This week’s episode of Wall Street Wildlife kicks off on a somber note as Krzysztof shares the heartbreaking loss of his beloved dog, Bunk. It’s a poignant reminder that investing is ultimately about creating the freedom to spend precious time with those we love. Every moment counts.
Buckle up though, in this episode we also dive into the wild world of “ugly duckling” investments – those overlooked companies with the potential to transform into magnificent swans. We’ll explore the contrasting views of Warren Buffett and a successful microcap investor, highlighting the risks and rewards of both, and why either strategy can deliver market beating returns.
We take another hard look at one of Krzysztof’s ducklings, Coherus BioSciences, a company now navigating supply chain disruptions on top of its already myriad risks. We’ll analyze the impact on its stock price and discuss the potential implications for investors. Plus, Luke is now a shareholder, so that’s double trouble!
But that’s not all! We also touch on the upcoming U.S. election and how understanding the contrasting economic philosophies of the candidates could help you make informed investment decisions. We preview our upcoming conversation with Professor Bradford Delong, author of Slouching Towards Utopia: An Economic History of the Twentieth Century.
And finally, we’re thrilled to announce the launch of our Patreon page! If you’re enjoying the show and want to support us in creating even more valuable content, head over to patreon.com/wallstreetwildlife. Your support will help us research, learn, and bring you the best insights from the investing jungle.
So, are you ready to become a beast of an investor? Join us for this week’s wild ride!
Sources mentioned:
Professor Bradford DeLong on X: @delong
Slouching Towards Utopia
Segments:
[00:00:00] Introduction
[00:08:26] Ugly Ducking Investments
[00:17:58] Coherus’ Latest Challenges
[00:30:24] How to Support this Podcast!
[00:37:08] Can Studying History Make Us Better Investors?
WSW E45
[00:00:02] Luke: Hello and welcome to the latest episode of Wall Street Wildlife, and I’m delighted to be back with my buddy Krzysztof once again. The team is reunited. This week on the pod, we are talking about investing in ugly ducklings, quack quack, and can studying history make us better investors? Krzysztof, how are you doing?
[00:00:23] Krzysztof: Uh, little better, little better. I was out last week because I lost my best buddy, my child of 15 years. Frisbee catcher, ball fetcher, stick fetcher, skateboard killer, extraordinaire, bunk. And so, uh, I was telling you before the show that I had used up my entire allocation of tears and snot and I was completely laid out, for a few days.
But, you know, it shifted towards gratitude. The loss, the feeling of loss shifted to all the beautiful memories. And, uh, Heart Opening, and it was, uh, I wrote a little piece about it, uh, with, one of my newsletters, and looking through all those pictures just made me realize, you know, how fast it all goes, and what it’s all for, and what it’s all for is to have beautiful days with a, a buddy, or friends, or family that you really love, and Uh, there’s nothing else in this world.
So, sorry to have left you hanging, but, uh, you did a great job.
[00:01:33] Luke: It’s entirely understandable. if you’re not a pet owner, you probably don’t appreciate the extent to which, like, your beloved cat, dog, rabbit, guinea pig, whatever it might be, is very much a part of the family. And, uh, we’re down to one cat. We had two for many years. Unfortunately, the Wanderer, I think, ended up under the wheels of a truck, uh, like, two years ago.
That was a pretty terrible accident. Teary couple of days in the Hallard household. But, uh, I met your buddy Bunk when I came out to Austin, and he’s a pretty awesome dog. So, uh, yeah, my condolences on, uh, on the, the very real loss of a family member.
[00:02:11] Krzysztof: Yeah, it’s not an exaggeration to me. It was, I mean, uh, I was thinking about this 15 years where he’s probably the one being on this planet that was with me more consistently than any other because he was ever, you know, he was, he was always around except when I went traveling. So that kind of loss is just so painful.
And, uh, but the flip side of it is it reminded me how much, how beautiful it is to love and to, uh, have a partner in life. And that’s just the cost of it, you know? And, and in the moment I was like, do I ever want to pay a cost like this again? But without this kind of, you know, love, it’s like life really isn’t worth living.
So it’s, uh, it’s bittersweet, but thank you for, for, uh, all your support and care, uh, during what was a pretty tough week for me.
[00:03:05] Luke: unfortunately a sad fact of life, but, uh, We march onwards to the grave ourselves, as it
[00:03:12] Krzysztof: Although I will say one little bit of wisdom. The Tibetans, uh, hang out with death all the time. They actually, you know, train in graveyards and cemeteries. But one of the, one of the things to remember, I’m trying to remember is that when something old passes, it makes room for the new. And without that process, you know, we couldn’t get the, the regeneration and what life depends on.
So it’s not all, you know, it’s the loss hurts, but the potential of what comes next, a new bunk, there will be a new bunk in some version.
[00:03:47] Luke: but I feel like I can almost measure my life out in cats. Like I do, I love dogs, and we had a dog as a kid. Um, but really, I’ve had like a succession of cats. I’ve outlived a cat to cat, and I’m on, I don’t know, maybe my fifth iteration of having a cat now.
And they last, you know, a good couple of, like, 15, 20 years. So, um, you know, there’s a few overlaps in there. I was thinking the other day, like, my cat, Sushi, is 14 next month. So he’s getting on. He’s a bit of an old man. He’s probably got a couple of years left in him. Like, maybe I’ve only got one more cat left in me.
[00:04:23] Krzysztof: Right, the era, right, it’s amazing, right? Eras, eras demarcated by Not just place, but these beings. I hope you have several more cats in you.
[00:04:36] Luke: I hope so. Yeah. Well, the plan is to live forever, but you never know.
[00:04:40] Krzysztof: long do badgers live? Do you know?
[00:04:42] Luke: oh God knows. I’d have to Google it. Uh, probably not that long, the vicious f**kers.
[00:04:47] Krzysztof: Oh, indeed. So, anyway, uh, During my time of preparing for Bunk’s departure and loss, I did come across a curious, curious thing. I participate in something called the Learned League Trivia, which is something like 30, 000 people, it’s referral only. And one of the questions was, and this is no multiple choice, you have to know the answer.
I’m very curious if you will know this.
[00:05:20] Luke: Just before you spring the question on me, uh, the Learned League, so this is the app, or the thing on the phone you showed me while we were having lunch in Austin, and you were like, hey, you’re a smart guy, like, see how you get on with this. And I got like, One out of ten when like the typical score is like eight or nine out of ten.
[00:05:37] Krzysztof: Yes, that’s right. This league is there to humiliate you, uh, uh, and make you realize how little you know. Although there are, uh, it’s, it’s tiered in different, uh, capacities. So the more you play, the more you’re put in the appropriate, say, Yeah, tier. And the people in the A League, it’s, it’s no different than watching some Jeopardy contestants know every single answer and you’re like, what the, how is this possible?
But, uh, they exist. Anyway, here’s the question. A metonym is a figure of speech in which an entity or concept is referred to by a name closely associated with that entity. For example, Wall Street for the U. S. financial markets. What simple name, formerly that of a local authority district of England, as a metonym for the United Kingdom’s financial service industries? Should I read that again?
[00:06:38] Luke: Uh, the UK’s financial support, like the city, I suppose. Okay,
[00:06:45] Krzysztof: ding, ding, ding, ding, ding, ding! Okay! Right on! I did not know that. Yeah,
[00:06:50] Luke: well, I used to live in the city and work in the city. So, yeah, okay. All right. And there’s probably a heavy clue in your Wall Street. Example. Okay. Wow. Maybe I’m ready for the lead.
[00:07:03] Krzysztof: I wouldn’t push it that far, but yeah, I did not know that. I was like, London, but like, I never heard, I never heard of
[00:07:10] Luke: Well, I mean, uh, so the, uh, so there’s like the original London, if you go back like a thousand years, is what we now refer to as the square mile, pretty much. I mean, this, this is directionally correct, but you’ve got like the Tower of London, and then you’ve got, uh, various gates, like Aldgate, Bishop’s Gate.
Aldersgate, there’s like a whole bunch of them. And these sort of broadly delineate like the wall that was around like the original Roman London. And so that’s the Square Mile. And the city is, yeah, the sort of colloquial term for the finance district. and yeah, it’s a broadly overlaps with the Square Mile.
Although today you’d probably refer to Canary Wharf as being the city, because that’s where all the banks went over the last 20 years, albeit. Like a bunch of them are now moving back into the original city. So, yeah.
[00:08:00] Krzysztof: Okay. All right. Well, talk about knowing things.
[00:08:04] Luke: I know my city. I know my city. I’ve lived here for four cats.
[00:08:09] Krzysztof: Though, though, I recently got a question wrong, uh, about a small town in Washington State where I lived, uh, and I still got the question wrong. So it doesn’t always translate, but I’m glad you, I’m glad that having lived there, you got it. All right. Uh,
[00:08:26] Ugly Ducking Investments
[00:08:26] Luke: You shall we talk about ugly ducklings?
Yeah, go on. So you, uh, you threw this topic on our roster. Ugly duckling investments. What is an ugly duckling?
[00:08:35] Krzysztof: I want to quote Warren Buffett who hates turn arounds. Because, he said, turnarounds seldom turn. and, what’s his name from Micro Cap Club?
[00:08:46] Luke: You’re going to fail.
[00:08:47] Krzysztof: Yeah, uh, we featured him, uh, in his work, I think a couple episodes ago. He has a divergent view from Warren Buffett.
And he said, I got news for you. They do turn. You cannot be a microcap investor and not invest in turnarounds. If you don’t like the term turnaround, which has a negative connotation, then reframe them as transformations, positive connotation. Most big winners were ugly ducklings. that transformed themselves into beautiful swans. So we have a fascinating tension here, right? Between Buffett saying, yeah, nope, this hardly works and somebody who has been extraordinarily successful in this kind of investing. And it’s particular to me in this moment because my main holding in the kind of jungle portfolio and in my real world portfolio is is a turnaround stock, Coherus, which I’ll talk to, about a little bit later.
[00:09:48] Luke: Interesting concept, isn’t it? And I think there is a reason why two market participants can have a different view on this. And it’s kind of the end of the market you invest in. Like Buffett cannot invest in micro caps or even small caps really because to make a investment that’s even vaguely material, like he’d be, if it was a small cap, he’d be buying up such a material part of the company.
Like it’s very difficult for him to make those kinds of investments. Whereas if you’re, if you’re like a little investor like us. you can easily make an investment in a micro cap or a small cap without even coming close to moving the market. Like if you’re making five, six, even say seven figure deals, right, that doesn’t really touch the sides of a billion dollar plus company.
and I suppose, I’ve got no data to substantiate this, that like, if you’re a big giant, you’ve probably had all your pain, you’ve got it out of the way. And like, you found your, product market fit, you found your model and you’re, you know, you’re becoming more mature. And if you’re a tiny little company, you’ve probably got a bunch of missteps you still have to like trip over before you really figure out what your business is and who your customers are and how you’re going to make bank and grow.
So that’s probably why you’ve got far higher predominance of ugly ducklings down there in like the little pond as opposed to swimming in the big oceans.
[00:11:13] Krzysztof: yeah, it’s not one giant ocean, I suppose. It’s made of lots of different ponds you could swim in and rivers and to, to use that terrible metaphor. I always come back to To be, uh, the idea that to be a good, successful investor, you have to have located a gap between like perceived value and actual value.
And I think here in this case, your style so far in the first year of King of the Jungle is to identify great companies. And because they’re great, they will increase in value more quickly than the market currently thinks, right?
[00:11:49] Luke: Yep.
[00:11:50] Krzysztof: whereas my, uh, main positions in EOSE and Coherus have been more based around this philosophy, saying these companies have had major problems and they’re not performing well, but the market has severely undervalued them, assuming they will never get back to say even or perform well again. One thing I think we need to discuss about this is where risk fits in and I would argue that your strategy for the most part is less risky because I would imagine Warren Buffett would agree He’s looking for companies with moats, right? Yeah, protective barriers. So even if things cycle down, the company itself will survive because it has the say castle around it.
whereas the, the ugly duckling way of investing is, The companies are in danger to begin with and you have to really know what you’re talking about And even then you still might be wrong, but then the flip side is why would you ever? Invest in something like an ugly duckling and that goes back to the risk the greater the risk the higher the reward So you get hundreds or, you know, thousands of percent gains if you’re right in watching an ugly duckling turn into a swan.
[00:13:08] Luke: yeah. and that those can both be legitimate strategies. I do think like diversification and just how you manage your capital can be quite an increasingly important discipline when you’re investing in ugly ducklings or turnarounds or transformation stories, however you position them, but companies that potentially have like a glowing future, but they’ve got some challenges to overcome first.
Like not every company is going to succeed. In fact, most companies don’t succeed. So, yeah, you want to weight those appropriately in your portfolio. Maybe I’m underweight. Like I’ve got a subsection of my portfolio. I consider my venture investments and that’s like the really kind of risky, wild stuff.
And the way I think about that sub allocation is like, I might have to invest in 10 things and one of them might come good. And then ideally that one thing that the gains outweigh the losses on the other nine. So because of that, I’ve actually got a relatively small overall allocation. Like it’s definitely way less than 10 percent of my overall portfolio, I think.
So, you know, maybe I should have a bit more courage of my conviction and, uh, and invest in like those venture investments a little more heavily.
[00:14:18] Krzysztof: I’m glad you’re having this insight because it’s always about balance, right? And in my case, the error I’ve made over the last two years is I, became too confident in my understanding of a company. and took on way too much risk and as I’ll shortly tell you with Coherus the update I have for you when you’re dealing with ugly ducklings anything could happen and it’s not something you could have predicted or known and it’s just foolish I would say in hindsight to over allocate into risky positions. The poker analogy we always come back to is useful you know aces lose however many percent at a time, right? a 2 7, you know, loses most of the time. So, to go in heavy on the 2 7, you have to really know the table, so to speak. so, I think you’re right. This is, uh, you know, the lesson for our listeners is What is the appropriate balance?
And staying away from all turnarounds, I think is foolish. if you’ve done your work and if you’ve identified a scenario that would, uh, that has good odds or good risk reward odds,
[00:15:33] Luke: You know, here’s another, tension though, and I don’t know what the right way to resolve this is. And I’ve just rechecked my portfolio. I should have only got like really two or three venture investments and then in total, they’re less than 1%. It’s like a really tiny part of my portfolio right now. the other tension I’m thinking about here is if you do what I suggested, which is like you underweight, These wilder opportunities in your portfolio, let’s say they’re less than half a percent each, like it’s so, it’s almost so immaterial to your overall results that you’re probably not rewarded for doing like super deep research and spending hundreds of hours going down a rabbit hole with a company like that.
Whereas putting significant research time into a much more significant piece of your portfolio, that’s going to pay dividends. That’s the wrong word, obviously, that’s gonna, improve your confidence in a position that could be much more material. So I suppose the approach I’ve taken, and maybe this is wrong, with my venture investments is I identify them, I know I’m going to underweight into them because I want to find as many of these opportunities as I can.
I probably do kind of bare minimal due diligence. I buy my strategy, although I haven’t really followed this in the last year or so, is Buy as many of these things as I can and then the winners will show themselves to me. And it’s only when they become like a two or three percent part of the portfolio on their own that I’d actually then go and do some serious work and decide is this, is this like something I want to invest new money into.
[00:17:04] Krzysztof: yeah, that’s a good strategy. I like that. I’m always worried about, yeah, being spread too thin in my portfolio. So it just so happens that the companies I currently hold, I know a massive amount of around and fully believe in the story, so I’m not treating them. These turnarounds that I have mainly Coherus and EOSE, they’re different from what I think you’re talking about, which is like venture seedlings like almost sci fi ideas that may or may not grow.
These are more. Thorough turnarounds, like they were good companies, like Coherus was a multi billion dollar company, and then they ran into a series of really bad, you know, incidents and bad luck, and now they’re sort of like, you know, lost and forgotten. But that’s not, yeah, that’s not the same, um, as throw a bunch of mud at the wall.
Watch which one sticks and then allocate to the, to that one. Yeah.
[00:17:58] Coherus’ Latest Challenges
[00:17:58] Luke: So go and tell us about Coherus because it’s one you talk about fairly often. As you say, it’s a bigger allocation in your own portfolio. Even I’ve got Coherus options now on the back of your hard work. So what’s gone wrong with my, uh, my position? Just
[00:18:15] Krzysztof: was the bane of my Friday night. this is the last thing you ever want to have happened. picture this, um, you know, a week of grieving my, my buddy, it’s finally Friday, you know, at least I could turn off the market. And what do I, what do I see?
that Coherus filed with the SEC a document about issues it has with its supply chain. And so now all of a sudden, um, a couple hours into understanding what exactly is the issue, and as the market opens this morning, Coherus is down about 18%. there are many lessons here, by the way, that are not Coherus specific.
That’s why I think it’s worth talking about this. But the actual facts on the ground are that Coherus, when you’re dealing with drugs and you’re selling with FDA approved drugs, those things have to be meticulously packaged. You are not talking about like, say, you know, bottles of, energy drink, right?
That could be packaged and warehoused any, any which way when you’re talking about life saving cancer drugs, there’s very strict guidelines. So what Coherus got notified by it’s by the company that it had, has worked with on its labeling 10 years without incident that all of a sudden, uh, that company is. over allocated and cannot meet Coherus’s packaging demands because it’s basically run out of capacity for short. One probable reason, and this is not definitive, but one probable reason is that the big boys like, uh, Novrodisk and Eli, Eli, Pharmaceuticals, all those Zempik, weight loss drugs. Those are, you know, multi billion dollar new things.
And that this company, this manufacturing company, basically said, We’re going to the big boys instead of, you know, your relatively small, White Blood Cell, Cancer Product, Udenica. So, on one hand, it’s like, did Coherus do anything wrong? I don’t think so. Uh, they had a reliable partner, no missteps over 10 years, but the poker analogy comes in now, like, you never know.
You literally never know when something could go wrong. They talked at, you know, they talked in the SEC, document how, uh, in the end this will be a good thing because they’re, they’re now, uh, ramping up a second manufacturer, which will be good to go by the end of 2024, which will ultimately reduce all of the costs in making and packaging Udenica.
Eh, you know, maybe, maybe. But the problem is that specifically to Coherus, This is a company that is now banking its future entirely on the ramp up of Udenica. It says that it expects the product to be more or less out of stock for about a month. So that’s like 20 million dollars or 30 million dollars of lost revenue. And so the market is appropriately reacting like, okay. This is a problem. Long term, it still ends up being an execution story and if they fix the problem the way they said they will, then Coherus will be more than fine and this is just another one of these. A little less cash, the cash runway is a little tighter because it has some debt hanging over its head, so basically the risk gets a little higher. and of course with a drop in stock price to 18% this morning, the reward also gets higher In a moment like this, not what you wanna see ever, but I guess it’s powerful course when you’re dealing with, you know, smaller companies I wanna address one, one comment from, uh, one of our audience members on YouTube. in a situation like this where it kind of feels like, yeah, you, you know, you have a good hand and you lose anyway. You grasp at straws trying to spin things, you know, find the silver lining, if you will. It is possible, some people are thinking, that the reason Coherus slash this, uh, manufacturing company got caught flat footed is because Udenica has taken market share more quickly than expected. Which, as per last quarter’s numbers, that’s, possible because we know that Amgen is dropping its price, the competitor is dropping its price very quickly.
So maybe, maybe, this is sort of like what happens when the product is growing more quickly than expected, like a good problem to have. So to speak,
[00:23:09] Luke: just for clarity, is the allegation here that there’s pressure on the packaging manufacturer from the products that are being competed away? Like, oh, you need to squash these little guys because they’re going to steal our market.
[00:23:21] Krzysztof: if I understand what you’re asking, so basically this product that is now the Coherus’s bread and butter, that’s most valuable asset is essentially competing against a giant pharmaceutical and amgen and amgen and it’s taking market share because it’s a better product for reasons that don’t need to get into, right?
So the big guy is dropping its prices and Coherus is trying to stabilize prices and that strategy is actually working. That’s why I have such a big investment. The market doesn’t realize that that’s what’s happening. But all of a sudden, if we take this optimistic approach, way of looking at the problem that this is a problem only because it’s selling way more units than expected.
Well, in one sense, yeah, that’s great because that means that Coherus can potentially get 50 percent of this entire market, which would be huge, which would make the company worth, you know, much, much, much more than it’s currently valued at. That’s the thesis statement. But if along the way we get this, like, Late Friday night, you know, hush hush filing with the SEC that we’re kind of screwed because We’re at a product and it was not in our hands because you know These guys want to take more money from some other guys Man, that sucks.
It really sucks and it comes at a time where Coherus absolutely Did not need any more stumbles any more Ditches to fall into, and that’s exactly what, what happened. So the upshot right now is to tie this all in with ugly ducklings and like, what, how investors think about this. I’m looking at this thinking the stock is nonetheless still massively undervalued, but little less cash, right?
Call it. Yeah. I think I said something like 20 million less. I’m tempted to again, add more shares, right? Because, uh, I, I, I, I, this is the, uh, the monologue I’m saying. I understand the story and I understand the odds and blah, blah, blah. But my position is already big, right?
[00:25:34] Luke: I would, I would caution against that, not knowing your wider financial circumstances, but if this is already, you Like a relatively material part of your net worth, say. Like, you don’t want to be adding to that, just go find a better idea, right? Put your money in that instead, yeah.
[00:25:50] Krzysztof: yeah, so that’s why, right, we say all investing is personal. For me, it might be a mistake to add more shares or probably would be a mistake to add more shares. I probably need to hold my nose and wait an additional three to six months for everything to go back to normal, which I think will be the case.
But for any new investor coming to the story at this point. Where, uh, you know, based on all the, all the, you know, everything I’ve talked about the company starting a position here. would be, uh, one of my top priorities if I was, yeah, if I was in that situation,
[00:26:28] Luke: with the usual caveat. Like, do your own due diligence. Don’t borrow Krzysztof’s conviction. You need to find that for yourself.
[00:26:36] Krzysztof: Right. Yes.
[00:26:37] Luke: Are you in danger? Are you, are you, you know, like your love for Bunk, right? And you’re clearly a, uh, like a guy who wears his heart on his sleeve a little bit and you’re a loving guy. Are you also in the danger of falling in love with some companies? And that’s why you end up So overexposed to companies like EOSE previously and potentially Coherus now.
[00:27:04] Krzysztof: great question. Such a good question. Uh, I honestly, honestly think that the answer is no, because I have cut from my portfolio across the years, many, many companies that I’ve loved. What keeps me sort of stuck, if you want to use that metaphor, is that, that, uh, financial gap that I think still exists or exists even more so If this was, put it this way, put it this way, if this was an issue with say, the science or the chemistry or the effectiveness of the drug, and I started doubling down, that’s the, I married the wrong gal, and now I’m, right? This is the least severe of, say, supply chain problems. that will be rectified in a matter of call it 90 days.
[00:27:58] Luke: That’s fair, but that doesn’t make his like one additional risk on top of all the other risks of being like a subscale biotech in a bit of a niche and only really having like one or two products that are material like life or death to the success of the company. So like that doesn’t, that doesn’t. Get rid of all the other risks that you’re already bearing. Yep.
[00:28:20] Krzysztof: Yeah, your question though, I love, I really, really love that question and I’m trying to be as always as honest as possible. EOSE might have been a case where because, because I, you know, uh, Because the story gripped me so thoroughly in terms of its, uh, the impact of the grid and the safety of, you know, all of it, right?
The, the EOS, the, it’s a, it’s a energy story, right? So I began, I don’t know if falling in love with the company is the thing, but I fell in love with the narrative that is the need for, say, energy alternatives, right? But the, the mistake is Say, yeah, risk allocation stuff over allocating and, betting on say only one horse rather than four.
However, even that even it is interesting EOS in this case is an interesting sort of counterpoint that stock fell down to 60 cents. Now it’s at 260. So up 300 percent from, you know, those lows or whatever, 200%. And so it’s not. Simply the case, right, that, uh, because you’re wrong or the story turns against you in one moment that it’s you abandon ship and you, you divorce your wife, so to speak.
I’m always trying to revert down to the fundamentals, and in this case, I continue to believe the fundamentals are correct. It’ll The market forces just have to do what they do.
[00:29:51] Luke: Fair enough. Alright, good luck. Let’s see how that goes. I’m riding this ugly duckling with you. So, uh, hopefully, hopefully there is a turnaround or a transformation. You’ll transform into a beautiful swan. Hopefully before our options mature in January 2026.
[00:30:06] Krzysztof: Right, right. Uh, I’m actually, yeah, not worried about the stock per se. It’s the, it’s the January 26 options that now have about three months less, uh, room, so that’s a little bit.
[00:30:24] How to Support this Podcast!
[00:30:24] Luke: Very good. All right, so before we turn to our next topic, I do want to remind you all, if you’re enjoying the pod, to give us a like and a subscribed, chat to us on on the X’s on the Twitters. We got a fun little comment on episode 43 about renewable energy, and Stephen asked us how we feel about First Solar. I own, or I did own Enphase and SolarEdge and a bunch of other stuff. Um, I never owned First Solar. And I don’t know a huge amount about the company, but I think all of the risks that I described about renewables and concern about the upcoming November election, I think these apply to First Solar, just as they do to the others, and the company itself.
Itself has made some comments in its recent earnings call about the Inflation Reduction Act. So they’ve obviously got their eye on the, on the, the political flow as well. So, you know, personally, I just wouldn’t go near this sector, until it’s clear which way the wind’s going to blow in the election.
Um, but thanks for that question, Stephen. And if you want to message us on the X’s, we’ll definitely. Endeavour, if we’ve got something intelligent to say, to reply to you and give you a bit of insight on your own investing quandaries, you can find me at 7LukeHallard.
[00:31:41] Krzysztof: Is this where I say where you could find me? I am at 7 Flying Platypus.
[00:31:51] Luke: a comment from one of our fans. Someone said they’ve been enjoying the Wall Street Wildlife podcast, not just for stock tips, but I also feel it offers a lot of context for the state of the world at large that I should be paying more attention to. So thank you for that comment. Very good.
[00:32:08] Krzysztof: We do what we can. Badger, you want to talk about our new, our new venture into Patreon. com?
[00:32:15] Luke: Yeah, go on. You’ve been twisting my arm about this for Like a year. Unlike Krzysztof, let’s at least do a couple of episodes. Uh, but yeah, you’ve brought me to the table and we are going to turn on our Patreon. What’s it all about?
[00:32:28] Krzysztof: Yeah, so, uh, I’m a fan of the podcasting industry in general, and there are some, you know, creators that do amazing work. And the fact is that these guys or gals who do this work because it’s their life’s work, their hearts are going into making their shows better.
And when you do that, you don’t have much time left over for all the other persnickety, endless tasks, which are infinite, as you are humble, Humble editor of our show knows better than anyone. And so Patreon, this idea of patronage, you know, goes back to the, across the centuries. Artistry, right? Great art requires a sort of safety net that most societal structures don’t often allow because, you know, factory workers need to get their assets to the factory rather than painting, right?
So think about how much amazing art never got made because people did not have the proper, say, economic support. So, one of the things I’ve always loved doing myself is throwing a little bit of coin to the patrons, to the artists, to the makers of podcasts that I really value because for me, the three or seven bucks is meaningless, right?
But to them, it allows them to really focus on what they’re doing. So I’ve been trying to squeeze your shoes about this for a while because I would love it if some of our listeners had the opportunity to support us and to allow us to make the show better. by supporting us a little bit without it being a big deal to them, but a big deal to us and how much free time it would free up.
[00:34:12] Luke: It would definitely free up a ton of my free time that I can then reinvest in actually doing due diligence on stocks and publishing deep dives and prepping for better quality conversations podcast. So yeah, we would very much appreciate a little bit of patronage.
[00:34:29] Krzysztof: Right. So here’s the deal. Here’s the thing. We have a website. It’s, uh, patreon.com/wallstreetwildlife. All one word, all spelled exactly the way you think it ought to be spelled. And when you get to that page, you’ll see that there are a bunch of tiers based on the animals. And for each of those tiers, we thought up, perks for you.
It’s really at this stage in the game, it’s less about the perks and more about, you know, thinking these guys provide value to me. They’re teaching me about investing. And we want the show to get better. So we want them to have a little more time to do what they do. So you pick a tier and then, when we collect enough coin, we’ll be able to outsource some of the tedious work and release the badger and the monkey to doing what they really ought to be doing, right, which is researching great companies.
Reading more books about how everything works, going out, getting interviews, and worrying about the stuff that will make a difference to you. So, we hope one of those tiers strikes your fancy and that you can support us.
[00:35:39] Luke: Yeah. And if you enjoy the show and you, but you don’t have the financial headroom to kick us a few bucks, that’s totally cool too, right? we appreciate the patronage of your eyeballs, if nothing else.
But if you want to give us that bit of encouragement and let us know that you really love what we’re doing and you want us to up our game, then a couple of bucks will go a long way towards helping that out.
[00:35:59] Krzysztof: Yes, and maybe one last plug is that, believe it or not, when I give to the shows that I like listening to, it feels good. You know, when I, when I throw, nine dollars a month to my philosophy guy, I know how much work it goes to making an episode like that, and the nine bucks for me is a coffee.
And for him, it’s, you know, it’s his livelihood, and I learn so much. So, to me, that patronage is about the kind of generosity, which is not like, oh, this sucks. It’s like, oh no, this feels good. Hopefully, one of the things we could do via this Patreon site is figure out, find out who amongst our listeners are really in our tribe, who really value what we do, and are kind of voting with their coin, and saying, yeah, we believe in you guys, we want you to get better, bigger, bigger, bigger, better.
And, it feels good to support y’all. So, website, one more time, is patreon.
com slash wallstreetwildlife.
[00:37:06] Luke: Krzysztof.
[00:37:07] Krzysztof: All right.
[00:37:08] Can Studying History Make Us Better Investors?
[00:37:08] Luke: So Krzysztof, can studying history make us better investors?
[00:37:13] Krzysztof: that is the question, isn’t it? And I know you’re skeptical about this, like just like
[00:37:20] Luke: Yes, I am. like to study future history, not the shit that’s happened in the past.
[00:37:25] Krzysztof: right. Uh, yeah. So I think that in markets and investing, there are patterns and that those who don’t know their history are doomed to repeat it. I want to approach investing from all the angles. And so one of the things that we both have done recently is read a book called Slouching Towards Utopia, An Economic History of the 20th Century.
[00:37:54] Luke: That’s my thing.
[00:37:55] Krzysztof: Oh, right. Yeah, there
and this is written by Professor Bradford DeLong, who is, uh, in the economics department at Berkeley. We are at the moment, uh, negotiating an interview with him. So hopefully that pans out and we, we will have a whole bunch of questions for that conversation. But here’s the big picture.
Here’s why I want to bring this up in this show. To our listeners, I think it would be a good idea to some of you interested in this stuff to get the book and read it for yourselves, uh, so that when the interview comes along, you’ll be, you know, much more, uh, versed in the topics. But the big picture here is that we have an election coming up, and this election, we know because the United States is the power still, uh, affects the way the world works. How does an investor or how does somebody interested in economics and finances make sense of who the better candidate is? Who should they vote for, really, if they want to do so from an educated place rather than, say, a tribal place? This book, I think, goes a long way to answering that question, at least from the, from the professor’s perspective.
Here’s the big idea you’ll find in this book as a preview. There are essentially two warring forces. in terms of how markets work or how they ought to work. On one side, you have the phrase by an Austrian economist, Hayek, That more or less says the market giveth, the market taketh, blessed be the name of the market. That is sort of a poetic version of what , neoliberalism believes. The market essentially is what we should follow. Do not interfere with the market. And on the other hand You have the idea made popular, or at least in this book, he’s the advocate of this idea. Polanyi, I believe, is the economist’s name, who says, The market is made for man, not man for market. Which is the position that says, Markets, for example, do not understand morality. Markets can, if left to their own devices, result in cruel outcomes that do not serve humanity as a whole. And so this is the question for us, right? Economists have been fighting and debating over this stuff all the time.
And, this book has a bunch of really, really interesting anecdotes and fact points about which one is right. So to speak, he definitely takes a position, even though it’s complicated. I won’t spoil it for you yet, but this is the question. I think all voters need to be thinking about for the next two months, because the two candidates we have.
in the U. S. election are, are pretty much representatives of these two positions, Donald Trump on behalf of the neoliberal position and Kamala Harris representing the more social democratic position.
So me go back to the, the main question. You posed at the top of the segment. Do you think having some understanding of these kinds of labels in any way would make you, could make you a better investor as opposed to simply not either caring or not worrying about any of it and kind of going to the poll booth? ignorant about any of the economic forces underpinning these two candidates.
[00:41:32] Luke: Yeah, like I was a bit, a bit tongue in cheek saying I only study the history of the future. like reading Brad DeLonge’s book, has saved me reading like a hundred other history books. So that’s fantastic in itself. I now feel like I understand the history of America and the history of finance a little more clearly.
but maybe the world is a bit of a different place now. And so my skepticism about the lessons of the past perhaps comes in because I do think we’re tipping into like an ever accelerating where like a speed of innovation is vastly outstripping our ability as humans to keep up with Like the latest, greatest technology, what you can do with AI today, like what’s happening on the streets of our cities, and how that’s impacting all aspects of society.
certainly there’s going to be some relevance of some of the lessons of the past, but, I think far more important is perhaps to be a student of the present. That’s where I get value, mostly.
[00:42:34] Krzysztof: Yeah, I don’t think it’s a mutually exclusive situation and this is one of the questions I definitely want to discuss with the professor, which is someone like Elon Musk right now to me is a fascinating figure because he, he very strangely, to me, was on one side And now has recently switched to the other, but there’s lots of, contradiction in his views that don’t really logically make sense to me.
But if I were to sort of like dumb it down, as a CO of Tesla. He basically says, let me do what I want because I know best and any kind of regulation is just interfering with all this progress I wanna make. Right. But we also know from history. that the way capitalism run, say, unchecked works is that you end up with a bunch of plutocrats that basically amass immense amounts of power.
And when power is that concentrated, the people end up being, you know, the, that, that gap between the massively rich and everybody else not only winds, but is, you can’t come back from it because you, you kind of enter this sort of totalitarian regime and that’s what history has taught us.
So I don’t think it’s the case, Badger, that, simply because the history is past, it’s no longer with us. And then also, like you’re suggesting, study the potentialities for all these things and what they need to bear fruit in the future. I guess this is my plug for doing this kind of thing, but to, ignore what I would say is the vast majority of human knowledge simply because it’s past feels like it’s a little bit like maybe at the poker table, you know, like after a bunch of rounds, you, you, you remember who plays what in what way, and that makes a big difference.
[00:44:28] Luke: Yeah, not to stretch that analogy though, but, what happened to someone two hours ago probably has less bearing than what happened in the last two minutes in terms of impacting their emotional state and what they’re going to do next. But it’ll be interesting conversation anyway, with the professor, will definitely going to endeavor to ground this in insights for investors.
very much.
[00:44:48] Krzysztof: Yes. So, we have a whole lot of questions. all queued up, but we look forward to your questions if you have any. So this will be a really great opportunity over the next, if you’re listening to the show, oh, next couple of weeks, if you’re interested in the history, in the economic history of the 20th century, to listen to his book or read the book and as you’re thinking through some of this stuff, send us some of your concerns, your questions about the way of the world and how, Understanding it might make you a better investor and what you would like to know from a, a world expert in this field.
[00:45:28] Luke: Great stuff. Thanks for securing that interview for us, Krzysztof. So if you’re enjoying the show, as ever, we are on YouTube and all major podcast platforms, subscribe now for a finance podcast that’s hopefully as fun and playful as it is insightful.
[00:45:42] Krzysztof: Indeed. And check out our new Patreon page, patreon.com/wallstreetwildlife.
[00:45:48] Luke: We have the 10 Laws of the Investing Jungle, still as relevant today as they were when we wrote them a few months ago. You can find those at wallstreetwildlife. com And if you’ve got ideas maybe for laws of the jungle that we didn’t consider strongly enough, drop us a note on the X’s and let us know your thoughts.
[00:46:06] Krzysztof: Are you ready to become a beast of an investor? Your journey starts here.
