In a brand new segment, we each pitch a stock that’s on our radar:
🔎⚡️ Luke looks at Oklo $OKLO, pioneering next-generation nuclear power plants, and with a close relationship to OpenAI
🔎⚪️ Krzysztof thinks bananas are to be made in Sphere Entertainment $SPHR, a best in class venue located in the entertainment capital of the world, Las Vegas
Find us online and vote for your ‘most interesting watchlist idea’!
This week we also deep dive into a crucial question 📬 from one of our listeners: “I have $1,000 to invest — how do I get started?”
In the midst of answering, we get into a fur-flying scrappy brawl about the merit — or lack-thereof — of buying one share of a market tracker like $SPY. Monkey says “it’s a quick way of seeing how the market has performed during your investing career”, while Badger’s claws look for blood out of the needless complexity.
There’s much investing wisdom here, so beginners take heed and ask us follow-up questions on X or YouTube.
🌴Welcome to the jungle Paul, Bruce B. and Paolo M! Thank you for supporting Wall Street Wildlife on Patreon:
https://www.patreon.com/wallstreetwildlife
We love seeing who’s committed to being in our inner circle of trusted investors, and the few bucks you won’t miss will help us make the show and your investing returns better.
Sources:
https://companiesmarketcap.com/assets-by-market-cap
Segments:
[00:00:00] Introduction
[00:03:49] How Would A Beginner Invest $1,000?
[00:12:08] (random sidebar argument)
[00:17:12] (back to the original question!)
[00:38:19] Luke’s Radar Stock – OKLO
[00:44:23] Krzysztof’s Radar Stock – SPHR
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WSW E46
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[00:00:00] Introduction
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[00:00:02] Luke: Hey, and welcome to the latest episode of Wall Street Wildlife. On this week’s episode, we’re answering a listener question. How would you get started investing if you had 1, 000? And we’re gonna try out a brand new segment to yet to be named where Christophe and I are gonna pitch an interesting off the radar stock to each other.
And I’m gonna ask you guys to tell us which one of ’em was the most interesting and maybe the most interesting might become a feature on a future episode. I think this is beyond the blue chips. Maybe it’s a vulture hunt. Who knows? Anyway, two interesting off the radar stocks coming up in the back half of this episode.
[00:00:41] Help Us Make This Show Even Better!
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[00:00:41] Luke: Krzysztof, you are looking excited. Why is that?
[00:00:44] Krzysztof: I’m really excited because, my dear Badger, we have gained three animals into our jungle menagerie. Paul, Bruce Blohowiak, apologies if I butchered that, and Paolo Manlapaz have said Essentially, we value what you guys are doing and we want you to stop wasting time, doing all the background editing and all that stuff.
And we want you to focus on getting the show to be as good as it can. And we’re gonna throw you some coin to help support you. And boy, let me tell you, Badger, it feels really, really good. to see folks supporting us in this way. They believe in us.
[00:01:26] Luke: They do, surprisingly. And I was holding you back for at least six months saying, do not turn on the Patreon. We can’t ask for money. We’re not, we haven’t got enough of a presence yet. And then you twisted my arm and lo and behold, We already have Patreons. I am surprised. We have three more Patreons than I expected.
[00:01:46] Krzysztof: Yeah. And I think the, uh, I think the, the test case here is that unlike say the YouTube model, which is, you know, people try to just make it as big as possible, as quickly as possible to monetize. I think the Patreon model is different because it says like, here are people that don’t necessarily, want or need anything back and they don’t want to be seen anonymous, they’re stepping out and saying like, we’re part of your tribe and we want you guys to be as good as you can and, you know, we’re stepping up to the plate.
So, I think to me it’s like a little bit of that building trust and your small intimate community that starts small and then who knows where it gets to. But, uh, fellas. Thank you so much for your vote of confidence. We’re definitely motivated to keep going and getting better and better.
[00:02:35] Luke: Absolutely. And if you would like to become a Patreon of the Wall Street Wildlife podcast, you can find Krzysztof and I at patreon. com slash wallstreetwildlife, all one word, just as you’d expect it to be spelt.
[00:02:48] Krzysztof: Indeed. So take a look at all the animals available that you might find in the jungle and see if one of them matches the reflection in the mirror.
[00:02:57] Luke: And Krzysztof, we are going to have to fast track creating some damn merchandise, now someone’s paying for it.
[00:03:02] Krzysztof: That’s right. One last thing. There are two tiers I created just to, just to see, uh, how many people will, opt for Team Monkey versus Team Badger. as a little, you know, in house competition So if all of a sudden we have a hundred bad badgers and zero monkeys, I, that would not, that would not look very good for me, so.
[00:03:26] Luke: Well, there could be, well be a hundred monkeys out there, but they’re all going to blow themselves up with their wild options trading when the market melts down, and then they’ll have to withdraw as our Patreons, whereas any badger Patreons are just going to, uh, cruise into the sunset, making solid, Compounding returns, and hopefully stay as part of team Badger.
[00:03:46] Krzysztof: I’m never gonna hear the end of that, am I?
[00:03:49] How Would A Beginner Invest $1,000?
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[00:03:49] Luke: Well, the end of the King of the Jungle is coming up at the end of October. This probably leads us into our next topic. How would a beginner invest a thousand bucks?, which is an excellent question that came on X .
From Suzanne, who goes by the handle of Wonder Woman. Suzanne said, Hey Luke, I’m a beginner investor and I’m listening to your podcast. Can you give me your opinion on buying 1, 000 worth of shares for a beginner? Interesting question. I thought we could pick this up in conversation because this is our shtick.
This is the stuff we love to talk about.
[00:04:22] Krzysztof: Yeah, exactly. Maybe as a refresher for some new listeners, our King of the Jungle Portfolio Challenge started almost a year ago, specifically as a way to model the way we’re handling this question. And the first thing I like to say, I guess, uh, improv style is, The thousand dollars ought to represent an amount of money that you literally do not need. But you’re wondering what should I do with it? Should I put it in the bank account? Should I buy a bond? Or should I invest in stocks? And obviously if you listen to us, you’ve made the wise decision to invest in stocks because that’s the highest, most profitable asset class. But point being that the thousand dollars is not an overwhelming amount.
It’s manageable. If you need to take off a zero. to make it feel manageable, then do that. Then the 100 is the same. It ought to feel the same, right?
[00:05:16] Luke: Yeah, and I think in these modern days of fractional trading, you can get started with literally a couple of bucks. Like if you end up buying like a thousandth of a percent of a MercadoLibre share and you’ve got like a five dollar holding, well actually there are platforms that exist that enable you to do that kind of thing.
[00:05:37] Krzysztof: yeah, second point I would say, referring back to King of the Jungle, is that the 1, 000, the way we see it, ought not to be the end all and be all. I think it’s even more important to then say each month I’m going to add X. And the way we did it is we We’re adding 100 at the start of each month. So that’s what 10 percent of the original, but why is that so important?
it’s not that the dollar amounts themselves are the end all and be all because like you preach all the time. It’s the magic of compounding that does its work over many, many, many years. So whether you start with a hundred or a thousand, it doesn’t matter. But whether you add a hundred dollars.
every month. That will really make the difference. So I would kind of rephrase the question almost like a thousand dollars to start on this day, knowing that there’s going to be incremental amounts put in each following month, say.
[00:06:38] Luke: And you gotta, you gotta learn your lessons and kind of take your knocks and your bruises and podcasts like ours, and there’s tons out there also, will help you identify interesting stock ideas, help you figure out your investing process, but you’re still going to slip up here and there. And if you’re, if it’s in the early years, if it’s an amount of money, that’s not going to wipe you out.
If. The market maybe turns on you nastily and bites you, or if you make a mistake, quite frankly, and you can recover from that. it’s great to learn the lessons, get started young, and then when the money becomes significant much later in life, like you’ve learned quite a lot. Like Suzanne, the most important thing, and to all our listeners out there, if you’re listening to us and you haven’t started investing yet, the most important thing is just get started.
And like Krzysztof says, it doesn’t take a lot of money to get started, even in low tech UK. There are fractional trading platforms. I’m not endorsing them in any way, but the one I happen to be using for my King of the Jungle portfolio is Trading212. I think if you’re in the US, you’ve got platforms like Robinhood, you’re using SoFi.
There are a bunch of platforms out there that let you trade for no fee, and they let you buy for free. Like a tiny fraction of a stock. So you don’t need, like if you want to buy one share of Mercado Libre, I use that as my example, because like one share costs you over a thousand dollars. That would be probably more than the whole of Suzanne’s portfolio if she was starting out.
So she’d have to wait a little while. She could never be diversified. We’ll talk about that in a second. but fractional trading platforms take a lot of that friction out. They make it really easy to get started with relatively small amounts of money.
[00:08:23] Krzysztof: Right. I would like to go back to the um, starting amount as, It’s not that it’s random, but it’s just step one of a, in theory, multiple many steps. And the reason I want to reiterate that from a different point of view is that you should expect, I think, for anything to happen. And right now, the stock market is nearing all time highs. So I would not as a beginner think, oh, let me wait for the stock market to crash because you might be waiting for a very long time.
Instead, you take that initial, say, thousand dollars, and then you say to yourself, because I’m going to be adding a hundred dollars, uh, next month, then if the stock market does fall, I’ll be able to buy the companies I liked even more cheaply. So it’s a kind of built in system that if you really have the long term approach, you won’t be afraid of the market falling.
[00:09:22] Luke: There’s a really nice tweet I saw a few days ago. I’m trying to find it as I speak. I think I’m going to probably struggle to find it live, but essentially it had a chart that showed market returns if you invested on, I think like a random day or every day versus market returns. If you only invested on days that were an all time high.
And in the long run, like 20 years plus, investing on all time highs yields more money, like a better return, than investing on like a random day, that could be any point in the cycle, might be the lowest part, middle part, and it’s so counterintuitive, but in the long run the most important thing is get started, your investment rolling, start to learn your lessons. Don’t try and wait for a downturn because it might never come.
[00:10:14] Krzysztof: right. And I would also say, 20 years, I think is the number I think of as kind of a long time because, you know, we don’t live forever. you and I have already been doing this for over 20 years.
And even now I’m, I’m 45. I kind of think, wow, because I keep myself in pretty good shape, fingers crossed, I think I’m still going to be, you know, a, a, a feisty 65 year old, which means I could kind of start today with the same exact mentality, knowing that I’ll have 20 years for. the market to work for me, so it shouldn’t matter that it’s at all time highs right now, just get started.
So that’s the main point, right, that we’re reiterating. Having said that, any specific strategies that you’re thinking of?
[00:11:00] Luke: Let’s pick up on that question of diversification because I think that’s quite important. I think implicit in Suzanne’s question is she wants to buy stocks, like stock shares in individual publicly listed companies. But that’s not the only way to get started as an investor.
And actually, when you’re starting out, you might literally just want to buy Passive index trackers by an index tracker like SPX or vu, where you’re tracking the s and p 500 or maybe the FSE or the nasdaq and start with the majority of your money in those trackers. I, I would accentuate the passive. I think it’s quite important that you don’t have that kind of money in actively managed funds .
’cause in general, they don’t outperform the market. But by definition, passive index trackers are the market. And you could start with maybe 70, 80 percent of your money in an index, and you could just have a little fun money on the side that you put into individual stocks. So putting that caveat aside, let’s dive into Suzanne’s question though, which is she’s got a thousand bucks and she wants to invest that in stocks.
[00:12:08] (random sidebar argument)
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[00:12:08] Krzysztof: Okay, let me backtrack and pick up something you said. Um, some people do swear by passive investing and then they just buy the market tracker, for example, ticker SPY. That would track the The top 500 stocks that, that mimic the market. I would alter that say that, that as individual investors picking individual companies is the harder gig and it’s not for everyone.
But I like this idea. If I’m starting from scratch, I like the idea of buying one share of something like SPY. which will, as long as I don’t sell it ever, will show me how much money I would have gained 10 years from now just by looking at that one ticker in my portfolio. So it’s kind of almost like a hack that says you’re buying it not to buy passive funds, but you’re buying it, as a measuring stick.
Obviously you could do that via a portfolio tool, right? But, but, It’s a little different when it’s real money, is all I’m saying. So as a proposition, I like what you’re saying about dividing your money into, say, say percentages, but one of them I’m saying make it the SPY index tracker as one of your positions.
Here’s passive investing, as a, as a, as though it were an individual company.
[00:13:31] Luke: I think we’re going to sidetrack the conversation because I want to rip that apart completely. We’re going to sidetrack what we want to talk about.
[00:13:40] Krzysztof: Let’s hear it. Let’s hear it.
[00:13:41] Luke: Well, so one share of SPY will cost you 569 right now. So, if we’re talking fractional trading, there’s nothing meaningful about one share, right? and you wouldn’t buy one share of a 500 stock in a 1, 000 portfolio just for
[00:13:58] Krzysztof: right, right, right. I see. Okay. Sorry. I meant one, uh, call it a unit before getting into percentages. I would
[00:14:07] Luke: But then what’s the, I’m still ripping this apart. What’s a unit, right? And like any portfolio management tool, for example, one I’m going to talk about in the next couple of weeks, I’ve just started using, I’m quite impressed with. That’ll show you like your portfolio return against a whole bunch of different indexes.
And it’s more complex if you want to compare, I said, this is a damn rabbit hole. I might, I might cut this and put it in the appendix. So, um, it’s, it’s more complex because say, what if, what if Suzanne buys, Like, one share of Google today, and then she buys a share of Amazon next week, and then she buys a share of Mercado Libre next month.
What is she benchmarking against? Does she buy, like, one mystical unit each time she buys another thing?
[00:14:46] Krzysztof: wait a second. I think all I was saying as an idea for a beginner who has zero in their portfolio is if you buy, whether it’s a unit or a percentage or a dollar amount, let’s say a thousand dollars. So let’s say 10 worth of SPY,
[00:15:04] Luke: Okay.
[00:15:05] Krzysztof: maybe even like that’s a 1 percent holding,
[00:15:08] Luke: Sure.
[00:15:09] Krzysztof: and then doesn’t touch that. So it’s just sort of sitting there It’s its own built in tracker that anytime I open that portfolio, I see 10 years from now, oh, that, that is up however many percentage points, but it’s, but you see it relative to all the other stuff you have.
So you never need, I don’t, I don’t, do I understand your pushback? I don’t think I understand your pushback against that. You’re saying it’s making it more complicated?
[00:15:37] Luke: Yeah, I am. You’re not getting it true. If you wanted to mark your portfolio against an index, you wouldn’t pick an arbitrary start date and say, okay, I had all my money invested on this one day because you tripped your money in, right? And we’re putting a hundred
[00:15:50] Krzysztof: right. Yeah, yeah,
[00:15:51] Luke: If you want to benchmark against an index, right?
You have to look at all of your inflows benchmark them individually. And then you get like a grand total.
[00:15:59] Krzysztof: I think so. Right. I’m, I’m using it more like just this basic orientation that if I’m starting, if I’m literally starting on September 23rd and it’s 10 years from now, I could see like in 10 years from the day I started, the market went up this much and it’s like a nominal amount. It’s not gonna make a big difference in terms of your investing, but you could always see that.
It’s like a, you’ll see, it’s almost like since I started investing, how much has the market gone up or down? That’s it.
[00:16:29] Luke: this, this argument has taken us so far off the track, maybe we should cut this out and turn it into a special, tiny, mini argument just for Patreon members.
[00:16:40] Krzysztof: Okay. All right. So, so ignore or not. So you’re at liberty to ignore my suggestion to buy one share of an index tracker. If you think Badger’s line of reasoning that gets makes things too complicated is, worthy. I’m not, I’m not bound to it. I think it’s just an interesting idea. It’s what I would do if I were starting today.
[00:17:03] Luke: I’ve never been a fan of that random ass shit you do in your portfolio of one character novels and that. Just stick it on a watch list like a normal person.
[00:17:12] (back to the original question!)
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[00:17:12] Krzysztof: Okay, so spy trackers aside.
[00:17:15] Luke: Yeah, let’s get back on to Suzanne’s question. Right. So, uh, but I think we both agree whether or not you have like units of other stuff. I think we both agree that you shouldn’t just have like your entire portfolio in one stock. You should have a range of stocks. Ideally, at least, let’s say if you’re really starting out 10, but ideally 12 to 15 different companies that are not all like the same company.
You know, if you buy, I don’t know, NVIDIA and AMD and Supermicro and a few other like semiconductor stocks, they’re all in the very same industry and if that industry Nosedives, they’re all going to kind of stay pretty highly correlated, but if you own like an entertainment company and a retail company and a maybe like something in consumer goods, like something you buy in the supermarket and maybe like a car company, you’ve got like a bunch of uncorrelated assets, broadly uncorrelated, um, you’re diversified, i. e. If one thing goes down, they don’t all necessarily go down and wipe you up. Obviously, they will all go down and up with the whole market, but that’s why you want to be invested for at least five years, and ideally 20 years plus a lifetime.
[00:18:27] Krzysztof: Okay, I’m, I’m gonna object a little bit in saying I think this is already like getting into not necessarily intermediate waters and everything you said is true, but I think there’s a more fundamental first step. I agree that with a thousand dollars to make it simple for yourself because it should not be a lot of money to you. You, you go and divide that thousand into nice even 10 percent chunks. Later on, as money keeps flowing in, you could either decrease it a little bit or increase it to say 15 or 20 companies. We’ll talk about those limits later, but start with 10, 10 percent in each. But before you start thinking about. Say that the nuances of like industries, I would say, ask yourself which companies in your life you genuinely know about or use.
This is the Peter Lynchian model that you care about or are enthusiastic about. So you’ve basically, you know, It’s like proof of concept because you as the consumer like them. So for example, Apple, here’s the difference. Like you, I might not invest in NVIDIA because I don’t, you know, the chip, I don’t see the chips.
I don’t understand the chips, right? It’s versus say, Apple or Chipotle. Right? I like their burritos or I like their computers. That’s a different kind of entry point, but don’t stop there. The next step I would really insist on is if you’re going to buy a share, the very least you should do is go to their website.
For example, let’s use Apple. I type in Apple space IR for investing relations, and then I would look for their latest Usually the, the, the nicest general overview is like their annual presentation, which might’ve happened say nine months ago or six months ago. But at the very least, you want to see what the company is saying about itself, how it’s presenting itself, and you’ll find out all kinds of stuff, that you probably didn’t know even about some product that you like.
Once you’ve done that and you say, yep, I like this company, And you ask yourself, do I believe in its future? Like the next kind of fundamental basic point, do I think it’s going to remain a good company? take 10 percent of your money and invest in that as a starting point. This is not meant to be rocket science.
This is meant to get you to the just start.
[00:20:59] Luke: Yeah, I like what you said. You’re absolutely right. This is why you’re an educator and I’m like some guy who just sits in front of a keyboard. Um, you made it, simpler. And he’s good. And you might seem kind of a bit bewildering and scary when you go and look at an investor relations page on the website, but most companies, not all, most companies have like a really pretty friendly, easy to access, like slide deck, PowerPoint deck or something, PDF deck.
And it’s just like 30 or 40 slides and you can skim through it in 10 minutes. And what you’re trying to do when you do that is probably just, you know, if you’re starting out, probably just be able to answer the question, what does the company do? Right. And I, my test for myself is like, if I can’t explain what one of my investments does to my mum, what, what does this company do?
I really shouldn’t own the damn thing. Because sometimes you have to be able to, my mum is a smart lady. I’m not saying, like, I’m trying to explain it to a dummy. I’m just saying I have to understand it so well and so cleanly that I can explain it to like a five year old in like five minutes. And then I understand it sufficiently well that I should be invested in it.
[00:22:07] Krzysztof: And this is so important. And I think many people really mess up when they skip the step, because if you think about what you’re doing, when you’re starting is you’re becoming an owner, literally it’s, it’s to me, somewhat embarrassing to embarrassing might be too strong a word, but if I’m If I’m all of a sudden an owner of something and somebody asks me, what do you own?
And I’m like, oh, I don’t know. Like, like it’s, I can’t, it’s, it doesn’t really make sense because that immediately tells me you’re gambling or you’re just listening to other people’s ideas and you have no idea. So you should not own that business. But the moment you, you look through a slide deck, often, you’ll be surprised by the depth of the company’s offerings and, and how the products fit together and visions of the future.
And after doing that, you still say, like, I would be proud. Maybe pride is also maybe too exaggerated, but certainly you don’t want to feel ashamed of owning a company and you don’t want to, you know, be puzzled by it.
[00:23:17] Luke: yeah, and I, I think I’ll, maybe it’s optional, maybe it’s mandatory, right? I think it’s really good to be interested in the company and what it does and how it’s getting on, because if you can get interested in it, it doesn’t, it’s not work then, like, because you are going to want to manage your portfolio.
Like if you’re not interested in tracking the journey of the company, let’s say Apple, like, you know, studying its new products and are they landing well with consumers and are they still in a good place? If that doesn’t interest you, you probably shouldn’t be invested in that company, right? You should probably be the guy or girl who sticks to investing in indexes.
But if you can find, like, The joy in that, which it sounds like a bit dumb, but like, I genuinely really enjoy going much deeper than we just described and really getting in my arms, like buried in the numbers. if you can find the joy and the interest in that, then it becomes kind of fun. It becomes a hobby.
And that’s how you suddenly look back like 20 years later, you’ve got your own investing podcast and you’re like, uh, you know, waxing lyrical about some of these random companies to your own three Patreons.
[00:24:28] Krzysztof: That’s right. And by the way, by the way, this is important for beginners to know. I think there’s a kind of, um, barrier to entry, which is often financial statements. And I think what many people think if they go to investor relations, is that all of a sudden they’ll be hit with a bunch of 10k forms and AQ filings and SEC and, and that does require a kind of nerd level, uh, that’s when you’re really getting in the weeds.
But that is really not necessary to be an outstanding investor. We’re talking about, what I’m talking about, is there’s a natural joy to learning. It’s all humans as children enjoy learning, because it’s interesting. So even if it’s on the surface of boring business, say, like let me actually give you a real example.
Like I think of Chipotle as Like how, how much joy could I get learning about a burrito, uh, grill, you know, franchise shop, but lo and behold, right, because I am interested in this company and was a former shareholder owner, I now know that they’re trying to use AI robots to build the burrito bowls, you know, themselves, and I’m like, wow, that’s, that’s where the world is going.
So as a share owner. I would definitely dive into that and think of all the landscapes of knowledge that open up just via something as boring as a restaurant business.
[00:26:01] Luke: Yeah, and you know, you put like a sort of techie spin on that and that technology and innovation and that stuff does interest you and I. But even if it was a retail company, like a luxury goods company. You know, maybe the next Hermes handbag. Right. You’re maybe you’re excited about fashion and trends and things like that.
And that might be the domain you choose to invest in. And the joy you’ll find from reading some of these presentation decks is, understanding their product strategy and who their next, like, designers are for the next season, whatever it might be. In my venture capital portfolio, I’ve got a holding in a lingerie company, and I can tell you their quarterly reports are a good read.
[00:26:47] Krzysztof: I have a feeling that that acknowledgement might just have gotten you some future Badger Patreons. I’m gonna have to, I’m gonna have to take that playbook and start talking about spicy things. I have another thought about the beginning, the very beginning stages, because that’s what we’re literally talking about, right?
I would also recommend starting with, uh, this is a generalization, but what I would say big companies that you don’t expect to make you a huge fortune, but that sort of like the idea of tracking the SPY as a unit. If I buy one share of something like Amazon, I am very confident because it’s a close to a trillion dollar business that this company won’t suffer the fate of.
Many other businesses, which is go out of business, go bankrupt. And that that beginning chunk will, provide, I guess, stability, something like an anchor. So maybe that’s an interesting metaphor, like start your portfolio with a bunch of anchors, companies that are solid, that you won’t like make you dizzy and nauseous.
Then evolve from there. 7,
[00:28:01] Luke: And as the numbers get a little bit bigger, maybe you’d have, like, a different weighting. You might have, like, a big chunk, which might be, say, in the 10, 000 portfolio. Like, a big chunk might be 1, 000, and a small chunk might be, like, 200. So maybe you buy, like, Eight big stocks, and then you can still buy like 10, like 200 chunks of some little fun, interesting stuff, and if one of them blows up it’s not going to do too much damage, and maybe you learn some interesting lessons.
But that’s something that’s maybe a bit later, as Krzysztof says, when you’re really starting out trying to keep this super simple. It’s just so you don’t scare yourself away from the, um, the whole endeavor, because this is a lifetime endeavor if you really get into this stuff. Start out small, keep it simple, keep it low risk, and learn your lessons.
But, above all else, do get started. I do want to share one other quick, important thing, and it may not seem important at the beginning, but, like, trust me, after, once you have, like, 20 years in the game, it’s incredibly important. And it’s to make sure that, uh, Even from the very start, if you can, you’re making use of tax efficient accounts.
So in the UK there’s something called an ISA, in the US there’s something called a Roth IRA, if I got that right, and like most governments will allow you to invest a certain amount of money a year, I think in the US worth like 5, 000 bucks, 7, 000 bucks, 10, 000, in the UK it’s 20, 000 pounds, and you can invest that money and any returns you make.
are mostly tax free. There might be some nuances depending on your jurisdiction, but mostly tax free. And yeah, like, it doesn’t matter when you’ve got like a 10, 000 portfolio because your gains might be, I don’t know, like a thousand bucks a year or something. But if you stay at the table and you keep investing for like 20 years, like, that’s good for you.
Probably faster than you think. That’s gonna turn into a six figure, maybe a seven figure, maybe more portfolio. And when you get to those kind of numbers, like you’ll be thanking yourself that you, uh, that all of your returns at that stage are tax free. ’cause that’s suddenly really, really material.
[00:30:15] Krzysztof: Definitely agree. This was one of the biggest mistakes I made. I didn’t learn about this stuff till later. Taxes are like kryptonite to me. There’s something like my monkey self loathes about the Byzantine. I mean, especially in the U S. So I, I, I was way too ignorant for too long, but yes, if you’re a US investor, first thing you do, you set up an IRA Roth, uh, that’s 7, 000 max, but then it also, because you, there’s a penalty to withdrawing earlier, it sets you up in the correct mindset.
You’re literally saying to yourself that you’re not going to touch that money. For a long time and whether then the market goes up or down and goes crazy, it really doesn’t affect you that much. So it puts you in the right mindset and then there’s all the tax benefits. So absolutely. One thing I want to go back to a previous, uh, what we were talking about previously, When I was saying like start with bigger companies that are like anchors, go to a website, companiesmarketcap. com. There’s a bunch of sites like this that lists all the companies in the world in terms of largest to smallest, because you’ll be forgetting some. That will be your first homework assignment, right? And then go down that list and ask yourself, which of these companies are you actually interested in?
And so you’ll see, like, Uh, oil company, no, not for me. Oh, Tesla. I like that one. You know, oh, Disney, not for me. Oh, this pharmaceutical one. I like that one. And then, you know, start with a list like that from which you could winnow down.
[00:31:50] Luke: Great shout. Top of the list, you’ll be unsurprised to hear, is Apple.
[00:31:53] Krzysztof: Uh, it’s like, what, almost 3 trillion, right?
[00:31:56] Luke: Yeah, 3. 47 trillion dollars with Microsoft snapping at its heels at 3. 2 trillion dollars. This is like, these are, these are the, this is now the time of trillion dollar companies and it won’t be so long before we’ve got 10 trillion dollar companies. Yeah, interesting times.
[00:32:14] Krzysztof: Yeah, I’m shaking my head because my younger self had many, many, many Apple shares. And actually that’s, you know what, I’ll say it again. If I had taken my own advice that I’m telling you right now, which is have found a company that I loved because I used it, bought a little chunk, and then done nothing, uh, it would be a whole different game for me. But that would mean, just not to make it seem, seem like, oh, that’s so easy.
Apple was on the verge of bankruptcy, by the way. So it’s not like, you know, Like in hindsight, obviously everything’s obvious, right? But it happens more often than you would think. It’s shocking how often this kind of thing happens. If you start with an anchor that you really know or care about or have enthusiasm for, you buy something like one tenth of your portfolio net and then do nothing.
Odds are staggeringly in your favor.
[00:33:16] Luke: I do want to share like a bit of an anecdote, a friend, a close friend of my wife’s, has started investing relatively small amount of money just to get started, kind of following the model that we’ve been talking about for the last half an hour. and then she messaged me maybe a month or two ago and said, Hey, Luke, like I invested in this company.
Like I looked at the investor deck and I bought some stock and my shares are up like 30%. Should I sell? And like, maybe we’re going now beyond the original question of like, how do I invest my thousand bucks? the wrong question to be asking yourself. You shouldn’t be saying, Oh, it’s up X percent or it’s down X percent.
Should I sell? Should I buy? if you’re tracking your stocks, you should be looking at the performance of the company. And if you still think that that’s a good investment, like nothing’s, the wheels haven’t fallen off in some way, let it run, like let it run. Let it, uh, like that rolling stone gathering moss.
And if you, you know, if you trim or you sell your winning positions when they’re just getting started, you never have the chance to make like the very, very significant gains that can come over an investing lifetime. I’ve got multiple stocks that have returned 10 times, 20 times, 50 times, 250 times in one case.
Like, you can’t get a. 25, 000 percent return if you sell Windy at 30%.
[00:34:37] Krzysztof: the absolute principle fundamentals. So my greatest mistake is being too smart for my own good, so to speak, right? It’s kind of amazing that the simplest things, are not necessarily easy to, to do, even though they’re sort of simple, but the principle here is the main thing.
If you’re thinking like an investor, You are thinking like an owner. And if you’re thinking like an owner, say, if you own your house, do you think you, how, how often do you say to yourself, Oh, my house is now worth 7 percent more than it was yesterday. Let me put it on the market. Right. You don’t do that because like, that’s obscene, grotesque, absurd.
Right. But so. If you take this mindset of really investing in a business, then it won’t matter, as Badger was saying, whether it’s up 30%, even though technically it might be quote unquote overvalued and due for correction, but that’s for later. Right now you’re, you’re, you’re building anchors.
[00:35:37] Luke: Great. Well, Suzanne, we took what was a simple question and turned it into like half an hour of argument. So I hope you managed to pass something useful out of that conversation.
[00:35:47] Krzysztof: I’d like to know from Suzanne, if she gets back to us, whether the, uh, squabble we just had about buying a, you know, one unit, uh, share of something like SPY index tracker, whether that confused her or whether that’s, uh, something that she’s going to do. So Susan, let us know.
[00:36:07] Luke: It would be good to hear from you on the Twitters. Let us know if you got started and tell us which stocks you bought. Be fascinated to hear what tickled your fancy.
[00:36:16] Stocks On Our Radar – Beyond The Blue Chips
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[00:36:16] Luke: Well, shall we talk about, our brand new segment in the show, Krzysztof, which I suppose are two stocks that have kind of tickled our fancies a little bit, stuff on our radar.
Let me just quickly share why I’d like to do this as a regular spot on the podcast. because I think my radar has broken. Um, I’ve probably got like 30 stocks in my overall portfolio, but the majority of my own investments are in More like a top 12, top 13. And I don’t really have a sort of good working source of new ideas right now.
I’ve kind of turned inwards a little bit. So I’d like to start looking out there, scanning the horizon, and then finding a way to encourage myself to look for interesting new opportunities. And so I think if we have this as a regular spot on the podcast, it’s going to force me to rock up every week and just give you a fairly ill thought out one minute elevator pitch on a company.
So we’re going to do that for this week’s episode and if you guys like the format we might make it a regular thing and what we’d like to ask you at the end of the episode is give us a tweet or a comment on YouTube or on Spotify and respond to our poll and let us know which of these two ideas you thought was the most interesting.
[00:37:32] Krzysztof: Right, and maybe even more importantly is we need to figure out what we were gonna call this segment. So I was fishing for something like Indiana Jones, like, you know, he’s an archaeologist looking for the Holy Grail in the temple. But that’s a long ass name segment. So if you have something snappier for us, what to call this search for, you know, the next idea, let us know.
And I like the, I like the poll too. I like our audience members telling us which of these two Very informal first pitches are more interesting to them. And then depending on, you know, what, what the, what the crowd says, that’ll give us a more direction, which of the companies we, we should investigate maybe more thoroughly with greater vigor.
So who are we talking about today?
[00:38:19] Luke’s Radar Stock – OKLO
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[00:38:19] Luke: So let me have a crack at my first Stock pitch for this new segment. I would like to pitch the idea of a company called Oklo, ticker O K L O. So, Oklo are super early stage, pre revenue company pioneering next generation nuclear power plants. And if you’ve listened to me ramble on this podcast in the past, you’ll know that I used to actually own a company called EOS.
SMR, New Scale Power, who are small modular reactors. Oklo is not wildly dissimilar, and my thesis for Oklo isn’t wildly dissimilar either. Essentially, the world needs much more clean power. Nuclear power is clean, and modern reactor designs are incredibly safe. Literally more people die putting solar panels on roofs than have ever died, uh, involving in like a nuclear accident of any sort.
Oakclose have a design for something called the Aurora Power Plant, and that’s Mostly intended for off grid applications. And so these things like remote communities, military bases, industrial sites, but I think the application that makes the most sense to me and resonates for me is data centers, because AI.
runs in massive data centers, like the cloud is just someone else’s computer. When you say you look at your phone, something’s happening in the cloud. It’s happening in a massive data center somewhere in the world, probably an Amazon or a Google or a Microsoft data center. That’s probably only like a couple of hundred miles physically from where you’re based, because they’re all over the world.
And these data centers use incredible amounts of power. And as AI, becomes more and more important to society. Like AI currently, although it’s becoming more efficient, like these large language models take a shit ton of power to power them. So that’s kind of the thesis for companies like NVIDIA, but. And the people who are building the data centers and building the hardware, but they need the power to run it on.
And so Oklo is a really interesting idea, I think. And one reason I particularly like this idea, and I’m bringing it from my, my first pitch on our new segment is the chairman of Oklo is none other than Sam Altman, who’s the CEO of OpenAI, the chat GPT guys. And I think the fact that Sam is also sitting on the board of Oklo, is really going to be a catalyst if they do get to commercial scale, which is a long way away.
and like certainly OpenAI are going to be one of the key, uh, customers of companies like this.
[00:41:05] Krzysztof: okay, I guess there won’t be follow up questions, right? We’re just kind of, uh, pitching.
[00:41:10] Luke: Chat about, chat about it if you like, but you can, you can push back on it. I can’t, I can’t defend the thesis. I think it’s an interesting idea. And I will say, I think it’s actually a bad investment. So this is on my radar, but I don’t think this is a good investment today because the company is like zero revenue.
There’s more money in Suzanne’s portfolio with a thousand bucks than there is revenue being made by Oklo, I think. Um, and they’re on a, like a decent burn rate. They’re spending something like 40 or 50 million a year, and they’ve only got about 200 and something million dollars in the bank.
So they’re going to have to raise a lot more money. They don’t anticipate getting to revenue, even if they ever do, before 2027. And being realistic, that’s probably more like 2030. So yeah, this is probably a poor investment right now. But I think this is worth keeping on your radar. Hence, I’m pitching it as a stock to watch.
[00:42:04] Krzysztof: Well, first one comment, one question. How about we do it that way? My, my comment is I like this area that you’re looking at. This is why I have in King of the Jungle portfolio, my company Iren, Iris Energy, because they’re a Bitcoin miner, but they’re involved in building out the data power structure for AI, basically, and they’re on the cusp of signing some big customers.
So, I think we’re thinking the same way in that regard. But my question was going to be, Like, are we going back to the future, uh, to what extent, you know, like, are we talking about two years, three years, ten years, and the biggest trap I know about ideas that sound fascinating like this is that the reality, uh, is still way further than you think, and my own mistake is frequently is being way, I like being early, but I’m often super, super, super early.
And as an investor, that’s often not, not ideal.
[00:43:01] Luke: Yeah, and this is definitely the case with OK Low today. Uh, you would be an investor today would be super, super early. The current market cap is about a billion dollars and like I said, the company has zero revenue and it probably doesn’t anticipate having any really material revenue until, let’s say, generously, at least 20, 27, 28.
I think I would as an investor, I’ll be waiting for the revenue tap to turn on. and to see them getting beyond like agreements in principle with potential clients to actually being let’s say at least within a year like they’ve broken ground they’ve started building these reactors they’ve got their approval and they’ve got real customers who are on the hook and have signed real contracts to buy power that’s probably the time when this might come off the radar and into the portfolio.
[00:43:55] Krzysztof: Yeah. So what I might do, speaking of organizing ideas and like getting your ducks quacking in a row, I might start a new portfolio, like abstract portfolio and add a share of Oklo, uh, theoretically, right. At today’s price, just to keep, just to keep tabs on it. I
[00:44:15] Luke: on my watchlist.
[00:44:18] Krzysztof: like owning one share, it keeps me, keeps me, uh, keeps me more interested.
[00:44:23] Krzysztof’s Radar Stock – SPHR
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[00:44:23] Krzysztof: all right, are you ready for my, for my first discovery? So let me do a screen share. So as a reminder, these are very, very crude notes. This is not sophisticated by any stretch of the imagination. But I am interested in the company, uh, SPHR, uh, ticker symbol S P H R. The short version is that this is a company that has two segments. One is a boring old segment, MGM Networks, which runs the entertainment for the New York City area. So think, uh, Yankees and Rangers and Madison Square Garden and some shows. But that’s a steady business.
But these folks went out and created what I think is the world’s most sophisticated entertainment venue. ever made, uh, called the Sphere in Las Vegas. And what’s fascinating to me about this as a business is that the Sphere in Las, the Sphere, this venue, this giant dome on which you have, I think the most high tech, Sound and visual technologies and all kinds of like, haptic, your seat shake.
And it’s kind of this immersive venue is located in the world’s entertainment capital Las Vegas. So the thesis here is that upfront, this thing costs massive amounts of money to build, I think to the tune of 2. 3 billion. And there’s a lot of early investors that are sitting on huge losses, but. A year into operations, we’re now seeing the kinds of events that can be hosted here for premium, premium dollars. So there was just a, Ultimate Fighting Championship event held there. A live draft was held there. Formula One event is going to be held there. You could rent it out via like corporate suites and kind of have the world’s best party there.
and it seems to me the future of Entertainment. At the moment, that’s not really like, I think that’s kind of a wash because IMAX, I remember investing in IMAX being, you know, like, um, really blown away by the theatrical experience. And depending on where you entered that stock, you, you, you’re either up a little bit or down a little bit.
It hasn’t like exploded. I think what’s happening here is that there’s a, assumption being made by Wall Street, that Each show is created equal and that the margins are much lower than they will be in the future. this business really will be about maximizing butts in seats and are the shows that are being offered, is most of the money going to the artist or is Sphere keeping most of it?
So if you think about it, Badger, in terms of like upfront costs, It costs this massive amount of money to build, not only build the structure, but they also have a secondary studio in California where they, you know, shoot and develop the films. Once they have a film in hand that is their own, they’re going to keep the majority of that money.
And the margin of the costs will essentially be running the show itself. So things like hiring ushers and concession stands, which is very, you know, that’s minimum expenditure. So right now investors are looking at this wondering if the operations make sense. And so far, the numbers have not been great.
It’s still burning a lot of cash because of all the upfront costs. But as a potential investor looking at this, I could count on one hand how many events I would legitimately make a kind of destination, make it like a point to go see. And this is, this is an off the cuff proposal to you.
When you’re back in the U. S. next time, I’ll I think you and I should absolutely 100 percent try to make it out to go see the new U2 film that was recorded specifically for the Sphere. And when I, when I just say that, I get excited about that idea, right? That’s why I think this is like a, a, a, you know, a diamond in, in, in the mind kind of thing.
Right, right structure in the right place. with infinite demand given how many people, 40 million annual visitors to Vegas. So you’re always seeing new eyeballs going in and out. And when you have like marquee names, live performances, potentially Lady Gaga might be like in the residency. That’s a rumor being tossed around.
The Eagles were just playing. There’s this fascinating new, what’s it called, electronic dance music performer that will be playing six shows at the end of the year. For mega mega bucks, I think the margins will make this a home run.
[00:49:16] Luke: Yeah, I like it. I’m really glad when I saw this one in our Monday dashboard that it was your first doc, because this is one that was genuinely on my radar, like a year ago, and I forgot about it. So a comment and a question then. so I, I recall seeing that they do have international rollout plans.
And London kicked them back. They were supposed to be building a sphere in London, in Stratford, which was kind of like the Olympic Park from London 2012. And our mayor, unfortunately, I’m a big fan of his, Sadiq Khan, but, uh, he’s kicked it back because of, like you saw in Krzysztof’s screen share, the big eyeball on the outside.
Essentially, like the residents of Stratford don’t want this giant eyeball or smiley face or whatever, like video showing on the outside of the thing. Polluting their light and ruining their environment. Because it’s kind of a residential neighborhood too. So this kind of thing super works in Vegas. Do you think it could work at scale in like the Singapore’s and the Dubai’s and the other capitals like that?
Yeah,
[00:50:21] Krzysztof: the point, right? There’s this, the second half of the thesis is international expansion. In my sense is that this, this is a big world. And if you have things like, say, Burning Man existing, you know, Burning Man is a festival in the middle of the desert, but the people that go there are fanatical about it because it’s life changing.
So the fact that it would be that some of these alternate expansions would be located in places like Dubai, say, which are Destination, uh, uh, uh, destination, I don’t know what the right phrase is, like, uh, deliberate destination venues, whatever. So, no, this kind of thing won’t be like IMAX popping up in, say, every city because of what you said.
But the, but I don’t think you’ll need them to pop up. It’s kind of, I’m thinking of this more like Disney World. Or Disneyland, right? There’s the original, then the second one popped up, you know, there’s Florida in California, then there’s now one in China. So if you have like slowly expand into say 10 places in the world, there are 10 places on this planet that are, you know, not part of the NIMBY crowd, not in my backyard.
So, um, it’s just a matter at this point, I think, uh, about execution and whether they could prove. that the margins are in fact so superior that you just have to get through the initial costs to make it a worthwhile investment. And I think that’s what we’re starting to see. And I really, really want to test drive this.
[00:51:52] Luke: me too. I’m super keen. Yep. All right. That’s a, that’s a great entry for The watch list, whatever the hell we’re calling this segment. So I guess our, our ask to listeners is go find one of our many polls. We’ll stick them on Spotify and X, and a few other spots and go give us a vote. And what you’re voting for is I think the most interesting of those two ideas.
Because even my one, it’s, I don’t think it’s investable. Oklo is not investable today. I’m not asking that question. We’re saying like, does this thing, is it interesting enough for you to put on your watch list?
[00:52:25] Krzysztof: Exactly. Yep.
[00:52:26] Luke: All right,. So I hope you enjoyed today’s podcast. We are on YouTube and all major podcast platforms. Subscribe now for a finance podcast that’s hopefully as fun and playful as it is insightful.
[00:52:36] Krzysztof: and as you should know by now, we are on patreon. com slash wallstreetwildlife. Please let us know by throwing us a little bit of coin if you want to be part of our intimate inner circle to support our efforts to make the show even better.
[00:52:55] Luke: But we do love all our listeners, and if you can’t spare us a little bit of cash to help us pay for the editing costs and all those sort of bits and pieces that I currently do, my sweat and labour, then just give us a like or a subscribe, give us a comment, those things always help. A five star review on Apple Podcasts goes a long way to helping us get traction and grow the show.
you can also find us on Twitter, that’s the best place to chat to us if you’ve got questions or you wanna Pose a quandary like Suzanne’s and maybe it will turn into another whole podcast episode argument. On the X’s, I am at 7 Luke Hallard.
[00:53:29] Krzysztof: Um, at seven flying platypus. Also, we have a website wallstreetwildlife. com where you could find our 10 laws of the investing jungle, which are geared for all beginner investors and medium and advanced investors too, who have yet to internalize them.
[00:53:47] Luke: Are you ready to become a beast of an investor? Your journey starts here.
