Long-Term Investing Ideas in a Volatile Market
Simon recently spoke with a $35 billion global asset manager about how they're navigating the market volatility. The key takeaways are to think long term, tune out the noise...
In 7investing's Episode 11 of No Limit, lead advisors Luke Hallard and Krzysztof Piekarski sink their investing fangs into the ARK Big Ideas of 2023 paper, the dangers of being a futurist investor, and the two essential elements to being a good investor— being right and being contrarian.
February 21, 2023 – By Simon Erickson
7investing’s Episode 11 of No Limit has lead advisors Luke Hallard and Krzysztof Piekarski sinking their investing fangs into the new ARK Invest Big Ideas of 2023 paper, the dangers of being a futurist investor and the two essential elements to being a good investor— being right and being contrarian.
Luke and Krzysztof wonder whether they’re being contrarian about Alphabet given their latest kerfuffle with Microsoft. And if you want to know what TV episode is the best Luke’s ever seen, tune in to 7investing’s podcast for all levels of investors, from beginners to the sophisticates and beyond.
Luke: Hi, and welcome to another episode of No Limit with Krzysztof and Luke, your friendly chaps who are digging into all things poker, AI, technology, and just general nonsense. How’s this week treating you? Krzysztof?
Krzysztof: Luke, every time I see you alive, it’s always a thrill as I’m learning your ways, I know that they are not the. Uh, safest or most, uh, conservative of, of ways.
Luke: But by, uh, by day and by night. We were on our subscriber call yesterday. You might still hear that the, the lowered octa voice of a, like a two day long hangover. So, Christoph, while I was presenting on our subscriber call yesterday, you messaged me and said, dude, are you okay? Do you wanna push the podcast recording?
You’re very kind,
Krzysztof: Yeah, it’s either, yeah, you’re gonna be, you know, be lying dead in some gutter or uran into some tree. God, you know, God only knows. But the irony, Luke is that yesterday on my way back from teaching, uh, mining my own business, I fell off my bike. Maybe first time. I mean, I don’t even know. I really don’t know what happened.
Like I was, I was riding and then all of a sudden a bump or something and then before you know it, like I’ve
Krzysztof: I’ve got a pretty nasty, nasty fall, but so you know, pop calling the kettle black.
Luke: Right. There’s definitely no alcohol involved in your spill.
Krzysztof: Uh, ? No. Usually I do fill, I do fill my, uh, coffee canister when I teach with whiskey, but not, not yesterday. . I was like,
Luke: Sorry to that. I’m glad you’re in one piece. We’ve got, you know, that enormous hat that you always wear probably acts as, at least as some form of hip protection. There’s a lot of important information in that head, right? You don’t wanna crack it open. All this knowledge like leaking onto the pavement,
Krzysztof: Yeah, we don’t want it. We don’t want that. So let me tell you about something that could, that’s kind of exciting in my own, uh, life just happened last night. Starting last year, I decided to do the intermittent fasting thing. So I, where I only ate one meal a day with about, uh, 20, I, I’d say I have about a 21 to 22 hour fasting window every. And I’d say I kept to that all year, like maybe I had 10 lunches, give or take, like not many. And I also ta started taking some supplements for the first time in my life. Like I did the research, the longevity research stuff, and I kind of chose the, the most, uh, important ones, uh, on top of, you know, adding cold showers and, uh, exercising pretty much every day, blah, blah, blah.
So I got my blood. I had my baseline last year and then this was the first draw basically a year later. So I was a little worried because I’m like, uhoh , like, did I do all this shit for nothing? You know, I was really, you know, wondering like what the results would show. But lo and behold, one of the main measures.
Is something called inner age where it compares your biological chronical age to what we now know is more important, what’s happening on the inside as more or less measured by the damage to your epigenome or to dna to keep it simple, right? To your DNA and it’s measurable. And so you are looking, see this, uh, almost 44 year old face before. on the inside. It’s actually a 35 year old,
Luke: Very nice
Krzysztof: so I, I reverse aged two years, 1.9 to be exact. I went from 37 point whatever to 35
Luke: You’re Benjamin Button. Yeah.
Krzysztof: uh, yeah. So keep going. I’ll be a, you know, 21 year old spanking babe in, in no time but to all.
Luke: for this?
Krzysztof: She she, yeah, she kind of gave me, uh, some raised eyebrows and, uh, but you know, other than I was thinking, you know, like, should I talk about this or not?
But, you know, why do we invest? What’s money for anyway? And I like getting like real metaphysical and philosophical about this kind of stuff because it’s so obvious and sometimes it’s. Right in front of our face, but we don’t notice it. Like if we’re dead or unhealthy, what’s the point? What’s the point of money?
Right. I mean, and, and I guess the way our society is structured is that typically by the time we can retire or take advantage of our life savings, our health is now starting to plague
Luke: Yeah. Yep.
Krzysztof: We can’t do the crazy shit. We can’t go or not without hindrance. And so I don’t think this is a small thing, you know? especially to our listeners that are maybe in there, still in that youthful phase where you, you can’t do any wrong. I guess from my current perspective now, um, if you are like in your mid thirties, I’m not sure that’s too early to start kind of just doing some things that will, uh, Keep you around healthier, longer.
Luke: Hey, I’m, I’m totally with you on that. I started on that same sort of stuff a couple of years ago, um, because I had a view that, um, you know, you need like a couple of things to have, like a happy retirement, right? You need the, the, the money and the capability to be able to do the things you wanna do.
You need like a purpose in life. And actually like seven, investing has become very core part of my own purpose. Um, but you know, you need your health as well. So if you can de-age yourself through various mechanisms and techniques, then fantastic. I, uh, this is probably gonna get a little bit off piece.
I dunno if I get clamped down on by someone for saying this. So, um, have you, have you heard of. Benefit of Metformin. The, um, the anti diabetes medication? No. Cholesterol. It’s anti-cholesterol. Sorry. Yeah. Yep.
Krzysztof: yeah, that’s one of the four main ones that I take.
Luke: Okay. Right. Oh, well. So, uh, so how are you procuring your metformin, because you can’t buy it over the counter in the uk.
Krzysztof: Yeah. It was actually very easy. There’s just a tiny loophole that’s like this needs to be prescribed, but it’s so common that it’s one of those, you go down internet. You put in your stuff at Doctor? I mean, I’m, I’m, I’m sure it’s a real doctor, but you know, it’s not like a doctor’s visit that they look at your form.
They’re like, okay, you’re good to go.
Luke: Very good.
Krzysztof: Just a hoop.
Luke: Wait, I, I put mine on the dark web
Krzysztof: And this ladies and gentlemen, is Why Why Luke is the star of the show. And I’m just, you know, uh,
Luke: It’s a fascinating rabbit hole. I, I was, I was intrigued by the dark web. Anyway. I had some cryptocurrency. I’m like, screw it. Let’s go see what I can buy. . There’s a whole bunch of things I could have bought. I mean, this was definitely the, the low end of legality. Uh, but yeah. Uh,
Krzysztof: Oh my God. That shit scares me. You know, I followed the story of the Silk Road and it was on some podcast, I think it was the Tim first podcast where he, he, it was this interview with the da, I think that caught that guy.
Luke: Yeah. I call that
Krzysztof: and then he realized that when he was at the San Francisco Library, he was probably next.
Like he must have been working next to that guy. It’s all insane. But anyway, you’re braver than I am. , I’m so tempted to say like, okay, like, so step one is why am I, no, no, no, no. Okay. Like I’m better off not knowing how you get your Metformin
Luke: Well that’s, I, uh, so I bought that initial supply. I haven’t been brave enough to go and sort of top it up, but that lasted me about a year. Um, but so I’ve kind of, I’ve kind of fallen off the wagon as it were. I’ve to take my metformin, so I need to go and get another supply cuz it does seem that that has, uh, life extending properties potentially with very well understood, uh, other effects which aren’t bad for you.
Krzysztof: Well, that huge paper was just published. I don’t know if you follow, David Sinclair is the, the person that, that kind of was my go-to source, but, As a scientist, that paper that actually proved the mechanism of aging was, I believe, over a decade in progress. Like it was so complex and had so many different, uh, points of, authentication and go back to the drawing board, yada.
uh, I think it was just published a couple weeks ago, like officially in the top journal in, in the World. That’s like, yeah, now we understand how aging works, and this is not a, you know, sci-fi, sci-fi thing. Which might lead us to the, the next topic, but No, go ahead.
Luke: Uh, what I was gonna say, so, um, like, it seems relatively, uh, sensible to me that like anyone being born today, or in the last say 10 years, probably, you know, borrowing an accident, like falling off their bicycle cause of the sidewalk, probably could choose to live forever. Um, like we’re gonna hit the point.
Um, you know, our ability to tify people is, is accelerates faster to the point where we can kind of deh someone consistently by more than one year per year. Effectively, you can kind of hang onto your, you know, your mid twenties, like the golden age. Um, I figure like an old guy like me is probably missed that train.
You know, maybe you are, if you’ve managed to get yourself down to like a 30. So, Maybe you can just about catch the train before it departs the station. It’s interesting, you know, we could be one of the last generations that dies of old age.
Krzysztof: That is fascinating. It really is a nice segue, I think, to our first, first topic, this question of innovation. Here’s the, I think first level thing to say for me is in the obvious thing, innovation tends, seems like it usually gets ahead of. in these wild ideas that we hear about, we get all excited and then they take way longer to actually manifest.
Luke: Yeah, we’ve got a, what’s that saying? We’ve got, uh, humans have a habit of like over anticipating what can be achieved in the next few years, but under anticipating what can be achieved in the next 20 years.
Krzysztof: Right. Yeah. That’s so right. That’s so true. But I think there’s a second level level here that. Feels unprecedented to me,
so for for listeners who may be unfamiliar, uh, Cathy Woods is the head of an investment fund called Ark Invest, and they’re quite public. I’m not, I’m sorry, not even quite. They’re public. So they publish all their trades, all the info is available for anyone to see. And because they have this public persona, they also publish their.
and so I believe in late January they just released their kind of Big Ideas paper for 2023, and it’s like, what? 150 something PDF pages. Kind of a, a monolith of a futuristic thinking you and I Luke. Uh, were planning to kind of break it up into sizable chunks over the course of some of these episodes, right?
Because it’s too much to do in one shot.
Luke: Yeah, like there’s a ton of topics, so we’ll put a link to it. It’s public, as you say. They released this deck every year. Um, it’s always a really fascinating read and like some of the topics align with our interest areas so hard. Yeah, let’s go deep on it over the course of few episodes, but I think in this year’s big ideas, they’ve got something like, Probably 14 kind of core ideas they’re gonna explore.
So maybe we’ll pick out a couple each week. And actually if you’re on Twitter and you’re interested in hearing about a particular one first, like give us a tweet. Let us know where we should go.
Krzysztof: Right, and the paper starts off kind of acknowledging, or at least maybe this is me interpreting it. that AI as one of these innovative forces, they name five, is the one that will obviously have an impact on all the others. And what I was saying earlier was this, this feeling I have of becoming a little more skeptical, maybe more doubt, I, I have more uncertainty now, whether the innovation that’s always futuristic but takes way longer than we.
whether that gap might actually start shrinking considerably given the way AI and neural networks work and how they kind of feed data into themselves to accelerate their own learning, which means once the sort of these things start powering the machines that make the other things.
these innovative ideas, like for example, flying robo taxis, right? I mean, that’s, that’s technically a thing. This paper mentions, so, you know, there’s the eye roll. Like, yeah, okay, fine. But I’ve never really thought this before, like I, it feels within the realm of the possib. Now that things will accelerate so quickly that even the craziest of ideas might be closer than we think.
Luke: Yeah, I agree. Ultimately it’s all about money, right? So if, you know, it sound like a kind of crazy idea that we’ve been talking about, you know, flying cars, flying, flying taxis for some time. But when that does come right, that’s gonna unlock just a shit ton of value for countries. So, if nothing else, you’ve got that economic spur to kind of make that stuff happen.
Krzysztof: And it’s weird talking about this because it, it seems like it’s such a drastic, drastic shift potentially in, in how the world operates,, maybe I’ll talk about one example that’s non the, the ai, which is, um, maybe on the surface level before doing a deeper dive later.
But this concept of digital wallets, right? In our day today, they’re different kinds of assets, right? You have your car and you have your cash and you have, but they’re not equivalent, right?
And, and say swapping them is certainly a whole different ballgame if you’re selling your house versus your car versus. The more typical exchange in the retail store, right? But what happens when, say, everything becomes tokenized, like in the sense your car can begin to exist as a token on the blockchain in sort of tradable much more closely like a coin.
So I’m, and I’m not even sure if I’m thinking about this the correct way. And maybe we don’t even know how, how this will all evolve, but it seems to me that everything in society right now, at this moment is up for grabs for kind of reconfiguration. Maybe that’s what I was going for.
Luke: Right, right. I think that’s an interesting one in their paper. Like if we, as I look at just like the, the headlines of these 14 different topics, you know, things like, Um, smart contracts, robotics and 3D printing, electric vehicles, molecular diagnostics, digital wallets kind of stands out for me in a funny way because actually we’ve, I think arguably we’ve got the technology now and maybe the barrier to adoption are clearly this whole world has been set back quite materially in the last couple of months, really, with the, cryptocurrency meltdown, sang, bankman, freed all the.
Nonsense has happened there, but um, yeah, before you got this technology that the hurdles are gonna be more. Societal and regulatory and you know, you could put your car on a blockchain tomorrow probably, I’m sure, like 20 different startups have already done this and they’ve got the technology, but it’s about getting people to adopt it and, and start using that technology kind of day-to-day.
And there’s, you know, a lot of legal complexity and probably a whole bunch of kind of Supreme Court cases that need to be heard before this stuff really. So truly adopted and that, you know, the register of cars on blockchain becomes the kind of official government record as opposed to some database held by the DMV or whoever, kind of managers vehicles.
But if we look at a lot of the other technologies like flying taxis, precision therapies, molecular diagnostics, probably a lot of hard science that needs to be figured out before that stuff is ready for primetime, let’s say.
Krzysztof: I’m trying to wrap my mind around, I think the key piece from their paper is this sense of. These things converging with each other
Luke: Right. The way everything kind of supports each other. Yeah. That is interesting. Yeah.
Krzysztof: right, exactly. That’s the thing where, you know, you could be as imaginative as you want, but how? AI is going to affect battery storage and battery storage affects, uh, autonomous driving and how autonomous driving therefore needs blockchain to do its transactions and all of that.
Like starting to, I think that’s the point of the paper really like converge and coalesce and we know from complex theory systems theory that there’s a very quick tipping point that happens where you can’t predict the next thing that will happen. , X number of variables show up. And so to be an investor in this day and the age after reading this paper seems one absolutely thrilling.
Like on that side of things, like, oh my God, we’re gonna , you know, if we think we’ve built some amazing companies up to now, like just ho, just, you know, hold on. But then the flip side is, it’s kind of daunting, right? Like in terms of if, if an investor’s job to some extent is. think carefully about where things are headed. The massive amount of unknown emergent qualities here on the table now is like almost overwhelming.
Luke: There’s a real danger, and I fell into this bear trap myself a couple of years ago. If you try and be too futuristic with your investing, you could find yourself investing on the far left of the Gartner Hype Cycle. So what do I mean by that? Um, like any new technology, we build up to this kind of peak of over-inflated expectations where we think like the next hot thing is almost here.
Everyone gets super excited. Valuations go crazy, and everyone’s kind of piling in their investment dollars into this area. and then suddenly like reality bites and everyone realizes, wow, this stuff is actually quite hard and we haven’t dealt with the regulatory issues, or, you know, whatever the other complexity and the mess of the real world is.
And that’s when valuations plummet. And it’s only very slowly after that the kind of real world utility is realized, and that’s really the time to invest. So I think the danger of being like a super futurist as an investor is if you get in. Before we’ve kind of gone over that, that hump of over-inflated expectations into the kind of trough of disillusionment where you could be buying in a kind of crazy valuation that could take like a decade plus to realize, and I did that with 3D printing.
So it’s really interesting to see that in the, big idea is deck, um, you know, maybe that stuff now is becoming investible, but certainly I got burnt by into a whole bunch of different companies way too early in that.
Krzysztof: That’s a nice segue Luke to what I want to talk about a little bit in the same vein. This idea that to be a good investor requires two things. You have to be right. In other words, you can’t invest in something that fails, obviously, right? But. I mean, that is still a key component. Many times we do invest in things that don’t work, but so assume you’re right.
But then it turns out that’s not enough for an investment to be successful because if everybody else is thinking the same exact way, you’re gonna be paying the higher valuations. Right? And it’s the mob mentality. So you actually have to be right and have to be contrarian, which is way, way more tricky and harder than we think.
Right? Because I mean by definition, if you’re a contrarian, you’re basically saying something that everybody else is contradicting, which is one hard to do psychologically. I don’t wanna undersell this. Maybe that’s the hardest thing, right? To think you’re correct and everybody else is wrong.
Like it takes a kind of either egoic arrogance or maybe just, sheer utter conviction, which is only born from depth of research and understanding.
It’s not clear to me whether being early, say, in an investment is the same thing as being contrarian.
If I, for example, were to invest in some blockchain technology today, am I being early? Or am I being contrarian? And how do we know?
Luke: I don’t wanna make, listeners think that this is the only way to invest because you absolutely can invest in great quality companies. Everybody knows are fantastic businesses, the Alphabets and the Amazons and companies like that. And you’re gonna do just fine.
Um, but if, I think what you’re talking about here is, you know, this very particular branch of investing where you’re trying to find those hidden ideas, kind of venture investing. But that is difficult and this is why we diversify, because you might make 10 bets like that. And if you’re lucky, maybe one of those kind of comes off and pays back all the rest. But, uh, but that stuff is hard and you’re kind of like the salmon swimming uphill, uphill. What they do, they swim upstream,
Krzysztof: Yeah, right.
Luke: it’s like pushing the card of frozen salmon up the hill.
It’s, uh, you know, it’s difficult and arduous. And when everyone else is telling you you’re dumb because you’re investing in particular area, that’s hard to retain the courage of your convictions, perhaps.
Krzysztof: And you know, I just thought of a perfect test case for this topic that we’ve been mulling over recently, Tesla. Just tracking the price action for a second, I believe it fell down to about $108 a share or so on all kinds of bad news or data points that were interpreted as bad.
Recession plus Twitter worries and all this stuff, I don’t wanna necessarily go over all of it. From a over a trillion dollar market cap to something like 300 billion So massive, massive loss of valuation.
And then lo and behold, right, that’s that moment, right? This is what I’m talking about, that moment where panic, everybody’s selling, and it’s an innovative company that you’re talking about. The question to some extent is, are we too early in some sense? Like all the promise of Tesla’s new and future gadgets, is it still a ways off and it will be a mistake to invest now because of recessionary headwinds and so on?
Or is this a case of being contrary, where this is the exact thing you’re looking for, a bonafide proven company with positive cash flow and all that. That for reasons out of its control, created a bad, bad feeling. And now if you can be the person that says, I know this company well enough to be contrarian, this is the time to act.
And lo and behold, it basically doubled, in a month. If you think about how insane that is, Luke a 300 something, $400 billion market cap doubling in about a month .
Luke: Yeah, when nothing kind of fundamentally changed, it was more how the market felt about it. It’s probably the most talked about company right on the internet, I suppose, um, on, you know, platforms like Wall Street bets and also with serious investors. You know, it’s, it’s one of the biggest companies in the world, so it’s not like some tiny little, micro cap that flitters around on the slightest rumor.
But for some reason, well, I guess Musk is the main reason. Um, you know, that company trades like it, so microcap almost.
Krzysztof: Yeah. And so I guess maybe to wrap this segment up, for anyone thinking of investing in innovative companies, I guess all we’re saying this isn’t a binary either. Nothing’s ever neatly in one category or another, but you have to be very aware of like you were. getting too eager beaver about it when in, in maybe name it as speculation or, or potentially even gambling.
Right? Like, we don’t know. It’s super early, so a little goes a long way versus, you know what, you know right. You did your work. you read the 7investing research reports, you followed up with conference calls and, and research and maybe like we talked about last, uh, episode, you even love the product. You know, the product out of that is born that kind of conviction to be contrarian and that is where the real money lies, if you have the spine to pull it off.
Luke: Here’s another example then. Um, And I, I’ll be being contrarian or not. So another mega cap, Google Alphabet, right? So their, their valuation hasn’t collapsed, but it’s, it’s down materially, let’s say just over the last six months. Um, you know, market cap is down to $1.22 trillion from, um, Uh, what, 1.6 trillion?
They’ve kind of shed like 20% percent or so of their valuation in a few months. And particularly right now, the news cycle is pretty bearish on Alphabet. You know, it’s almost a kind of dft example, but like the news cycle right? Today is, um, Google’s kind of botched marketing attempt, bringing their own AI chat bot to market something called Bard.
They’ve been beaten into the punch by Microsoft. or suddenly Google who are supposed to be the AI leaders now appear to be on the back foot and maybe they rush.
Their own equivalent technology Bard to market. And they’d had a fairly, uh, infamous example just a few days ago where one of their very first adverts for Bard, was giving out incorrect information. That’s just kind of the nature of large language models write there, statistical. And if there’s bad information on the internet, well these tools and technologies are gonna regurgitate that bad.
So, I mean, definitely a screw up from Alphabet because they should have kind of fact checked their ADFA before they put it out. Now the eggs on their face. But is it contrarian to be an alphabet investor right now? Stocks down, everybody’s kind of loom and doom about their future? This is still fundamentally a fantastic company with a great culture and some of the smartest engineers on the.
Krzysztof: Yeah, great question. Is, uh, investing in Google now a contrarian act and in some ways I would call it maybe a micro version of that. I mean, there’s always bears and bulls and all that, right? I’m not sure, like if people are really dumping on Google, it seems more like a kind of reactive, short term thing to fully label a contrarian.
But for whatever it’s worth, uh, and I’ll try to keep this. Abstract for, for disclosure reasons. One of my good friends works in the AI ml industry, so he knows it intimately and has recently, doubled down on Google because his claim. Because he has the insider’s conviction and understanding of ai, and he knows firsthand, according to him that their AI is the real ai, so to speak.
Now I’m putting words in his mouth, right? But that’s loosely right, and therefore, whatever these distractions may be, commercial advertising, eggs in the face, the real thing is still the real. , they’re the dominant leader in this position. So doubling down would be an act of, I guess, yeah. Opportunistic.
Contrarianism. Born from understanding.
Luke: Well, let’s hope so. I’m not doubling down. It’s a pretty big exposure in my own portfolio right now, but I’m holding firm, that’s for sure.
Krzysztof: Wanted to mention something else. I kind of heard in the, this, uh, big picture thinking of investing. I believe I got this from the All In Guys.
They ran an analysis, uh, about the most successful companies that became the behemoths, and there became an obvious pattern that there were three ingredients that turned out to be required f as fertile soil for like a Google slash Amazon to emerge. And the, uh, the first one is, They tend to occur during times of economic austerity, which makes sense actually if you think about it, right?
Because the, the winners have to be the strongest to survive. All the competition gets killed, and the winners get just, it’s easier for the, for a strong winner to feast on the minnows when there’s little, uh, sustenance around you, right? . So that’s kind of encouraging if we are in fact entering some sort of period of austerity.
The second piece is that they have to already be operationally slash cash flow positive, which makes sense. In order to survive austerity, you can’t be relying on outside sources for capital, right? , the haves versus the have nots. At this point, I think it’s starting to become clear to talk about Tesla very briefly again, why is it such a potential behemoth?
Because it’s operationally already in the positive compare with, say, the upstart EV companies, right? They’re nowhere close. And then you add on top of that basically taking us full circle. , you need a, some sort of major technological paradigm shift to be happening. So I guess in the early odds it was the birth of the internet, right?
And then in the tens, you, I guess you could say the cloud showed up and now we’re entering, I guess I would say from Ark’s perspective, the age of AI and all of its stuff. So the company, so if you look at those three pieces, As investors, you kind of have a nice framework to from which to ask yourself what might be the next Googles and apples and Amazons
Luke: Certainly the deck’s stacked in your favor if you’ve, if you are in that sort of enviable position, that’s for sure. It’s not to say you can’t succeed if you are not free cash flow positive, but it’s much more of an uphill battle.
Krzysztof: The implied thing is these companies that have these ingredients, their benefit can become way larger than the market gives them credit for, and that’s where the thousands of percent gains happen, right? Where the S optionality curves continue to appear as though out of thin air, but they’re not really.
It’s just you can’t foresee them in the moment. But when you have these ingredients in the bag and the cash there to take advantage of whatever’s around the next corner,
Krzysztof: you have the makings of the next trillion dollar.
Luke: Whether every company can become a trillion dollar company, it’s very questionable. Cause you, you know, every company exists in its niche and at some point, if you own maybe some more than 50% of the market, if the market’s like a 10 billion market, what you’re never gonna get.
um, you know, 5 billion worth of revenues. But, um, but there’s still significant upside for, you know, any, any company in this position. And not to name names, but say in the cybersecurity arena particularly, I know you and I have both recommended two different companies in that sector for 7investing.
I’m a big fan of both actually. Uh, and I, I now have a call option on your, Um, because you’ve picked the kind of smaller upstart, whereas I’ve got the, the big incumbent, oh, and by the way, you know, I know you wanted to pick my one, but I just beat you to the post I got there first. Um, so, you know, they could both be fantastic investments, but it’s just much easier for the dominant company, the one I picked to succeed here.
And, you know, maybe they end up by acquiring your company along the journey because they’ve got the deep pockets to be able to do that.
Krzysztof: Yeah, which makes sense. The risk and reward for the smaller guy is way, way larger than for the bigger guy, and that’s always the case in investing. Right.
Krzysztof: In all honesty, I prefer to be in, in, in the more stable position than the precarious one. But if luck goes or go, goes the smaller guy’s way, the returns will be much higher.
You just have to know ahead of time. Right. That these are the circumstances. The risk is very, this is how things tend to play out and know what you’re doing in terms of risk tolerance.
Luke: And as an investor, as we’ve said before, that you don’t need to pick the one winner. You know, you have the luxury of being able to invest in many companies in a sector, and then you’ve got exposure to both the giants and the little upstarts just in case they kind of come along and, disrupt the space and become the leader of the future.
Krzysztof: You wanna talk about, uh, productivity a little bit
Luke: Uh, yeah, sure.
Krzysztof: cuz uh, I’m. I have in my, I have in my hand the, uh, my daily potion from Magic Mind. And so, uh,
Luke: Tell us about, tell us about it, Krzysztof. What is, what is this stuff? Is this part of your extending your life to start with?
Krzysztof: it kind of feels like, it actually does feel like magic to me. So the routine I have in my day is I get my coffee, I drink my coffee around nine to 11. That’s a kind of slow sip. It, I get that little bit of caffeine and then around noon or one I down one of these guys tastes really good, honestly. Uh, and I guess this is, uh, like a kind of magic portion of, uh, a bunch of things that are good for you, including it has matcha, a neutropic called Bacopa Manier.
And, and Lions mean mushrooms and a bunch of good stuff, right? I’ve, I’ve never really felt as smart in my life as when I drink one of these.
Luke: Have you, have you tried to like double blind yourself with this though? You need to like, yeah, you need to find some similar tasting thing that doesn’t have these magical ingredients.
Krzysztof: uh, I have, um, I have not done. I see why you would suggest that. . But I think, I don’t know, man, the, the productivity that I feel like that, that afternoon period, right, where I know I’m, I’ve just taken this so lasts about, for me feels like four hours or so. I don’t get that, that midday low. Cause I wake up early, right?
So I’ve already been working for a long time that post caffeine thing, and I just feel like for me it’s a, it’s subtle enough that I don’t get the jitters. I don’t feel like overwhelmed. I’m not bouncing off walls. I kind of mostly want to sit and read and as I’m reading, I’m like thinking and connecting things and like writing things and it just kind of feels good.
Luke: Are you giving us the, the Krzysztof seal of endorsement? Then Magic Mind, your, uh, daily Boost.
Krzysztof: I do, I do. Uh, I I’m very curious for our listeners to give it a try. It feels like the real thing to me, uh, tastes good, doesn’t, you know, feels completely made, like it’s made of all authentic ingredients.
Luke: Yeah. One. One ingredient I did notice though, which is quite topical right now, is it’s got cor decept mushrooms in it. Is that right?
Krzysztof: that’s what it says.
Luke: Have you been watching the new TV show, the Last of Us?
Krzysztof: No, I heard. I must.
Luke: it’s incredible. I mean, episode three, perhaps the best episode of TV I’ve ever seen in my life with Nick
Krzysztof: That’s what I keep. That’s what I keep hearing. Oh my God. And
Luke: Uh, yeah, it’s remarkable. Like, I don’t wanna go, I don’t wanna be too big a fan. I haven’t, it’s actually a tv TV show adaptation of a video game. I haven’t played video game yet. I will at some point. But, uh, anyway, it’s essentially, it’s a post-apocalyptic story. Uh, in a kind of walking dead universe, there’s kind of essentially like zombies everywhere.
Um, but these zombies have come from cor decept mushrooms, and it’s this like, um, fungus basically taking over humans and taking over the brains and turning ’em into kind of, you know, robotic things that want to go and, uh, eat other humans and disinfect them. So hopefully your magic mind isn’t gonna turn you into some like ravening.
Krzysztof: I hope we avoid that fate too. Luke, I think my conversational prowess would, would drop a few levels. Not that it’s, uh, anything to, you know, to my horn about as is. Yeah. Uh, so anyway, this was, uh, I hope this, uh, advert for Magic Mind, uh, read well, because I’m a genuine fan of this stuff, so, um, I can’t wait for you to give it a try and, and see how smart you get.
So check ’em out. Magic mind.
Luke: watch out. World
Luke: Alright, are you ready to play the three conversations game? Do you need to drink your magic mind before we get into this?
Krzysztof: Uh, I’m still on my coffee, so, so I’m good. I’m gonna give you the pre magic mind answer is this morning.
Luke: Okay. Uh, and I’m sure anyone knows what’s going on now, but I’m gonna pose three conversational topics to Christoph. He’s gonna kill one, and then I’m gonna pick one of the other two, and he’s gonna give us a minute of wisdom on that topic. Um, I’m flexing my little bit on the hoof because I thought of a better one than one of my boring questions.
So, uh, my first question. Um, in a last of us slash walking dead post-apocalyptic wasteland, let’s say any, anyone who is taking magic mind has turned into one of those zombies. Um, how would you, uh, how would you plan to, uh, to live the longest? How would you manage your survival? Um,
Krzysztof: Oh fun,
Luke: question two. Um, you might be familiar with the concept of universal basic. Which could be one way of keeping us all healthy and happy in a post AI world where there’s no real jobs for any of us to do is UBI heaven or hell if you are a recipient. That make sense? Uh, and my third question, are you, you familiar with the game Dungeons and Dragon?
Krzysztof: I heard of it.
Luke: so, uh, in Dungeons and Dragons on your character sheet, you have six attributes being strength, dexterity, intelligence, wisdom, constitution, and charisma.
And you have a certain number of points you can assign to each of those. If you could modify your own character sheet, which of those attributes would you, uh, would you shuffle points in?
Krzysztof: which one of those attributes
Luke: as many tweaks as you like. You can make as many tweaks as you’d like. Would you? Uh, yeah. So for
Krzysztof: between the.
Luke: between the six exactly, you might take like five points of strength and direct them to wisdom or something. Whatever you think is the right way to play it.
Krzysztof: right? Yeah, yeah,
okay. Uh, so let’s, uh, nix the dystopian survival plan now, feeling the zombies this, this morning,
Luke: Okay. Uh, Alright, well you wrote down those six character attributes. Let’s hear, hear from you on that one. And I will say, so there’s two styles of Dungeons and Dragons player. Some people try and get, you know, a little bit of everything and some people MinMax, you know, they, they try and really max out a particular stat.
So, uh, so based on, you know, you and your life that you’re in, how are you gonna manipulate your own statistics?
Krzysztof: there are two, two answers, two possible answers to this Luke, and I’ll give you the correct one first and then I’ll give you the one I would actually do
Krzysztof: So the correct answer is you maximize wisdom. , it’s kind of like, uh, it, it, that will be the same as you find a genie, right? And you get three wishes. One of you, you ask for a million wishes and then you’re set, right?
And that’s what wisdom gives you. Like, cuz without, without wisdom, nothing else goes. And I guess as a, as a doctor of philosophy, it’s in my title, right? Like lover of of wisdom. That’s what, what, what it is. so I have a soft spot for, or maybe full respect for this particular quality, which is, which is different from intelligence cuz you could, you know, inte uh, intelligence can corrupt and you could be a smart, very smart, evil person that does all kinds of harm, but you can’t if you have wisdom.
So that’s the correct answer
Luke: Well, there’s another side to that answer as well though, before you go onto X example. So I mean, you’re a pretty wise person, so to max out wisdom, you probably only need to add a few points, let’s say. What are you gonna take those points off of though?
Krzysztof: Uh, I would take them off of,
hmm. I guess that’s hard, but probably strength
Luke: Okay. Alright. You feel like you got some strength spare? You got some spare strength in there.
Krzysztof: I mean, if I get to be so wise, I’ll find alternate ways. So my, my, my actual answer, Luke is that I, I. Maximize charisma, because, you know, uh, Socrates man, you know, he died and he was, uh, drank hemlock. Right. And there was, uh, nobody liked him because he was a gadfly, you know?
But, but if I were, even, if I could even get to a 10th of. Charisma level, it seems like, like the seas would part, right? The the ladies would swoon the, uh, I mean, it just seems like life would be so much fun if you were, you know, this, this sparkly, um, Magnite of energy and, um, and vivacity.
Luke: And just imagine, how our podcast listenership would explode if we both had max charisma
Krzysztof: Can you even imagine? Oh my God,
Luke: So you, so you see, uh, if you’ve got charisma, you don’t need wisdom, right? So you gonna steal from your wisdom.
Krzysztof: Oh yeah, yeah, yeah, yeah. You just, I’m just going to charm my way through, through life. be so much more fun that way cuz you know, when you’re wise, you know, everything has, you know, a downside and there’s. Is life is hard and blah, blah, blah. If you’re only about charisma, man, , ignorance is put bliss for a little while.
Krzysztof: Right on. Is that a wrap
Luke: That is, we’re fully into double digits now. We’re nearly into the teens if, uh, so coming into episode 12 in a fortnight’s time. So I think we’re gonna dig back into this big ideas paper. Um, so we’ll pick out maybe two or three of those topics and just go a little deeper and maybe share our own perspective.
So we’ll tweet link to the paper and, uh, if anyone’s listening and you want us to go and dive into a particular topic first, we’ll, at your own views for Officer Line, let us know.
Krzysztof: Yep. And, uh, we are @7LukeHallard on Twitters. And I’m @7FlyingPlatypus. Can’t wait to hear from you.
Luke: Great stuff. Krzysztof, another good episode in the bag. Always fun chatting to you. If you got some value out of this as a listener, maybe share the episode with a friend
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