E42: Six Skills to Sharpen your Investing Claws

If you’ve ever wondered about the difference between Badger and Monkey, here it is: Monkey spent his weekend getting a haircut, while Badger was playing poker until 6am in a literal castle on the outskirts of Edinburgh. Whose team are you on now?

In this week’s episode, Luke buys Coherus $CHRS January 2026 options on the strength of Krzysztof’s sales pitch in episode 41. “Deep Value” seems to have been the magic phrase that made his claws tingle, despite the “likelihood of failure still being high”, a fact rebutted with sound reason, logic and facts. We’ll agree to disagree, but it’s a high risk investment, however you look at it!

@iancassel, Founder of MicroCapClub.com recently shared an excellent presentation on the “Six Skills of Stock Picking”. We discuss all six, brought to life with lessons from our decades of mistakes and successes:

🎯 Identifying Actionable Ideas
🎯 Valuation
🎯 Buying and Sizing
🎯 Holding Due Diligence
🎯 Selling
🎯 Survival!

Krzysztof also reminisces about Jon Stewart’s righteous grilling of Jim Cramer during the Great Financial Crisis of 2008, and Stewart’s current beef with the media spouting economic nonsense about inflation and the politicization of anti-price-gouging policies. Moral: know your sources and make sure you trust their motivations.

We’re getting many more comments and questions from our growing community — keep up the good work, beasties.

Sources mentioned:

https://microcapclub.com/the-skills-of-stock-picking

Segments:

[00:00:00] Introduction
[00:02:00] Luke Bought Coherus Biosciences As Well!
[00:05:45] The Six Skills of Stock Picking:
[00:08:45] 1. Identifying
[00:12:13] 2. Valuation
[00:20:30] 3. Buying
[00:23:57] 4. Holding
[00:25:36] 5. Selling
[00:28:44] 6. Survival
[00:31:39] Listener Shout Outs!
[00:33:00] The Real Deal on Price Controls and Media Spin

WSW E42

Luke: On today’s Wall Street Wildlife, we talk about the six skills of stock picking, the inexorable rise of renewables, and we’re also going to touch on inflation and capitalism. Today is Monday, the 26th of August.

Krzysztof: Badger, you went mucking about, as is your way. You, you could not sit still, so you got yourself to a castle, rumor has it.

Luke: Did, uh, well, so, like, we definitely need to open our intro with, like, some wild adventure you’ve had, maybe next week. But yes, let me set a new bar for you. If you’ve seen the movie Saltburn, I spent, Friday in my underwear running around a castle with a couple of buddies singing, uh, Murder on the Dancefloor at the top of our voices from the battlements at my buddy’s, at my buddy’s castle just out in the outskirts of Edinburgh.

We run up for the Edinburgh Festival as we do every August. Superb fun.

Krzysztof: a phrase you rarely hear, my running around in my buddy’s castle. And dear listeners, for what it’s worth, Lukas literally was literally running around the castle. And I will, I will confess that this is the, the, the main difference between, Luke and myself. He runs around castles over the weekend and my highlight is getting a haircut.

So, uh, this is what you get when you’re, when you retire early via your investing prowess versus still, you know,

Luke: one would know, you never get that hat off. You’ve got some succession of hats. I’m not convinced you actually have any, like, do you open it and it’s just like a brain pan open with the air breathing in like, bearish thoughts about the world touching straight into the cranium.

Krzysztof: it’s a jungle in there. Okay, so you’re back from the castle, you survived, you listened to music, let’s talk investing.

[00:02:00] Luke Bought Coherus Biosciences As Well!

Luke: Before we get to our docket, I’ve, uh, I re listened to episode 41 and your very persuasive arguments about Coherus Biosciences, and I bought me some options. I’ve got a synthetic long. I’ve jumped on board, Krzysztof, have I made a mistake?

Krzysztof: oh man, I don’t know how to feel about that, um, I feel mostly good. You know what I’m generally curious is that do you have a specific part of that long pitch that I gave that made you enthusiastic enough?

Luke: it just seems like they might, like, super high risk. I do still continue to hold the view they’re more likely to fail than succeed. But I think I buy your arguments about the sort of deep value. You didn’t use those. Words in the chat last week, but you called out like a couple of elements of the thesis where essentially they’re priced right now for absolute disaster.

And there’s just a ton of upside. So even if I didn’t really do my, as we say in the UK, back of a fag packet, basically, you know, my little scribbling, uh, estimate of value, but it seems clear to me that there’s at least. A 5x return in this company over a reasonable time frame, given moderate, reasonable assumptions about growth.

And so then if that’s true, I only need them to succeed , well, a little bit more than one out of five times. And that doesn’t seem out of the question. So screw it. Anyway, I only bought like, like a teaser bet, like 50 contracts of, in fact, it’s my birthday as well. So I noted that, um, that the January 2026 calls, that falls pretty much on my birthday within a couple of days.

So I thought I’d bring some Luke Badger birthday magic to your, uh, your own investment thesis. And let’s see if we can go to the moon together.

Krzysztof: Right, excellent. I hope those are printing big bucks by the time you gain some extra gray hairs. We won’t make this into a Coherus segment, but there’s one tiny little thing I got a nitpick with you about. And this is very common in the biotech sector. You said, like, you know, the likelihood of failure is still high.

I disagree, and here’s why. This is why. It’s a nuanced thing. Take even though the company is tiny or rather because the company is tiny, that is the way in which you could be right because all tiny companies just blown the wind more. However, most biotechs that fail as investments are pre revenue.

They’re, they fail because they have a great idea and they just never make it. They run out of money, blah, blah, blah. Coherus, is revenue generating already. They passed the hard stuff. So now it’s a question of how quickly they grow. that puts them much more in the category of any other business that it’s just a question of how much, how soon, and valuation.

And as you said, because the valuation is basically counting nothing, the fact that they’re growing revenues, I don’t think the phrase Likely to fail is accurate in this case. It’s just how good of an investment will it be in terms of returns. That’s all.

Luke: To what, to a badger’s conservative badgery eye, It looks highly risky and highly speculative, but sure, I’m on board anyway. And look,

Krzysztof: All right.

Luke: set my own, I set my own expectations. If I go into an investment like this, as I have done in the past with other companies, and I’m going into it saying, like, actually, I expect this to blow up, right?

And go to zero, anything that doesn’t involve going to zero is a win, right? So, um, You know, I’m managing my own expectations from the start.

Krzysztof: Well, that’s the secret to life too, isn’t it? You know, as I always say, if it wasn’t for disappointment, I wouldn’t have any appointment.

[00:05:45] The Six Skills of Stock Picking:

Luke: Well, this might be a nice segue to our actual first docketed conversation, which is the six skills of stock picking. And we have plagiarized these entirely from the excellent Ian Cassell on X and various other platforms. And Ian is a Uh, is a leading light in micro cap club. I think for decades now he’s been, identifying the tiniest of tiny speculative, interesting micro cap companies and identifying great opportunities to make money.

That’s a little bit like the Coherus bet we’re just talking about. And Ian did a, quite an interesting presentation that I saw that he’s published for free on his ex. We’ll drop a link to it actually, it’s worth a watch. And it was quite an unusual video. Like the first three quarters of it was all about martial arts and uh, the gentlemanly art of combat.

But he does then pivot into, what he sees as being the six skills of investing. And I think it’s worth. dipping into these and picking out a few comments for our listeners, because there’s some good stuff in here.

Krzysztof: Yes. You know, what was inspiring about that is that the guy talking about the martial arts guy is the world’s best jujitsu coach. Yeah. who I’ve seen here in Central Market with his, he walks around with a fanny pack, but the guy is absolutely dead serious. I mean, he’s sort of like, he’s a New Zealander with this, like, uh, when he talks, it’s like a pre made lecture.

He’s very analytical. He was, he used to be a philosophy. He was a graduate student in philosophy. And you know, switched his talents over to the martial arts. What was inspiring to me is that when you’re talking about something that has so many moving pieces and so much complexity, it’s amazing the difference between the people that take their art seriously and treat it as like a life’s mission to get better and then everybody else.

And he talks about that, right? The difference between, you know, jujitsu hobbyists and world class athletes. And I think you could take the same approach to investing and ask yourself, what would it take for me to become world class? And he identified these six skills.

Luke: Yeah, absolutely. I think that’s a key part of the analogy as well. Like you can be a successful investor without any of these skills really, but that’s by like passive index tracking, dollar cost averaging, keeping it real simple. If you want to be like Ian, investing in micro cap companies or like Krzysztof and myself and many other individual investors investing in, you Small to medium to large to mega cap companies.

Well, you, you need some skills which you can practice and develop, and you need to employ those regularly, like build your experience, earn your knocks and earn your bruises, and, um, and then you too could be running around your own castle, perhaps one day in 20 or 30 years time. Should we go through the, uh, the six skills?

Krzysztof: Let’s do it.

Luke: Let’s do it. So, um, and

[00:08:45] 1. Identifying

Luke: I think the first one is something you’re very good at, uh, which is identifying actionable ideas. And again, essentially breaks this down as finding ideas before others by knowing what to look for, using lots of different methods for generating ideas, like screeners, doing research, networking, just observing the world.

And, and that it crucially, I think you could be a great at this skill, you could be great at identifying. Actional ideas, but you could still be a terrible investor. This is really just like the starting point to find value, perhaps where others have overlooked it. And yeah, you’ve done that a couple of times with, um, with some really interesting stocks that you were probably one of the first people on X to start talking about in any meaningful sort of way.

Where you get your ideas?

Krzysztof: Yeah, well, I’ll tell you this. This is, this part of investing is what makes it a lifelong journey for me. And I’ve said this many times. I feel like as long as I’m learning something, I’m interested and you can’t be, be a good investor if you’re not learning about how the world works. And so, you know, um, I try to spend most of my days reading, and figuring out how things go.

And this feeds my natural curiosity. And I would say, I mean, I think the guys mentioned it in the talk, right? Good investors are naturally curious in all kinds of ways, not just generating ideas, but, uh, continuing to learn and, you know, working with their biases and stuff. your question was how do I find ideas?

I think I sort of answered that by when you read a bunch and you try to stay open about the world, new ideas just flow in. But also, and this is big, uh, I try to curate the people that I trust. And I listen more, my ears just always, you know, they widen a bit any time. For example, you say something about a company that is on your radar, that certainly gets to the top of my, to investigate pile much more quickly than anybody else.

Why? Because we have a longstanding relationship. I trust you. You’re a professional. You know what you’re talking about. And the idea may or may not work out. Bye. The fact that you have your eyes on it is counts for a tremendous amount. And I think this is the value of, uh, in the way our podcast, right?

Luke: yeah, definitely. Podcasts are definitely one source I use. I read. I can read. You might be surprised to know I can read words, but, um, I also write them sometimes. Uh, but I mostly absorb the knowledge through talking to people and watching YouTube and listening to podcasts and I suppose I get my ideas, from doing that, like observing the world and trying to figure out, for me, because I’m always trying to look like 10, 20 years ahead. So I’m trying to figure out, like, what are the questions that are just challenging for the world? What are the problems we have?

And then just trying to figure out who’s got the, probably the best solution to that or the, the germ of the best solution. And that’s kind of broadly where I get my ideas from. I’ve got, when we talk about, uh, the climate a bit later in today’s episode, like I did that, I think really well, found an interesting company and it turned out to be a shit investment.

But anyway, we’ll, we’ll loop back to that later.

Krzysztof: I’ll bellyache of maybe about this, maybe a little later during one of the alternate categories, but I will say that had I stayed invested in all the companies I had found early. I would have had seven castles.

Luke: Yeah, that’s right. That’s right.

[00:12:13] 2. Valuation

Luke: Well, anyway, Ian then goes on to say, I think, I believe he has it as his second skill is valuation. So once you’ve identified one of these actionable ideas, you need to work out, like, is it fairly valued? Maybe we can, we could also link it back to the Coherus conversation just a few minutes ago.

Um, like potentially high risk, but potentially there’s deep value there if the thesis plays out in the right way. We could argue about how speculative or how risky it is, but, you know, it’s certainly riskier than like an Apple or a Google, doesn’t necessarily mean it’s a bad investment.

It just means that you want to have it at such a material discount to the value it could be at if the thesis plays out to your reasonable expectations. To optimistic expectations that you make a shit ton of cash and that compensates you for the risk that you took because maybe you have to make three or four of those bets for one of them to pay off and hopefully that one covers the losses on the others to some massive extent.

Krzysztof: This is, I think, the trickiest one out of all of them. You need math to some extent. You’re trying to predict the future of the business. There’s sayings that the great businesses are usually very expensive.

So sometimes trimming based on valuation reasons backfires or looking for good valuations backfires because those are known as value traps.

Luke: I, I suppose I’m just thinking this on the fly a little bit. really not a fan of analysts or services that set price targets that say, Oh, you know, this is, this is, we think this is fairly valued at a hundred bucks. It’s currently valued at say 50 bucks. So strong buy, go buy it.

And when you hit your price target of a hundred dollars, that will probably tell you to sell it or trim it or underweight it then. But that stuff doesn’t really make a lot of sense to me. And I think you see, you see a lot of folk out there Putting a ton of sweat and effort into building like discounted cashflow models, where they’re looking at all the different goods and services and the cost base of the company and building these really phenomenally complex models.

And I think you probably, you build a wood, which stops you seeing the trees to some extent, like you make what could be quite, not simple, but you could take, uh, more of a perhaps A decision that’s better made as a more of an intuitive decision, once you’ve got the experience, and you turn it into like a math puzzle, which gives you potentially an answer that feels so precise, you have too much confidence then in the outcome, and then perhaps you end up making a bad investing decision by either saying, oh, It’s too expensive, therefore I won’t buy it, and it might have actually still been a great investment to make.

Or the other side, you say it’s so undervalued I’m gonna massively overweight into it, and maybe that wasn’t the right thing to do given the risk level.

Krzysztof: I think I disagree with you to some extent. and agree with a bunch of other stuff. I agree that the precision aspect in, in a lot of models. leads people astray, because the moment one of those assumptions is off by a little bit, the whole thing’s out the window, right? So keep it simple, stupid usually works better than, than the obverse. I think what I disagree with a little bit, or maybe a lot, though, as I think about saying this, I realize it’s all dependent on the specific nature of the company, that there is no general statement like this, so that’s a big caveat. But one ought to have, if not a precise target in mind that you become dogmatic about, some sense of the assets are worth this much, the revenue is worth this much, and we could predict that relatively conservatively. and the call it market capital valuation is way below or is priced way higher and therefore there’s either a lot of margin of safety or little margin of safety based on those assumptions. So to have some sense Ballpark ish, if you will, of what that gap is. I think is, this goes back to old school investors like Benjamin Graham and, you know, margin of safety stuff and like a lot of calculating.

So I agree ultimately that, uh, don’t get, here’s how I would say this. Don’t get so caught up that your math is correct, that you become dogmatic but don’t, not. have some idea about a gap.

Luke: Yeah, that’s a good refinement. I think we’re broadly saying the same thing, but I prefer the way you said it. if you don’t have the decades and the war stories and the cuts and bruises, you probably do need more of a strict framework to build an investment thesis around. So you’re right. And it’s helpful for anybody. It’s helpful for anybody to have, as you said, at least a sense of what the fair value of something is.

Krzysztof: And you know what, uh, recent example, recent example of this should be so obvious. In hindsight, everything is obvious, but I was a major shareholder of Cloudflare, which ticker symbol NET. I loved everything about the company. I did all the research. And then if you remember during the post COVID, everything’s going online mania, There’s some point at which CloudFlare be became valued at multiples that were absolutely astronomical. In hindsight, it’s so obvious that it doesn’t matter if this was, this business was actually printing gold bars. It, it was not the, it was the, the value, the, the, how expensive it was could not be justified no matter what. in, in ought to have been sold. But of course, in reality, you get caught up in like things going up all the time, every day, right?

Uh, it’s one, it’s a painful lesson, but I wouldn’t need to have done exact math or gotten an exact price target, right? To have known in general, right? It was way too expensive, no matter what.

Luke: Yeah, here’s a, here’s a quick extract that I posted from my own Cloudfare holding. I think I tweeted this, um, when I did my 50 day review on X a couple of months ago.

I love you called out Cloudflare because I felt like a super smart guy with this one, because as you can see on this pretty picture, like the green blobs are buys and the red blobs are sells, like, I’ve kind of one a little bit. And you’re exactly right. I think it was like November 2021.

I was in love with the company. I was actually using their services. I had CloudFare deployed on one of my websites. I thought it was great, but it was just wildly expensive. It was like over a hundred times sales. It was like something crazy. And, uh, uh, I did a fairly material trim of like more than half of my holding just before it took a massive nosedive.

So, um, yeah, like no matter how much you believe in a thesis, as you say, right. Unless the company’s literally got like maybe a warehouse of Aladdin’s lamps and genies. Like there’s a, there’s a limit to its ability to generate real earnings and shareholder value.

Krzysztof: Yeah, I, I, I would say even more explicitly that even if they have a bunch of Aladdin genies and gold bars, there’s still a price that’s too expensive. So, so valuation as a skill never really goes away. ,

Luke: from the genie. Like what would your, uh, wishes be? Any ideas. And you can’t wish for like an infinite wishes. Oh,

Krzysztof: uh, that, um, it’s Monday morning. I’m not being very creative right now. I mean, for sure, I didn’t want a castle with a unicorn. maybe like personal concerts by Bruce Springsteen and like Prince coming back from the dead.

Luke: Like a band, like just yesterday I saw last night, very excited, a band I love has just come back from the dead. Oasis are reforming, evidently, it’s not confirmed yet, they’re going to reform and they’re going to play like 10 gigs next year is what the rumor mill is saying. So I’m rubbing that genie lamp as hard as I can.

Krzysztof: Oh,

Luke: Anyway, I’ve taken this on a big sidebar, but uh, thank you. Noel and Liam, please get back together. Um, , let’s come back to, Ian Cassell’s Stop Picking Skills.

[00:20:30] 3. Buying

Luke: The third one I think is really interesting. And I think this is one. With the greatest respect is a skill.

That, uh, you’re, uh, you’re still rather a novice and you need some, some practice of, and this skill is buying or sizing your conviction. basically making sure that your exposure to a thesis, to a stock, like how much have you got in your portfolio broadly aligns with like your conviction levels, the risk, the other stuff in your portfolio, you want to mention diversification, things like that.

You do want to have enough exposure that you do get the benefit when your thesis plays out, but also you don’t want to be so overexposed to something that’s so high risk, or have like much of your portfolio perhaps dependent on a single risk that could take them out that like a bad decision or just bad luck, on behalf of the company could like impact your lifestyle.

Krzysztof: Absolutely. I agree with everything you said. This is risk management stuff. which by the way I’m planning on doing some very deep dives about because this is one of the most interesting, phenomenas both in terms of psychology and emotional control. It’s so interesting when, you know, you said this is what I’m still a novice about.

I, it’s how, I want to phrase it this way. There were years in which I was not a novice in this category. And then something so it’s almost like it’s not that I don’t know the principles, right? I think the pitfall is more like it has more to do with that psychological component. where things got fuzzy because of the amount of research I did.

Luke: It’s definitely something to watch and it changes all the time. Like something, something that could be a high risk in your portfolio and over time it could become low risk so you can get, develop more exposure to it. Or maybe, The company missteps and it becomes higher risk in some way, like something’s gone wrong.

They lose a key customer or supply chain failure or something. So you’ve got to monitor this stuff ongoing. And yeah, but it’s just, it’s like the maintenance and the, the housekeeping of your investment portfolio and of your investments. It’s why you, like, you gotta Do your due diligence and you’ve got to listen to the quarterly earnings calls and just keep tab on what’s happening in the world.

Krzysztof: Right. And it’s important to know everything is relative. Like you were saying, regarding who you are as an investor, your age, where you are, your income levels, but also everything relative to everything else you have in your portfolio. And, uh, maybe a little preview of a future conversation we’ll have on this podcast relative to macroeconomic conditions, because An investment in one time period that is say, uh, not risky would be much riskier in another set of circumstances.

And that obviously like the weather always changes. So this is right to use a poker analogy. It’s you have to be a successful poker player. You have to adapt your strategy based on who’s sitting to the left of you, to the right of you, the level of the game you’re playing. It’s not like, you know, one hand equals this amount bet each and every time.

That’s what gets you figured out.

Luke: Yeah. Like some, the guy who’s deeply stuck like in the red suddenly gets a phone call from his girlfriend for like the third time to say, you got to come home. You know, that guy’s going to do something wild any minute, be poised and ready to exploit that situation. Yeah.

[00:23:57] 4. Holding

Luke: Hey, I’ve realized I’ve taken us almost into the fourth skill because in my rambling, I started talking about Ian’s fourth skill, which was, Like maintenance, due diligence, continuously monitoring your high conviction holdings.

So yeah, I guess we kind of covered that one.

Krzysztof: Uh, I’ll add this Badger. remember these guys are talking about smaller companies, , micro cap companies. In one sense, yes, due diligence all the time, but there’s, you can’t say there’s something like too much like Apple. I mean, in hindsight, right? Apple at this stage. And I mean, yes, keep up with the company, understand it, follow the news.

Sure. But that’s a whole different kind of due diligence that’s needed than an evolving story, like say EOS. The moment I fall asleep on EOS, I might be shit out of luck because, you know, all of a sudden some, the major broke and the company’s, you know, on life support. Apple ain’t going to be on no life support, probably.

So just quantify the amount you need to do based on company life cycle.

Luke: yeah, that’s fair. That’s fair. You can definitely get away with like a mega cap, not, not checking in with every earnings, but you should do like I’ve, I’ve sort of proceduralized it myself now. And it’s a bit of a social media thing, but also it’s part of my process now. Like I do an annual review for myself sometime.

Maybe I’ll try and do it in Q1 every year. And I just go through every holding and make sure I’m, you know, I’ve got the right exposure and I’ve got it for the right reasons and I’m comfortable with the company and its mission and kind of where it is in the world and what it’s doing. And I think that, that’s an essential Irrespective of how mega your megacap is.

[00:25:36] 5.Selling

Krzysztof: The next skill is selling. And I want to share an anecdote about this one. I was asked, uh, in analyst interviews that I did way back in my, in my 30s, Like, when ought you sell? And it’s a tricky question because obviously there’s no, it’s, it’s very complicated. The answer I gave was never.

Luke: Yeah.

Krzysztof: And I think in hindsight, that’s in many ways a bad answer because, uh, there are so many variables that go into it.

And like we even talked about due to valuation reasons and, uh, broken theses and problems with management and so forth. However, this is the irony. Even though I think it’s a bad answer, had I actually never sold the companies that I invested in, I would have had much more money than I do now.

Luke: Bit more complex than that though, right? Because, you didn’t sell those stocks and just stick the money under the bed, right?

You reinvested it in some way. So to really answer that question accurately, you got to say like, I sold those things and they did great, but the things I used the money for and reinvested it in, like, did they do better? That’s probably the right way to answer that question.

Krzysztof: probably, yeah, I still go back to the fact that I had Apple early, I had Netflix early, I had Nvidia early, I had Tesla early. And like, there’s something about, you know, like all these years of doing this. that, you know, the simplest answer could sometimes be, for reasons that might be even illogical or like, wrong, are still correct in hindsight.

So I don’t know. Um, the one point I would like to underscore is the microcap club guys saying, if the thesis breaks, sell because then it’s, it’s like holding on to, it’s like marrying a stock versus dating it. But also if management somehow, lies or becomes untrustworthy or some shenanigans happen, that’s one of these principle things, like don’t even think twice, sell and move on.

Luke: Yeah, I’ve done that once in my investing career. Unity. I forget the guy’s name, the CEO, just, I had my misgivings about him when I bought the company. and, uh, it was a bad buy. Like he was, he wasn’t a great CEO. He’d made a mess of his previous role at EA and, uh, yeah, he led the company in a bad direction.

and so I sold for principled reasons Related to his poor management style, his poor leadership, poor leadership decisions. I should have made that call much sooner. Well, I should have made that call and not bought the damn stock in the first place.

Krzysztof: In hindsight, was that a good move or did the stock continue going up? I mean, did it go up? I think it went up, didn’t it? After you sold?

Luke: don’t want to look. Don’t make me look. Don’t make me look at it. It probably went off, but I definitely, I feel happier wherever the money went. I feel happier about it being supporting the mission of a better company than Unity. That’s for sure.

[00:28:44] 6. Survival

Luke: Ian’s sixth skill, which is quite an interesting one. It’s uh, it’s maybe a bigger, broader one. Survival. Have a mindset of continuous improvement of risk management to endure in the stock market in the long term. I forget exactly the words he used, but my buddy Albert had like a really good saying around this.

I might have to go and Badger him to remind me of the exact terminology, but essentially, like you want to stay in the game. I suppose we can use a poker analogy, right? You know, say a poker tournament, the cash game, you blow yourself up. You just get some more money out of your wallet and you buy back in the tournament.

You, you know, chip in a chair. That’s the same, right? You’ve got to stay in the game because if you’re in the game. You’ve got like the ability to win the poker tournament still. And to some extent, investing is the same. Like if you blow yourself up and set yourself back decades, then you just haven’t got the capital to deploy.

When you have like a good opportunity, you come along.

Krzysztof: I love when they talked about as you get older, you naturally become more risk averse, but risk averse, sure, it could be appropriate, but that’s not really what we’re talking about. Here, we’re talking about becoming better and better investors, and that means needing to recognize that you’ve become more risk averse than the data suggests, and you ought to, like a beast in the jungle, continue sharpening your claws without getting complacent.

And if you do that, then ironically, or counterintuitively, right, you sharpen your claws, that actually might also reduce your risk in unexpected ways. So I just love these, this set of Skills because as John Donahue was talking about, it’s like something you could develop, you could continue to work on, you could identify.

It’s like a way to live better, really.

Luke: Yeah. Yeah. They’re good. There’s lots of ways to articulate the skills of an investor. And we did our own version with the 10 laws of the investing jungle that you can find at wallstreetwildlife. com. But, they all kind of circle around the same principles, really. And I do like the way Ian’s put this together.

Krzysztof: You know, I just had also the thought, and I hope this is encouraging for other folks. I started investing when I was 17, so it’s now year whatever, 20, jeez, if I do the math, 28? Is that right? 45, right? So 28 years, my god. And yet, and yet, having made all the mistakes, I’m still, as Badger loves to point out, a novice in many areas, or have had severe setbacks in many areas.

So what’s preventing me from saying the next 20 years I’ll continue to try to get better and continue to identify the weak points so that by the time I’m 65, you know, it’s a, it’s a continuing journey. Don’t stop just because you have some arbitrary accomplishments under your cap.

[00:31:39] Listener Shout Outs!

Luke: Krzysztof, and we’ve got a ton to talk about still on today’s episode.

But before we do, I just want to remind you to give us a like and subscribe if you’re enjoying our content. But also, drop us a comment. And we had a whole bunch of comments in the last couple of weeks on the YouTube and on the X’s. I do want to call out Sarah Paredes, thanks for telling us that you’re planning to start investing in MercadoLibre.

That’s definitely one of my higher conviction stocks. Also got a couple of Rocket Lab fans there too. Oh, got a good comment on your Coherus discussion last week, Krzysztof. One of our commenters said if Amgen was smart, they’d buy Coherus, get an approved PD 1 and Udenica for the price of the bombs at seven to eight bucks a share.

Krzysztof: We’re thinking, uh, mostly because there will be antitrust issues.

Luke: But yeah, a bunch of folks seem to think that coherence was a good find, uh, including Jason Smith. So, yeah. Good stuff. And if you are enjoying our content, give us a comment, give us a tweet.

Krzysztof: You know what, Badger, uh, uh, you left out all the comments about how, uh, the majority of our listeners are, uh, Team Monkey and, um, how they, there’s some selective comment, comment filtering going on from, uh, our humble Badger.

Luke: Uh, no, not deliberately.

[00:33:00] The Real Deal on Price Controls and Media Spin

Luke: So Krzysztof, you were going to tell us about a interesting comment you saw on inflation and capitalism.

Krzysztof: Yeah. So, uh, I’m from Jersey. that makes me a big Bruce Springsteen fan and a big Jon Stewart fan. I love Jon Stewart when he talks economics , in policy, economic policy data. He’s really, really smart and really in tune. I don’t know if you heard some of his commentary way back around the great financial crisis.

uh, Google Jon Stewart versus Jim Cramer. around 2008. That was mwah. Oh, he tore him so many new ones and he was so legitimately pissed at the shenanigans going, oh my god, it’s just some of the best stuff I’ve ever seen. Anyway, I respect Jon Stewart’s commentary about these things.

he was, uh, on his podcast, uh, responding to claims that, Kamala Harris is turning into a communist because she’s engaged in price controls. In his commentary was that the media, and this is what Jon Stewart does best, the media are great. at spinning things that are not true and, you know, inducing fear and clickbait stuff.

Stewart’s point was, look, when you have a crisis, including stuff with energy, and high inflation, corporations will try to take advantage of the crisis. So everybody agrees that things like price gouging ought to be illegal. And so what Kamala Harris was saying was, Companies cannot price gouge. that is, uh, not a inflammatory position and that does not make her a communist as the media reported, right?

Luke: And I think it’s worth just taking a quick sidebar to explain like why some commentators were misconstruing her comments in that way. Okay. And I saw a a New York Post headline describing Harris planners. Communism, the thing they’re waving are like the Econ 101 textbooks, and they’re basically saying, this is price control, which is essentially where, like, government steps in and dictates to companies how much they can charge for goods and services.

Like, we have seen many, many times in history, this just doesn’t work. Like, you’re better off letting the market, the free market, figure it out. If a company’s charging too much for its products, Like a competitor will dive in and steal those margins and undercut them. You know, people just won’t buy stuff.

you’re better off designing thoughtful incentives, not just telling companies what they can charge. you know, dive back in, back over to you what it was that Kamala Harris was actually proposing.

Krzysztof: right, so she was actually proposing not controlling prices in this evil nefarious communist way, but anti gouging laws, which, as Jon Stewart points out, quote, every state, including fking fucking Texas, has anti gouging laws. And being from fking fucking Texas, the land of the free and where, you know, you get to do whatever you want and nobody can say otherwise.

The fact that even Texas has these kinds of laws is basically all the proof you need that this is a bipartisan issue. It’s logical. It makes sense. So really the, the bad guy here is the way that media is spinning. What’s really a non issue that everybody agrees on to, into some political issue that is divisive.

And I think for our listeners, the important point here is that. For anybody that doesn’t listen to a podcast like ours and, you know, attempt to learn more deeply, go move beyond the surfacy stuff and peel back the onion layers, you might actually get fooled into a wrong view because Truly, and this is Jon Stewart’s other main point, the media is paid to kind of synchronize and spew the same nonsense without any real understanding what they’re doing.

And if you’re a normal person, and you see the same quote on every single channel you turn to, you actually might reasonably believe that there’s some kind of like price control nonsense going on. uh, be careful out there, folks. I don’t know if that’s the moral, or just listen to us religiously.

One of the two.

Luke: Or, or like a bunch of other like smart people who actually think about the headlines and what their implications are. Not just taking stuff at face value. I’m going to try and relate this back to investing, right? Because it’s like, you shouldn’t listen to other analysts. You shouldn’t listen to us and then go and buy Coherus, but we might’ve given you that idea.

You should go and do your primary research, right? Read the source, go read the 10Q, the 10K, listen to the earnings call and make your own decision. Like you shouldn’t form your opinions just by reading like your highly right wing or highly left wing newspaper and not soaking up. other sources of information, trying to get a balanced view.

And if it’s a really important topic, like trying to ferret out the original sources, whether they’re academia or some international source, whoever it might be.

Krzysztof: and Badger, you, you, maybe to close out the episode, there’s all the like and subscribe stuff that we’re asking our listeners of, but we’re now growing nicely, and I think what comes with growing our subscriber base and our listenership is that the more comments you guys leave, The more it allows us to respond and to fit in, to have dialogue and conversation.

So it kind of takes a village to get good at this investing thing. So we highly encourage you all as part of your due diligence, say, if a question arises, ask, don’t hold back, go on YouTube, ask, go on X, ask, go on Spotify, leave a comment there, and while you’re there, you know, help the algorithms make us a little bit more findable.

Luke: Well said, totally agree. And we, we do, I think we took one listener question a couple of weeks ago and we turned it into a whole episode. So we are. listening, and we are. It’s making us be thoughtful about our own investments, right? It’s a two way value street, because if you ask tough questions about the stocks that we’re talking about, maybe you open our eyes to something we haven’t quite considered. great. Another good episode, Krzysztof. I think we skipped over a couple of topics because we spent so long chatting about, Ian Cassell’s great insights, and we’ll pick those up next week. Plus there were like 20 things on the docket this week. So this is great. Our long form podcasts are great, but also, uh, we’re now overflowing with things to talk about.

If you do want to chat to us, suggest something, have a moan, you can find us on X, it’s best place. I’m at 7LukeHallard.

Krzysztof: and I am at seven flying platypus.

Luke: Are you ready to become a beast of an investor? Your journey starts here. All 

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