Cinema Meets Investing Wisdom – we revisit our “10 Laws of the Investing Jungle,” bringing each principle to life through the lens of iconic films and TV shows. This is a back to the fundamentals episode, perfect for when you need help navigating intense market volatility (like – right now!)
🚀 The Shawshank Redemption Long Game – how patience and persistence, exemplified by Andy Dufresne’s tunnel, can transform your investing outcomes
📉 The Big Short & Dangers of Leverage – the devastating consequences of leverage
💡 Moneyball’s Independent Thinking – the importance of making your own investment decisions rather than following the herd
🦈 Diversification Lessons from Jaws – Why depending on one income stream (or beach!) can leave you vulnerable
🐺 Ethical Investing – the seductive dangers of “get-rich-quick” schemes, courtesy of The Wolf of Wall Street
🌌 Emotional Discipline – how Luke Skywalker’s Jedi training can help you master your emotions and improve your investment outcomes
Plus:
🚗 Learn about this auto company’s ultra-fast charging breakthrough (1 megawatt charging capability!), delivering 250 miles of range in just 5 minutes. Coupled with expanding international revenue now reaching 30% of their business, can they challenge Tesla’s EV dominance?
🩺 An update on one of Monkey’s favourite biomedical companies. Despite management under-delivering on promises, they’re projecting 61% growth for the year. With a $236M market cap targeting a potential $3.5B market. Here’s why Monkey is holding this as a small but promising position!
🌴 *Thank You for Supporting Wall Street Wildlife on patreon.com/wallstreetwildlife
💵 Your support helps us continue bringing insightful episodes and valuable investing wisdom.
👨👩👧👦 If “It’s a Wonderful Life” taught us anything, it’s that true wealth lies in relationships and shared success!
Segments:
00:00 Cold open
02:46 Welcome Back to Wall Street Wildlife
03:17 Revisiting the 10 Laws of the Investing Jungle
03:46 Pop Culture and Investing Wisdom
10:00 Company Update: An electric vehicle manufacturer
15:11 Company Update: A biomedical microcap
21:37 Revisiting the 10 Laws of the Investing Jungle
24:30 Law #1: Protect your essentials (The Pursuit of Happyness)
28:00 Law #2: Know your investment comfort zone (Free Solo)
34:04 Law #3: Focus on the long game (Shawshank Redemption)
39:33 Law #4: Chart your own course (Moneyball)
45:43 Law #5: Tame your emotions (The Empire Strikes Back)
48:37 Law #6: Thinking you’re smarter than the pack is dangerous (Mary Poppins)
51:44 Law #7: Build a resilient portfolio (Jaws)
54:52 Law #8: Understand the deadly perils of leverage (The Big Short)
1:00:08 Law #9: Resist the urge to rearrange your trophies (Silicon Valley)
1:06:26 Law #10: Beware of get-rich-quick schemes (Wolf of Wall Street)
1:08:47 Bonus Law: Investing is better with friends (It’s a Wonderful Life)
1:12:22 Closing thoughts
WSW-E73 MOVIE LESSONS-with ads
[00:00:00] Luke: The Empire Strikes Back. ’cause if you know your Star Wars law, you remember that incredible movie from 1980. that’s the movie where Luke Skywalker meets with Yoda and really gets his like deep training in, where is he Dtu in on that like swamp planet.
And so the movie is all about his journey towards becoming like zen-like and controlling his emotions and to think rationally so that he doesn’t just react, he can like respond to the situation that he’s in.
[00:00:33] Kryzsztof: I suppose this is a great pitch for our community, again, because if you see yourself acting as like a rogue, like lone wolf kind of figure, your emotions will get the better of you
[00:00:52] Luke: if you’re an investor, you know, it’s gone really badly. Wrong if literally you lose your house, there’s probably other laws you’ve broken to get [00:01:00] into that situation.
But take this to heart. If you’ve got money in your investment portfolio, make sure you got your emergency fund first.
[00:01:09] advert – 60s: This is Wall Street Wildlife. Before we get to this week’s show, a short word from our sponsors. All right. If you’re serious about investing, you need to know about public. com. That’s where you can invest in everything. Stocks, options, bonds, crypto. They even offer some of the highest yields in the industry, like the bond account 6 percent or higher yield that remains locked in even if the Fed cuts rates.
What sets public apart is how they give you the tools you need to make informed investment decisions. Their built in AI tool called Alpha doesn’t just tell you if an asset is moving, it tells you why the asset’s moving, so you can actually understand what’s driving your portfolio performance. Public is a FINRA registered SIPC insured US based company with a customer support team that actually cares.
Bottom line, your investments deserve a [00:02:00] platform that takes them as seriously as you do. Fund your account in five minutes or less at public. com slash wildlife and get up to 10, 000 when you transfer your old portfolio. That’s public.com/wildlife paid for by public investing. Full disclosures in podcast description for an advertising free version of the show, check out patreon.com/wallstreetwildlife
[00:02:31] Luke: Hello and welcome to Wall Street Wildlife with Christophe and Luke. I am back from ski season back in the uk. It’s delight. Christophe, it’s amazing to see you on a big screen again, not some tiny little thing that I travel with. How are you?
[00:02:45] Kryzsztof: I am doing very well, Badger. Glad to see, every time you come back to me alive, it’s always a blessing.
[00:02:52] Luke: Yes sir.
[00:02:53] Kryzsztof: So thanks for, thanks for doing that.
be one sad monkey without you. I’ll tell you that.
[00:02:57] Luke: Yeah, well we have [00:03:00] a interesting episode for you this week. You might remember if you’re a long time listener to the show that way back at the start of Wall Street Wildlife, we put together our 10 laws of the investing jungle, kind of timeless investing wisdom with a bit of a jungley twist. And so we’re gonna revisit those today in episode 73.
And, uh, we’re gonna give a bit of a, a, an alternative spin though, ’cause we’re both fans of pop culture and great movies and amazing TV shows. So we’re gonna try and bring some of our laws of the jungle to life with like metaphors and stories from existing TV and pop culture that you might well be familiar with.
Hopefully this really helps us land those lessons hard.
[00:03:46] Kryzsztof: Uh, speak for yourself buddy. I’m more of a classical music guy myself. I don’t dabble with the, uh, I hang with the aristocracy.
[00:03:57] Luke: If you’ve, uh, if you wanna give us some [00:04:00] musical tips as well as we go through our laws, like you feel free, Christophe.
[00:04:03] Kryzsztof: Okay. Hey, pop quiz for you. Apollonian in the streets. How does the T-shirt end?
[00:04:14] Luke: Oh. Uh, we we’re, if you’re on the YouTubes, we’re looking at Christophe’s T-shirt, Apollonian Streets, Apollo in the sheets di in the sheets. Nice. Okay. Excellent. Was that bought for you by your, your, uh, your beautiful wife, like thinking of Italy and like Roman gods and her homeland?
[00:04:37] Kryzsztof: Better. I bought it for myself after publishing a recent essay on the Apollonian and Dionysian for my fire philosophy Substack.
[00:04:48] Luke: Okay. All right. All.
[00:04:49] Kryzsztof: So since I spent a lot of time thinking about niche’s, uh, first book, the Birth of Tragedy, I was like, I, I own, I earned this [00:05:00] t-shirt right here. So for anyone that doesn’t know what the hell we’re talking about or what it means, go read my blog post.
I mean, Substack Post
[00:05:07] Luke: All right.
[00:05:08] Kryzsztof: Badger your, uh.
[00:05:10] Luke: is a b an alien? Is that a thing? Can I be a b an alien in the, in the, I dunno. In the streets probably. And the sheets just drunk everywhere.
[00:05:20] Kryzsztof: That’s right. You’re just, you skip the apollonian, you go straight to the, to the ian. That’s right. So how’s your time? How would you rate ski season number? What, five?
[00:05:33] Luke: Yeah. Uh, I suppose four of the last five, ’cause Covid killed one. So ski season four. Uh, yeah, it was awesome. Really, really good. We did the French Alps. We usually do North America. I. like just the scenery is, was beautiful. I couldn’t get my camera positioned to like have like Mont Blanc in the background when we did the last couple of podcasts, but, um, but fantastic.
And then finished the season nearly three months in [00:06:00] Avo for Snow Box for a good Buddy Ben’s 50th birthday. So that was a ton of fun too. yeah, but I’m back, back in the UK for about three days and, uh, played some tennis today, like re acclimatizing to normal life.
[00:06:13] Kryzsztof: Three whole days. Damn.
[00:06:15] Luke: Yeah.
[00:06:16] Kryzsztof: Uh, hey, how does the North American skiing compare to the French Alps? I, I assume it’s a, it doesn’t favor too, too well,
[00:06:25] Luke: I prefer North America to be quite honest. Yeah, yeah, yeah, yeah. You don’t really get bladed runs like trees. You don’t really get those in the Alps. I dunno, I’ve, I’m not a geologist. I dunno why. Maybe it’s like to do with, uh. The variety of trees that grow, maybe they grow at a higher altitude. Trees generally grow at higher altitude, perhaps in North America, or maybe the soil.
’cause the mountains are like more mountainy. I, I got no idea. Like if, you know, like message me and let me know why that is the case. I’m sure I could Google it. I haven’t Googled it. Um, so I like, you [00:07:00] know, you want, I like getting in the trees and getting like messy and that’s really good fun. And you can’t really do that in norther in Europe.
other than a few like, spots that are lower down. And then, and you know, the other thing I love about North America is, I like to have random conversations with people. And on a chairlift like, you know, you’re with a, often you’re with like a bunch of strangers for 10 minutes and you know, I like to have like a, something a bit more than a, flimflam conversation, like often I’ll promote the podcast ’cause I’ve got my like Wall Street Wildlife thing attached to my helmet and someone might in conversation ask me what the hell that is. We’ve probably got a couple of listeners that way ’cause I, you know, I like to talk about investing.
I like to talk about the show and you, I like to talk about you. Um, and in North America, uh, I can do that. On every lift. And I know I’m gonna be speaking to someone whose first language is English pretty much consistently. Plus my British accent is an asset in North America, in France, right? Everybody [00:08:00] speaks English, obviously, but I feel like I’m moron because I don’t speak their language, be it, you know, SW Swiss German or French or Spanish or some other, some other thing.
And so I feel like a bit of moron plus a British accent in the Alps is definitely not an asset you looked at like an idiot. ’cause most British people are idiots. Yeah. So that’s the same kind of freedom of expression on the chairlift. Doesn’t really happen for me in Europe.
[00:08:25] Kryzsztof: That’s right. You, you and the French, uh, you and the French, the Brits and the French have had a few scuffles back in the day. Have they not?
[00:08:34] Luke: We have, we have, yeah.
[00:08:37] Kryzsztof: Uh, right on. Um, well, it’s good to have you back. Where are you off to next?
[00:08:45] Luke: Sardinia Motorcycle tour of Sardinia in May with some friends, one of whom is, uh, a friend’s girlfriend. She’s awesome, fun, and she’s Sardinian and she’s a motorcyclist. So she set up this really awesome tour for us where we’re gonna see the whole island [00:09:00] on two wheels, and I’ve never ridden a Harley before.
We’re gonna fly over and we’re all renting Harley’s, Harley Davis, and motorcycles. So that kind of, it’s not gonna be a quick tour, but it’s gonna be a fun one, I think. Yeah,
[00:09:11] Kryzsztof: oh, man. I have, I have, I got the idea for you, like I’m in your Harley. You know, you gotta wear the leather jacket and the big bite, like get one of those, what’s it called? Uh, cruisers or whatever, and then have a little badger ears.
[00:09:26] Luke: Okay. I’ll look into that. If you make a note, Badger on bike. Okay, great. Very good.
[00:09:38] Kryzsztof: All right.
[00:09:39] Luke: So we’re gonna talk laws of the jungle and we are gonna talk in investing stuff, but before we do, I think you and I have both got a bit of a company update and I’ll go first. Um, I want to chat briefly about BYD build your dreams like the Chinese automobile manufacturer [00:10:00] because you might remember, , was it, I think it was our predictions for 2024.
And I predicted that BYD would be outselling Tesla and they didn’t, it was super close. Like it was basically like neck and neck. And we’ve always thought about Tesla as being like the better innovator. Well, I saw some news today that makes me think that like BYD are stealing the crown from in more ways than one.
So, BYD have just announced. Their super e platform, which is evidently like a ultra fast charger. So I think the current state of the art for Tesla superchargers is like 250, kilowatts. so you can charge, like fully charge your, I dunno, a few hundred miles of range in like 30 minutes, give or take, given like optimal conditions.
Is that right? Well,
[00:10:54] Kryzsztof: faster. Uh, I charge it in one, version three or something where uh, it was like [00:11:00] 900 miles per hour.
[00:11:01] Luke: no. Okay. Okay. Yeah. Yeah. Right. Well, BID have just announced a platform that they’re rolling out now of ultra fast chargers that charge at one megawatt, which is like way in excess of what Tesla can manage. And so at that rate. I think the demos that they’ve done, say, sorry, here we go. Uh, yeah, 250 miles of range in five minutes.
So that’s like, like a thousand miles in 20 minutes. Well, obviously you’d cap out and it would slow down at the very end, but that’s still way faster than Tesla can manage. And that was one of the big Tesla, advantages. And thanks to our friends at Fin Chat. I also wanted to take a quick look at where BYD in terms of like revenue trajectory, so BYD, like they were primarily. An Asian company, and now they’re selling into the rest of the world. You can see this bar chart, uh, [00:12:00] of their international revenue versus their kind of local Chinese like China, Hong Kong, Macau, Taiwan revenue. Like they’re now 30%. Pretty much of their revenues for international, like they’re growing their international presence nicely.
And the market cap is still relatively sensible. At about, I’m gonna eyeball that about 160 billion US dollars. Like Fin Chat does some nice stuff with the data. Um, these, uh, these metrics, from fin chat.io. Oh, and by the way, if you go sign up at fin chat.io/wildlife, you’ll get a handsome discount. And you’ll be doing us a great favor.
Thank you. fin chat, pull in like a whole bunch of. custom metrics, essentially like metrics that they pull out of the quarterly earnings reports. So you won’t find this on other finance platforms, where we can start plotting like international versus domestic revenue. And then the other nice thing they do, like this stock is [00:13:00] quoted in Chinese Yuan.
And so there’s a just little toggle on fin chat.io that allows you to flip it into US dollars so you can kind of see like for like when you compare it to companies like Tesla. So anyway, Byrd’s revenues becoming an international company, I think still reasonably valued. I’m very happy to have this one in my portfolio.
[00:13:18] Kryzsztof: Cool. I don’t know why I’m not that interested in it. it could be that it’s the Chinese. Rule number one that I have that’s served me well for a long time. Maybe I’m, uh, too biased on Tesla’s end, even though it seems like that’s, I need to look into some priors, you know? But, what’s the one thing you would say to me to get me more excited?
[00:13:51] Luke: In BYD versus Tesla. Well, his one, right? Who is BY D’s CEO. [00:14:00] Exactly. I haven’t got a freaking clue either.
[00:14:03] Kryzsztof: I see what you did there. That’s good. That’s good. Yeah, that’s pretty good. Okay. Sold. Yeah, I mean, just to spell it out though, the reason I have the China rule, uh, I learned the hard way some, some time back invested in things that blew up. But I always think it’s like, well, if something does go wrong, what recourse do we have is US investors. And I, you know,
[00:14:31] Luke: I agree. I agree.
[00:14:32] Kryzsztof: I don’t know how you solve that problem.
You just assume that nothing will happen, nothing bad will happen, right?
[00:14:38] Luke: Well, one thing you might wanna do, because it’s an international stock, is maybe not by the a DR, like the US listing version of it. If you can, I would own this on, for international investors, I would own it on the Hong Kong stock exchange. And I think you can’t buy the China listing, but you can buy the Hong Kong listing, and I imagine you’re [00:15:00] gonna insulate yourself at least from some of the geopolitical risk.
[00:15:04] Kryzsztof: Okay. Yeah, makes sense. I would just po position very conservatively with any Chinese company. That’s all that’s on my, my Ledger, but
To Godspeed to them. I have an update for you. One of our Patreons requested a few words about Avita medical ticker symbol RCEL
why I have a couple of these shares, my King of the Jungle company. It’s not that I love this company. It’s a small biomedical company that deals with serious wounds. It’s that it’s all about the fact that it’s a small cap, that it’s not at the whims of the larger market forces for better or worse. And I think it has a very strong growth runway [00:16:00] ahead of its, ahead at the moment.
management has basically, underdelivered, they, the, you gotta think of it this way. You know, you make a good product, in this case the toolkit that allows surgeons to perform, operations on people’s wounds. But you also in the medical industry, need salespeople to go out and convince more and more doctors to use your better product.
And dealing with healthcare and hospitals. It’s not an easy sell. I’m not a professional salesperson, but there’s all kinds of issues that come up. So I don’t know if it’s the fault of Vida Medical or the larger healthcare industry and hospitals having budget shortfalls or whatnot, but for quite a few quarters in the last two years, management promised a whole lot and then came way under.
So right now, wall Street [00:17:00] is rightly so, a little bit skeptical. We don’t know what to believe because of these under performances. That said, the company grew at 29% in 24, which is fine. That’s a, for a small company it’s decent, but on the latest call they’re projecting about 103 million in revenue, which would represent 61% growth.
Now 61% growth, you know that now we’re talking if they can deliver. at this point, I’m just thinking to myself manage. I mean, they know they’ve fallen short with their estimates for them to put out this number and then not meet this one after having the egg on their face, it seems like that would be quite a stupid blunder.
So I’m feeling pretty confident that they can meet that. So at the moment, it’s a $236 million market cap. They recently added two new products, new-ish, more or less, to their fundamental [00:18:00] resell machine. Think of it this way, wounds go deep. Especially the bad ones, these folks cure. So you gotta basically have something at the base layer, then the ReCell machines go and they add new skin cells to the wound, and then there’s a new patch on top that basically helps it heal better.
So they’ve expanded their kind of stack, if you will, of heal so of, skin burn solutions. And this new stack is at the beginning of its growth trajectory, and it actually has underperformed, underperformed. Some of these special indications have underperformed as of now, but we’re very early. according to their slides, and I know you, you, hold your nose at projections of Tam, but this is a niche, you know, like, it’s not like you could just say all of the internet, right?
I mean, there’s only so many burn cases in the world. And so I’m taking their estimate a little more seriously, and they’re [00:19:00] calling it something like 1.5 billion, for certain kind of wound, and 2 billion for an even deeper kind of wound. So three and a half billion sort of total for down the road. And the market cap, again is a 236 million.
That’s not even taken into consideration. Vitiligo, which is, I think concluding its clinical trials but they’re, not talking about that much. But that’s even further down the road. But that’s the biggest market. Long story short is if they deliver, if the sales team delivers and justifies management’s forecast, this company will be in very good shape and we should see the stock appreciate handsomely. The downside is they’ve underperformed recently, they only have 36 million in cash. that’s like, starting to scrape the bottom of the barrel but free cash flow and net operating positive should be attained by end of the year if they in fact meet [00:20:00] these sales goals. Last little bit that I can’t speak to, but international has not been going as well as expected.
And I think some of that has to do with European regulatory, uncertainties with which ought to be settled in the second half of 2025. So all of that combined, Badger is, I’m happy holding just a few percent of this in my portfolio. It’s one of those small companies nobody, nobody really pays attention to, but has a lot of upside if they just meet their guidance.
[00:20:35] Luke: Great stuff. Very It’s not one that’s, I think I, maybe I owned options on it for a while ’cause I was backing some of your ideas. So I don’t think I own that one currently. So not in my radar, but they’re doing good work.
[00:20:45] Kryzsztof: Yeah. What I would say like pure plays because you’re really looking at a small company and it’s just, it’s easy to wrap your mind around as opposed to like monsters taking over all the whole world.
It’s a good way to train your investing skillset is maybe what I’m saying. [00:21:00] and there’s often in these underlooked companies that serve a particular niche, there’s often massive room for not just growth, but over performance. So this is one I’ve studied for a few years now. I’m comfortable with it. And I like companies that end up where you feel like the ball’s in their court, can they execute, can the sales team execute the products there?
The FDA is there, those are risk reward odds. I like, I just wouldn’t go, this is nothing like some of my, really high conviction, ideas. This is almost like a hedge, I think of it.
[00:21:33] Luke: Yeah. Fair enough. Fair enough. Very good. It’s good to be diversified and you know, diversification is one of our 10 laws of the jungle.
[00:21:42] Kryzsztof: It is. Are you gonna, are you gonna talk to us about that?
[00:21:46] Luke: Uh, I am, I’m gonna get to it. I’m gonna get to it. So if you’ve been a listen to the show for some time, you will be familiar with our laws of the jungle, but really headline like, what Will Our 10 laws Protect your essentials?
Know your [00:22:00] investment comfort zone. Focus on the long game. Chart your own course, tame your emotions for investing success. Thinking you’re smarter than the pack is dangerous. Build a resilient portfolio. That’s your diversification. Understand the deadly perils of leverage. Resist the urge to rearrange your trophies.
IE, like, don’t sell your winners too soon, and build wealth on fundamentals, not rumors. So those are our 10 laws. If you wanna go read them like they are timeless laws, and you can find them@wallstreetwildlife.com or at patreon.com/wall Street Wildlife. Even if you are not signed into our Patreon, it’s there as a freebie download so you can go check it out.
So we’re gonna revisit those 10 laws, today’s episode, and we’re gonna give ’em a bit of a pop culture twist because Christophe, I think I’ve got a movie or a TV show that really [00:23:00] brings each of these to life. So let’s dive into them.
[00:23:03] Kryzsztof: Yeah, no, this is, this is great. And you know, just listening to you going over them, it’s so obvious in hindsight, after what, 30 years of doing this all, when things have gone wrong, I could tell you exactly which law was broken. And this is one of those things that you and I yap about. I guess this is our bread and butter.
Like these are serious. If you were to follow all of these, you would do incredibly well in the stock market. But they might sound, they, some of them like look simple or they sound simple. Or maybe they are simple. But to actually, I. Truly understand them. Think about them and fi find ways that you are tempted to break them or have broken them.
And the thing that needs a [00:24:00] little tweaking that requires some legit work and, clarity. So I hope we could explain them a little
[00:24:06] Luke: Yeah, well, let’s, let’s both try and do that today. And like, I’m, breaking some of these laws like today, like I know I am and it’s, I think I’m, you know, I’m being too smart for my own good. It’s gonna be my undoing. I know it is. But at least I think at least be conscious where you are going a bit off piece and you’re doing something that historically probably isn’t gonna work out.
At least know that you’re doing that as opposed to doing it blindly.
[00:24:30] Kryzsztof: Yeah. Be a smart idiot. Don’t be a dumb
[00:24:32] Luke: Yeah. Yeah, totally. Yeah, totally, totally right. But I think this first law is immutable, and I never break this one, which is protect your essentials. And so really, I’m not gonna read the whole law. Go, download our PDF and you can read it in detail. But the headline of this one is really like, never invest money.
You’re gonna need in the next five years. Maybe five years is a bit long. Maybe you can come a little bit shorter, but, [00:25:00] you know, make sure you know, like the money that you need to operate your life. Because if you invest that money and if you get caught with the wrong part of the cycle, or you make a bad decision or a company just kind of blows up on you, you might find that your actual like day-to-day life is impacted.
And you know whose life was really impacted in a particular movie was Chris Gardner played by Will Smith in the Pursuit of Happiness from 2006. You a fan of the pursuit of happiness. Have you seen the movie?
[00:25:29] Kryzsztof: I have not,
[00:25:31] Luke: Oh wow. Yeah, it’s an incredible movie. every movie we’re gonna talk about today is our big movies. Great movies. this is a really, it’s a good Will Smith movie before he became like Bad Will Smith for slapping Chris Rock.
[00:25:44] Kryzsztof: oh, how fast the world Yeah, yeah, yeah, yeah. Well, so like, it’s not core to the movie, but the character Chris Gardner, like Will Smith’s character in the movie essentially like is down by his luck, he ends up destitute, [00:26:00] like living in like a locker on a tube state, on like a, subway station with his kid. And then he manages to turn it all around with, ’cause he is a super smart, entrepreneurial kind of guy and ends up getting like a great job in a finance firm.
[00:26:15] Luke: But the reason this law comes home with this less with, this movie is like the reason the character ends up in these dire straits is. He takes all of his money at the setup of the movie and invests it in bone density scanners, I think like some bit of medical technology and, yeah, and he just, he’s not able to sell them and he’s like, put all of his, like the money he needs to basically buy lunches for his kid and run his life into this product.
It doesn’t succeed. And then he’s suddenly on a really bad back foot. yeah, this is, I think Chris Gardner, the character really felt it ended up literally homeless. like if you’re an investor, you know, it’s gone really badly. Wrong if literally you lose your house, there’s probably other laws you’ve broken [00:27:00] to get into that situation.
But take this to heart. If you’ve got money in your investment portfolio, make sure you got your emergency fund first.
[00:27:09] Kryzsztof: there’s a second part to this, which is if you’re following this law, then you know you’re okay, and then you never panic. And if the market takes a severe downturn, you actually probably. Feel happy because you get to buy more shares for cheaper as opposed to pulling your hair out because that’s your livelihood.
it just makes investing better if you don’t violate this rule. And I have violated this rule. I think I’ve violated all 10 at some point or other, I mean, you know, 35 years or whatever, do doing something, you’re gonna break the rules. But this one, you are right. Don’t violate this
[00:27:53] Luke: Yeah. And definitely don’t violate it like later in life when you have responsibilities, maybe you’ve got like [00:28:00] people who depend on you, like a kid or, Maybe you’re, financially supporting like family members or something. ’cause you’re not just screwing yourself if you burn like your life cash, you’re putting all those people in difficult situation too. So maybe you can break this rule when you’re young, but don’t break it later when it’s much more important. You wanna, uh, you wanna pick us up on the second law of the jungle? And I’ll tell you, I’ll tell you about my movie link.
[00:28:27] Kryzsztof: so let’s see. Number two is know your investment comfort zone. Um, understand your risk tolerance. So, I think the PO of poker analogy here is good. Let’s see.
By definition, investing is risky. Poker, like it’s a game of what? Odds, probabilities, no such thing as a hundred percent hit rate. Correct.
[00:28:51] Luke: Yeah.
[00:28:51] Kryzsztof: So, you know, ahead of time you’re gonna lose ACEs lose all the time. [00:29:00] But it’s one thing like walking into a casino and sitting down, say at the one, $2 table versus sitting down at the a hundred, $200 table.
And when you lose in both situations, I think it it, like you, you probably ought not have been at the a hundred, $200 table if you’re, not in the right, if you don’t have the right skillset or it’s not right, not the right time in your life or your bank role isn’t big enough, right? It’s almost I translate this like know yourself and know how you’re going to react when things don’t work out so that you don’t panic and you just continue, right?
You just continue the process and you continue introspecting and you, then once you have a base on a base around that, you can see if you need to adjust it, right? If you’re always beating the one, $2 table, [00:30:00] you might say to yourself, okay, maybe I could go up a little bit. Right? Maybe I could test the waters at the five 10 table, right?
If you’re always losing at the 20 10, 20 table, well maybe those are, you are out of your element. Maybe you gotta walk back down and continue tweaking and adjusting. How’s that sound?
[00:30:18] Luke: Yeah, that’s good. I think. Yeah. Yeah. And you are like, you’re weighing up like we all, it’s natural human behavior, right? To want a certain level of risk in your life, which is why. Some people do it like insanely risky things, and some people live like a much more comfortable life. And we all want to be like risk neutral, not risk neutral.
We all we all want to have a life. Like you can have too little risk, right? We talked about this in a recent conversation with Zoe, Zoe Ross, the, uh, our clinical psychologist who joined us last week. you want to have risk, we wanna have good risk in your life. and so being a good investor, sorry my cat sushi’s, come to say hi.
Hello. Being a good investor is about [00:31:00] knowing your own risk tolerance and being aware and kind of balancing that off against reward. Now I think my movie linkage here is have you seen Free solo? You familiar with that movie?
[00:31:12] Kryzsztof: Have I ever, like my palms have only been sweatier in one other movie, like it is the most distressing movie, second most distressing movie I’ve ever seen
[00:31:22] Luke: Yeah, it’s pretty wild. iF you haven’t seen free solo, like check it out. It is an incredible movie from 2018. It’s about a climber, like a world class climber called Alex Ho. And he climbs l Capitan. That’s how it always somewhere, right? It’s not that far from
[00:31:38] Kryzsztof: in California. Right? Yeah.
[00:31:39] Luke: And he heli, he, he solos it like he free solos it.
So essentially he climbs it. No ropes, no crampons. It’s just like the guy on his like fingertips and toes climbing this enormous edifice, which looks like vertical and smooth as hell. Like who knows how he does it. and so he’s clearly a guy who [00:32:00] is comfortable having like an extreme level of risk in his life, but at the same time.
Like in his mind because of his preparation and his practice and how carefully he kind of approached this, the project, like planning. He didn’t just go out there and go, okay, I’m just gonna climb this thing. he planned it, meticulously assess the risks, and he was able to do this really incredible physical feat of endurance and, fear, I suppose, because he was kind of well prepared for it and he, the reward for him, like there wouldn’t be a huge amount of reward for me personally and climbing El Capitan because I feel like holy, holy f like, what the hell is this thing?
But he felt this was like a really important, of milestone achievement to be the first person to, make this ascent.
[00:32:46] Kryzsztof: My, my palms are sweating again, just thinking about scenes from that movie. in the other movie that I was referencing, same, same thing. I don’t know if you’ve seen it, man on Wire.
[00:32:57] Luke: Oh yeah. Okay. I haven’t watched it actually, but I’m familiar with it. [00:33:00] Yeah.
[00:33:00] Kryzsztof: Oh, dear God. That’s the, uh, guy that. Tightrope walk between the World Trade Center, and if you could just picture tightrope walking, with not with air underneath you just on, it’s just utterly insane. And you could say, I just get the, I, it’s just awful to think about.
But they survive because yeah they practiced, they dedicated their entire lives still, obviously not without risk, obviously, but they understood their risk tolerance and, no. You know, one thing to note though is that life is unpredictable. You can’t ever count for all contingencies. So when you’re risking your life at one of these things, like what would have happened if, say, like an eagle, you know, flew by either of these guys, right?
And like both would be dead.
[00:33:49] Luke: I guess that is, for that kind of physical feat, like the risk is the reward for investors. we accept risk if we’re smart investors because we feel there’s a [00:34:00] disproportionate reward. You know, I mean, if we’ll just be really capitalist about it, right? You know, stock go up, make money, but the risk that stock might go down and lose money.
So we want to kind of balance the probability and the magnitude of those things.
[00:34:14] Kryzsztof: And for, transparency purposes. My portfolio right now in the King of the Jungle is pretty, I wouldn’t say it’s, Alex an old level, risk, but, they’re pre-revenue companies with, with lots of promise and I’ve done massive amounts of due diligence. Until you finish the job, I. palms are still a little moist.
[00:34:36] Luke: right on. Our third law from the laws of the jungle is focus on the long game, which was essentially about. Identifying companies with proven track records and potential to some solve like long lasting problems in the future. Taking a long view, not looking for like a short term buck, a quick buck, and I think it might be [00:35:00] the number one movie on IMDB and deservedly so the Shawshank Redemption.
I think it really brings home, like I weighed this against the counter Monte Crito, like two characters who take just an incredibly long view on how they’re gonna achieve their goal. And I can’t believe anybody listening to this podcast or watching us on YouTube hasn’t seen the s Sure. Shank Redemption.
If you haven’t, go check it out. But would you agree with the analogy? So you’ve got like Andy Dufrene, he’s been wrongfully imprisoned and he takes, he sort of comes to terms with the situation, makes the best of it, and then takes a very, very long term view, a plan on how he’s gonna escape essentially, and, and also take down the warden in the process of escaping.
yeah, his slow, steady, meticulous kind of tunneling. I don’t wanna, sorry. Spoiler alert, if you haven’t seen the movie Bad Luck. Can you spoil a movie from that’s like 30 [00:36:00] years old? I don’t know. Anyway, I just did. Yeah, I think that’s a good example of like taking a long-term view and as an investor, taking a long-term view can be incredibly powerful.
When in fact, I think essential.
[00:36:12] Ads – 30s Read: right, if you’re serious about investing, you need to know about public. com. That’s where you can invest in everything. Stocks, options, bonds, crypto. You can even earn some of the highest yields in the industry. Like the 6 percent or higher yield you can lock in with a bond account. Public is a FINRA registered SIPC insured platform.
That takes your investments as seriously as you do fund your account in five minutes or less at public. com slash wildlife and get up to 10, 000 when you transfer your old portfolio, that’s public. com slash wildlife paid for by public investing full disclosures in podcast description. Wall street wildlife is brought to you by the chit chat stocks podcast.
[00:37:00] That’s right. Another investing podcast. You need to add to your listening rotation. My name is Brett, one of the hosts, and I produce two episodes weekly, along with my cohost, Ryan Henderson on the chitchat stocks podcast, we talk a lot of stocks from the hottest names to undiscovered gems, interviewing sector experts, studying super investors and why they are successful.
And having a fun time while doing it. Follow the chitchat stocks podcast on YouTube, Spotify, or Apple podcasts, and never miss an episode. That’s the chitchat stocks podcast.
[00:37:34] Kryzsztof: You know what I love about this analogy? It helps people like really visualize what this might feel like in their own lives as investors, because it’s hard to imagine 10 years, right? You say to yourself, you know, when the market’s going up and down every day, where every minute to truly take that minimal of say, 5, 10, 15, 20 year perspective, it’s hard.
It really is [00:38:00] hard. I mean, we’re finite mortals. There’s that, right? We don’t have all the time in the world, but this movie, yeah, like it’s been years, a long, long time since I’ve seen it, but I could visualize some of the faces and some of that like, okay, this is the situation. I’m not gonna fight it.
I’m gonna like go with it and I’d rather be, yeah, there’s something quite apt, I think
[00:38:25] Luke: Yeah, and, and you know, and like Andy kind of, you don’t, you don’t see it, but him kind of chipping away and building his tunnel over the course of. Like a decade plus as he kind of plans and, makes his way towards escape. Like that’s directly analogous I think to, you know, being meticulous and making small decisions, which over time are gonna add up to a huge reward in your portfolio.
[00:38:49] Kryzsztof: yes. And LA Last point about this man. If you’re listening to us, especially if you listen to us about the, uh, episode about investing for your kids. If [00:39:00] you’re 20 years old or 25, think about it, even 20 years. Even 20 years, which might to you seem like an infinite amount of time because that’s your whole lifespan doubled.
But then you’re only 45 when you’re free out of the financial prison, so to speak. So in one perspectival sense, yeah, it’s a long time, but in another life goes fast and before you know it, you know you’re out. So it’s the stolen, steady, slow, and steady little by little.
[00:39:35] Luke: don’t like underestimate the long term, get benefit of these small decisions you might to make today. And like, as we said in our, how to get started investing episode quite recently, like the most important decision is just get started, right? If you haven’t got started yet, what are you waiting for?
Quite honestly.
[00:39:56] Kryzsztof: Yes.
So [00:40:00] the next law of the jungle is chart your own course. And by this, we were talking about this concept that you really should know what you own and why you own. And it seems like almost obvious, like, yeah, duh. But it’s shocking to me and to you, I think how many people buy things just because they heard somebody else bought it or mean things and or you know, being invested in a bunch of indexes that you have no idea who, what, where, like just zero, zero either idea or care.
And to me, I think to us it’s just fundamentally the wrong way to do it because I. An investor is an the owner of a business. Can you imagine going to the shop you own on Main Street where you sell X, Y, and Z and you walk in there and you’re like, [00:41:00] and you have no idea what you’re selling or why you’re even there. I mean, it makes no sense, right? Like no sense whatsoever. But if you act like an owner, then you could tend to your customers and you sell more. And then everything like this is a kind of ignorance to me that’s almost offensive.
[00:41:17] Luke: Yeah, I mean, it’s one, it’s one that , I was guilty of totally though, for the first probably 15 years of my investing career, because I would never go and read like the primary sources. I would never, I wouldn’t go and look at the quarterly reports from the company I just read, you know, I read it on the Motley Fall and I’ll read other analysts on Seeking Alpha or, you know, whatever sources I was using back then.
Um, I’d listen to podcasts like this one and go, oh, that sounds interesting. I’ll buy that story. And I, I feel like that’s the most important evolution of me as a professional investor is actually doing. My own deep, thorough research on the companies I own and then maybe validating it [00:42:00] afterwards with other opinions, but getting my own view first.
and so a movie link for that, that I think brings that aspect of it to life. I. Is that’s a film I need to rewatch. ’cause it’s a Brad Pitt classic Moneyball from 2011. And Pitt’s playing Billy Bean. And this guy essentially sort of reinvents the way baseball is studied, right? And so everybody else, all the other teams were following like conventional wisdom and picking their teams and like for like managers and coaches.
And he went out, Billy Beam went out. It’s a true story. And he did his own kind of fundamental analysis on what, like a, a data based approach, trying to be objective and scientific about what attributes is it of players that makes ’em successful and how do you put those together into like a whole baseball team.
And so by essentially ignoring all of the received wisdom and kind of reinventing this space, [00:43:00] like he changed the way, , baseball teams are, are put together and run.
[00:43:04] Kryzsztof: Yeah, and it’s also fun to really know what you own and like it’s really fun to understand the players on your team. And that’s no small thing. I mean, it it like, when you’ve really invested into your team and players and really built it up from scratch, you give your players what they need. you water your plants better, right?
Like, I forgive the mixed metaphors, but uh, you just care more. And when you care more people do better. And it’s easier to spot mistakes and it’s easier to spot the things that are working. And for me as a lifetime learner, I just, part of the fun and investing I think is this game side is the, like, the competition of it, which means you need to know the stats, you need to know, do the background or else you know you don’t [00:44:00] belong in the field.
So big fan of this analogy too.
[00:44:03] Luke: And you know, and I think what, what is underestimated about doing your own due diligence and actually really directly understanding what’s going on is like sometimes stocks go down for reasons that are nothing to do with the way the company’s executing. Or maybe they make a misstep like something’s, but something’s happened and the investment is failing.
And if you’ve done your own homework, then you are gonna understand why. There’s a problem maybe you’ll sell it if it’s a real problem that’s gonna last forever. Or if it’s, uh, you know, something transient or you see a path through this, you’re gonna hold the stock. You might even add to it.
Ideally, you’d add to it if you really believe the market’s got it wrong. If you are relying on like another analyst, or you heard us talk about it on the podcast and you didn’t go and do your own research on, for example, why Nintendo is an incredible company. Like you just listened to Christophe last week, two weeks ago, you didn’t do the work yourself, you’re gonna go, [00:45:00] uh, Nintendo’s failing that guy.
Christophe’s an ass, he got it wrong. You’re probably gonna sell the stock and like property unsubscribe from the podcast. And you maybe you’ve made a bad mistake like doing your own d dd. Do your own DD due diligence helps you stay the course when things aren’t maybe necessarily going in your favor because you’re relying on like your own assessment, not borrowed conviction from someone else.
[00:45:25] Kryzsztof: Yeah, this is so important. I mean, this is, uh, what our own business model is that we run a podcast and we run a small community over our patreon.com/wall Streete Wildlife, where we say to, to our listeners and our members basically, look, these are companies we’re interested in and we’ve put in the time and we really like what we see or don’t like what we see.
And that is only translated as you now have a green light. To go look in the [00:46:00] places we’re looking and begin your own process. That’s all it is, right? So it’s not financial advice in any sense of the word. It’s basically we’re encouraged by this story and you think you might find a lot of satisfaction in exploring it for yourself, Great stuff. Yep. Absolutely. Absolutely. All right. Our next law was tame your emotions for Investing Success. And this is really like be the master of your emotions, fear and greed can kill your returns and you wanna really get into this law. Literally just check out last week’s episode where we went deep on understanding and defining and managing your emotions with a clinical psychologist.
[00:46:49] Luke: ,and I think I’ve got a fun movie suggestion for you here for this one, the, the Star Wars trilogy, but specifically the Empire Strikes Back. ’cause if you know your Star Wars law, you [00:47:00] remember that incredible movie from 1980. Like that’s the movie where Luke Skywalker meets with Yoda and really gets his like deep training in, where is he Dtu in on that like swamp planet.
And like the dark side of the force, like Luke has to, come to terms with controlling his own emotions. And then he faces a sort of image of Vader who he doesn’t know at that point is his father. There you go. I’m spoiling another movie for you. And you know, he succumbs to the dark side briefly during his training.
And so the movie is all about his journey towards becoming like zen-like and controlling his emotions and to think rationally so that he doesn’t just react, he can like respond to the situation that he’s in.
[00:47:50] Kryzsztof: I suppose this is a great pitch for our community, again, because if you see yourself [00:48:00] acting as like a rogue, like lone wolf kind of figure, your emotions will get the better of you, probably, especially now, like, I mean for, for, I think this is not a compliment, like an app like Robinhood, their business model is to make it more like a casino, to make it easier to push the button.
And I’ve been guilty of this many times over the last few years because it is so easy. I mean, you know, like willpower can only get you so, so far, you know, if you keep encountering the same sort of like seductive qualities. So I love, for example, I. I took, I really took to heart what you said some years back, Luke.
This, your journaling, when you make a purchase, journaling your reasons. But now in our community, there’s a way, for example, if you wanna make a trade, why not pop over to our community and say, I’m [00:49:00] thinking about buying X, Y, or Z or selling X, Y, or Z, sort of like I did with my A-A-S-T-S thing and see what the community members say, right?
And see if there’s that gap between impulse and feedback, whether two days later you still see it the same way. More often than not, it’s gonna save you money rather than cost you money, right? The delay.
So the next law of the jungle is thinking you are smarter than the pack is dangerous. Byline, stay humble and disciplined. This one is a, mixed bag for me. This one is hard because I see both sides of, the mirror, as you will. On one hand, if you really think you’re smarter than the market odds are, statistically you’re not. So you’re sort of swimming upstream, right? But on the other hand, the way you make the huge returns in investing is when [00:50:00] you are contrarian or you see something that others don’t. maybe because you have access to inside, call it expertise, domain level knowledge, or you’re just, you know, looking in the right direction in terms of emerging technologies or who knows what.
So it’s not like a black and white picture, but staying humble, knowing that you something like, okay. odds are that I’m not right, or odds are that the market is right and I’m not the smart, smartest guy in the room. That humility, probably will keep you from making the bet too large or blowing yourself up or, even noticing cracks in your thesis,
[00:50:46] Luke: Yeah, exactly. Exactly. And like being a successful investor isn’t about like being this like dazzling, like lone voice that has this one opinion. it can be like that, but [00:51:00] that’s like the exception most of the time. It’s about, staying the course, having a long-term view, just getting compound interest working for you.
And I think that’s the angle where I’m bringing in my, movie reference for this law. And it’s, this is a movie I haven’t seen since I was a kid, probably, Mary Poppins from. 1960 something. and there’s a scene in Mary Poppins, a Google search today reminded me about that. Where Dick Van Dyke convinces one of the kids, one of the children to deposit their money in the bank rather than spending it on sweets And the kid’s not happy about it ’cause he wants to enjoy it right now. But, uh, Mr. Dore, Dick Van Dyke’s character wisely explains that by putting the money aside, then it’ll grow and compound in the bank, and then he’ll benefit in the future, be able to buy a lot more sweets and toys in years and years to come.
So yeah, I think that kind of being humble [00:52:00] aspect is, uh, can be important. But it does, you’re right, it does stand in conflict a little bit to do your own due diligence. Don’t follow the crowd. But I think these, I think with nuance, these two things can coexist.
[00:52:14] Kryzsztof: that’s where the art of it comes in. This is one of those where the longer you do this, you could do both. You could stay humble and sometimes see things that others don’t and know when you’re right and when you’re wrong.
[00:52:27] Luke: Yeah, exactly. Now I wanted to get a horror movie into this, so I’ve had to force this one in a little bit, but I hope you’re gonna like my analogy or my metaphor, whichever that is. So the seventh floor is build a resilient portfolio, which is essentially about where we started the conversation an hour ago about being diversified.
Don’t put all your eggs in one basket. And you know, the horror movie where the situation became much [00:53:00] worse because they didn’t have diversified income streams. I know you might think I’m making a bit of a leap here. Jaws Jaws, right? Like ostensibly Jaws is like a story about. Like a giant shark that like chomps swimmers, and then, you know, we’re gonna need a bigger boat.
And we get out there and like slay the jaws shark. But really it’s a story about like the greed of the town and how this, , disaster became much worse because this beach town, somewhere in the, where is it? Florida? I’ve got no idea. Probably, somewhere in the states, this beach town had, was like so dependent on their like seasonal income from holiday makers and like everyone enjoying the beach that the mayor or whoever the guy, like the bad guy in the movie refused to like shut down the beach and shut down everything and, and make it clear that like, it’s like danger in the water because that would erect the economy.
And um, [00:54:00] so yeah, so like the lesson there was things got much worse because the town of Jaws didn’t have. Other income streams and they made a bad situation much worse.
[00:54:12] Kryzsztof: Right. And that ties in with, one of the first laws, right, which is don’t invest more than you could afford to lose, or something
[00:54:20] Luke: Mm-hmm. Mm-hmm.
[00:54:20] Kryzsztof: So resilience comes in many shapes, shapes, and, forms. But just think about it in the in jaws’ terms, right? if you weren’t the greedy commercial owners of this, this town, and a shark comes along and you’re like, cool, okay, uh, I’m heading off in, uh, I’m gonna go eat some ice cream at the other town over until the shark goes away, right?
Instead of being forced to swim and get your bits chopped off.
[00:54:46] Luke: Hey, speaking of which, bizarrely, so just, I just literally just occurred to me, , the, we had a terrain park lesson in VO last week where we were, we were skiing, me and myself and a couple of buddies. And our, terrain park [00:55:00] instructor only had, he was an incredible skier. He only had one leg, and we were towards the end of the day, and he’s been doing like back flips and like crazy cliff drops and all sorts of stuff, like the half pipe he’s teaching us to do this stuff.
And, uh, we’re chatting on the chairlift going up and we’re like, oh, well, you know, how come you’ve only got one leg? He was surfing and it got bitten off by a shark.
[00:55:19] Kryzsztof: Oh God.
[00:55:20] Luke: Holy, holy hell. And like the guy literally, yeah, like went into like. Like, I’m not panicking. Control mode. He was a pretty smooth, like smart, you know, handsome French dude, and he’d managed to like paddle himself back to shore, shout for help, and then got rescued and now he’s like a world class skier.
Beberg.
[00:55:40] Kryzsztof: you wanna talk about more horror?
[00:55:41] Luke: Let’s talk for more horror. Go for it.
[00:55:43] Kryzsztof: This is for me, the most horrific one. And I would, I would maybe put this at number one, like rule. I would make this rule number one, and I broke this rule when I was, uh, in my twenties, uh, which is understand the deathly perils of [00:56:00] leverage, meaning borrowing money to invest.
so you’re paying interest costs and then the upside is magnificent when you’re right. But the downside is steeper and accelerated when you’re wrong. And because of things called margin calls where the loan, when the lender can basically tell you they want their money back, now you’re then forced to sell at the bottom.
Many, many people have lost their entire life savings this way. I’ve lost way more than I’m afraid to admit. And so for this reason, I’m happy to be on the record to say, do not under any circumstances use margin to invest, period.
[00:56:51] Luke: Yeah, and there’s lots of different ways you could make leveraged bets. Like at the simplest, you could just buy like a two [00:57:00] XETF or something, you know, basically, essentially some product that tracks some other thing, like an index or a company you can buy like a two X or a three x Nvidia ETF, if you like.
But it essentially, this thing is designed so that when the stock goes up, it goes up by two times or three times. When the stock goes down, it goes down by two times or three times. Like those are short term products that you might rationally own for a good reason, for like a trading reason. But these are not a lot of things to hold for the long term.
Like you will lose all your money if you hold those kind of products.
[00:57:35] Kryzsztof: the only, would say asterisk would be once you obey rule number one, which is never use leverage, it is in the realm of more advanced investors to say, allocate something like, whatever, you pick some percentage of your portfolio that you are literally okay going to zero because you’ve already made it and [00:58:00] you’ve, you’ve, you’re doing well everywhere else.
Call it 5%. And then within that 5% bracket. You might say to yourself, okay, I’m gonna take some real big swings based on my due deep diligence and if I’m right, great, and if I’m not, no skin off my back, ’cause that’s what I expected would happen. But that’s like I would say not till you’ve been investing for 10 years and you have a lot of experience and you are financially sound, and this is all playing with house money, so to speak.
[00:58:32] Luke: And uh, our movie you link for this one is the Big Short from 2015 Awesome film that teaches you a ton about the way the financial system actually works. Like, just really, really good. Um, and it’s kind of, it’s a bit odd the way like leverage functioned in the great financial crisis, but essentially like that was the underpinning of how everything really went up the wazoo.
Like too many people, like the example in the movie is like [00:59:00] they find a stripper who, who owns like 10 houses or something. Like she’s leverage to the hilt. ’cause she’s. Like, she’s sort of, you know, playing property and so she’s over leveraged if as soon as things start to retract. And then all of these like dubious mortgages, which were not backed by like fundamentals, like the people’s ability to actually pay the mortgage.
they were all repackaged into mortgage backed derivatives, like complex financial products and then resold to other banks and then like leveraged and leveraged. So as soon as one tiny, like straw broke, uh, at, at the kind of housing level and people’s debt started going bad, that brought down the entire financial system pretty much.
, so yeah, great movie. A ton of investing lessons in there, but one of them is the danger of leverage both for the householder, the consumer, and for the big banks who kind of levered their books off the back of these bad loans.
[00:59:59] Kryzsztof: And maybe [01:00:00] bad news for, , for humanity. I’m convinced that I. The market is way over leveraged right now because human beings can’t help themselves in that. The, the lessons we learned in 2008 that nearly brought the world to a financial collapse, we’re right back where we were, I guess it’s now 17 years ago, and it just won’t surprise me, like for this thing to happen again.
We saw a, we got a taste, a little bit of it with that Japanese, uh, trade carry thing, right? People over leveraging and whether it’s take advantage of a financial arbitrage situation thing. And then you saw the market just plummeting at the hint of like this massive unwind that would happen with margin calls triggering more margin calls, and it’s just ugly.
And, rule number one, don’t use leverage.
[01:00:56] Luke: Yeah, yeah, yeah. Well, we, we are nearly at the end of our [01:01:00] 10 laws, but rule number nine. Is resist the urge to rearrange your trophies. So this, you know, a bit of sort of jungley language really, but what we are talking about there was like, let your winners run. Don’t, like you want to stay diversified and you need to rebalance your portfolio, but part of the art of portfolio management is also like recognizing when you’ve, you have a strong performer in your portfolio and giving it a chance to compound.
Like you can’t have a hundred bagger or a 10 bagger IEA stock that delivers like 10 times your investment. If you don’t let it double first ’cause you keep trimming it and whittling away at it, obviously caveated, you gotta manage the diversification. You can’t have 46% of your portfolio in eos, like a particular podcast co-host I know.
[01:01:56] Kryzsztof: Uh, funny you say that [01:02:00] because as per my resolution in 2025, I said I’m not gonna sell a single share of EOS in as the story unfolds. I’m gonna try to duplicate your, , ISRG holding, uh, intuitive surgical that you said you’ve never sold at all. And I’m on the record as as saying I expect to be a shareholder still, not having touched a single share, my King of the Jungle portfolio in 20 28, 20 29, 20 30.
As long as the thesis still is unfolding, I will resist trimming it no matter how, so to speak, uh, within, well, God, there’s all these caveats, but within reason, like if it goes to a hundred dollars a share and 20 Xs or 50 Xs, I’m gonna sell. But like, you know, like relatively speaking, no selling from me because of the confidence.
And like you said, it takes time for the massive money to be made.
[01:02:59] Luke: [01:03:00] Yeah, so I don’t have a movie for this. I’ve got a TV show kind of linkage for this. Have you seen Silicon Valley ran for about five years in mid two thousands? Yeah. Super. Oh yeah. So you say you have not, you said, because I miss you.
[01:03:12] Kryzsztof: I have not,
[01:03:13] Luke: great. I must have watched it through like three times. It’s a really good TV show, especially you’re a tech guy.
It’s hilarious. Like it really was just ripping the, the thing out of like all of the big tech stuff at the time in like the 20 teens. Well, like at the core of the show it sort of evolves is this guy Richard Hendricks, who’s got, um, he’s like a world class, you know, super developer guy and he’s got like a startup called Pied Piper.
And they evolve what they think Pied Piper is along the journey. But essentially like the Richard, the founder recognizes the core of this thing is its revolutionary compression algorithm in outside, in or inside out. and then throughout like the five year TV show, all the [01:04:00] seasons the show, like he’s constantly fending off various, uh.
Acquisition attempts from, uh, Huley Gavin Belson Huley, who’s like, can see that his business is gonna get wiped out by Pied Piper ’cause they’ve got an inferior compression algorithm. Uh, back manatee try and like end up with a significant stake unexpectedly in the company. But, uh, the founder, Richard Hendricks, like clings on somehow to the core of this thing.
’cause he can see the long game and he can see that , if he loses control of the IP around his algorithm, which I think he does briefly, and then gets it back again. Like he won’t be there for the compounding and like the long-term benefit to accrue to, you know, him and his team. So, yeah, you know, do that manage your portfolio, manage your diversification.
But if you are onto a good thing, like let it run, let it go and let it deliver for you.
[01:04:56] Kryzsztof: I am sorry. I have to, I have to say this, the [01:05:00] art of it though, you know, ’cause that’s simple. In theory. The art of it is that, you know, when I think about selling Amazon, like in 2000 and whenever I sold it and buying it back higher and selling it again, there are periods of every company’s.
Majestic rise where the stock creators and things are looking awful and you realize you should have sold. and many companies do. Like, I mean, you know, for quick, easy example, zoom, right? When it was $500 a share, if we follow this principle, you’d be like, never sell because right. But now it’s $60 a share and the world has changed.
And so it’s not like it’s an end all and be all, because you have to check that the thesis is still intact. And if you do that, then speed bumps are not enough of a reason to sell. If the overall picture is still in [01:06:00] play with, with Zoom, that was I. It became pretty obvious.
You can’t sell to more than the world’s population who, which already had Zoom, right? So, but that’s a whole different
[01:06:10] Luke: No, but you’re exactly right, right? That that is the skill and the nuance of being like a, you know, a real investor. It’s understanding all these laws and, and many others. It’s understanding the interplay and how they’re contradictory sometimes. But being able to like thread the needle and navigate that, you know, knowing the difference between like a Zoom and an Amazon at its early stages is critical.
I make good money in Zoom and I got out. I. You know, I didn’t catch the peak, but I got out before things went too ugly because it became apparent to me because I was in like an investing community and chatting to Matt Cochran about Zoom, like he made the great point that this isn’t, shouldn’t be a company.
Like it’s a feature and it’s in, you know, teams and it’s in like so many [01:07:00] other products. Like, does this really deserve to be a, deca, billion dollar company? Probably not. And the growth expectations that were built into it were just unsustainable because that, that was like the world we were living in and Covid, right?
Like it looked like work from home was here to stay and to grow and to grow. But now, like we’re turning back on that. So, yeah. the art is putting all these things together.
[01:07:23] Kryzsztof: Indeed.
[01:07:24] Luke: Do you wanna pick us up on our final lore of the jungle?
[01:07:26] Kryzsztof: Sure. Uh, this, uh, this is maybe, easily my top five movies of all time. Beware of Get Rich Quick Schemes. Uh, sponsored by none other than Mr. Uh, Wolf of Wall Street himself, Jordan Belfort, played by Leo DiCaprio, which I, I will go on the record to defend and say, that is the best acting performance, uh, I have ever seen.
And nobody’s is better if you look at it just from that, that angle. But, [01:08:00] um, to, to our business. Yeah. Uh, invest in real companies that do real things that, , help people as opposed to, gambling and ripping people off and grifting and generally being a douche bag. Like pretty good set of rules for life in general.
Uh, God, I love this movie.
[01:08:23] Luke: And, and like you quote it often on the podcast. What’s the, what’s, what’s the quote you gave us a few episodes ago? Like it was from, DiCaprio and he’s like pitching this like BS stock to like some guy over the phone. And he’s like, like, the only, you’ve only, I’ve gone. Do you know the quote?
[01:08:40] Kryzsztof: yeah. the only mistake you’ll have made is to say you wish you had bought more, or something like that. Something like that. It’s not the exact quote. this is a cynical view of humanity, but there are a lot of grifters out there. There’s a lot of people that think of things as a zero sum game.
Their intention is to steal from you [01:09:00] or take, take your money. And unless you have a fundamental, solid ethics where you’re investing for the right reasons, with the right frame, which is to create value and be rewarded for. The act of creating value, then you’re gonna be taken by one of these grifters or you might be one yourself.
And that’s not something that the monkey and the badger, support on any level whatsoever. live by the side sword, died by the sword.
[01:09:26] Luke: absolutely. Yep. Yep. See. Christoph banging his chest as they were in the movie. Very good. You know, so, so,
[01:09:39] Kryzsztof: You know what badger, those are rookie numbers. Those are rookie numbers.
[01:09:44] Luke: So you, you know what, Christoph, I think we, when we wrote our 10 laws at the Jungle, I think we missed a law and we sort of talked about it, but I wanna bring it into play now and make it an official, like 11th Law of the Jungle. And it is this, is [01:10:00] that like investing isn’t a solo game, right? It’s better with friends.
It’s easier with friends, it’s easier as part of a community because. You know, like you said, you can pitch your idea on patreon.com/wall Streete Wildlife and get feedback from other investors, some of whom might already be shareholders, some of whom might have direct experience of the actual products and services the company, provides.
You just bounce your ideas off, off other folk who are interested in this, this same kind of fun game of trying to find like the world’s greatest companies. It just, two heads are better than one and 200 heads are better than two. Right? It makes so much sense, and we do have the seed of a great community at Patreon.
So do check it out.
[01:10:49] Kryzsztof: Wisdom of the crowds. There’s something to that one also. It’s just more fun. this is one of those things, you know, how people burn out, when they either go [01:11:00] too hard at one thing alone and then they just can’t sustain it. Or they make a mistake and then they, we’ve seen this, how many times have we seen this in all the market cycles, right?
People get excited when it’s up, then it goes down and they, they say never again. Then they drop out, right? They drop out, the market goes up. When they’re out of it, then they come back, buy in at the top. I mean, and just like burning your money away as opposed to saying, no, I’m sort of in this, not just to get rich and wealthy, but to have a good time to make friends, to make relationships.
And that will help you stay in the game longer and like, what’s life about? Really? , it’s not about the money, it’s about the journey, blah, blah, blah. I’m not gonna get all hallmarky on you, but I mean, really, this is huge.
[01:11:50] Luke: , yeah, like you said, it makes stuff more fun. It makes it easier, and you’ll make better decisions as a result of being part of a community and maybe a nice sort [01:12:00] of financey community oriented movie is the Christmas classic. It’s a wonderful life, which reminds us that true wealth lies in community and relationships and having a positive impact on others rather than just pursuing financial gain.
[01:12:19] Kryzsztof: Yes, and no disrespect to YouTube or our YouTube commentators, but I gotta say in this moment of our own journey, when I get, when we get some requests for some comment, you know, on YouTube, because it’s such a huge, big platform and we don’t often know who it is that’s asking something, it just isn’t the same as when one of our own.
community members on Patreon does, and it has nothing to do with money or it has nothing to do with like incentive. It has to do with like, there’s people that are in and there are, and then there’s everybody else and people who are in your tribe, [01:13:00] you know them and you respect them and you will take the time and like, it’s just a whole nother thing.
So if you’re listening to this from YouTube and you’re not in our community, consider that, that it’s just like a structure of human nature. Like we treat others more thoughtfully when they’re on the, when they’re one of us, so to speak. One of us.
[01:13:21] Luke: You do love that movie. Great stuff. Well, I hope you got some value out of our little review of the 10 Laws of the Jungle or the 11 Laws of the Jungle. If you do want to go read them in full and see our pretty pictures, go check ’em out at patreon.com/wall Street Wildlife. You can find it on there as a freebie download. You don’t need to, um, you don’t need to sign up to get that.
Christophe, anything you wanna close us out with?
[01:13:49] Kryzsztof: check out fin chat.io, the program. I love it. We both love using it. It’s kind of our one stop destination. It’s what I used for, uh, a Vita [01:14:00] Medical to go over the latest, uh, what’s it called, transcript that they did at a medical conference. It was so cool. Like, uh, the transcript was already there.
You see it transcribed and you could also play the recording and it highlights the section of the transcript. So it’s just AI stuff doing finance, and it’s making a. The finding of information so much easier, so much more direct and like you have no, nobody has an an excuse anymore to like, not know the answer to some investing question.
Really. If you use a product like Fin Chat. So check it out. Use Wall Street Wildlife or is it just wildlife
[01:14:37] Luke: fin Chat io slash Wildlife to get our promo discount code. Great stuff. Alright, until next week, are you ready to become a beast of an investor?
[01:14:49] Kryzsztof: your journey starts here.
[01:14:51] Luke: I. [01:15:00]
