Obviously not financial advice:
The original purpose of yesterday’s post was to highlight how just questioning common sense and looking at things holistically has made me, at the very least, a decent investor.
In the end I talked more about how I ended up investing in the first place. Rather than retell that story, I would like to share some examples of how rejecting common sense and holistic thinking has worked in my benefit or how taking things at face value and listening to popular narratives causes people to make foolish decisions in both investing and in other parts of life.
The example from investing that came to mind when i thought of my parents trusting a stock broker was Netflix. Can anyone tell my why people were dumb enough to treat this as being in the same category with google and apple and microsoft?
But I remember when people talked about FAANG stocks, Facebook Apple Amazon Netflix and Google.
Think about the potential growth of each company. See anything strange here? Google and Apple have a huge variety of products and collect data and work with government. Facebook has fewer products but they have all our data, and many realized and potential income streams. Amazon has monopolized retail and also has cloud storage.
Tell me, please, what the fuck does Netflix have?
I’m not saying Netflix is worse than the others as a company. But where is the upside? What makes it anywhere near as attractive as an investment as the others!?!
Where does it plan on growing? Mobile games? Why do i need netflix for that when I can download games straight from the app store on to my phone? Has anyone become addicted to Netflix game?
Maybe Netflix mobile gaming could have taken off, but Netflix has never presented itself as a very ambitious company and they grew for the sole reason that they were the first company to streaming well. Now what?
I don’t actually have a problem with this and I respect Netflix more than the others because I don’t think businesses need to grow until they have no where else to grow and start payong lobbyists to change laws so they can keep growing….but in no conversation does it belong with the other companies mentioned.
Maybe if they had announced they are buying up movie theaters and revitalizing that industry. Maybe if they had created a social media branch with advertising. Maybe then it would belong next to Facebook or Google, but that’s only if they managed to succeed.
I don’t follow the news enough to know for sure, but I imagine this term FAANG was made to refer to tech stocks which were performing well at a certain point in time, and from there people ran with it and invested in all of them without much thought.
Netflix is everything that is wrong with popular naratives.
The fact is, you would have ended up extremely wealthy if you invested in Netflix…back in the early 2000’s! That term FAANG was used around 2010-2020. It was a promise of previous performance, and anyone using their brain could tell you it was a dishonest way to present it, and probably exit liquidity manipulating media so they wouldn’t crash the price on the way out.
Once again, I don’t follow enough market news and trends to know if I am getting all the details right but I know I can still make my point…. Think of where you’ve been “Netflixed” before.
And how can you prevent being Netflixed? Look at the entire ecosystem. Think holistically.
Let’s look at the top 100 companies in the world and see if anything looks like it has more upside potential than Netflix. It’s a low bar and I am not planning on investing in stocks right now, but if I did, this is how I’d do it.
I have no idea what is the best investment here, and in the end half of it isnhype anyway so Netlfix may remain in the top 20 stocks.
But inorder to figure out what to invest in that is based on more than hype and not just a gamble, I’d choose a few that felt like they were ambitious and had a good business model to keep growing over time. I’d look at who has better connections to governments around the world and who just signed big govenrment contracts. I’d look at which companies are adopting AI in an intelligent way and not just because it’s AI.
I have no idea if this is accurate, but I imagine that since crypto is becoming more mainstream and banks are trying to integrate blockchain and maybe even integrate stablecoins, and new regulation is going to make that easier, Mastercard is a comapny worth looking at.
With China’s growing influence, Alibaba could have even more success in the future, but what about it’s competitors from China who are also trying to win in the foreign market? I think those might be smarter than Alibaba (do some research into owner Chinese stocks though, apparently, you can only own a shell company that allows the stock to be sold overseas which is an extra layer of risk).
If I were to invest in stocks I may look for a gap in two similar companies with a similar product and try to find a company which would be likely to overtake it’s competitor in the future and a low chance of complete and utter failure.
Low risk, medium to high reward.
Tesla a few years ago seemed like such an obvious investment. I would have bought some but I was focused on bitcoin, and that worked out even better. I was shocked that so many people were hesitent but the media wasn’t talking about it and so only Elon Musk’s cult and a few people with good holistic thinking really won big.
Personally, I have other things going on. I don’t care to research these companies….and so I WON’T INVEST! I’m not investing in anything new. You could apply this whole idea to crypto too. It’s about capable teams and actually making progress towards solving problems, plus the ability to get the word out and adapt.
If you don’t want to do research you shouldn’t invest, especially if your goal is to make money. If you just want a hedge against inflation, diversifying is the best answer and even that really needs some research.
It’s just incredible to me that even with the internet, people don’t do some real research, and by that, I mean ask important questions and trying to find the answer, not “what should i invest in?”.
If everyone is talking about it, you are probably already too late. If some people are talking about it and most are not taking them seirously you might still have time. Stay curious, inform yourself where you feel called to and invest in the things you understand best.
For me, bitcoin is still the easiest pick. I don’t know if it will ever beat gold but I feel confident it can at least make the attempt and even if it fails and just beats Nvidea, is a 2x something to complain about?
At some point I will start to look for things outside of bitcoin because I don’t think it’s without risk, and it’s best to diversify.
Besides that I invest in things I care about and can be a part of. Hive and Leo and my local community. Those are the most rewarding investments because you can actually influence them.
And once again this post focused on only 1/4 of what I wanted to talk about so I guess next time we will get out of investing and focus on other kinds of “common sense” that will destroy your life
Posted Using INLEO