🎰 The Degeneracy Trap – Is the economy forcing investors into a casino mindset? We dissect the viral debate on “financial nihilism” and why the pressure to get rich quick is destroying portfolios.
💪 Skills vs Luck – The antidote to social media envy. Why compounding your skillset is the only reliable hedge against inflation, stagnant wages, and the housing crisis.
📊 The P/E Ratio Myth – Why looking at historical P/E ratios might be costing you money. We break down how accounting rule changes and stock-based comp have distorted the “market is overvalued” narrative.
⚡ Selling Winners? – Luke explains the painful but necessary decision to trim his Axon position. A deep dive into Price-to-Gross-Profit reveals why a 32x multiple signaled it was time to take chips off the table.
💄 Oddity: The New King of the Jungle – Krzysztof unveils his latest portfolio addition. See how combining patience, technical analysis, and fundamental strength led to the perfect entry point.
📉 Options Mistakes & Lessons – We strip back the ego and discuss our recent losses with Cipher and Quantum Computing. Learn why paying too much for volatility or misjudging the clock can zero out your returns.
🎓 The Alpha Strategy – A sneak peek into the upcoming Patreon Options Course. Krzysztof reveals advanced strategies, including how to sell calls against purchased options to lower your cost basis.
💊 Novo Nordisk’s Pivot – The community portfolio’s top pick is up 34%, but the run might just be starting. We discuss the massive implications of weight-loss drugs moving from injections to oral pills.
Sources:
Degeneracy Post and Response:
https://x.com/systematicls/status/2004900241745883205
https://x.com/JaredKubin/status/2006028297688297475
The Broken Yardstick, why historical Price-to-Earnings (P/E) comparisons are fundamentally flawed:
https://manuinvests.substack.com/p/the-broken-yardstick-why-your-historic
Segments:
00:00 Introduction: Patience vs Degeneracy
02:11 Krzysztof’s Options Course Marathon
03:30 Ski Season Begins & One Battle After Another
07:22 Degeneracy Debate: Are We Becoming Gamblers?
11:47 The Case for Compounding Skills
16:50 Rejecting Social Media Comparison Culture
20:23 Asset Bubbles & Historical Context
24:25 PE Ratios: Why Historical Comparisons Fail
34:38 Axon Enterprise Valuation Analysis
42:16 Oddity: Monkey’s Latest Addition
50:20 Combining Fundamentals with Technicals
51:59 Options Timing: The Critical Variable
56:10 Cipher Options Error & Strategy Missed
01:00:47 Options Course Beta Testing Announcement
01:03:23 Novo Nordisk & Oral Weight Loss Drugs
Body
[00:00:00] Krys: I just needed to be patient for a long time, and that’s really the trick, you know, because it’s hard.
[00:00:06] Luke: even if you are not having, say, financial success now, again, like bringing it back to investing, if you look at what you’re doing and say, okay, well look, I’ve actually learned some lessons.
[00:00:14] Krys: not your dollar signs in the bank account by which you should be measuring that net worth
[00:00:21] Luke: you’ve got like influencers renting, you know, mansions and supercars and like in like fake airplane, like private jet fuselages to take like content to make their life look so incredible
[00:00:33] ​
[00:00:33]
[00:00:45] Luke: Welcome to the Deep Investing Jungle with your hosts, Luke, the Badger, Hallard, and Christophe the monkey. This week, are we in the midst of Degeneracy gambling culture as investors and is it getting worse? Also, how PE ratios could be a misleading indicator as to whether the market’s overvalued, but is Axon overvalued?
[00:01:07] Luke: Anyway, Christophe’s gonna tell us about Oddity, doing a bit of technical analysis, and also talk about the fundamentals. Plus, we have both made options, errors with Cipher Quantum Computing, Inc. And Coherence, and I’ve got a bunch of options expiring, worthless this Friday. Christophe’s gonna give us a teaching of what we did wrong.
[00:01:28] Krys: Yes, sir. Badge. Before we get into all that, goodness, let me tell you something, buddy. You are very lucky to even be talking to me this morning
[00:01:37] Krys: because, because I have been. In the Options course, dungeon Options Course Design Dungeon for like 18 hours a day. For the last two weeks, I barely saw Sunshine.
[00:01:52] Krys: For, for I I I, I smell real bad. There’s flies buzzing around my head. Uh, I’m, I’m borderline degenerate. We’ll get back to, to de degeneracy in, in, in a bit, but the fact that I could almost clean up to make it for our recording, uh, count your blessings.
[00:02:11] Luke: Very kind of you looking forward to seeing the options course. We can talk a bit later about it, but yeah, you’ve been working super hard on this and, uh, we’re gonna be doing a pilot run for eight Lucky Patreons in like the next few weeks. We’re kicking off.
[00:02:25] Krys: Yeah. I mean, uh, and it’s wild. I’m, you know, you learn 50 times as quickly when you have to teach something. So I’ve gone into so many corners and, and, uh. Um, I couldn’t be more excited. I couldn’t be more excited about what, what I’ve been cooking up. Meanwhile, you, my friend, have begun ski season. This is a, this is an annual badger tradition.
[00:02:53] Krys: Yeah. Uh, sporting maybe one of the fanciest, uh, bits of Wall Street Wildlife Merchant. Where’s my, where’s my, uh, fancy Wall Street Wildlife, uh, ski jacket.
[00:03:06] Luke: Yeah. Well, you gotta make your own merchandise, right? Like this podcast don’t make itself.
[00:03:12] Krys: What kind of operation are we running here? Gotta make our, make our own, uh, merchandise.
[00:03:18] Luke: Yeah, like I reinvented my life like five years ago so that I could do three months in the mountains every year. So yeah, delighted to be back in snowy climbs for, uh, for another couple of months this winter.
[00:03:30] Krys: Excellent. Uh, good, good to have you badge.
[00:03:34] Luke: Hey, do you know, do you know what I did last night? Uh, this might please you. I’m, uh, I’m in ski season with a buddy Dave, and I sat him down and I made him watch one battle after another. So I watched that again. What a great film. It’s actually better on a second, watching. You’re right.
[00:03:49] Krys: Isn’t it amazing? Yeah, I saw it for the second time over the holidays. It’s just, oh my God. You could see the humor too, a little more when you’re, you know, you, you could see DiCaprio’s character as just the guy, he just keeps going. Right? He’s just, he just does the next thing well enough to, to, I mean, yeah.
[00:04:10] Krys: Oh my God. Uh, delightful.
[00:04:12] Luke: Awesome. And they just won like best motion picture at the Globe and Globes yesterday. So
[00:04:17] Krys: Oh, is that
[00:04:18] Luke: Good job. Yeah.
[00:04:19] Krys: Oh, cool. Yes, obviously deservedly so, I’m not one to proselytize often, but. I’ve been screeching from the, from the treetops about one battle after another, for sure. For since I’ve seen it. Uh, not least because my main man, literary love Thomas Pinchon wrote the, the base book, which most people don’t know, called Vineland from, which was adopted.
[00:04:40] Luke: you’re not gonna, yeah, you are not gonna, you’re not gonna tease me to read the book, but I will tell you, because it came up in a predictions episode last week. I have already read two books this year and it’s only what, January the 12th.
[00:04:51] Krys: You have not,
[00:04:52] Luke: yours. I have,
[00:04:54] Krys: you have not what? What are their titles?
[00:04:57] Luke: uh, one is a reread, it’s a sci-fi book called Hyperion by I think Dan Simmons. It’s a, it’s like a, I guess one I go back to every couple of years. It’s good. It’s a good like quad trilogy. And the other actually interesting, I kind of half read it ’cause I didn’t get anything out of it. This is gonna be controversial.
[00:05:14] Luke: Um,
[00:05:15] Krys: wait, wait, wait. Hold on. Slow down. Slow down. When you say you okay, what do you mean half read it.
[00:05:20] Luke: No, no, no. I read that. I read Hyperion. I enjoy that. I half read the second book, which is The Art of Spending Money by Morgan Housel. Um, yeah, I dunno. I mean, it might be controversial. Like, I like Morgan, I enjoyed the psychology of Money, but this feels like, this feels like, sorry, it feels like a, like a one or two idea book that could have been like a blog post, not a book.
[00:05:42] Krys: interesting. Uh, does half reading something count as having read it?
[00:05:48] Luke: Uh, I’ll read another book before the end of January, so I’m gonna hit your prediction like two books by the end of the year. Anyway, apologies to Morgan fans. Um, he’s a good author, but like, I dunno, this one feels, this one feels like a lot of pages with not a huge number of ideas.
[00:06:06] Krys: Well, if you might have, well, you teased us enough. Uh, I know this wasn’t planned, but if it’s just the blog idea rather than the book, what’s the main, what’s the main takeaway?
[00:06:15] Luke: I think just be like, be thoughtful about how you spend your money. Um, like don’t live beyond your means. Don’t, um, you know, don’t live in like a culture of envy and as aspiring to stuff that you can’t afford. Spend money on experiences and all stuff kind of, yeah. There’s, there’s more to it. I kind of, I then, like, I got through the first couple of chapters and I just started like whipping through it.
[00:06:39] Luke: And then, then I got Gemini to summarize it for me.
[00:06:42] Krys: Although, you know, it might be, might have been blase for you because you live this model and you’ve been living it for so long, it probably feels like, you know, swimming in water, many people we forget, are actually caught in these traps more than you, you know, the, the wealthy poor. You know, the people that make a lot, but they’re, they’re scraping by because they’re making such disastrous decisions about how they value, what they value, why they overvalue a seven room mansion or whatever, when, you know, it’s, it has nothing to do with their quality of life kind of
[00:07:16] Luke: Yeah. Yeah. Perhaps, well, actually, this is an interesting segue, right? ’cause maybe this brings us nicely onto your topic of degeneracy.
[00:07:22] Krys: Yeah. So, uh, in our show notes, we’re going to put links to two posts on X that were making the rounds, and I found them fascinating. It’s, uh, the first poster it was making a claim, which initially I posted also on I Patreon it Got, it got me thinking. The basic claim more or less is that this current generation born, you know, born into, obviously not just the age of the internet, but the age of the ai, uh, housing costs have doubled.
[00:07:57] Krys: Wages aren’t keeping up. He’s making the claim that mathematically you can’t catch up because the system is already too rigged.
[00:08:08] Luke: Yeah, I’d like to bring it to life. I don’t, I haven’t read, I, I’ve read the article like a couple of weeks ago, but it’s like housing a good example where there’s like a lot of housing wealth in. Like baby boomers and older people who got on the housing ladder, and now if you are like in your twenties, you’re coming into the workplace.
[00:08:25] Luke: Even if you’ve got a good salary, you just feel like you can’t really get started in life.
[00:08:29] Krys: Yeah. And I, I, for the most part, I buy that argument. So I kept reading, you know, uh, then he makes a transition to saying, you know what, what this generation again sees all around them is in social media terms, that poison of comparing themselves to what looks like everybody has more than you do. So.
[00:08:56] Krys: You’re not, you know, you don’t have a house, you’re, you’re not keeping up, but everybody else somehow is right. That psychological state. Then he layers on top of that, oh, by the way, this AI thing is coming and it ain’t gonna, it’s not like from this perspective, not like jobs are gonna be all of a sudden more bountiful.
[00:09:19] Krys: It’s like, no, there’s an overlord coming and you better watch out kind of feeling. Right. So his conclusion is that this is leading people to becoming more or less degenerate gamblers. Not necessarily because, uh, of, let’s call it for short, uh, deep problematic psychological, uh, addictive habits. But because of the structural position they’ve been put in, his conclusion is it’s better therefore to.
[00:09:56] Krys: Take a one in 20 chance on some degenerate call, right? With the hope that you could overcome these limitations, then to simply die and let the AI and the system eat you alive. That’s his claim, right? Ultimately, he ties it, I think, for our investing purposes. He therefore said, okay, what do you do with this as an investor?
[00:10:20] Krys: He’s like, okay. You basically invest in the gambling sites, the sites that take a little bit of rake from, from every transaction, like for example, DraftKings or Coinbase, or Poly Market, obviously being the latest fad, right?
[00:10:37] Luke: Or maybe, maybe, and maybe we’re get, maybe we get just a sidebar a bit. Maybe we’ll loop back to this later in the conversation. Like you might, if that is your thesis, like, society is screwed, people are gambling from necessity, therefore I’ll invest in the gambling sites. You know, maybe that’s like immoral.
[00:10:58] Luke: Maybe that’s, you know, tantamount to owning like tobacco stocks or, you know, whatever your kind of principles might be in life. But anyway.
[00:11:05] Krys: Yeah, Absolutely. I, so anyway, I posted this on, on Patreon because I thought that half of, I actually said, I think, quote, this is worth reflecting on to our Patreons. What’s interesting is that when you wa read the comments, many people were like, yeah, yeah, yeah, yeah, right. This is okay, I gotta go all in.
[00:11:28] Krys: Right? I gotta now become, you know, more of a degenerate. That’s not what I was saying. I didn’t comment on it much more besides, let’s reflect on this, and then not too long after. I read, um, a second response to this, which hit me even harder, and I thought it’s more aligned with what we’re talking about.
[00:11:47] Krys: It’s not an outright denial that these are issues, these are issues, and, and we don’t know exactly how they’re going to unfold. But his response was quite different. It wasn’t double down on the degeneracy, it was take a step back first and realize, and I’m gonna paraphrase and maybe add my own 2 cents here, that adding skill sets now has never been easier than at any time in the history of humanity, as long as you have access to call it the basics, an internet connection, right?
[00:12:22] Krys: And maybe hopefully if you’re not, you know, in a really developing country like a bank account, if you have enough to pay for some subscription, like a GPT or whatever, you’ll be more than fine for this purposes, right? So compounding skills now. Is the way out. The problem is badge. I know your, your ear is already burning.
[00:12:45] Krys: It’s that word compounding. People in general don’t have enough patience in the degenerate kind of culture to put in, let’s say a year or two or three of skill acquisitions so that they could see how bigger it gets in the third year. Does that, does that make sense?
[00:13:06] Luke: Yeah, yeah, totally. And it’s, you know, it’s fueled by that. Social media dynamic, you know, you’ve got like influencers renting, you know, mansions and supercars and like in like fake airplane, like private jet fuselages to take like content to make their life look so incredible. And that, you know, and you see on Instagram, you see like these young guys and girls living this incredible life.
[00:13:29] Luke: And then that drives you to this. Like, I’ve gotta be in a rush. Like, how come these guys have succeeded? And I’m like, they’re younger than me. I’m like, why? Why is it taking so long for me? But you can’t get rich quick. Like, you know, if we bring it back to investing. But you’re right about building skillset as well.
[00:13:46] Luke: Um, you know, you gotta put the work in and the foundations in, and it’s not a couple of years, it’s like a couple of decades to get to the point that compounding, you know, really starts to take off. Took me, what, 10 or 15 years before I got to the point that like my investing returns in a, in any given year, where on average more than my salary.
[00:14:08] Luke: And that’s the point where. The steamroller really started to roll, but you can’t just fast track your way there. If you could try and gamble your way there, if you are lucky, well probably, you know, 99 other people were unlucky and you were the lucky one.
[00:14:21] Krys: exactly. So we have the problem and the solution sort of already, to me it’s quite clear. You could either go for the quick win, the quick kill, but that has a negative expected value. By, by design you’re betting against, you’re playing against the house, you’re not gonna win.
[00:14:40] Krys: Or I’m sorry that you use myself in this example, but it’s so close to home. I was telling you, you how I’ve been, you know, uh, cooking this options course nonstop for the last two weeks. I can’t, I am, my mind is just continuously being blown at what is now available to these paws. If I just like sit in my seat, you know, buckle in, and then when the first thing doesn’t work and this thing breaks and that thing blows up.
[00:15:13] Krys: If I just continue focusing in using the amazing AI tools to help me fix the things that are breaking, in other words, I’m saying this is a character issue. This is like, can you just, just learn the hard way, learn the old, old school way, and not give up and continue sort of grinding. Then with that mindset, my God, there’s nothing that’s not possible for anybody.
[00:15:43] Krys: So that’s kind of pushback number two. And then the, the, you know, the, um, the main pushback, pushback number two is he says, you know, just reject the social media comparison machine. And for me, as a Buddhist, philosophically grounded person that swims in the water of money is not the solution to anybody’s problems. We talk about this nonstop. It’s your character and it’s what you do with the money. A, KA, how it opens up time. And friendships and experiences, that’s the solution. So if you just get away from that social media nonsense, then the degeneracy bit basically stops being as toxic to you.
[00:16:35] Luke: if you’re optimistic and you look at your, even if you are not having, say, financial success now, if you can look at what you’re doing, again, like bringing it back to investing, if you look at what you’re doing and say, okay, well look, I’ve actually learned some lessons. I may have underperformed the market.
[00:16:50] Luke: I may have lost money like in the last two years, but I’ve learned a lot and now my process is better. And so like I’m still moving forwards.
[00:16:58] Krys: Right abs. Absolutely. And so the ribbon, I think on this, on this exchange was this particular responder replied actually quite explicitly with, you gotta double down instead with something like. F Faith, and he actually talked about his own Christianity, which is perfectly fair, I think in this context.
[00:17:19] Krys: It doesn’t, it doesn’t. I think the bigger point is whether it’s Christianity or whether it’s, uh, pick your, pick, pick any of the candidates for how people find faith. The point is the same. It’s not your dollar signs in the bank account by which you should be measuring that net worth. And if you fix these basically three orientations, then I think the de degeneracy impulse will be much less existential.
[00:17:54] Krys: It’ll, it won’t feel as, oh my God, I have no options. I have to take this, you know, crazy bet. You know what the irony is, by the way, as I’m talking about all this poly market just went live for me. Uh. In the US I got off the watch list and so I threw in like 25 bucks, you know, and there’s some football games and it’s just astounding how easy it is now in all the ways to just bet on everything and like, oh my God, it’s just what the wild world, this is the next frontier that we’ll be dealing with.
[00:18:31] Krys: So anyway, that’s yeah.
[00:18:33] Luke: No, it’s cool. It’s cool. We’ve had that stuff in the UK for a long time. Some app called BET Fair, which kind of does a similar thing peer-to-peer betting and you can bet on like the next point doesn’t have to be like the whole match and you can bet on random stuff. Um, I think that’s, you know, if you treat that sort of aspect of gambling as fun and entertainment, I think that’s okay.
[00:18:53] Luke: It’s healthy as long as you don’t let it spill over into like dominating your
[00:18:57] Krys: finance. Yeah. And you know what? Actually, because we’re also designing our Las Vegas outing for our Wall Street Wildlife, Patreons, March 27th and 28th kids, uh, mark your calendars in this moment.
[00:19:12] Krys: Badge. I do want to subtly point out that there is probab to me, it always, it, it’s this gray area of where, where the surfer rides the wave. And the analogy for me is the, are the poker tables. Because, because it has elements of both gambling and it has elements of skill. But in order for the skill to show up, you need the proper timeframe.
[00:19:38] Krys: And that’s why people both, they confuse, right? They look at what is poker Exactly. And it really depends on the view they’re taking. If it’s a one night thing, it could be a degenerate gamble, right? But if you approach it a different way, it’s not, it’s a com compounding mechanism that displays your skillset over time.
[00:19:58] Krys: And same, same thing, right? And so I wouldn’t rush, maybe monkey’s, you know, moral of this story is don’t be quick to judge, call it the technology or the platform first. Figure out what your relationship is with that thing, how you’re using it, and that’ll probably get you off on the right path.
[00:20:23] Luke: Alright. Interesting stuff. So, um, let’s get, let’s get our hands dirty with like companies and real investing stuff. So you are gonna tell us about asset bubbles.
[00:20:34] Krys: Yeah. Uh, topic du jour due month due last year is the AI bubble, right? Uh, I found this take, I found a more interesting take on this n not denying that we’re in a bubble. We’re obviously in the bubble, if you wish. I don’t even, maybe it’s that word that’s problematic, more useful, I think to think about.
[00:20:59] Krys: It shows four, uh, five different historical periods during which there was a massive paradigm shift in technology. So railways in, in Britain in the, um, 19th century than we had the 1920s with cars and electricity coming online. Uh, then there was, uh, the 1980s, I don’t know what it happened in the 1980s. That was, that was technologically shifty, obviously the nineties we had the, the birth of the internet and, and, uh, everything moving online. And now we have ai. The point of this chart is to say these kinds of massive revolutions take a while to play out.
[00:21:52] Krys: And if you look historically at, at. I guess it’s all relative at when the technology started to, when the bubble peaked, then you have a better sense of, more or less, how much longer do we have before things actually co naturally course correct. And according to this chart, and I, I think my thesis is that yes, there’s a kind of froth and excitement because it’s warranted, but we’re also historically, early or not, maybe early is in the right.
[00:22:32] Krys: We’re certainly not at the peak of where the, the, the, um, technology is, is either via evaluations or maybe because everyone’s already doing the thing. So we’re not there yet. So therefore, from an investing standpoint, right, you, you, you have to hold two things simultaneously.
[00:22:54] Luke: if you were in any of those other bubbles, it probably didn’t, like if it didn’t feel like a bubble when you were in it and at any point in, you know, like the NASDAQ 1990s. Yeah, yeah.
[00:23:06] Krys: I mean, oh my God. Well, well, during the, I mean, the one that I lived through as an investor was the internet stuff,
[00:23:14] Krys: and, and and that there was no question, you know, I was 20, whatever, 22 years old, and I was looking at my mini portfolio and I was like, oh, up another 34% today. That’s easy. Like, there was no doubt.
[00:23:28] Krys: There was no doubt some bizarre stuff was going on. I think the takeaway here though is for us it’s less tough of this binary thing. It’s not, are we or are we not in the bubble where something’s obviously happening, but how much longer can we reasonably expect for things to be. Uh, I don’t know how to phrase this exactly.
[00:23:55] Krys: Not for the bubble to pop, but for the wave to continue, um, creating things we’ve never seen before, which in a way justifies more investment and greater, you know, CapEx and so forth until eventually, of course, there is that peak where, okay, now this is just Palantir level silly kind of stuff where everything is like on that kind of peak.
[00:24:25] Krys: Then we’re like, okay, it’s probably time to look the other way.
[00:24:28] Luke: Is it interesting you point a Palantir? ’cause I like my, my takeaway here really is. It’s quite hard to draw conclusions and look at the whole market. Like if you’re an index investor, okay, you do own the whole market. If you own like, you know, the all share and the s and p and a few things and you’re well diversified.
[00:24:46] Luke: So some of these conclusions might actually be relevant to you, but that’s not our game and it’s probably not the game of the majority of our listeners. Like we own individual companies, we own stocks and maybe it’s a kind of false, false dichotomy. I dunno if that’s the right use of that phrase, but, uh, apply like these big market sentiment things to our own companies.
[00:25:09] Luke: Like, I like to look at the companies I own and try and form an opinion on their valuation. And I did that for Palantir and you know, I formed the view that actually it’s probably overvalued, like it’s fully valued at least. So I’ve really reduced my stake. Um, I’m gonna tell you a bit about Axon in a minute, and like I’ve got a similar conclusion around that.
[00:25:29] Krys: Yeah. You know, that reminds us, uh, sorry to bring back this old, uh, horse of ours. But a moment where you and I were both very sadly mistaken because of this lens was Nvidia and we, we both did our research and understood that this thing is gonna be like wowsers amazing. But we, if I may speak for on behalf of both of us, we got in a sense too, rationally, not sure, but like convinced that, um, the wave, you know, the valuation thing just, it’s too high.
[00:26:12] Krys: It’s the classic error of, of knowing too much, I would say. And then you forget that that paradigm shifts, like what Nvidia brought in don’t happen very often. And so we sold too early because we thought, okay, this is too expensive now, and so on and so forth. And so this is why this is a tricky thing, you know, like Palantir is just.
[00:26:34] Krys: To bring that back. It’s just so off the charts pish that I can’t blame you for selling it. I, I mean, I tried shortening it for a little while, which was also kind of silly. I got lucky that I got out on with a little bit of profit. But, peaks, bubbles, you gotta put many asterisks when you’re in the once in the lifetime kind of phase shift.
[00:26:58] Luke: Yeah. And so, and like, you know, the way I navigate that and like there’s a lesson here is you don’t have to be black and white. You don’t have to be like fully invested or. Outta the stock entirely or even shorting it. Like there can be a gray zone if you think something’s like a bit overvalued or like incredibly overvalued, just own less of it, but still keep some exposure to it.
[00:27:23] Luke: ’cause if you believe that company is like defining the future, then you know you want some skin in the game.
[00:27:29] Krys: Yeah, uh, uh, agree, risk, proper portfolio, risk management and so forth. Badge.
[00:27:35] Luke: we bring, should we bring this round to like p pe ratios? ’cause there’s a, a really interesting topic came up on our Patreon, I think just last night actually. this is a really interesting article, uh, that Tom posted for us and from a guy called Manu Invests and, uh, the, the sort of core thesis.
[00:27:53] Luke: So this picture we are looking at on the podcast now, this is like PE ratios over time, going back to. Like the 1980s and, and maybe like what is a PE ratio, like price to earnings. So essentially like how much value, how much real dollars does a company generate after paying all the bills and, you know, running the firm and doing everything it does, like the real money that’s created, the earnings as a proportion of the price, like the market cap.
[00:28:26] Luke: And so today
[00:28:28] Krys: Wait badge. Sorry. Can, can, I can just one quick, quick, quick thing. the only thing any beginning investor needs to know based on that intro to what PAE is, is that earnings themselves are kind of an accounting. Uh, they’re, they’re an accounting framework which companies can and do easily manipulate because there’s lots of variables that go into it.
[00:28:57] Krys: And so when you get more advanced in investing, you begin to, uh, look at other metrics because they might be less manipulable. That’s all. Just cyber continue.
[00:29:14] Luke: No. That’s right. That’s right. And actually, that’s kind of the conclusion of the article and kind of, you know, where I am as well. Um, but let’s go, let’s go on the journey a little bit because. If you are an index investor, so we’ve described what the PE is for an individual company and so, you know, the PE of, um, the whole market, which is to say like the weighted average of everything in the s and p 500 is about nearly 30 right now, like 29.8, I think is what the article described.
[00:29:45] Luke: And you could use that. And if you look back through history, like the average PE ratio back in the 1980s was more like seven or eight. And then, you know, it’s this sort of chart that’s been really wheely and it’s been up and down, but it’s definitely trending up. So you could look at that and you could go, well, historically companies are being valued at many more times earnings today than they used to be.
[00:30:11] Luke: Like therefore the market’s overvalued and therefore, you know, we are in a bubble. And so the article’s interesting and it can, reflecting on what you just said. Accounting rules have changed over the years. So this guy, man, who invests points at a couple of examples where, um, because the way earnings are being calculated has changed.
[00:30:36] Luke: And I’ll give you a couple of examples that has kind of, it makes it artificially look like things are more expensive than they really are. And if you, if you back out and you try and do more like an apples to apples comparison based on the accounting rules today as they used to be, then actually we’re, you know, things might be slightly overvalued, but they’re certainly not like crazily overvalued.
[00:31:00] Luke: So then we just bring it to life with like one of the three examples, stock-based compensation. So way back pre 2006, companies could essentially pay like unlimited stock-based comp to their employees. Um, without that really being a drag on earnings, they just kind of created the shares out of, you know, thin air.
[00:31:22] Luke: They just printed more shares and it wasn’t reflected. Certainly you’re being diluted as an investor, but it wasn’t reflected in earnings because of the accounting rules. And now accounting rules have been tightened up and you do have to account for that, which is like a good thing. It’s more transparent.
[00:31:38] Luke: ’cause if companies print a crap ton of stock, then you do want that reflected earnings. So there’s like a, a pretty significant difference that would bring more sort of normalize what PE ratios used to be and what they are today. There’s a bunch of other factors as well. We’ll put a link to the article, but I think it’s quite an
[00:31:56] Krys: Interesting.
[00:31:56] Krys: Well, take us, take us through one more.
[00:31:58] Luke: Sure.
[00:31:59] Luke: Yeah. Okay. Uh, the na the nature of, let, let’s do the third one. So r and d. So, um, companies say, you know, you, you talked about railroads earlier. Companies, the biggest companies in the world used to be like manufacturing and big, like heavy industry type companies. And so they would have to, um, build factories and like have a load of like physical assets.
[00:32:27] Luke: ’cause it’s like way, way pre software. And so accounting rules will then and now allow you to, um, like capitalize the cost of those, like depreciate the cost of your factory over many years. But the biggest companies in the world today don’t build ginormous factories. They build like software. And so software is fundamentally different.
[00:32:50] Luke: It’s less, it’s more intangible. And so like the exp the equivalent of the expense of building the factory is like investing in r and d. And so like the Googles and the Amazons are spending a crap ton of money on research and development, but they don’t get to, um. They don’t get to like spread that out over many, many years.
[00:33:12] Luke: They have to pay for their r and d in the year where they spend it. So again, that’s like another factor that, uh, makes looking at PE ratios historically kind of not alike for like comparison with PE ratios today. ’cause the nature of the business has
[00:33:28] Krys: has changed.
[00:33:29] Krys: Right? And the counting rules stay the same. It’s the same kind of, uh, issue in education, right? We’re still using an education system, um, born out of the industrial age when the way we need to teach young people now is massively different.
[00:33:45] Krys: It’s the same kind of problem. That’s why actually most sophisticated investors prefer non-gap. Uh, earnings in accounting because it actually, ironically gives you, um, a more realistic v vision of what the company is performing based on the new kind of company it is. Which is more likely than not software or digital or just very different, yeah, very different standards.
[00:34:14] Krys: So, but the point, right, the point badge is, is if you hear something like the market is wildly overvalued, and look, the p ratio on this fancy chart says, so slow down a little bit and make sure you are understanding Apple. Is this apple’s to bananas or, or what kind of fruit are we dealing with?
[00:34:38] Luke: so we’ve talked about broad market, but we are not investors in broad market like we are investors in individual companies and trying to draw, like, is the PE ratio of the whole market higher than it used to be?
[00:34:50] Luke: That I don’t think that really tells you anything useful. So let’s take one specific example and it’s a company in my portfolio Axon who are like, you know, they, they’re like the prime supplier. So most of the police forces in the US a bunch of other security services they make like tasers and drones and like, they’re really embedded.
[00:35:09] Luke: They’re an incredible company. Um, that’s transitioned from being like a hardware company to becoming more like a software company. Um, and it’s been a mainstay, it’s like a core investment in my own portfolio, but I think it’s overvalued. And so I trimmed it quite heavily, maybe six months ago. And I got a question on the Patreon a few weeks back, like, is Axon still in my view, overvalued, like I still own it, but I have a much smaller allocation, So I’ve popped up a little picture here from fiscal do ai, which is our favorite investing tool. And here’s a really nice little graphic. I, I think I snapshotted this like a week ago, so it might be a tiny bit out of date. Um, the valuation metric I like to use for Axon is price to gross profit because the company does some like it, it pays incredibly high levels of stock-based comp, which kind of confuses earnings and you know, it’s egregious levels of stock-based comp, but actually it’s a bit distasteful.
[00:36:10] Luke: Um, so you can’t really use PE and it’s still investing a lot. So you can’t really use like price to free cash flow. ’cause free cash flow can be all over the place. So I just had, I tend to pair it back to like. Price to gross profit, which is like, how to explain this in simple terms is like the, the profit you earn based on like the cost of the thing.
[00:36:31] Luke: You know, if I wanna sell you the glass of water, well, it’s not my own time, but I had to pay for the water and I had to manufacture the glass and I sell it to you for like a small profit that’s like my gross profit on that glass, but it doesn’t, you know, account for my own time and the fact that I had to like do some marketing to get your eyeballs.
[00:36:48] Luke: So anyway, I, I feel like that’s a somewhat useful valuation metric for Axon. And if you’re on the YouTube, you can see like the green on the, uh, chart here, like on a price to gross profit basis. Axons currently around 32 times gross profit. And when I was buying Axon like way back, it was more like 15 times gross profit.
[00:37:10] Luke: So in my view it’s overvalued, albeit it’s kind of come down quite a lot. And I just, I threw stock based comp onto this chart as well, just to kind of show how. Ugly. The picture is like the company’s paying essentially, like the founder Rick Smith is paying himself more than 20% of revenue, not profit revenue as stock-based comp.
[00:37:31] Luke: That’s like, that’s pretty ugly. And it, it puts me off the company a little bit. So, so yes, like I think Axon is overvalued, but you do have to look at what the company’s doing. And this is like the art of being an investor. Like has the valuation changed for a fundamental reason and to some extent kind of.
[00:37:52] Luke: It has, I hinted at it a few minutes ago, like it used to be considered a hardware company. And typically like hardware companies have a low evaluation, multiple ’cause they have to like build physical stuff. And if you’re a software company, you tend to get a higher valuation multiple. ’cause you’re much more scalable.
[00:38:12] Luke: Like, I don’t need to build a thousand widgets if it’s software. I can sell like a thousand times what I have. ’cause it’s just software, right? There’s no, the marginal cost is quite low of selling like another bit of software. And so there is a good reason why Axon is trading a higher valuation. But I don’t know, it just feels still a little bit pricey to me and that’s like art, you know, if you ask me to try and precisely create like a discounted cash flow model, I could do that, but I don’t think that would tell you anything particularly useful.
[00:38:45] Krys: No. What would tell us something useful when I’m looking at this chart using a little bit of my technical eyeballs. One I see is that even after having, uh, come down quite a lot from what looks like two lofty peaks, it is still nonetheless at the high end of its historical valuation. So the only question I would ask myself as a potential exon investor is, is the company growing fast enough?
[00:39:15] Krys: Is something on the fundamentals going to accelerate the rate at which it makes money that would justify this still lofty price? If I could answer that with a positive, then I would say the it, the valuation is gonna work itself out. If I can’t be very convinced of that happening, then I would say stay away, because it’s still very, very expensive historically speaking, even after a correction.
[00:39:43] Luke: Agree. And that is, I think the, like the train of thought you should have. It’s much more accurate to look at an individual company and then try and form opinions informed by what the company’s doing and informed by macro, but you know, don’t draw big, broad conclusions and try and apply them and get some sort of sensible conclusion out of it.
[00:40:04] Krys: Yeah. And you know, axon, every time I see an Axon chart, it pains me a little bit be because we went on that one run and you know, you were telling me this is your number one bet right now. And of course, through, through Silliness Monkey did not take your, uh, encouragement urgently enough. And I know the company, I really, uh, I think I understand it de decently well, but I cannot, for myself answer no doubt on the level you can, the, I don’t have the confidence in why. Their rate of growth will continue, you know, onwards forever based on, you know, your reverse, um, your reverse, uh, dollar cost, um, model. God, geez, what
[00:40:58] Luke: Discounted Discounted cashflow Model. Reverse. DCF.
[00:41:02] Krys: thank you refers DDCF, um, but you who, who do have a fundamental understanding of their growth trajectory could probably justify why even at these levels it is a good enough investment maybe.
[00:41:18] Luke: You can definitely make an argument for both sides. But maybe coming back to my comment like half an hour ago, doesn’t have to be black and white. You don’t have to be all in or all out. Just own a little bit and then at least it keeps your skin in the game so you can, you’re encouraged to monitor what the company’s doing and if the valuation looks more reasonable or if suddenly something changes fundamentally and they open up like huge new markets, which they might actually be doing.
[00:41:45] Luke: You, well, you notice that ’cause you’re, you’re reading the earnings reports every quarter, um, and you can start adding again.
[00:41:51] Krys: shall I tell you about monkey’s latest edition to the King of the Jungle portfolio, which took place late last week. ticker is ODD company is Oddity, and this is very unusual company for, for me, because it’s. Technically are known as a beauty business. Uh, think, what’s that other company?
[00:42:16] Krys: Elf, ELF, ticker symbol Elf or Ulta. Uh, the big broad thesis is that makeup and beauty products never go out of style, but still, it’s not in my wheelhouse particularly. But something caught me eye on the big picture level is that they’re combining that with ai, um, image call it, that the user is put through a gamut of, call it AI tests, pictures and snapshots, and the answers to questions.
[00:42:48] Krys: And then the company formulates a more fine tuned product specifically for that user based on their skin tone and shade. So it’s basically cutting out the. Middle person. You know, I don’t know much about the makeup industry other than people try to tell you this matches yours. You know, you need some guy to help you, you know, bring out that, that amazing deep sea blue of your eyes, whatever.
[00:43:13] Luke: can I quickly sidebar my buddy, she and I are like remorselessly competitive and we’re in, I think we’re on like ski season in the, or a ski trip in 2017 and we’re in, I think we’re in like LA after ski season and we, uh, we went to some department store and this lady had like some kind of gun that measures like your skin age and we had a hundred dollars bet before we used the gun on who had the younger skin.
[00:43:38] Luke: And I looked young, but that motherfucker had, sorry, cut. I’ll say that again. Beat me out. But that MF had like 10 year younger skin according to this lady’s gun.
[00:43:49] Krys: well, so, okay, so maybe you are future, either the customer. Anyway, that’s the big picture. Really important. I wanna shout out to our Patreon community. Again, somebody pitched this, I’m sorry, I forget who it was. Somebody pitched Oddity in our community some months back. I would not have been looking at the stock.
[00:44:09] Krys: We’re not for that pitch. So monkey squirreled it away, put it on his watch list, eventually got around to researching it and saw things that he liked, but is like, hmm, not good enough. Right? It still didn’t merit, you know, an investment, but this is how things work, right? The, the company intrigued me enough to then start going deeper.
[00:44:34] Krys: And what I did over the holidays was I poked around the website and I said, dad, this is actually really cool technology. And so I got Mrs. Monkey, a gift, uh, gift card, whatever. She then picked her own stuff. And then is really delighted with what she got. And it wasn’t just makeup, it was actually wellness.
[00:44:55] Krys: They have a secondary business that is more about wellness, uh, skin, not hair, whatever. Vitamins. Vitamins, and not just like superficial stuff. Anyway, that’s the, that’s the big picture stuff. But there’s a reason I want to talk about this rather than it just being like, oh, I, I bought this share more and more as I’m, I’m developing this options course.
[00:45:20] Krys: You’ll hear me say this in the future time or the variable of time is crucial to understand and know and admit how you’re using this. And, um, there is such a thing as poorly timed investments. It doesn’t matter how good the company is, as we were talking about Axon, right? Or how bad the company is. If you could somehow time your entry relatively. Intelligently, then you will be buying low, selling high, right? But of course that’s easier said than done and so this is what you’ll see here. Badge is this is the chart that each candlestick represents a week, so it’s going back to 2001.
[00:46:07] Krys: Basically it’s the history of the company’s price. And immediately monkey saw something glaringly obvious badge, which is that line. He marked it with a blue solid line that basically runs through the middle of the screen. That line represents in the history of this company. Um, you could tell that that’s the level at which price was either be below and couldn’t break or above, um, which was its support.
[00:46:42] Krys: So it was either acting as the resistance to price or the support of the price. And there was, I guess it was two years ago, a big massive peak in which that the price went way, way above that level. And now curiously, as I’m watching the price on the sidelines in recent weeks, the price then dipped below that level in once a massive level like that gets broken, you basically have to be thinking caution, caution, caution.
[00:47:13] Krys: For whatever reason, the market is saying something’s not quite quite right. So that’s when I started trailing tracking just the price action. And withholding ’cause withholding buying. And then last week, just last week, the price went below yet another level. You could see I had a second blue rectangle drawn the price dipped below that and actually touched the third level.
[00:47:43] Krys: That’s the lowest level on this chart. The price touched that level. As soon as it touched that level badge. That basically meant to me the following. Either this company is really, really broken somehow and people are just continuously selling it and the price is gonna keep dropping. So if you were a momentum player, you would not touch this right now because obviously the trajectory is basically straight down.
[00:48:09] Krys: But then when I went back to the fundamentals and if, where monkey goes to do all his fundamental research, you will see this company is basically firing on all cylinders.
[00:48:20] Krys: Revenue’s increasing cashflow free cash flow is increasing. There’s a little dip. And that’s actually because they’re starting a third brand. So they’re investment in CapEx is increasing. So it makes sense that their free cash flow levels would dip. But this company basically could not be any stronger on the fundamental levels.
[00:48:41] Krys: So what we have here is monkey’s marriage, perfect marriage of real. Um, it’s not that he wants technical weakness, but what he’s seeing, what monkey’s seeing is that the price finally dipped to a technical level, which probably will show will, will start reversing soon because it really got down low enough. Or the valuation just got so silly cheap based on the rates of projected revenue growth that even if it continues falling further, monkey will just start dollar cost averaging. And so this is, I don’t know, this is, this is for our listeners. I think my sweet spot in how I’m, I’m now investing, which is fundamentals plus technicals.
[00:49:32] Krys: Plus patience, plus patience. And now watch to see if I’m right or wrong in my, as my understanding of the company grows and I start listening to quarterly earnings and start developing more of a thesis.
[00:49:49] Luke: That’s great and you, you know, I rail against like these chart guys who just look at like price action and try and form an opinion, but like, you are doing what an investor should do and you’re going beyond that perhaps. ’cause you’re actually going out and like subscribing, buying the products, trying out the service.
[00:50:08] Luke: It, you know, you are forming, you’re getting like your own anecdotal experience, plus you’re looking at earnings reports, plus you are looking at like technical indicators and I think together that can be quite powerful.
[00:50:20] Krys: Yeah. And that’s really the, um, I’m gonna go on about this more during our options course, I promise you, because it’s key. However, for this episode, I think the moral of the story here is I feel really good about my process because I did not take any shortcuts. I, and I’m combining tools, and when I combine them, I could feel. That that mystical problem of trying to get the timing right becomes more probabilistically set up in my favor. I just needed to be patient for a long time, and that’s really the trick, you know, because it’s hard. I was like, when I first discarded, really, to be honest, when our Patreon poster posted about this company, I was like, cool, this is the coolest thing ever, right?
[00:51:12] Krys: This is gonna be a big winner, but what did the price do? In the meantime? It kept dropping and dropping and dropping, and had I invested merely on, call it the hype, or because I liked what I saw, I would have lost a lot of money. And so this is a more, I think, professional grade approach and it takes time to develop, but more on that soon.
[00:51:36] Luke: it’s, it’s probably a nice transition into like a bit of conversation around options and why the options course is certainly gonna be useful for me because one of the things about options is it’s not like you buy the stock and you own it. And if you can be patient, you don’t, you know, timeframe sort of doesn’t matter in some respects, like as long as you can be patient.
[00:51:59] Luke: Um, but when you buy an option or you sell an option, like there is a date, and that as that date approaches. That affects the value of the thing you own. And so, you know, I didn’t get like, wiped out or lose my pants, but I do have options expiring this Friday, the 16th of January. And like a couple of ’em are expiring, worthless.
[00:52:21] Luke: Like I took a, a put on Quantum Computing Inc. ’cause you know, I go on along for the last year about what garbage these quantum computing companies are and none of ’em are gonna, in the long run are gonna win. But like my bet on this company failing by January the 16th, 2026 was a sucker’s bet. ’cause I’ve lost like 97% of, uh, of my option of the money I invested in that.
[00:52:47] Luke: And like my option to buy coherence, uh, $3, like that’s expiring this Friday that’s lost like 99.5% of its value. So yeah, like you, you gotta be right with options, but you’ve gotta be right with the timeframe as well. So in your options course, you’re gonna give us like some proper learnings around that stuff.
[00:53:09] Krys: Yes. And I could tell you the two big mistakes here, uh, in hindsight, obviously, because had they worked out, you would’ve been a great genius, right? The two mistakes here are actually very obvious and, they’re obvious and they’re, I don’t know how avoidable they are in these two instances. The mistake with they’re different though.
[00:53:34] Krys: The mistake with qubit badge, because I was in the same boat with you, I just got out way earlier, is that the initial price for those options was too high, meaning technically speaking the iv, which is how the option understands its price. Was so elevated because every, every, any investor under the sun was basically looking at this saying, Hmm, this is, this is not a good company.
[00:54:00] Krys: So the market makers are like, yeah, we’re gonna charge you out out the butt if you want to participate in this bet. And so, even if you’re right about all the other things, if you paid too much, it’s gonna be a losing proposition. So that’s easy way to sum up that problem. The coheres problem is a little more interesting because I too hold a lot of coheres options about to expire worthless.
[00:54:25] Krys: But here’s a little, little, I don’t know if it’s an irony, but the major, uh, JP Morgan Health conference that a lot of companies use as a kind of sales pitch for future mergers and acquisitions and basically shop talk in the biotech industry are actually taking place this two, I believe this Tuesday and Wednesday.
[00:54:50] Krys: In fact, coherence, I believe, is presenting tomorrow,
[00:54:54] Luke: Yeah.
[00:54:55] Krys: uh, at like 10 30 Pacific. The problem here is the great problem of all options holders is that, uh, you ran out of time, unless this conference tomorrow basically save, you know, like last minute save, which has been known to happen in biotech because all they need to say is, you know, like we’re, we’re, we’re in some talks with whatever big company and the stock could shoot up 300%.
[00:55:30] Luke: Right, right.
[00:55:31] Luke: I need to stop to double, to, uh, to, to my option to be in the money, but it’s like a $200 million company. So that can happen with like
[00:55:39] Krys: of course, of course. The, the real, the real, to be more specific, the real error was once it got within 30 days, you. should have to protect whatever was left in value, sold it and rolled it out to the future and not left it to the last week. But we’ll talk more about,
[00:55:58] Krys: yeah. And there are, you know, tax gain losses, harvesting and all that.
[00:56:01] Krys: So there’s, there’s ways in which it’s not the end of the world.
[00:56:05] Luke: Hey, listen, don’t leave me on my own here. Right? You made your own errors with, uh, cipher. What happened there?
[00:56:10] Krys: Yes. So badge before going to bed last night, I was thinking about how, how I wanted to talk about this. This is gonna take us a little off, off, uh, not specifically about options only, but about our challenge, our community’s Patreon, king of the Jungle Challenge, and how we’ve set up our accounts. Because I realized the mistake I made was actually boneheaded in a very different way because we.
[00:56:39] Krys: Only, uh, what we deposit $200 a month, right? Our accounts are limited for now in size. I’m at what, 14 k? You are at about 10 k. That’s still, call it small-ish. Given that options require at least a hundred shares of something to, uh, as either collateral or to sell calls. So basically, more sophisticated stuff only happens when you have a large amount, right?
[00:57:10] Krys: So at the start badge, I just got into a mental framework that says, because we’re, we can’t use margin in our accounts for this competition. I just don’t have enough, call it collateral to, to do, uh, call it secondary legs, which involves selling against collateral. So all I’ve done in our King of the Jungle so far has been by calls.
[00:57:38] Krys: Which is very risky. I actually have sold calls against eos, but that’s because I have 250 shares, so that’s the only one position I could do that with. But in the Cipher example, I took a risky call and I actually had a big profit on it. And sometime last week, as I said to our patrons, monkey’s Paw was hovering over the sell button and then greed one out because I was like, the technicals are great and you know, this company, you know, like, so I justified it, uh, I mean, I put myself through the paces.
[00:58:19] Krys: It’s not like I was being laissez-faire. I was like, ah, should I sell and take the but greed one out, let’s call it greed for short. So that’s the main error. That’s how I would answer your question, literally, right? What was my mistake? I wanted even more than I already had. But the secondary thing I’m talking about was.
[00:58:37] Krys: Here’s what I should have done. I should have realized that once you buy a call, you, you nominally control a hundred shares for, from the perspective of the brokerage, even though I didn’t have the the shares, I only have 12 cipher shares in my account. I bought the call. So I do control a hundred shares, and I should have actually sold a call at a higher strike price, which would have worked against the hundred that I could controlled by buying the call, and I would have actually profit money would have come into my account.
[00:59:18] Krys: It would have lowered my gains, but it would have also lowered my risk, my error. I didn’t literally think of it. I didn’t think, right, because I was in the mindset that I can’t sell calls because of the initial. Limitations. It didn’t occur to me, man, like that was my error. Now because I’m designing the options course, I’m like, duh.
[00:59:45] Krys: It wasn’t a question of should I have bought or sold them. It should have been at that moment I would have re decreased my risk, taking risk off the table and just threaded the needle in a much more sophisticated way. And duh, didn’t think of it, but believe you, me, monkey will be back. Um, and, and I’ll use more of these fancy double layers in the future.
[01:00:09] Luke: Great stuff. I mean, I don’t even understand the strategy you’re describing, so look forward to being the Guinea pig in your course, along with our like prototype batch of eight Patreons, and we’ll learn about this stuff with you.
[01:00:22] Krys: Our, our very noble Guinea pigs. By the way, if you’re listening to us, uh, Patreons. Sorry for monkey Apologizes for not yet explicitly inviting you all because I’ve been in the, in the lab, but do expect an email within a week or two saying, okay, let’s, let’s iterate this first version of the course and I can’t wait to, to show it to y’all.
[01:00:47] Krys: And then everybody else will, will get a larger invite once it’s, you know, out of legit beta.
[01:00:55] Luke: And we we’re gonna make this available to Patreons. Um, so like if you’re listening along and you’re interested, um, then go check us out@wallstreetwildlife.com. And there’s a whole bunch of Patreon tier. It’s not just the options course. This is some brand new initiative from Christophe, but there’s like a whole bunch of other stuff happens there every day.
[01:01:14] Luke: Like interesting Alpha market insight conversation. If you are at our dolphin tier, Christophe and I share in real time like our actual trades that we’re doing in our real portfolio in like my retirement portfolio and in, in both of our King of the Jungle portfolios, like we’re just being transparent with our investing decisions and the lessons we’re learning from them.
[01:01:36] Krys: Yes. And even better now, badge less. You forget, we ha our patons have their own portfolio that they are making the pitches for and then voting on. And right now that portfolio too is whooping ass and we are up to six companies, uh, with company number seven being, uh, solicited and voted on this month. So it’s a learning process for everyone because correct me if I’m wrong badge, it’s one thing to listen to a podcast.
[01:02:11] Krys: And it’s another thing to start rolling up your sleeves and taking your investing process more seriously and pitching an idea to community and then going through a selecting process and then tracking your results. It’s not like paper trading anymore, right? It’s, it’s really, it’s something shifts when you become more active.
[01:02:30] Krys: So that is really a virtue, another unsung virtue of, of doing it this way.
[01:02:36] Luke: And if you are on there and you know, you don’t, you don’t feel up to making a stock pitch. They get involved in the voting anyway and there will still be, uh, merch and recognition for Patreons who voted for their stocks in general. That drove like the main returns of the community portfolio.
[01:02:53] Krys: You know what, I just wanted to, to check in, uh, in this moment, in this moment, our top selection, which was brought into the portfolio in December, is up, uh, 34%.
[01:03:05] Luke: Is that by any chance? Novo Nordisk?
[01:03:07] Krys: It is indeed. It is indeed. Yeah. Good on you. Badge. Good on you. Something happened with them. It was, um, some big fundamental news recently, right? Um, am Was it have, have to do with the Amazon Pharmaceutical partnership or something like that?
[01:03:23] Luke: I haven’t really drilled into the Amazon news, but Amazon, like Amazon Pharmacy in the US are now selling like oral weight loss drugs. Um, but it was the, it was the drugs themselves. Like I’d been buying steadily Novo Nordisk for coming up for a year now, maybe nearly a year. Um, ’cause I wanted like to build the income investing side of my portfolio, but very clearly like.
[01:03:48] Luke: There’s a huge untapped market for these weight loss drugs. I’ve got friends now who are on them, right? They’re incredibly beneficial. Like the, you know, there’s pros and cons, there’s side effects, but if you’re trying to conquer like an addiction, which might be like a food addiction, like these are incredibly helpful, uh, pharmaceuticals, but some people are gonna be, they’re just gonna be resistant because you have to, used to have to inject yourself like once a month, go get jab from your GP or do it yourself.
[01:04:17] Luke: And now it’s pill form. You take like a pill every day and like the weight starts dropping off. So like, so my mind, it was like a no brainer. So that was gonna massively expand the adoption of these, these therapies and yeah, like the pills got released in the US maybe like a week or two ago, and now, like the stock is re-rating.
[01:04:39] Luke: Sometimes investing is easy, like.
[01:04:41] Krys: In. Although yes, and in hindsight everything is, is not only easy, but like the most obvious thing. But sometimes investing is easy in this case, you know? Yeah. Seems like it. So, right on. So, uh, I guess, uh, monkey’s last pitch to our listeners is, uh, check us out on the YouTubes. Uh, but above all, we encourage you to check out our Patreon Wall Street Wildlife community and be active in your comments if you’re lurking in the shadows because you don’t know where a little bit of alpha, uh, will, will come from.
[01:05:14] Krys: As in the Oddity example, forgive me, Patreon, I forget who, who you were that pitched me that idea or pitched us that idea, but, but thank you.
[01:05:24] Luke: Awesome stuff. I’m, I’m just gonna mention again before we close, like our, uh, partners@fiscal.ai. Um, it is an incredible tool. I use it every day. Christoph uses it every day. Um, they have just repriced their. Most, uh, the premium tier enterprise is now significantly cheaper. Like, go check it out. If you’re interested in building your own models, downloading financials, being able to look at like as reported versus real metrics, um, it’s a really, really powerful tool.
[01:05:56] Luke: If you use fiscal.ai/wildlife, you’ll get a handsome discount and that’ll help us out. So, um, yeah, like e even if you go use the free tool, like this will up your game as an investor.
[01:06:08] Krys: All right. We always end the show with, are you ready to become a Beast and Investor? Um, I don’t know. That’s kind of gro that’s kind of getting weary on me. I just want to end this episode by saying, uh, badge, uh, don’t kill yourself on, on the ski slopes. I need, I need to, I need you at the poker tables in Vegas, in, in March.
[01:06:32] Krys: So, so I don’t know how good badgers are on ski. You know, I always see ’em sniffing around acorns rather than like going a hundred miles an hour down some black diamonds, so,
[01:06:42] Luke: There you go. 70, 78 miles an hour. That’s my, that’s my record speed so far.
[01:06:46] Krys: oh, damn. Okay.
[01:06:48] Luke: Badge badges. Badges are pretty good on skis. Yeah. That’s not much of a closeout line though, Christophe, if you’re gonna pitch me like, you know, I, I do. Like, are you ready to become a beast of an investor? Your journey starts here.
[01:06:57] Luke: If you want to pitch me a different close, like now is your.
[01:07:01] Krys: if you wanna be a beast of an investor, don’t die on the ski slopes.
[01:07:05] Luke: I don’t think that one’s gonna have longevity, but whatever. Thanks for joining us for another week, Christophe and Luke, over and out.
[01:07:12] ​
