors, you know, you get out there and vote, everyone should be voting, but as an individual, you probably can’t influence the outcome, right.
Other than, you know, you have a vote. So yeah. So, so what do you do about it? I, my own sort of conclusion coming into that topic was. It’s just another factor. stick to good investing discipline, be diversified, take a long term view be aware of the policies that the party that’s looking like they’re going to win is going to implement and maybe make some small adjustments based don’t bet the farm. In the expectation that something drastic is going to change. Like these parties are relatively similar at the end of the day, at least in terms of how they’ll operate the economy. There’s certainly subtle differences.
[00:22:01] Krzysztof: Yeah, I would agree. And maybe synthesize that to say we have more or less one job that we could control as investors, which is to gain an edge. You have to have a deep understanding or as deep an understanding as you can about certain industries and companies.
And then over time you build your conviction in that company. and that you can control.
[00:22:28] Luke: Yep.
[00:22:28] Krzysztof: The other stuff can become a complete distraction, and you could tie yourself up in knots emotionally and ideologically, and for what? You, you really can’t control much in these cases. only asterisk I’ll add is I I think I have a difference of opinion with you that five months from now, whenever the election is. Some of these business oriented policies will matter more than, than you think. And
[00:22:58] Luke: Sure.
[00:22:58] Krzysztof: the outcome of this case will affect some of that, but that’s for later, I suppose.
[00:23:04] Luke: Yeah. So, and you were actually bridging us quite nicely into our headline topic of the day, which was around like, as you were saying, sort of the stuff you can control, but being an early adopter and how you think about markets. So let’s, let’s take our way onto that topic before we do, though I did want to give a quick shout out.
To a couple of our listeners, we’ve been nagging you to go and give us a star rating on Spotify, drop us a review on Apple podcasts. Well, a couple of folk did. We’ve got a whole bunch of five star ratings on Spotify now. So fantastic. Thank you. Keep it going. That’s really going to help us. And I want to give a particular thanks to Matt.
Investor Ed and Runner Investor who left us a a little written five star review on Apple Podcasts. So if you get a chance to go do that, these three chaps clearly enjoy the banter, enjoy the show and Matt thinks we are insightful and knowledgeable. So let’s do our best to stick to that.
[00:23:57] Krzysztof: Do as monkey says, not as monkey does. You’re right. Okay. Yeah. Thank you so much. And if you have not yet reviewed this podcast, please do. Please do because it will really, really help us. And we are not nagging. We are, we are gently inspiring.
[00:24:17] Luke: Hopefully, hopefully, hopefully the politics topic didn’t put you off. Voting for us. Vote for us. Don’t worry about voting for, like, do with your party in November. Vote for us now.
[00:24:27] Krzysztof: Right. But right. Monkey 2024.
Is being an early adopter investor dangerous?
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[00:24:30] Luke: Yeah. Right. So, Monkey2024 believes he is an early adopter. So what does that mean? And why have you put this on the roster? Because you’ve, you’ve got a bit of a self critique around this comment, I gather.
[00:24:44] Krzysztof: Yeah, it’s I had an insight this morning. it’s not just a critique, but you know, insights, if, if developed can be useful. And I realized that. As a person who is interested in technology, one of the reasons I love investing is it’s kind of, kind of wild to realize that not everybody, not, not wild to realize, but it’s humble and good to realize most people are not like you. And in this case, I’m identifying being early to find trends and new technologies. And as an optimist, I think you share this with me, right? General optimist. And I get excited about the newest latest thing out of that, I guess, tendency. then. Become passionate at an early stage in the investment hype cycle. And it usually the insight is it usually takes. longer than I think or acknowledge at the beginning for the idea to play out. Now I’ll say this out of, in all humility, I do think I’m right about these things way more than I’m wrong. I think that’s just my own track record. If I’m, you know, I’m being as honest as I can, but. Despite that, that process from when I discover a thing to how long it actually takes to play out, there’s all kinds of costs to waiting and there’s all kinds of difficulties in thinking, you know, what happens in the interim.
[00:26:19] Luke: And if I can, if I can cram that in like a bit of, I think well accepted, I know science or what you know, how, how, how seasoned investors think about the world. There is something called the Gartner hype cycle basically like a big kind of S curve thing.
insight here many years ago when they started producing these was. when a new technology comes to market and people get excited about it and the early adopters get in, like the world thinks this is the hot new thing and everyone piles into this technology and everyone gets overinflated expectations about what this thing is going to do for the world.
And then at some point you cross the peak of overinflated expectations and you come crashing down essentially you realize the reality is. Like it’s decades before we really commercialize, let’s say, whatever this technology might be.
And, but then eventually the curve starts turning upwards again, and that’s when you really climb the slope of productivity to the plateau of productivity, which is when this, this technology that everyone was like hyping about 10 years ago, actually now is real and now it can do the thing.
[00:27:26] Krzysztof: I think it’s also worth pointing out the obvious. What is the benefit of being an early adopter? And the benefit is, I’m going to put this really bluntly and, and reductively. Buying Tesla for 5 a share is better than buying Tesla at 200 a share. If you are an early adopter and you studied your electric vehicles and you’ve, you know, you’ve really come early to this hype cycle, you’re, you’re in way before everybody else. Right? And if you’re right, if you happen to be right, and then do the hard part of just, you know, Letting the story play out despite all the huge volatility and changes in the hype cycle and all that, then you will still run off like a bandit, like in terms of like thousands and thousands of percent right ahead of everybody else, because it’s such a magnitude of difference. But this is what I was reflecting on. The costs of doing that are also high because, you know, I was just, I don’t know if this is. It’s too early to say, but I was reflecting this morning on the fact that more and more of the economic data is coming in, and it does look like there is, in fact, now a slowing economy and stagflation and blah, blah, blah. And I just thought, like, shit, this is some of the stuff I’ve been saying, like. For seven months when we started our king of the jungle portfolio, right? But so I don’t think I was necessarily wrong and starting to play out. But over seven months, I’m getting my ass kicked by you because I was early because systems thinking tells you that things take time to move.
And so I was like, Hmm You know, I saw what I saw. I don’t think I was wrong about what I saw, but I underestimated the time and now I’m losing, you know, money and it costs me a lot. So it’s like this bind. How does that apply to other industries? How does that apply to investing in general? And my one takeaway that I want to share with you, cause this is pretty complex is to say mostly that I hate to make the squishy, but know yourself. And if I know this is my tendency, then the next time I have another Eos like opportunity, I, I think I will be better at saying to myself, okay, I might not be wrong about Eos part two, but from experience, I know that’ll probably be another year or two before something comes of it. So let me use my capital and a more uh, invested in something that is already succeeding.
And then when it’s, you know, a little bit more timing, but like let a year go by and then, you know, so it’s a little bit of restraint plus leaning in. I don’t know. What do you think?
[00:30:12] Luke: I suppose I have a good reflection on being an early adopter, but maybe it’s because that of the last thing you said, which was, you know, maybe you, you, you made sort of bigger bets around early cycle technologies. I have a bunch of small companies that, you know, in 10 years time, we might be having a similar conversation about like them being the next Tesla, whatever they might be in their industry.
Right. But I don’t have a huge exposure to any of those. They will, they will put one or 2 percent of my portfolio max. Most of my growth, most of the holdings that I consider growth stocks or venture stocks are between half a percent and 2%. So none of them are going to really hurt me. And, and you probably got to do that big and we link it back to the conversation we had in the intro about.
the unknown unknowns, like the things that you, you can’t have a handle on, like those risks are potentially much more mortal risks to a young fragile company. Like if you’re a.
Amazon, it’s going to take a hell of a lot to displace you, but if you’re like a tiny little coupang, let’s say, it’s like an Amazon like model in its own market of South Korea, like you are more fragile, you’re, you know, you’re more ripe to be disrupted by maybe some big global giant stepping in.
[00:31:29] Krzysztof: Yeah, I agree. Risk management is, I think the, probably the best way to solve this unsolvable problem. If you’re an early adopter, know that things will take longer than you think, even if you’re right in the end. Therefore, manage your risk in terms of how much you’re willing to lose on the assumption that you will either lose it or you’ll have to suffer opportunity costs as, as it takes time.
[00:31:56] Luke: I think you touched on another interesting, like totally different conversation, but highly related where you said you’ve, you’ve worked to kind of know yourself. And in this particular case, you’ve identified maybe a. If we think about, you know, strengths, weaknesses, opportunities and threats, right, you’ve identified a potential like threat where you might be too inclined to over allocate to like an early cycle idea.
So then you can put some controls in place to try and mitigate that, or at least be aware of it. But knowing yourself could also be a, it can be a strength and opportunity as well. Like if you know the stuff you’re good at or the industries you’re interested in, then for me, like investing is, is it a main where you should lean into your strengths?
It’s not like, like there’s so much money to be made almost everywhere. if you’re really insightful and knowledgeable about one particular area, you don’t need to learn about every other possible business model, another area, right? Just focus on where you’ve, where your interests and your strengths are.
I mean, you’ll make a ton of money there,
[00:32:58] Krzysztof: Agreed. Yeah. Spreading yourself too thin is obviously problematic, but I don’t know if I have much more, to follow up, follow that up with.
[00:33:07] Luke: but you’ve got a, but you’ve got like a new bit of your framework. I think that’s quite good. Where. You know, I did my 50 day thing. You’ve reflected on the last six months, seven months, like all investors should do this bit. We had an interesting comment on discord last week, I think. forget exactly what prompted it, but my answer to one of our members questions was If you just invest over a very long period and you strive to improve your process just a tiny bit every week, every month, then it’s not just your money that compounds, it’s your process and your discipline that compounds too.
So if you can just get a little bit better, every time you do one of these little reviews, whether it’s a, you know, micro reflection one week, or it’s like a big annual review you might do, however you approach it, if you just keep improving, like your results will eventually follow over a lifetime of investing.
[00:34:04] Krzysztof: I agree. And this is you know, my side project. I don’t know if I don’t talk about it much, but I have two philosophical substats that I published, but one is about character and, investing in your own character is a work of a lifetime. And, you know, the slogan that I, that I teach people or share with people all the time is that you know, your actions turn into your habits and your habits are what make up your character and your character is your destiny. So it’s no small thing that if you repeat a certain kind of behavior, that behavior is then how you do everything.
So if you’re impulsive about something and you don’t, which many of us are, right, I mean, we’re, we’re monkeys and animals. I mean, you’re a badger, you have fur, but like, we’re all like, you know, I mean, well, I have fur too, but right where, you know, impulsivity is a thing all animals share, but if you take the time to identify that as something that can be just controlled, but shaped into something And you treat it seriously, then, yes, your investing results will improve over time, because the process will have improved.
The ability to change your mind is an investing superpower
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[00:35:15] Luke: I think there’s quite an important thing there as well for us all to be aware of in in our wider lives as well, like it’s easy to get locked into a certain mode of thinking just because that’s the way you’ve always thought about stuff. And if you can genuinely. challenge yourself and try and see the opposing view and look for ways in which you’re wrong, you’re going to get better.
It gives you the opportunity to improve. Like the, the ability to change your mind is almost like a superpower. A lot of people will find it very hard to change their mind about something. Once it becomes, they become stuck on a certain idea or goal, you know it can, it can be powerful. I’ve changed my mind about defense recently.
Like maybe up until about two years ago, I was actually pretty staunchly anti the defense sector, the military industrial sector. And I thought, you know, countries should be taking that huge wealth that they have and sticking it into far more productive things like trying to solve like social issues and trying to improve the wealth and fix.
You know, poverty with like, there’s a huge poverty challenge in the UK. But I’ve turned around on that actually in the last couple of years. Mostly as a consequence of just like wall being in the news so much in the last five or six years, and actually this seems really important to me now. So I own Lockheed Martin.
I was hoping to get a stake in Anduril, but it looks like I need to write like a six figure check. I probably can’t quite afford that just yet for a private investment. I’d love to. And I’ve recently bought Palantir for my own portfolio. Cause I think companies like Anduril and Palantir probably are the future of just like bringing technology to bear and a, and a startup mindset to what is increasingly a very complex.
And I, and now I’ve changed my mind. I now believe quite an important. policy for countries to have. Yeah.
[00:37:23] Krzysztof: can’t do it because it’s painful. It’s painful because it attacks your identity. So you need to have a looser hold on how you identify. And most people, that’s where their meaning comes from. That’s why it’s so hard. But if you can do it, it will probably be to your benefit.
Interestingly about the the example you, you gave I’ve spent a lot of time thinking about this kind of stuff and I’m not, I’m not in this new position where you are and, you know, as per our latest conversation, you gave me some you gave me feedback as to why you think Palantir is now. I don’t know if you said this exactly, more on the side of good than, than evil. You didn’t, you certainly didn’t use good and evil as terms. But I remain skeptical
[00:38:12] Luke: Just because you brought it up, let’s, let’s, because I do remember the conversation. Let me just recap what it was because it was, it wasn’t quite that because I do think they have an incredible technology that probably is being misused in some domains. But yeah, you, you push back on my bull thesis for Palantir and your point was Well, Luke, like what about the ethics of investing in a company like this that is almost known to be doing really quite unethical things with data that’s possibly harming civil rights and individuals.
And my point wasn’t to say that’s not true. It was to say that’s probably if you put ethics aside and you’re just a capitalist, that’s probably positive for Palantir because the challenges, the problem is policy. and government, and you know, the way these tools are used, but the genie’s out of the bottle.
And the fact that people are talking about Palantir in this context just shines a light on the fact that it is like, you know, the most, it’s the most powerful software tool in the toolkit.
[00:39:19] Krzysztof: Hmm, this makes me think of Oppenheimer. And, and, you know, the problem that, okay, on one hand, science is not the issue. It’s how you use science, but, if we know ourselves to any degree, we’re monkeys that overestimate our capacity. To either do the ethical thing or see the ethical thing.
And there’s many people in the world that say something like, well, if it’s available to do, we’re going to do it because it’s there. And so same kind of issue around a topic around AI, AIG.
[00:39:54] Luke: Was going to say in the closing, we got through an episode without mentioning AI, but God damn it. You had to say those letters. We could have broken new ground for the podcast and not talked about AI. Yeah. I
[00:40:09] Krzysztof: it out, but so since we’ve wandered off to this path. Let me say that I remain cynical or maybe skeptical. Let me take that back. Skeptical that in an Orwellian time. Where there’s more and more power being aggregated in more and more ways for companies to take advantage of that power and data when you have a company with a background like Palantir, all of the ways in which. citizens like you and I will not know, cannot know how all that stuff is being used despite what they say, despite all of the advertisements. get more of the feeling like in situations where, where ethics are involved and it could go very, very badly. It’s one of those buckets that I’m like, ah, sure it could go well,
but
[00:41:12] Luke: mean as a Palantir shareholder. I’m glad a new pound of shareholders a few days ago. I’m glad we’re talking about Palantir in this context, because clearly it’s one of the best tools in this space. So that’s good for shareholders, whether it’s good or bad for the planet. I don’t know. As a citizen of the West, I’m glad that Palantir is being used by in the West to define, defend our ideals, as well as doing a whole bunch of stuff in the commercial sector.
And I suppose I’m glad as a. Privacy advocate I think it’s, it’s perhaps interesting that Palantir is, it’s not some NSA black ops software that no one knows exists and is just doing bad things behind the scenes and no one knows about it. Like it’s commercial software.
That’s being used in lots of different domains. And we don’t know how it’s precisely, it’s being used in the military, unless you’re a general, but we do know how the same software platforms are being used in the commercial sector. And so that at least gives people more access to understand what these tools could be used for.
So you have a bit more insight into what’s going on perhaps than you might about who knows what other weaponry and hardware is out there that perhaps. Perhaps we don’t know about,
[00:42:31] Krzysztof: that’s a good good optimistic spin. I’ll buy some of that. Because, yeah, because as a public commercial company, you have, you have all these guardrails and checks, and so working in, in the open is better than working in the shadows. Sort of similar, I think, to the route Tesla’s taken with FSD, you know, like, before the law catches up with you, or, you know, there’s no way of Doing these things in the shadows.
Let’s just let everyone do it publicly. And before you know it, maybe we’ve solved a huge problem. I wonder though, if you would have the same, I don’t know when the last time you read 1984 was, but if that would color, you know, color it all, all the ways that humans will. can abuse this stuff. So
[00:43:14] Luke: for sure. And yeah, not, not that long ago, maybe like in the last 10 years, and I’m a big fan of the Terry Gilliam movie, Brazil, and that came to mind today when I was reading some article about Palantir and it yeah, so, you know, clearly, this software has the potential to be used in nefarious ways, but then you could say that about most anything.
[00:43:36] Krzysztof: right. Okay. All right. I think does, does that take us through today’s long and winding road from cryptocurrencies and political chaos? And man, today was a little bit of a, we, we feared on a little bit of the edge of the, of darkness today.
[00:43:55] Luke: Yeah, I, I thought the politics was gonna be the dangerous topic. Turns out not all sorts of other bad places we went.
Well, if we didn’t completely put you off we are on YouTube and all major podcast platforms. You can also find us on the exes, the Twitters. I’m at seven Luke Hallard.
[00:44:14] Krzysztof: I am at seven flying platypus. Also check us out on wallstreetwildlife.com where we have a shiny PDF for you, about the 10 laws of the investing jungle.
[00:44:26] Luke: You guys didn’t tweet us last week. We asked you to let us know. If you’re interested in hearing more about things you should look for in a good investment. Got a whole bunch of topics we could go into there, but Hey, if you guys don’t want to talk about that, fine. We’ll keep, we’ll stick with the stick with the politics and the mumbo jumbo.
So let us know on the Twitters, what we should go talk about. Now, Krzysztof, you’re traveling for the next couple of weeks, aren’t you? You’re going to be in over here in Europe somewhere.
[00:44:49] Krzysztof: Yes. I’m moving in next door, Luke.
[00:44:52] Luke: Oh.
Yeah, it won’t be far cause I actually, I’m going to be in Milan in about a two weeks time myself.
[00:44:59] Krzysztof: Oh wow. So
we really close.
[00:45:01] Luke: But yeah. So I think the podcast will be going on the road a little bit, so we’ll apologize in advance if our, the audio quality or the visual quality goes down a little bit, but hopefully we’ll have some like beautiful backgrounds of various bits of Italy and the surrounding countryside for you.
[00:45:17] Krzysztof: Right. The only background you should hope for is me eating a cannoli.
All right.
[00:45:23] Luke: All righty. Are you ready to become a beast of an investor? Your journey starts here.
