👑 Badger wins year 1 of King of the Jungle! You won’t believe the margin of victory! And his Banana trophy 🏆🍌
🤓 Monkey tries hard to identify his mistakes while Badger tries hard to remain gracious: lots of lessons and reflections on how we can both improve our process to get even better
💵 How to think about cash as a position
🚀 $RKLB Rocket Lab: Badger’s best performer, and one of Monkey’s worst. Learn all about the dark dangers of options
📆 How we’re thinking about year two: $200 per month, consistency of adding, watching emergent trends
🎯 Next stocks Badger is looking to add: $META $GAW; Monkey eyes $NTDOY
🚨🌴 Shout-out to Kurt K and Julian G, you animals! Thank you for supporting Wall Street Wildlife on https://www.patreon.com/wallstreetwildlife! 💵 The few bucks you won’t miss will help us make the show even better. 🎯 All Patreon questions get boosted to the top of the queue!
Segments:
[00:00:00] Introduction
[00:02:47] What was the King of the Jungle Portfolio Challenge?
[00:03:28] Contest Results
[00:07:59] Krzysztof’s Best Performer
[00:09:24] Rocket Lab – Krzysztof Didn’t Get Off the Launchpad
[00:15:10] Luke’s Portfolio
[00:17:06] Krzysztof’s Portfolio
[00:19:40] What We Did Differently
[00:23:00] The Importance of Cash
[00:26:35] Changes for Year Two
[00:31:25] Stocks on our Radars for Year Two
[00:34:20] Understanding Risk and Reward
—
[00:00:00] Introduction
[00:00:02] Luke: Hello, and welcome to a very special wall street wildlife investing podcast. Today is episode 52 and Christophe, do you know what 52 weeks
add up to?
[00:00:12] Krzysztof: They add up to one round trip around the sun, dear badger.
[00:00:16] Luke: They do sir. One trip around the sun and the end to our one year King of the Jungle portfolio challenge.
[00:00:25] Krzysztof: You say that with a stupid smirk on your face,
taking advantage, taking advantage of a humble monkey who’s not only got his ass whooped, but also didn’t sleep at all last night because of the U S election. And there you are gloating and gleaming about your very sizable victory about which we will talk about. Non stop, but in case you’re just listening to this and not seeing our video, I am wearing my bare red ass baboon hat. Uh, in part, I guess from the spanking that I got and maybe we’ll get on this episode.
[00:01:11] Luke: that baboon’s ass is firmly red and ready for a spanking and I’m going to give it a spanking today because you didn’t just lose, you lost
magnificently.
[00:01:21] Krzysztof: Oh, did I ever.
[00:01:22] Luke: And dear listener, like a preview of some of the numbers that we’re going to share today, like in today’s episode, we are going to take you through our conclusions on the first year of the King of the Jungle Portfolio challenges.
We’ll talk about our biggest investing successes, our biggest mistakes. Would you believe we both bought the same company and got totally opposite results? In today’s episode, we’ll explain how that mysterious thing could have happened and propelled me to a
winning finish
line.
And
[00:01:57] Krzysztof: we got it for you.
the top of the show is that the king of the jungle portfolio lives live on wallstreetwildlife. com. So if you want to see. the historical data and the up to date holdings in our portfolio and the ups and downs of our portfolio value. Go check that out there,
And above all welcome to our two latest patreons kirk k and julian g God bless your hearts. You’re going to help us make the show better and now on patreon lives our pdf For the 10 laws of the investing jungle So check that out and you can mark off how many of those laws I violated in year one of the king of the jingle portfolio
[00:02:47] What was the King of the Jungle Portfolio Challenge?
[00:02:47] Luke: let’s do a quick reminder of what the King of the Jungle portfolio was, because if you’re tuning in on episode 52, like if nothing else, you’ve got a whole year’s worth of nonsense to listen to, but if you can’t be bothered, the TLDR is When Christophe and I launched this podcast, we decided to have a real money investment challenge.
And this is really like a 10, 20 year, like a lifetime challenge, but we thought we’d measure our results after a year just to kind of see how it played out. And that’s what we’re reviewing today. We put a thousand US dollars in each of our accounts to get started. We added a hundred bucks in real money every month.
And we just had invested it as we saw fit.
[00:03:28] Contest Results
[00:03:28] Luke: And here we are, a year later, checking in on the
results.
[00:03:31] Krzysztof: Yes And the results are as of uh one year around the sun starting november 1st of 2023 the difference between our two portfolios, a whopping 849 rotten bananas. But I can explain, I can explain. Uh,
[00:03:57] Luke: Christophe, if you had to sum up your year as the king of the jungle in one word or one emoji, what would it be?
[00:04:05] Krzysztof: I would, allow me three words, Mistakes were made,
[00:04:13] Luke: Okay. Okay. Is there a baboon’s
ass emoji? I don’t
know.
[00:04:18] Krzysztof: but, but also this is important in investing mistakes. Always get made. It’s a matter of, of, uh, negotiating them. And this is where we’ll get into the nuance of what I’m going to, uh, adapt and what I’m going to stick to, which might look like a mistake now, but I still suspect might not be a mistake. So we have to, we have to nuance that a little bit, but before we, before we continue, I think it would be shamed for me not to present you with a hard earned You deserved victory prize, and here it is,
you are
the new recipient. Of the top banana award.
[00:05:06] Luke: That is beautiful. I’m going to have to virtually accept it because we are literally 12 time zones different. I’m a long way away from you in, uh, Texas right now, but I appreciate the top banana and I look forward to receiving it by DHL as soon as
I get home.
[00:05:23] Krzysztof: Yes. I wonder what I’m going to get next year when I come back with a vengeance.
[00:05:27] Luke: The pleasure of buying me yet another banana and I’ll have a whole bunch after five or six years, but you were very kind and, uh, I’ll share a couple of photos at the back of today’s episode, but, uh, Katrina and I had a very fancy dinner at your expense. Just, uh, two days ago, when we banked the win.
So we thank you for our lobster
barbecue and champagne.
Beautiful.
[00:05:49] Krzysztof: Rice lobsters in champagne. You did not spare. You did not spare for humble monkeys, uh, bank. That’s for sure. But you deserved it. So shall we, shall we get into. Figuring out what went right, what went wrong on both our ends and what we’re going to try to do better for round two.
[00:06:07] Luke: Let’s do that. I mean, maybe the best place to start is we’ll pop some of the numbers up on the screen, but let’s just talk about our biggest wins and losses
to get things started,
shall we?
[00:06:16] Krzysztof: Yeah, absolutely. And actually, right before getting to that, I’m sorry. Um, I want to mention, uh, that the way we’re going to do this, you already alluded to this a little bit, but we did year one. So we marked that that’s closed and we aim to repeat yearly competitions. While keeping the overall portfolio, we’re not going to reset the overall portfolio.
So that’s going to continue showing our overall performance over the many years. But for each additional year, we’ll just measure the gains for that year from the end points of that year. So it should be actually pretty straightforward to keep track,
[00:06:56] Luke: And look, I don’t want to turn this into like an election conversation. Yeah. You’ve, you’re looking pretty sleepy over there cause you’ve been glued to the election and I’ve, I’ve been glued to it by the pool all days a day. I do know in our portfolios, I have Chinese auto manufacturer BYD and you’ve got Tesla.
Well, uh, our new president has firmly put the ball in your court with that little pairing of auto manufacturers.
[00:07:21] Krzysztof: right? We swore that we wouldn’t talk elections today on this episode in part because Everyone’s probably either crying or exhausted or, you know, gloating. but we, uh, we do have things to say about the election. So check us out in the next episode, especially how the results will weigh in on investing strategies going forward. But you’re right. I slept for maybe two hours last night. So if I say nonsensical things this morning, That’s not because I don’t, well, you, you decide why, why I’ve said nonsensical things, but
[00:07:57] Luke: Okay. Let’s, uh, let’s pick up some numbers.
[00:07:59] Krzysztof’s Best Performer
[00:07:59] Luke: Do you want to, do you want to kick us off with your best performer?
[00:08:02] Krzysztof: yeah, uh, my best performer was EOS energy, which makes long storage duration batteries for the electrical grid. And it was one of my two main big positions that I’ve held all year and continued to add as the price dropped. So at one point EOS. was down to seven, 70 cents a share. I kept lowering my average, uh, my average cost basis and I finished the year up 180 percent plus some additional gains on some of the options I bought, but that position was The biggest winner in both our portfolios combined, the color I want to add to that to use analyst language from investing calls is that this is on the back of me having done a stupid amount of research for a very, very, very long time. So, um. Normally I would not make this kind of bet and I would not keep adding to it as it kept going down and down and down and the sizable amounts that I did. But in this case, I think I knew what I knew. I was confident in what I knew and I was not going to let the market noise confuse me.
[00:09:22] Luke: Very good.
[00:09:24] Rocket Lab – Krzysztof Didn’t Get Off the Launchpad
[00:09:24] Luke: Well, my big winner wasn’t too far behind that, about 171 percent gain. over the year from one of my favorite stocks in my own real money portfolio to Rocket Lab. Peter Beck’s, uh, space systems company, putting stuff into orbit, but delivering like end to end space solutions right now. And Rocket Lab was interesting in The King of the Jungle, right?
Because it was the big winner for me, but it was your undoing a little bit. What went wrong?
[00:09:52] Krzysztof: What went wrong, uh, Badger is that Additional more additional context is needed here. If you remember early in the year of last year, I was very concerned about the macroeconomic conditions. I still am, by the way, but that’s a whole separate conversation. And in order to find ways of existing in the market. while these conditions still, you know, uh, were there, I attempted to learn about short term trading and using technical analysis and more kind of momentum ish trading, trading. So not longterm investing, but trading. And one of the companies that I Learned live with was racket lab because you and I both share a bullish thesis and then what I was seeing on the charts, uh, encouraged me
so I bought short term options. And I know there’s a bunch of stuff. I don’t think this is the time and place to explain the nuances of the trade, but long story short is that when you buy short term options, you’re making a bet that has many things that could go wrong. And the market is kind of controlled not by the fundamentals of the company, but by call a price manipulation or. Price action in all of my calls for rocket lab ended up expiring at zero. One side note, I don’t know how you feel about this, but it is interesting that neither of us copied each other’s companies at all. During this competition, even though we don’t have any rules that say we can’t do that. This was the only instance where we both, you know, really were bullish on rocket lab. And I wanted to make more money quickly. You said you were fine with a few shares for the longterm. And the result is egg on my face and you’re up 171%.
[00:11:53] Luke: Yeah, like, uh, to bring an animal analogy in, like I was the tortoise, I bought my stock, I thought I’d let it simmer like a slow cooked stew, whereas you were like this chef with a flamethrower trying to whip up a five star meal in 10 seconds flat, and unfortunately your uh, your flan collapsed. your rocket lab stock barely got off the
launch pad.
[00:12:15] Krzysztof: Yes, that’s exactly what happened. Here’s a slightly more nuanced picture for the future. Overall, my options strategy in this first year cost me a significant chunk of bananas, 500 something, really. I don’t think it’s necessarily that there’s no spot for that strategy. I just think it has to be applied probably later in the career of a portfolio, not like when, when the base is still so thin. And, uh, it has to be done, I think with a smaller portion of the capital. So I have adjustments to make.
[00:13:00] Luke: let’s, like pull out some investing lessons that we’ve learned over the course of this year. Like you and I have been investing for over 20 years each, like you’re something like 28 years in the market. I’ve been investing in growth stocks for about 21 years. I mean, like this investing is like a lifelong journey of learning and improving and trying to refine our processes.
And I think that’s a good insight that. If you are starting essentially, you know, we’re artificially starting from scratch here with our king of the jungle portfolios, like a relatively small amount of money, only a couple of thousand bucks now. That kind of works okay when you’re buying equities, particularly if you’re using a platform that allows fractional trading where you can buy, you know, a 10th or even a 1 percent of a share.
You don’t have to even buy a whole share, but with options, I guess you’re kind of the price of entry, like you’re starting price to buy a contract could be more expensive than a portfolio of that size can warrant. So, you know, not only is that a strategy for a more advanced investor, it’s probably not something you should be playing around with.
If you, you know, if you have less than a five figure
portfolio,
[00:14:10] Krzysztof: absolutely. I’ll put this point blank, you know, our audience, I think there’s a wide range of listeners, but we gear toward being, uh, guides toward the beginner beginners or investing curious playing with options. You just should not do it in the first, I would say, few years of your investing journey at all, because investing is plenty hard to do on its own.
There’s plenty of work to be done on all kinds of levels and options are like really graduate level stuff. And you could see that even though I put a lot of time and effort into my strategy. Uh, they backfired, and that could be very, discouraging if you have that kind of outcome early in your career, and that might lead to an even worse error, which is you might say investing is impossible, or you can’t win, or whatever.
And that’s absolutely not true, and why Badger’s wisdom here is, is really sound. No options
for
beginners.
[00:15:10] Luke’s Portfolio
[00:15:10] Krzysztof: Oh,
[00:15:12] Luke: for the year, I’ve got it on screen now, you look across my portfolio, I’ve only actually have one loser out of my 11 investments and that loser was Zscaler, cybersecurity zero trust guys. Like I’ve got a nice range of winning investments. Only one that was over a hundred percent return Rocket Lab. But my Palantir stock up 80%, MercadoLibre up 61%, Axon up 80%, CrowdStrike 66%, like there’s a ton of good winners there.
And I think this does bring to life, I’ve had a good year, no argument, but this does bring to life that you can beat the market you don’t have to make it complex. It can be as simple as my Maxim is. Find the world’s greatest companies, buy them and hold them for a long
time.
[00:16:00] Krzysztof: yeah. And that’s the strategy you and I have grown to love and depend on. Uh, so it works over time. The one caveat I want to add is that you had the tailwinds that the market was cooperating with you. So you bought great companies, but great companies are rarely cheap, but the market supported you. That’s not always going to be the case and it’s, you know, I thought that that wasn’t going to be the case. So I looked in the value section of the market. where I was looking at cheap companies. So when it works, which is usually right, usually statistically most years are up and statistically most years there is the wind that you’re back badgers strategy and mine usually the by grade companies hold them for the long term works. but it’s not as simple as it’s, if only that were true, like every single year, you know, so we’ll see what year two brings.
[00:16:58] Luke: Do you want to just give us a, like the 10, 000 foot view of your own portfolio for the king of the jungle and like how that aligned with the strategy you
planned?
[00:17:06] Krzysztof’s Portfolio
[00:17:06] Krzysztof: Yeah. Uh, I mean, I already spoke about it some that I was really scared about the market being overly heated and with lots of bad economic data. So based on a lot of research, I found two companies that I thought were massively undervalued and, or what I think of as uncorrelated from the market. One of them was the biggest success. Uh, in eos. The other one is a biotech in Coherus, and those two are the ones I kept adding to throughout the year. EOS worked out, uh, Coherus ended up down over 50% and that’s as I continued adding in dollar cost averaging. One reason I did that is because not only do I did, I think, and continue to think that coherence is massively undervalued, but as a biotech. biotechs in general, played by different rules from, from, Uh, market ups or downs. Why? Because, the success of the company more or less depends on whether the drugs they’re making get approved or not. And that’s irrelevant from the market and the speed, if you will, or operational efficiency at selling the drugs once they’re approved. So whether the market goes up or down, if you pick the right call it molecule to invest in, you’re going to have wild successes. So that’s what I wanted to position myself in deliberately, I didn’t want to be at the whim of the market. I did the same thing for relay therapeutics, though not in as big a size. And Iris Energy became a big winner for me throughout the year because that was a bet on Bitcoin and the AI data center movement. But all four of those were sort of, yeah, deliberately outside the market, if you will. Only Tesla, which was a small position, Is the kind of company both of us would own, you know, long term, uh, that’s very expensive, but we still think it’s a long term hold.
[00:19:22] Luke: Yeah, absolutely. Tesla’s like a mainstay holding in my real money portfolio. It is actually one I, I avoided it in King of the Jungle because you owned it. I thought I’d just, I’ve got a whole wealth of great companies to invest in. I thought I’d pick the ones that you hadn’t picked, but if you didn’t own it, I’d definitely have it in my King of the Jungle portfolio.
[00:19:40] What We Did Differently
[00:19:40] Krzysztof: And I did play, you know, at the beginning of this contest for the first year, you know, we’re sort of wet behind the ears because we didn’t know, you know, how it would go, how it would unfold. Especially since, you You and I are schooled in the same principles. What was most curious to me is that we really took as opposite strategies as you could take in this first year, which sort of, you know, in hindsight surprised me because I did not intentionally like. think I’m gonna, I wasn’t like set on being contrarian exactly. It’s just that as I was looking at things in the validating things, my perspective made more and more sense to me at the time. And then as the year went on, I had, I don’t know, uh, reason to abandon my strategy. And then we just ended up polar opposites strategy wise.
Right I don’t know if that’s, that’s going to continue to be the case. I doubt it because you know, I have an exit strategy. I don’t want to hold my sort of shittier companies for forever. I’m just, I’m going to sell them when they regain their more reasonable valuation. So it’s not like, you know, right.
I’m not, although, yeah, I guess maybe the more, more important point. Tell me if you agree with this for listeners, and we’d love to hear your perspective on this. It made for a more interesting show
potentially, right?
[00:21:09] Luke: Yeah. Yeah. We were both really divergent. And I didn’t touch options. I do a little bit of options, uh, gambling. I consider it gambling for real, but that’s even that’s, I consider that like a separate portfolio, which is more about entertainment than investing. I don’t know enough about options.
Certainly not enough. To use them in the King of the Jungle portfolio challenge. But I did want to use my King of the Jungle portfolio , to mirror the approach I’ve taken in the last 21 years, because I haven’t changed my approach, I figured out what works for me and I figure I’ll stick with that.
Hopefully till the day I
die.
[00:21:44] Krzysztof: Right. One, one caveat to the original question you asked me, I did know that I wanted to have a more motley, uh, toolkit. That’s why I not only did options, but I also experimented with the technical analysis. But if you remember at the beginning of the show. I had a position in Chainlink, which is my highest conviction investment in real life. Uh, but the problem was that SoFi deactivated their crypto portfolio stuff, and SoFi is the platform I chose to create for this contest. So I was forced to sell it. And now in year two, um, because Trump just won and because crypto now has a new life, new lease on life, I need to figure out how to get more direct crypto exposure for king of the jungle, because I have such. Uh, strong conviction in the two holdings that I own, so we need, I need to negotiate that for you to how I’ll do that. Exactly.
[00:22:51] Luke: think there’s a couple of other lessons to be learned from both of our approaches this year. Maybe we could reflect a little bit on anything we learned from each other.
[00:23:00] The Importance of Cash
[00:23:00] Luke: Yeah. And. Like cash is king. I love cash and I consider it to be a position. It’s not just dead money in my real portfolio. And maybe I brought that a little too heavily as a lesson for myself into the king of the jungle. Like I’d kind of forgotten the reason why I have nearly a 20 percent cash allocation in my real portfolio.
It is a hedge against maybe macro or the political environment turning against me. I’ve also got that much cash just because. Like, my portfolio pays the bills, and, uh, if I blow myself up, like, that could impact my lifestyle, but perhaps severely. That’s not going to be the case with the King of the Jungle portfolio.
If anything, my King of the Jungle money is in many ways much more longer term money than my real money portfolio, because it’s still real money, but it’s so small in relative for everything else. It’s like, I’m not going to spend it. So, I can afford to be I can afford to treat that as higher risk money.
So I think, I think my lesson there is cash is king until it’s not. , I probably should have been a little more aggressive at getting some of that cash into play and maybe just kept a little bit on the sidelines to give myself some optionality.
[00:24:15] Krzysztof: My pushback on that badger will be is that, well, one, I agree with you. I love having cash because I’m big red market days. You actually get excited because you could buy things on sale, but I sense a lot of hindsight bias creeping in because the sense that you saying that maybe you should not, you should have invested more of it, but that’s only because the market went up, had the market really corrected, you would have been so glad and wished you had even more cash available. So that’s important to know. But in general, I think we diverged in this sense because you kept the cash on hand. Maybe too much. Whereas I, because my investments were geared under companies that were undervalued I always wanted to own more of them, especially as they continued dropping in their valuation and that gap continued to widen. So I had very little incentive to hold on to my cash when I knew exactly where I wanted to put it. but here’s a big change we’re making, I’m making for year two. I wanted to control my cash a little bit more methodically, sort of copy you a little more. So we agreed that this second year we’ll be investing 200 per month, which is still very doable, I think for most people. And then I’m splitting that 200 into an even 50 per week. So this way I kind of measure out my purchases one a week each month. So every week I’ll be buying a little something, which means that at the start of each month, I will always have 150 just waiting there,
[00:26:00] Luke: Yeah, that’s good. And, uh, I remember that comical conversation we had about like maybe six weeks into the contest and nearly a year ago, and we each had a thousand bucks in the portfolio and you were like this kid in the candy store and you spent all your money straight away. And then you were like, look, we need to, we need to add more money.
We need to increase the amount. I’m like, dude, come on. I’ve been patient. I’ve taken my time. I’ve still got some money on the sides. What are you
playing at?
[00:26:27] Krzysztof: uh, I am a monkey. I mean, what do you, what do you want? You know, I want all the bananas.
[00:26:35] Changes for Year Two
[00:26:35] Luke: Well, you got your wish in for year two, you got your wish. We’re increasing the amount, but this is still a very accessible amount of money, we think for our listeners. And the reason we’re increasing it is, um, and I’ve got a lesson here as well. I think I knew already, but I think it’s worth reiterating.
Like this might be small beans today. It’s like, well, like a 2, 000 portfolio. I can see now if we run this competition for. 10 years, let’s say, which is truly like long term investing, 20 years, 30 years, long term investing, then it’s going to turn into real money, like serious money. So a change I’ve made as we transitioned from year one to year two, I’ve actually moved my entire portfolio from being a general investment account into the UK’s version of a Roth IRA.
It’s called an ISA individual savings account, and it’s just an investment account, but it’s tax free and you can put up to 20, 000 a year into this thing. So my king of the jungle portfolio is now like a little sidebar of my real entirely tax free portfolio. And if we keep this contest going for 10 years, You know, that could be, it could be part of the engineering supporting my life.
So, uh, you know, you’ve definitely, we’re increasing the amount, keeping it sensible. If you, if you play this well, and as you follow our journey for the next 10 years, like with just 200 bucks a month, you too, hopefully all of us will have, uh, really a handsome amount of money , to help us all towards our
retirement
goals.
[00:28:09] Krzysztof: Oh, this is such an important point. Uh, in 20 years, in 20 years, 10 or 20 years. We’re still going to be fit because, you know, we do our, we, we do our running. We do our jujitsu. We play our tennis, right? So these, these beautiful, uh, Appalachian models that you see before you will still be going strong. And for 50 a week, I mean, really, that’s the main point, 50 bucks a week, 20 years from now, or 10 years from now, we’ll be eating lobster rolls with champagne for breakfast, lunch, and dinner market. Market November 6th, 2024. This is the, this is this clip right here is going viral.
[00:28:53] Luke: I gotcha. Uh, I, I agree. Uh, follow us on the journey. Right. This is our one year anniversary, but actually Christoph, it’s really like our two year anniversary. This is our second one year anniversary. Right. Cause we’ve done some podcasts before. Um, so I hope this, I hope this brand sticks, but if it doesn’t like, we’ll still be podcasting under a different brand, but we’ll definitely keep cutting back and checking in on this King of the Jungle portfolio, Malarkey, because, um, yeah.
Like this is how you do it guys. This is, this is how I started 20 years ago. I learned some hard lessons and we’re now using the Wall Street Wildlife podcast to impart those lessons and learn new ones along with
your
[00:29:33] Krzysztof: Yeah. I mean, it’s fun and games, but it’s not because we know what we’re talking about. And especially, you know, in, uh, especially with mistakes because they’re inevitable, right? So, uh, they’re not, they’re like I said earlier, they’re unavoidable, but we know how to spot them. And so if you learn to trust us in the coming months and years. It’s shocking how fast five years, something like five years goes by and you’ll see that little portfolio that started with a thousand bucks. All of a sudden is much, much more. And it’s, it’s great to, uh, help empower people to, to see that it’s all possible. So,
[00:30:14] Luke: great stuff. As we do look into year two, have you thought about Not just your 50 bucks a month. Are there any other changes you’re thinking about making? Or maybe a more precise question. Um, is there a particular stock you’re excited and looking forward to adding as we go
into round two?
[00:30:33] Krzysztof: yes. So the big picture is, I think I already mentioned, I’m going to slow my role with the options specifically actually be, let me be even more specific. Call options, uh, because they are the most dangerous. There are other forms of options that are actually, uh, conservative for the most part, I’m going to refrain from using the options much, I think. Um, I have second piece is I’m expecting coherence. To flip to close that valuation gap sometime in, in, in this year, this next round, I’m going to have to figure out what to do with all that cash once I trim it. Uh, and the third point is that
[00:31:25] Stocks on our Radars for Year Two
[00:31:25] Krzysztof: right now, the stock I’m most excited to start adding in. in size will be Nintendo, just, uh, you heard that we did a quick stock safari segment on it, like a quick overview. I really, really loved what I saw. There was some recent news about it, uh, a couple of days ago. And I think this is going to be one of my better long term holdings for the long term AKA with the stuff you’re buying. So stay tuned for deeper, deeper dive.
[00:31:59] Luke: And actually, funny enough, I’ve got two stocks I’ve also reviewed in our weekly stock safari segment that I’d like to add to my portfolio, both my real money portfolio and my king of the jungle. And if I look back on my, my safari stocks to that, uh, standing the test of time on my to do list, I want to buy Meta and I want to buy Games Workshop, the, uh, the fantasy figure miniature Warhammer
40k
guys.
[00:32:29] Krzysztof: You know, I saw on our YouTube channel and our views that particular short has like a, what is it, several thousand or a thou coming up to 2000 views, which is doing much better than the, you know, some of the more arcane stocks that I’ve talked about or we’ve talked about. And I wonder if there’s like, that’s part of the thing, like, is it. star power, celebrity power. You mentioned, is it Henry cow? Uh,
[00:32:57] Luke: Yeah, every, every Kevil’s name is attached to the potential Warhammer 40k movie or TV show that Amazon may or may not be
making.
Anyway,
[00:33:08] Krzysztof: Right. So
[00:33:11] Luke: feels like that one deserves a place in the portfolio, plus, hey, you can’t argue with a 4 or 5 percent dividend
income.
[00:33:19] Krzysztof: yeah, cool. Uh, Oh, one more thing. I do want to say this, uh, this goes back to previous questions. Sorry for maybe a little bit of sloppiness here, Badger, but I’ve realized there’s a big principle, holistic principle that sectors themselves go. In and out of favor often. So how the election affects, for example, clean energy investors need to be sensitive to, but when I’m also seeing that two of my five companies are biotechs, and I actually expect to add more because. In this moment, biotechs have preposterously low valuations across the board and they, they are, those kinds of valleys will not last very long. So, um, I’m playing that contrarian card a little bit and saying when others are undervaluing a whole sector, it’s ripe for
[00:34:20] Understanding Risk and Reward
[00:34:20] Luke: I wonder though, if I can, I’m going to plug one of my own tweets from two days ago, uh, because I tweeted this with, uh, Coherus Biosciences, the biotech company in mind. I’m just going to read my tweet because I think it’s, I think it’s relevant. And there’s a lesson in here. Uh, watching a stock you own collapse and automatically assuming you made a mistake is a unconstructive cognitive bias.
If hindsight helps you identify a flaw in the thesis, Great learning opportunity, but stock prices can move for many reasons and huge drawdowns and extreme volatility is often simply the nature of the game with high risk investments. And I’m thinking particularly about biotech is almost the highest of all high risk investments.
Like many of those investments will fail some fatally never to recover. And if you’re going to grow as an investor, my insight here, I think was you’ve either got to acknowledge your emotional response and just accept. Like I can’t handle the heat. These are not for me, or you just got to embrace the fact that like risk and reward go hand in hand.
And if you’re going to play this stuff for me, at least anyway, have a diversified sub portfolio, like a chunk of wild cash of uncorrelated. High risk opportunities. Like you want a bunch of bets. If you’re going to make a bet on something crazy, you’re better off making 10 crazy bets than one. Um, and then just like buckle in buddy for a wild ride because for no fault of your own, for no fault of the companies, sometimes this wild stuff can just be incredibly painful for your
portfolio returns.
[00:36:06] Krzysztof: Yes. And my nuanced take response to that is be careful of, gathering all companies that with the label say biotech as though everything is wild and crazy because we know some of the largest market caps out there are biotechs. There are biotechs specifically go through stages and there, there is the gambling stage where it’s just a pipe dream and maybe this thing will work.
Yes, that’s a gamble with huge risk reward. In coherence’s case, for example, they have FDA approved drugs already and demand for them proven already. And it’s a question of commercial execution. That’s not wild and crazy. That’s more in line with. most other companies just waiting for the story to play out. But you have to know what you’re talking about and you have to, you know, um, you have to know the difference.
[00:36:59] Luke: We, uh, we give these. Health warnings regularly because they are really important. but along with the health warnings about the wild and risky stuff, we’re also using the podcast to share like safer strategies that are accessible to a beginner investor. So, um, today’s probably not the best episode to start with.
If you’re really just starting out your investing journey next week and the weeks after that will be because, uh, that’s where we’ll be starting. Round two of the King of the Jungle and continuing our journey. So if you haven’t, subscribe, and if you want to go read our Ten Laws of the Jungle, Go find them at patreon.
com slash wallstreetwildlife. You can also find Christophe and I on all the social medias, but our favorite place to chat is twitter slash x, where I am at 7lukehallad.
[00:37:48] Krzysztof: I am at seven flying platypus and my, uh, new favorite place to chat is actually on our Patreon page because it’s really clean and it’s sort of the place for our inner tribe. It’s where our, our people live, and that’s where if you ask a question, leave a comment, I will get back to you, tootsuite. So, check us out there.
[00:38:10] Luke: And if you’ve got, if you’ve got us on the podcasts, like you can see our furry faces if you Swing by YouTube slash at wall street wildlife. Maybe just go give us a subscribe there anyway, because it kind of helps our numbers where we’re trying to grow the YouTube channel and like, we’re definitely getting great conversations going on our YouTube videos.
So you got something you want to ask, like drop us a note that we made a whole episode out of a question from a listener just a few
weeks ago. Well,
[00:38:36] Krzysztof: Yeah, our community is growing, I think, uh, our experience is showing, and our, and we’re looking forward to year two of this journey. Uh, I hope if nothing else, the spanking isn’t as severe. but I’m, uh, this, I don’t know if I could handle another such severe spanking, but I’m really optimistic, optimistic badger. I think I got you right where I want you for this, for this
competition.
[00:39:04] Luke: uh, you, you, if I’m at this is right, you successfully turned Uh, 2, 200 into an end result of 1, 600. So yeah, if you can keep compounding at that rate, uh,
[00:39:20] Krzysztof: Yes. Mistakes were made, but, but it’s temporary. It’s all temporary.
[00:39:25] Luke: well, I mean, it just remains for me to thank you again for the delightful dinner the other day. we appreciate your generosity. Thank you for the top banana reward as when you ship that to me, it’s going to have pride of place next to my. Uh, Tesla tequila on the, uh, the top shelf back home.
And, uh, I guess until next week, are you ready to become
a beast of an
investor
[00:39:48] Krzysztof: Your journey starts right here.
