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Should You Buy Stocks? A Few Thoughts On The Stock Market

Some of you know investing is a passion of mine (and part of my former life) and here are some observations and my $0.02 based on conversation with friends.

Mr. market is certainly fascinating these days. It’s wild to see historically bad economic data reported as the stock market records historically near record weekly gains – and the overall disconnect. One rarely discussed point is that the record unemployment data doesn’t include the likely 10’s of millions who are taking a huge pay-cut. I suspect ‘the market’ will wake up to this soon.

Stimulus vs Economic Stop – Which Wins?
It will be intriguing to see how the unprecedented fiscal/monetary stimulus plays out vs. the equally unprecedented economic devastation. (Fun site – https://www.usdebtclock.org/world-debt-clock.html – note the USA Debt/GDP ratio is still far lower than some 1st-world countries).

The experts I respect most are generally staying on the sidelines (ie: they “have no idea what’s going to happen so they’ll just watch this play out”) – as the two primary factors driving the market – the unlimited stimulus vs full economic stop – both have no historical precedent.

-The ‘Bull’ case is mostly based on ‘don’t fight the fed’ (record-low interest rates, stimulus, etc) – usually a safe mantra to bet on. -‘Bear’ case is mostly based on under-appreciated long-term ramifications of the full economic stop. The brilliant economist, @elerianm, has cogent views on what happens after economic stops (hint – they are not optimistic). I highly recommend you listen.

Sidenote – Warren Buffet’s annual Berkshire shareholder meeting will be livestreamed free on Saturday – highly recommend you watch. I firmly believe that I learn more in 6 hours from listening to Buffet/Munger answering questions each year than I did during my 4-year ivy league education – https://finance.yahoo.com/brklivestream/.

Next 4-8 Weeks Are Critical:
If there are any false-starts to reopening (covid resurgence), it will not be good for anybody. I’m keeping a close eye on data from cities/countries that are re-opening (see Germany). Market Is Not The Economy & DJIA is not the market:It’s important to note that the top 5 companies of the S&P500 = 20% of its value (MSFT, AAPL, FB, GOOG, AMZN). The DJIA similarly consists of brand-name companies, with access to capital, that are currently thriving in the ‘new normal’ (cloud/tech, healthcare/pharma, etc). The Russell2k is a better ‘market’ indicator, which has substantially under-performed the ‘Market’.

Second Wave In Fall?
The medical experts seem to all agree that a covid resurgence in the fall is highly likely, and could be more devastating as it will coincide with the flu. This obviously would be disastrous and the market seems to be discounting this entirely at this point.

Consumer Demand Matters Most:
If/when consumer demand returns is what should drive the market’s next move in either direction. Many factors will impact this – duration of virus/fear, lockdowns, false-starts, progress of vaccines, and overall consumer confidence (ie: will I get/lose my job) are main ones. Every day that goes by makes it much harder for economy to recover from (ie: V-shape vs L-shape ‘recovery’). The next several weeks should be very telling. Medical X-Factor:A medical breakthrough is the x-factor that can change everything on a dime (today is great example with positive Remdesivir data).

Timing:
Timing is always impossible to predict, but the next several weeks should reveal a critical catalyst in either direction – how safely/quickly we can reopen and if we can keep virus in check while re-opening.

Long-Term:
Industries that will suffer long-term/irreparable damage due to covid/new-normal (malls, physical retailers, entertainment, travel/leisure, etc) seem toxic to me. Many companies in these spaces have been given a temporary lifeline due to the fed’s actions, but the ones with bad balance sheets are in trouble. I’m optimistic on companies/industries that should thrive in the new (post-covid) world (telemedicine, cloud, video/online-first model, gaming), especially ones with strong balance sheets.

-Not financial advice

The TLDR – the market may go up, or down, or stay the same

What do you think?

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Explosive Growth Ranked In ‘The Best Startup Books Of All Time’

Best Startup Books

Explosive Growth Ranked As Best Startup Books Of All Time by Benny Emerling – July 15, 2019

The path of a startup is marked by overcoming constant struggles and learning how to make a name in a certain industry. Reading books that tell the tales of successful entrepreneurs and their companies can help you navigate the twists and turns of starting your own company. These books are anecdotal, advisory, or a combination of both.

Whether you’re currently toying around with a simple idea or in the launching phase of your company, the right startup book helps guides you through making tough decisions. Some of the topics covered include vertical scaling, team management, and finding investors.

For a closer look at what it takes to be a successful founder, we’ve curated our top picks for the best startup books for your reading list.

Continue reading The List of the Best Start Up Books Of All-Time

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Explosive Growth Ranked In Best Growth Hacking Business Books

by Syed Balkhi In Entrepreneur.com – Learn about the potential to be found in ‘grit,’ ‘pre-suasion,’ explosive growth and other strategies these authors describe.

Want to know how to grow your startup to 100 million users? Then this is the book for you. Explosive Growthby Cliff Lerner is a book that gives step-by-step instructions, case studies and proven tactics on how to explode your growth.

Continue reading the list of the ‘Best Growth-Hacking Business Books‘ on Entrepreneur.com.

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Cliff Lerner Turned His Business Failures into the Entrepreneurship Playbook

It was 2005, and Cliff Lerner had a revolutionary idea:

What if online dating actually worked?

At the time, modern online dating was in its early stages, and was a pretty awful user experience. If you were lucky, you’d exchange a few emails with someone, set up a date, then discover at the last minute that your date had flaked.

For busy professionals like Cliff, the process was a waste of precious time.

In response, Cliff founded SNAP Interactive, which created one of the first apps on Facebook, AreYouInterested. It had all the hallmark features we see on dating apps today—swiping, connecting via mutual friends, and showing mutual interests.

“I knew immediately that we’d created something special. After 40 days, we had a million users. One year later, we had 10 million users. We eventually reached 100 million users and we were the fastest growing dating app in the world.”

Suddenly, Cliff’s small start-up went from eight employees trading at a nickel a share, to 50 employees and being valued at nearly $200 million.

Continue Reading Here

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