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...
Nothing is off limits in Episode 4 - including Pokemon drag-shows, $8 Twitter, and the magic of Stock Based Compensation.
November 15, 2022 – By Samantha Bailey
In which Luke is concerned that Krzysztof became too rambunctious for his own good, banging on things and making a wild ruckus! Can you blame him, though, when Luke confessed he has a “worry” category in his portfolio? What happens next is a *must listen*!
Also discussed feverishly: Being pot-committed in poker and stock-committed in the market; Pokemon drag-shows; TikTok – why it terrifies Luke and why Krzysztof plans to use it to save the world; $8 twitter; the magic of New Orleans; the problems with Stock Based Compensation; plus Potato farmers rescuing Silicon Valley and the semiconductor industry, from Krzysztof’s book of the week, Chip War.
[00:00:00] Luke: hi, and welcome to another episode of No Limit with Krzysztof and Luke, part of 7investing.com, where it’s our mission to empower you to invest in your future. I think this is episode four and today is Monday the 7th of November, and I guess this’ll go out in about a week’s time. How you doing buddy?
[00:00:19] Krzysztof: I’m doing all right. Luke. We’re getting to be old hands at this, huh?
[00:00:23] Luke: Uh, four episodes in. Yeah. When, when we get 40, I think we’ll be old hands. . So you’ve been in, uh, New Orleans for the last couple of days. What have you been up to?
[00:00:33] Krzysztof: Yeah. It just came back. That place is the most unique place in all of the United States, and it’s, it was my first time back in a while. I was there the first Mardi Gras after Katrina, which was an event,, It’s one of those places that, to me, feels like a cartoon when I think about it.
eccentricities of it. But then, and the folklore and the myth and the mythologies and all that. But then when you go there, It’s actually like that like, like there’s weird shit everywhere. There’s like, you know, oh, there’s a ghost going by. Oh, there’s a pothole with beads in it.
Oh, the, I mean, it’s just nonstop.
[00:01:16] Luke: And that’s, that’s like all the time. That’s not when, like, is it? Is it Mardi Gra now?
[00:01:21] Krzysztof: no, it’s like that all the time. That’s the thing. It’s norm is, is to be, it’s freakish self and it’s inspiring. I was, I was inspired. What was I inspired by? I was inspired by the diversity of not just humans, but the diversity of, it’s like this melting pot that’s actually like bubbling up and like seemingly continuing to be itself in the best way.
Almost like a best case advert for the, what the United States could be if it got its shit together. And of course it’s. All kinds of problems too. So don’t get me wrong, like there’s corruption and crime and all that. I just didn’t happen to see it. You know, on my trip, hung out in bookstores. The one I spent the most time in was William Faulkner’s old house where he lived for about a year and worked on his second novel, which is now a bookstore.
Drank Saks, met mystical pixie creatures at night. Went to Pokemon themed burlesque show.
[00:02:24] Luke: Nice. Did you catch ’em all?
[00:02:27] Krzysztof: I, I caught none. And
[00:02:30] Luke: You’re a married man now you gotta, uh, watch out for those Pokemon
[00:02:34] Krzysztof: and all the while I was reading about the history of the semiconductor industry . So
[00:02:39] Luke: Uh, very good
[00:02:41] Krzysztof: as, as one does
[00:02:43] Luke: Ballet Balancing the, balancing the discipline and the work with a bit of fun. Very good. I’ve never visited New Orleans. I guess it should be on my list of places to go visit. Whenever I come to the states, I always get drawn in by the snow and the mountains. I never, never quite make it to anywhere other than kind of mountain ranges, massive cities, or occasionally Vegas
[00:03:01] Krzysztof: Yeah. No, that’s a huge error in oversight on your part. Luke, Fix it. I’ll give you a tour next time you fly across the pond. I will happily meet you in New Orleans. It’s that special, a place. And, and also, uh, here’s a pitch. My favorite television show of all time, which I teach at the University of Texas as well, is the wire,
[00:03:23] Luke: Oh, wow.
[00:03:24] Krzysztof: is a kind of, for those of you not familiar with it, it’s a kind of novelistic look at, at Baltimore or Modern America, David Simon.
Second show after the wire is called Treme, which is, which has four seasons about New Orleans post Katrina Absolutely fascinating.
[00:03:42] Luke: Very cool. I’ve, uh, I’ve tried to watch The Wire a couple of times. It’s great, but for some reason I never make it past the end of season one. I think I’ve watched season one like three times and there is a link as well. My wife Katrina, not the hurricane, the wife, uh, uh, she lived in Baltimore while they were filming.
She actually worked in the Marriott Hotel there. And so her and her roommates were like constantly having loud parties, uh, cause they lived in the hotel as well as working in the hotel. And they were constantly getting in trouble with the actors and actresses on the wire for keeping ’em awake at night.
[00:04:12] Krzysztof: Yeah. Right. If you want a inside look into Amer How America Runs or Doesn’t run, David Simon’s Wire Treme are are your go to? Yeah. Do you still have a country up over your side of the world? What’s happened since we last spoke?
[00:04:28] Luke: well, we’ve all got a bit bored of the whole political drama, so we’ve just kind of forgotten about it and getting on with the next thing. There was a, uh, a protest march that I had intended to join actually, uh, in Central London on Saturday. Uh, protesting to demand a general election, but to be honest, I feel like kind of the, the world moved so quickly that March was planned and now, you know, is woefully too late cuz you’ve, we’ve installed a UPM before the guys could even get together and make their demonstration.
So I guess it’s just a heads down, try and get through the next year or two.
[00:05:00] Krzysztof: Right. And the rest of history too.
tomorrow is our election. It seems like anything could happen. Still, there are probabilities in favor of, of the Republicans taken back at least half of, uh, Congress. But, there’s so many unknowns that who knows what We’ll wake up to tomorrow
[00:05:20] Luke: Have you, uh, have you got your vote already or do you have to go and vote in person on the day?
[00:05:25] Krzysztof: I voted already early at the university.
[00:05:28] Luke: Great, Great. We have, this is, this is one thing that kind of infuriates me a little bit. Like people complain about politic. But then they don’t make the effort to vote. And I dunno what happens in the US like in the UK now, it is super easy. You register to vote by mail and you get your ballot paper like a couple of weeks ahead.
You can spend your time kind of researching it or you can just tick the box. You pop it back in the post box and that’s it. You’re done. You’ve exercised your, uh, Democratic, right. It should be mandatory.
[00:05:55] Krzysztof: Agreed. I mean, it’s a serious topic too. I mean, people die for the right to vote and then, um, but on, you know, the flip side is, I guess the mouth phons involved in making it harder or,
uh, it’s such a, it’s such a mess, you know, If you can’t, uh, reliably trust your own institutions voting apparat.
[00:06:16] Luke: Yep.
[00:06:16] Krzysztof: What can you trust? And so in order to make it say a little more proper, there are, there are all these roadblocks put in place and that deters people from voting potentially, and that gerrymandering and it’s such a mess.
Something, in other words, I envy what you just said, Luke, like it ought to be a pretty straightforward process
[00:06:38] Luke: I guess, you know, one day we will put democracy on a blockchain and kind of fix it and you’ll be to vote in your app in a highly secure manner, but today is not that day.
[00:06:48] Krzysztof: Today is not that day. I hope that’s coming.
[00:06:51] Luke: Yeah. Hey, uh, hey. Talking about apps, So, uh, I installed a new app the other day, over the weekend, in fact, cuz we were chatting and our team meeting last week about, uh, maybe, uh, launching a presence on TikTok.
And, uh, our director of marketing, Sam Bailey, was espousing how good the Washington Post TikTok was. So I installed TikTok at the.
[00:07:12] Krzysztof: huh
[00:07:13] Luke: My God, that is a terrifying app. It is just horrifically addictive. I had no intention of going down the TikTok rabbit hole and suddenly like an hour has passed and I’m just kind of swiping up.
It’s uh, wow. It’s, it’s interesting.
[00:07:26] Krzysztof: My brother-in-law swears by, and he’s a, he’s a, you know, he’s a mature adult. Um, and I, I could feel that kind of rabbit wholeness about it. So I, I up to now have not gone down it, but I have gone down YouTube rabbit holes. How do you discern the difference
[00:07:48] Luke: I pay for YouTube and that’s probably the best, like 18 pounds a month I spend just to get rid of the adverts , like I’ve learned to play the piano. Right? There’s a ton of. Really useful instructional stuff on YouTube, but also like a ton of interesting content, a ton of interesting news.
Uh, what was I doing the other day? Uh, I wanted to hang some pictures. This one I just re hung one of several pictures, so I watched a YouTube on like how to decide the correct height to hang your pictures up. And there’s, there is an official gallery height, which is 145 centimeters to the midpoint. So I’ve been going around with like measuring tapes and rulers and things.
[00:08:25] Krzysztof: So what’s the, So what’s the difference though? That doesn’t sound like the, a rabbit hole. That sounds useful. And I guess educational, but you’re saying, What about TikTok?
[00:08:35] Luke: I mean, it’s super engaging and addictive and that kind of, that little sort of adrenaline buzz when I guess, or dopamine buzz whenever you kind of watch the next thing. But one thing that is quite interesting, and I, I kind of knew about it in theory but hadn’t experienced it, is it’s, you know, you don’t follow or you can follow people, I think, but it’s more that it starts pushing content to you based on like how long you’ve spent watching various things.
So, you know, watch a cat video for a little too long and, uh, suddenly like your whole feeders, every third thing is a cat video. So it’s quite interesting, I suppose, in terms of, uh, maybe telling you about your preferences and the kind of content you want to consume in a way that you might not even be conscious of.
[00:09:17] Krzysztof: But I guess to me that still sounds similar to YouTube.
[00:09:21] Luke: Maybe it’s just cause I’m a new user of TikTok, but I, I generally go to YouTube with like a mission. I’m going to find out something specific, whereas, I dunno, I’m just trying to understand TikTok cuz I might suddenly, you know, have to create an account. Sam, uh, Sam said we have to be, you know, dynamic and full of energy.
So I thought I watch somes. I’m not sure I’ve got quite the uh, the dance moves in me though. , we need to set an investing dance
[00:09:50] Krzysztof: Yeah. Yeah. You know, all my life I’ve just relied on my beauty and charm to get me through. I don’t know if I, if, if doing a song and dance is in my cards, that’s asking a whole lot. Yeah.
[00:10:08] Luke: If we can get Matt Cochran to, uh, do the seven investing dance,
then we’ve got, uh, we’re going, we’re going for gold
[00:10:16] Krzysztof: Yeah. So, so, uh, you wanna talk about Elon and Twitter as another app that has a big shakeup?
[00:10:24] Luke: Yeah. What’s happening there?
[00:10:25] Krzysztof: Well, I, I have no idea who can have his zero idea what’s going on there, but I am sensitive to, oh, he’s to, I guess I would just call it confirmation bias. I was thinking about it this morning that the people who came in predisposed to view him as a problem or problem child, you know, are complaining $8, How can you, how dare you charge me $8 for something that might really improve the service.
Right. And the people that are part of his crew. are supporting all the efforts and saying, this is correct, and you’re gonna improve the operations of this thing and you’re gonna make it that much better. And it’s just so fascinating how the human mind just can’t, or has such a hard time trying to assess something objectively.
And it makes me feel weird thinking that I’m sort of seeing this objectively and thinking like, , why? You know, like all of a sudden I doubt my own perceptions.
[00:11:26] Luke: So what, so what’s your view do you think the, the plan to make Twitter kind of less dependent on advertising revenue and to pull in revenue based on, you know, millions of $8 a month? Is that a good direction of travel for the.
[00:11:39] Krzysztof: He, So yeah, this is something I think I’ll, I’ll circle back to, uh, when we talk about, um, operational excellence. I know that’s on our agenda today, but
I have faith in Musk as an operational genius. So whatever other political leanings he may or may not have, or provocative things, I know he could, he could execute. And so Twitter as a stock had kind of floundered for such a long time and you could feel there’s so much potential here.
[00:12:14] Luke: Yeah.
[00:12:14] Krzysztof: And so he comes in and immediately starts executing.
That might be a PT choice word, but, but he, he fires, uh, uh, you know, he trims a lot of fat. And, and in, in place of that, he’s asking $8, right? From people who would benefit tremendous amount if in fact we get rid of the spam and the bots, and if verification itself is solved. So the question is, for me, is $8 worth an immense amount of value if it, if it’s on the assumption that it, it’s done correctly and the probability here is that it will be done correctly.
So to me, it’s such an obvious answer like, hell yeah, it’s worth it. Like, hell yeah, that’s a coffee, right? I mean, I mean, I mean, I don’t know, people I guess fall on Twitter on different scales of use, but I find immense. Value on the platform in all kinds of ways. So, So
[00:13:12] Luke: an important point cuz it’s not like you, it’s like the plan isn’t, you must pay $8 to continue to use Twitter. The plan is you pay your eight bucks a month and then you are verified. And if, if verification actually has some teeth, like if it’s, you know, equivalent to the KYC for example, that financial apps do, then you’re relatively confident, you’re engaging with an authentic person or authentic news source that has value to me.
So even if I wasn’t paying my eight bucks, like the health of the platform, uh, it’s just, it’s, it’s gonna be a better place to kind of hang out and get news. But I think there’s, I think there’s an interesting idea, I dunno how far they managed to take it, but like some of the fringe benefits you’d get by being verified and like if they can depay wall a bunch of news sites and maybe incorporate like micro transactions and stuff, then that’ll make Twitter way more valuable for me as well.
Cause I’m forever like seeing something interesting clicking into it and it’s like, oh, you know, you’ve read your three free articles for this month so you can’t consume that bit of content that looked otherwise quite interesting.
[00:14:15] Krzysztof: Right. Yeah. first, it seems to me it’s wreaking of the, um, it’s a, what’s the name of this bias? The, Well, it’s free now, so you can’t charge me $8 later. It’s maybe familiarity bias or something like that.
Whatever it has, some name it doesn’t matter. But for people to, to have this outcry that you can’t charge me $8 because you didn’t. That to me seems obscene, but I also think, I remember hearing something like, I think it might be Steven King as one of the, opponents to the plane. He was saying, You should be paying me because I’m producing value for you.
But if it does in fact, unfold down the line that you can monetize content creation on Twitter, and to do so effectively would require some veracity, then $8 is a drop in the bucket.
[00:15:09] Luke: Yeah. And I haven’t actually read beyond the headlines, but I saw today of evidently Twitter now paying like highly followed YouTube creators to kind of come across the Twitter. So I guess there is some model where they are, they recognize that like the value isn’t the technology and the platform, the value is the community, like the people who post and they should be doing everything they can to reinforce that.
Like you don’t want people like Stephen King for example, dropping off the platform. Cause I don’t follow him, but I know I read his books and I enjoy his son’s books and he’s in, it seems like an interesting guy. Um, he’s gonna make the platform a richer place. Um, so maybe the, you know, maybe the direction of travelers.
At some point you can pay content creators through some sort of mechanism.
[00:15:54] Krzysztof: it seems obvious to me,
[00:15:56] Luke: Right,
[00:15:57] Krzysztof: mean, based, I guess, on what we see from YouTube revenue, and
[00:16:01] Luke: Yeah.
[00:16:02] Krzysztof: tick and TikTok, right? So why would, why would Twitter be the outlier? So,
yeah, maybe that’s not the most sophisticated take, but as a commentary on, on, um, humanities, knee jerk reactions without maybe deeper thought or maybe without give, like, I almost wanna say like, give the guy a chance, Right. He’s an operational genius. I mean, that’s not even like debatable, right? He, he, he knows how to code, he understands.
pretty sophisticated stuff like rocket science for God’s sakes. Right. He has a team of engineers. Right. He clearly knows what it, what it means to run a company, you know? Well, right. Despite the odds he, he wants to implement the change and all of a sudden there’s this like, political theater and drama that he himself was not necessarily, uh, trying to flame in this particular moment.
Right. So it’s,
[00:16:59] Luke: Sort double edged sword though. Like the way he portrays himself on Twitter, he does set out to inflame topics and, you know, put himself at the center of, you know, things he really should have nothing to do with as a business leader. So, um, it’s kind of the bed he’s made for himself people love to kind of hate on him right now, so they’re gonna jump on every little thing, but, he took the company private, he’s fired the board, right? He’s now in charge. He’s, he’s the guy driving it and he’s gonna turn it into something. And I’m, I’m very optimistic that, uh, it’ll come out of this as a stronger, better platform. But there is an outcome where maybe it die and everyone does move to TikTok or Mastodon, or wherever else.
[00:17:39] Krzysztof: Yeah. That’s interesting. You’re, you said you are wildly optimistic or just optimistic?
[00:17:44] Luke: I’m hopeful. I’ll say hopeful. Hopeful.
[00:17:47] Krzysztof: Hopeful.
[00:17:48] Luke: I’ve put some effort into building my own Twitter following, but I’m still like languishing with sub 3000 followers. By the way, if you’re listening to this and you’re not following either Krzysztof or myself, go hit that like and subscribe button right now. No, that’s a YouTube thing, isn’t it?
[00:18:03] Krzysztof: That’s a YouTube thing, but, But you are, you are, man. We are, we’re, we’re, we’re old geezers, aren’t we? Uh, you are @7LukeHallard, and I am @7FlyingPlatypus on the Twitters.
[00:18:19] Luke: There you go. Go find them and follow. We say wide stuff. We, we uh, we bullshit and shit talk on this podcast, but actually we do have some smart stuff to say on Twitter from time to time.
[00:18:30] Krzysztof: right. The smartest. All right. So what’s next? Luke.
[00:18:33] Luke: Oh, actually, well, I mean, just let’s, let’s stick on that topic. Cause actually, uh, I think something interesting has coming out of it. So I guess, you know, going back to your slightly ill chosen words about him being like a great, uh, executor, right? So he has, um, or he has already has me, he’s exited like a large chunk of the workforce and he’s, uh, you know, there’s still more to come.
And if we look more broadly, I think Meta in the last day or so who have made a very similar announcement, they’re gonna be exiting like thousands of engineers, stripe, like the, the darling kind of private company FinTech. They’re also exiting like a thousand plus employees. So I think now we’re starting to see, um, some of these recessionary forces hitting big tech.
And like, I want to, I gotta caveat this by saying like, I’m really sorry if you are one of the people impacted by this. Like, it’s not great. Um, but you know, assure if you are, if you’re coming outta Twitter, if you’re coming out of Meta or Stripe, You know, I imagine you are a pretty talented person and you’re not gonna have a problem finding another job in tech.
But I think there is something interesting here as a shareholder of many of these companies, um, and it relates to kind of stock based comp and compensation generally. Like it’s just gotten out of hand. I don’t your view, over the last couple of years and these companies that have been on a mission to kind of, you know, growth at all costs, um, to, to get there, they’ve had to overpay essentially.
And they’ve now set this, in my view as a someone who doesn’t work in that industry, I suppose this sort of unhealthy expectation of around, uh, kind of salaries and stock stock awards. And it’s not great for shareholders. I’m gonna stick some, um, some numbers. I’ll pop them up on the, on the edited video.
Um, but I’ve shared a few percentages with you. Some companies, if I, if I kind of look down the list, like UiPath, um, a market cap of just under 6 billion they’re paying out over 500 million in stock based comp. So what that means is they’re effectively diluting the company by more than 8% a year.
That’s a crazy number. And that they’re not alone, as in this, just this very quick kind of screen I put together. There’s like 20 companies here, um, Okta, Snap, Splunk, Wix, DocuSign, Palantir here that are, you know, they’re really, you know, it’s, it’s a very shareholder, unfriendly approach. And so like, I’m not saying that a a few thousand, uh, tech employees coming onto the market is gonna change anything directly, cuz there’s must be like tens of thousands or more folk working in this industry.
But it’s more, maybe if you’re the CEO of one of these companies, like say DocuSign, you know, they’ve got their own pretty horrible problems that they’re wrangling with right now. Well, maybe the actions of Musk and Zuckerberg in the last couple of days kind of give you permission to, within your companies, just get a bit tougher and say like, these golden days are behind us guys.
You’re either on the bus or off the bus. You’ve gotta decide, but this is our new compensation policy. There’s probably some short term pain for companies if they do lose, you know, the most talented engineers. But if the whole industry does this, I think on, on my Twitter I talked about it being a prisoner’s dilemma between many of these companies.
Cuz if, you know, if one or two cut comp, well they’re just gonna lose their people to the companies that didn’t. But, uh, I’m not saying, I’m not saying, you know, these companies should be collaborating on price fixing, but if there was a general reset across the market, I can only imagine that’s gonna be healthy.
Well for everyone, apart from the impacted employees,
[00:22:19] Krzysztof: It seems. What we’re looking for is some kind of balance, right, between the, the, the growth that’s needed by the top, the people who are the most talented and the most skilled. You need to recruit them and you need to pay them, right? But at what point do you get into the land of the, what was it, the videos showing, uh, Meta, someone working at Meta, a young millennial working at Meta, and it’s like a smoothie in the morning and a, lounging in the afternoon where first time, you know, just like all the, all the perks, right?
And none of the work. And when I first came across that video in our, on our seven investing Slack channel, I, I assumed it was a parody,
[00:23:05] Luke: Right.
[00:23:05] Krzysztof: but, but I believe Steve said it’s, it’s not a parody and right. And, and, but, so I think Musk’s. Uh, point of view from the operational end is that is obviously on the wrong side of the line, the balance line, but it’s so obvious, right?
And that’s what the letter from Altimeter was right to, to Meta saying like, We’re all for you exploring the Metaverse, that’s not the problem. But when you’re doing it in such an over abundant, over exaggerated, uh, lavish, if I may write lavish excess, and that’s coming at the, at the expense of the shareholders because you can, because there’s this funny thing about gap and non-gap and how, well, it’s not a cash expense, so, .
I guess what I come away from this Luke is one way or another, excessive greed catches up, right? There’s. Right. I mean, nobody has figured out how to, how to really rig the game and in the end not get caught. And it seems like the moment we’re in, if we, if I think about it as the big, as the DR.
Multiples get compressed severely by the highest performing companies, the only ones that really stand the chance to rebound and, and return to their glories are the free cash flow positive operationally, the ones that have all along, not been deceiving themselves or the shareholders.
[00:24:37] Luke: That sort of change in the last year, I suppose as, as valuations of reset where everybody, I, I used to be, you know, blindly investing in my own portfolio and some of these growth at all costs companies. But now, you know, they have suffered the hardest without doubt.
And so if a company can, uh, make more modest consistent growth, but profitable growth, you know, they’re growing within, um, you know, within their ability to spend and control costs, that’s much more, uh, I have much higher conviction in those positions in my portfolio today. We’ll, we’ll talk a bit later.
I, I wanted to talk a bit about portfolio construction and how I think about some of the stocks in my portfolio. Like I’ve certainly got a category of kind of wild investments that do have some of those companies. But really the, the, the investments I consider to be my kind of core. Or my, or my, you know, my solid growth companies these days are the ones that are free cash flow positive
[00:25:35] Krzysztof: I want to just have one thing about. Maybe analogy I see between the SBC stock based compensation and, and this crazy story I, I read about in the book Chip War. So my book, Dejo, as I was, uh, alluding to earlier, is Chip War, The Fight for the World’s Most Critical Technology And by Chris Miller.
This is insanely good. Omg. I mean, it’s, it reads like a thriller. I just can’t believe how, how, how fascinating it is. Let you know, forget informative and, and educational. But there’s a, there’s, um, he’s taken us through the birth of the semiconductor industry. So the part that really perked my ears was when Japan began outperforming the United States.
so forgive me if I get the dates wrong. Seventies, maybe eighties, all of a sudden, Silicon Valley who had this big lead in the industry where the inventors had the tech, had the talent, they fell victim to the same thing, excess, and then all of a sudden Japan got better at their, at their operations. Now they’re undercutting on price and ends up commodifying the product at that, that time.
Uh, d r a m chips, and low and behold, all of a sudden America is out of, out of business or about to go out of business. Fascinating point is that there wa there was, and I forgot his name. Uh uh Maybe did I write him down? Yeah, I did write him down. Jack Simplot. Have you heard of this fella
[00:27:19] Luke: I have not.
[00:27:21] Krzysztof: So he was a potato, uh, entrepreneur, potato farmer, and he made a, he made a fortune in Idaho, becoming really good at, at operationalizing potatoes.
He looks at what’s going on, and so based and, and the way he’s characterized this, he’s just, he’s kind of like a, he’s not a tech guy. He’s a, you know, he’s a, he, he’s gotta draw. Yeah. He’s just
[00:27:48] Luke: if he’s, if he’s doing potatoes, he’s a chip guy, right?
[00:27:51] Krzysztof: he’s, Yeah. And yeah, that pun was made right. Uh, and, uh, he looks at what’s going on with the semiconductor industry, looks at, uh, Silicon Valley and says, These guys have no idea about business.
He shows up forms micron, and long story short says, says, The time to get into this business is when everybody else is folding, when it’s turned into a com commodity, because I know how to actually make it run more efficiently. And he kind of singlehandedly, then out does, then out, does the Japanese, and kind of starts putting the pressure back on them and brings us back into the game where the actual engineering and, and creativity and innovations start to matter.
Now that’s oversimplifying it, that there, there were innovations along the way that helped bring us back in the game. But the point being, it seems to me extraordinarily analogous to what’s happening in this moment, right? You have wildly successful companies that overindulge. Lose, start losing two companies that were excellent in their, in, in their operations.
And the only thing that gets you out of those waters is by focusing almost maniacally like Elon can on the sort of bottom line. And that involves things like stop based compensation.
[00:29:21] Luke: Right.
[00:29:21] Krzysztof: does that sound, I don’t know, Am I making up that wild analogy? Is it like, does it seem to.
[00:29:29] Luke: I dunno the history of the semiconductor industry, but I guess, you can have a great technologist, who builds like a technology centric organization, but if they don’t have the business skills to build that organization in the right way, then you know, you could be generating like, incredible recurring revenues.
But if those revenues aren’t turning into earnings, like, what are you doing? What’s the point? Why, why is this a business? You know, might as well be a, might be a charity or a giveaway, right? So, um, but what’s that, what’s that saying? I dunno how true it is, but, um, like, success in business is like 10% the idea and 90% the execution.
So, you know, you could have this fantastic, uh, thing you wanna build, but if you build it in the wrong way, um, well, it ain’t a business.
[00:30:16] Krzysztof: Yeah, and bringing this, this analogy with the potato guy seems like so apt because, because when you think of the complexity of a semiconductor and needing to know physics and all the call it smarts in one way falls flat and needs a guy who knows how to sell potatoes to rescue. I mean, they couldn’t be more apt.
And I think right to land the plane on this with what, what it seems like what Elon is, is saying is, well, he seems capable to execute on both ends. Maybe that’s what makes him such a genius. He knows the tech and the, and the engineering side of things, but he also knows that to make Tesla the company that it is to.
Uh, disrupt the auto industry. He had to start at that foundational level of efficiency on the lines themselves. It’s kind of obvious, but I guess greed, I guess. Yeah. It’s amazing how quickly greed and the good times can, can blind most everyone involved.
[00:31:18] Luke: I suppose at the same time as kind of criticizing these companies that pay crazy levels of stock based comp, like, you know, I’m not, I’m not making an accusation that, you know, the CEOs of these companies, but as well as, you know, enriching their developers, they are lining their own pockets.
Right. There’s, um, stock based compensation, you know, these massive comp packages are diluting shareholders by, you know, eight plus. That’s really going to insiders. So, um, you know, are they dumb businessmen? Maybe not, right? Maybe they’re just, uh, you know, they’re just kind of focused inwards rather than on shareholder value.
That’s not, that’s not how you build a successful generational business. But, um, you know, if your goal is to make way like a bank robber, then no, that’s a way of doing it.
[00:32:04] Krzysztof: Yeah. So tell me about a Turkey voting for Christmas.
[00:32:09] Luke: Uh, yeah. Well that, I suppose that is that point, right? That, um, you know, I was saying earlier and I said on my Twitter, in some ways these CEOs have now got permission to, you know, maybe reset comp, but. Are they actually motivated to do that? Because if they reset comp, well, you know, the expectation is they’re gonna be resetting their own compensation at the same time.
If you take someone like George Kurtz, CEO of and founder of Crowdstrike, like it’s clearly. You know, he’s, he’s described this as his life’s work, and I’ve listened to him talk about the company on different podcasts, right? I, I certainly feel it’s one of my core holdings.
I certainly feel that he’s built that company in the right way, and he’s got, uh, you know, all parties, including shareholders and customers, and, you know, the industries best interest in mind. Uh, he’s, I get the impression he’s certainly not trying to enrich insiders, but then, you know, there are many peer companies that perhaps aren’t taking that same long vision.
Um, and so in some ways you can’t argue with, well, you can argue, but you know, the only way, the only impact you have is by selling your stock, right? Because if we are shareholders in these companies, effectively we are endorsing the, uh, the decisions of leadership.
[00:33:22] Krzysztof: Yeah, Agreed.
[00:33:24] Luke: Yeah. Should we talk about something a bit lighter? Um, oh, you know, we should do a little, uh, we should do a mini advert break. Um, now I had, I had dinner with a buddy Mike on the weekend, and, uh, he’s quite enjoyed the podcast, but he criticized us on being, uh, pretty, uh, low energy with our advert , so we need a high energy kind of support for seven investing cuz we’d like to talk about the company itself. And I thought an interesting thing I’d like to ask you about, so, um, we did our deep dive videos a couple of weeks ago, I guess now for our November recommendations, and you got a bit of a grilling on your deep dive from the team.
And so, uh, I wonder what your thoughts are on that and uh, how that potentially makes the service extra valuable for members.
[00:34:07] Krzysztof: Yeah. We need more of that. We need a lot more of that confirmation bias and everything associated with that is I, I would rank as one of the most deadly sense to commit as an investor. And of course, when we’re, as you know, when we’re researching companies and we’re diving deeply into a particular segment, It’s so easy to start just seeing what you wanna see and buying what the company’s selling.
And even if you, you know, awareness is, is sometimes not enough. I can’t think of a more valuable thing that a service like ours provides and having seven of us, having each other’s backs on the one hand. But on the other hand, the whole point is to make money for our members.
And if we’re doing our jobs correctly, it’s not to be yes men.
[00:34:58] Luke: Yep.
[00:34:59] Krzysztof: Which is tricky because we’re, we’re all colleagues, right? And we’re all, It’s such a difficult thing to do diplomatically, right? When I got that pushback, it’s like, yeah, they’re good. It made me feel like I did my job in the sense that, okay, I presented a, a bullish case, but there’s an obvious red flag there. Thank goodness somebody saw it or, you know, raised their objection.
And that doesn’t necessarily mean of course, that they’re right either, but at least the conversation then is on the table, right?
[00:35:32] Luke: Yeah, no, I, I totally agree. It’s, it’s valuable. Like we are seven investors who do have different opinions on some of these companies, and I think if we are, well we are respectful about that, um, that kind of debate and challenge. But I think that is really healthy, kind of makes those deep dives a bit more scary to do to the team.
But that’s a healthy thing as well, you know, causes you to be that extra diligent and, you know, have the answers to.
[00:35:58] Krzysztof: right, and, and I think if people see more of. . My, my sense is rather than say being confused, like, Wait, wait a second. There’s two people and they’re saying the opposite, uh, opposite things. They would leave that conversation with more faith in the process and then make up their own minds, which I think is what we’re about.
Empowering you to invest in your future. Right.
[00:36:25] Luke: Yeah. You got it.
[00:36:26] Krzysztof: Teaching you how to fish.
[00:36:27] Luke: Yeah. Well, let’s, uh, let’s sort of close the effort out by reminding, uh, listeners that right now I think we’ve still got, you can sign up for $1, that’s, uh, an eighth. The cost of a Twitter blue tick for a month. So for one, $1, you can, uh, you can come and check out Krzysztof’s grilling that he got in his deep dive video from the 1st of November.
[00:36:48] Krzysztof: uh, underselling Twitter. By, by, uh, by a lot. Deal of the century fellas in fell. And fellas. And ladies. Ladies and gents. All right. So that we, we good on seven, right? Okay.
[00:37:04] Luke: Hopefully Mike is happy with the energy levels.
[00:37:07] Krzysztof: Mike, it’s Monday morning for me over here. Man. Also, you gotta Luke has no excuses, but I’ve got plenty.
[00:37:16] Luke: Plus obviously the New Orleans hangover, although you look bright eye and bushy-tailed, so,
[00:37:22] Krzysztof: So, Luke, you wanna, you wanna talk? Talk a little bit more about the, your portfolio construction
[00:37:28] Luke: yeah. Let’s, let’s, uh, let’s do that. I just wanna give a couple of minutes cause something I’ve been dwelling. Uh, recently, I suppose as I kind of think about my own portfolio, so, and I, I tweeted about this, so go check out @7LukeHallard, and you can see some pretty pictures. But, if I think about the diversification in my portfolio, this is kind of where I’ve come from and I’ve been an investor for, kind of give or take 20 years, maybe slightly under 20 years at the moment.
And when I started out, I went from kind of indexes at the start I started buying individual companies and I kind of went crazy and I got up to like 60 to 60 plus different companies in my portfolio. Um, and then maybe a kind of early 20 teens I did some analysis and I thought, actually I’m making pretty good decisions here.
Um, and the way I sort of backed into that was by looking at the kind of, Compound annual return for each individual company based on like the percentage of money I put into it at that time. And the kind of conclusion I drew, whether it’s accurate or not, was the companies I was investing more in. Cause I wasn’t keeping like a diary at that point, but the company I was investing more in would do performing better on the whole.
So I think my conclusion there was like clearly I believe in these certain companies a bit more. My decisions are good decisions. So I thought, okay, this is actually a prompt to compress my portfolio and I got it down to. Um, like 20, 25 positions. And actually my intention there, I was chatting to my buddy Albert about it back at the time.
Uh, my intention there was to get, um, 90% of my portfolio assets, like the total value into a top 10, and then the other 10% into like a bit of a mish mash of stuff. Um, and I kind of broadly, I directionally got there and I realized, um, quite recently, a few months ago, I’ve sort of expanded up from that kind of 20, 25 stocks and now I’m back up to, well, it turns out 48 different positions.
And I kind of, I halted that deliberately, but, I hadn’t sort of articulated to myself why I was doing that, so I wanted to just put a frame around it and I thought I’d share that and get your views as well. And this is why I put on Twitter the other day, so I. I definitely consider that I’ve got like a core of my portfolio.
So it’s about six companies. And these, you know, directionally, I had a good debate with Albert about this last week. Like I say, these are the companies I will never sell. You know, clearly never say never, but you know, I’m, these are companies that I’ve, I own and I intended to be a shareholder of, Um, the day I die, even if, I have to kind of, you know, cut them down a little bit along the journey.
Um, cuz I, I believe so firmly. In their mission and that they’re just incredibly well run companies. Like one of those is Crowdstrike. Then within my portfolio then I’ve got my kind of growth companies. There’s about 12 of those, makes up about 20% of the portfolio. And, you know, maybe you could say I’m being kind of wildly optimistic, but I expect most of those to maybe five x, 10 x over the next 10 years.
Um, so I expect, you know, a solid return and these companies will probably be like the main engine room of growing my portfolio kind of total value when we come out of this funk and, you know, we kind of get back onto a kind of, everybody loves growth stocks track again.
[00:40:51] Krzysztof: Are you okay giving an example of one growth company?
[00:40:55] Luke: Uh, yeah, let me, Well, okay, uh, one of your favorites, Cloudflare, so, you know, very similar to Crowdstrike, um, but I consider Crowdstrike to be a core in some ways there’s no difference between the cause and the growths. Like I expect the same in terms of returns from them, but maybe I’ve got just a bit less conviction in, uh, Cloudflare.
Maybe actually, who’s the CEO there? Is that Matthew Prince? I got that right. Yeah. Yeah. I’m, I’m probably less keen on him as a leader than I am on George Kurtz, but, you know, clearly an incredibly strong business. Um, yeah, there’s, you know, I’ve picked sort of two companies that are quite similar there, but there’s a kind of range of, kind of slightly random, you know, healthcare technology companies and other things in there too.
[00:41:39] Krzysztof: important is that you sense that for, for anyone listening, right? It sounds to me like you have a sense that there’s a difference between core and growth, even though some of the core are also growing, but it’s a kind of felt sense type thing, right? Like you could sleep pretty easily with the core, whereas you kind of have to keep an eye on the growth,
[00:42:02] Luke: that’s a good, that’s a good differentiator. Yeah, you’re right. Absolutely. Yep. Although, you know, you keep an eye on everything, but then maybe, maybe it’s like this next category that’s perhaps the most interesting. So when I really sort of stood back from my portfolio and said like, how have I got from 25 stocks up to like nearly 50?
Back in five years ago, I actually felt quite confident. I knew what was happening and you know, when companies delivered good results, the, the valuation went up, kind of things made sense. Like, this year things have not made a great deal of sense. You know, clearly companies that were like wildly over inflated valuations have reset.
That made sense. But, you know, now companies are fairly sensible valuations, beating analysts expectations and the stock price is still going the wrong way. Some, like, what’s going on? I do not know. These are unusual times we’re living in, so I’m certainly less confident. And so because I’m less confident, what I’ve done is just started to take a lot of small positions in a lot of companies. So I’ve now got 15 wild stocks. You know, typically these are like half a percent to 1% allocations in my portfolio.
You know, probably less than that. Um, but I’ve got a ton of them and I’m, I’m hoping to add more, like I’m trying to add at least one every. And kind of as a bucket, this category, I sort of expect, like these are generally micro caps and small caps. I kind of expect one of these 15 or 20 to maybe a hundred x over the next 10 years.
And if just one of them does, you know, 50 x right, it’s gonna cover the, the rest that perhaps just kind of go nowhere. So that’s the kind of rationale for that category. Because kind of things are so strange at the moment, I don’t feel I can make quality stock picking decisions reliably right now cuz weird things are happening.
So in some ways, like the more bets I place, um, you know, the market will show me who the winners are over time. So that’s kind of the ethos behind that part of the portfolio. What, what are your thoughts on that?
[00:44:05] Krzysztof: Uh, yeah, you know, it’s maybe unsurprisingly, analogous to a little bit of what I’ve done. I think of it as a, the front tail of the portfolio and the back tail and the back, the long tail. But I, I found just recently in the last couple of days, I took what you were doing Luke in kind of creating this maybe wild bucket.
But recently I’ve sold most of those to reallocate into the core, what I consider core slash solid growth.
[00:44:40] Luke: Yep.
[00:44:41] Krzysztof: And I keep flipping likewise between, I want a portfolio that’s just the best of the best, and without any fact, Versus, But wait a second. With these valuations all reset, then making a bet on one of these wild cards is going to pay off.
So potentially wildly or exuberant. That, that’s incredibly tempting. And then there’s the mess in the middle, I feel of like, I love how clean a concentrated portfolio feels versus keeping up with weeds and, and all kinds of like, crazy stories and whatnot. Where you’re meeting me today with the strategy adjustment is I sold all of those wild card positions except for one share. So effectively, effectively I’ve sold out of them. But there’s an interesting difference between owning one share and having it on your watch list. I found
[00:45:43] Luke: Right, right.
[00:45:44] Krzysztof: I a and it doesn’t, it obviously has nothing to do about with the money you’re gonna make or lose because one shares pretty much, uh, nothing, but it makes me pay way more attention when I still own the one share.
I treat it differently. I listen to the earnings, whereas, you know, watch list could have whatever, 200 stocks or some obscene number, and so I, I don’t think I would count them in my own portfolios holdings, even though technically obviously they are.
[00:46:10] Luke: Are you doing that? Because your view is like, if you track them, you know, maybe they’re ready for investment again in the future. So it’s kind of, you’re keeping, just forces you to keep in touch with them a little bit.
[00:46:22] Krzysztof: Correct. My, I, I just pay way more attention to even a company that I have one sharing. It just doesn’t ever fall off the radar. And that makes a big difference. But it’s, it’s kind of, you know, right now I need more money. Trees is the thing. I’m so envious of your 24% cash position, like brother Luke. Can you spare a dime?
Because man, so many of these look so fascinating right now. Uh, but,
[00:46:51] Luke: uh, I’ve been biding, biting my time with that cash position and I, yeah, I’ve, I have been reinvesting it like one or 2% a month. But my main portfolio is, you know, the valuations are falling faster than I can spend the money. So actually I’m spend, I’m turning the cash into stock, but like everything’s getting cheaper.
So the relative proportion of cash is going up. Even though I’m spending it , I suppose, should make me a little bit happy. I’ve got a lot of buying power notionally, but at the same time, like I’m losing a ton of real money every month.
[00:47:21] Krzysztof: Right? Yeah. I can’t wait to see what our portfolios look like a year from today because this is so, so wild.
[00:47:29] Luke: Yeah.
[00:47:29] Krzysztof: You know, these, these incredible businesses down. I mean, usually, you know, in the investing world, we always say to people, you have to be okay with losing 30% or 40%, right? That just comes with the territory, right?
But like living through this phase where 80%, 85%, 90% of, I mean, some deserve that, but like Cloudflare to be down.
[00:47:57] Luke: Yeah.
[00:48:00] Krzysztof: uh, this world class business that is basically reinventing the internet for God’s sakes is down, uh, 80% last year. That’s nuts.
[00:48:10] Luke: Yeah,
[00:48:11] Krzysztof: well, insane. From one perspective. Perfectly reasonable from, from another because it was way overvalued. So, I mean, yeah, I get the bo the, You gotta be able to hold both sides of this.
[00:48:24] Luke: You’ve reminded me cause I didn’t talk about my worry stocks. Like I’ve got an income, small income portfolio. I’ve actually got like 10 things on my worry list and you selling out of your wild stocks just gives me that kick up the ass to. You know, I need to reassess the thesis of these things and either, you know, ice them, get them out of the portfolio or, um, uh, or remind myself truly why I, I own these things.
Cause I can’t leave them on my worry list. It’s like 5% of my portfolio. So that’s not immaterial. That’s money. I could be sticking into one of these beaten down world class companies.
[00:48:57] Krzysztof: Yeah. And if I was, uh, going to give you unsolicited advice, which I’m going to that was the, that was the only thing I, I wanted to discuss with you or talk about, because just this morning, I took my own medicine in this, and I, I thought it’d be interesting to, to actually verbalize it. I sold a company this morning that has caused me so much pain and anguish, psychologically, emotionally, Like I had to do all kinds of spirals and knots to justify keeping it in all of the, the, the, you know, and I, and when I press sell this morning, there was, I wish it was clean.
I wish I could say, Oh. And like it felt amazing. I mean, it was pain, It was so painful saying like, essentially I was wrong or now’s not the time. And I caused myself so much extra unneeded pain and anguish and worry holding it for as long as I did. Right. And of course, when it reports earnings, it’s gonna shoot up 200%, right?
So I already acknowledged that, right?
[00:50:02] Luke: All right.
[00:50:04] Krzysztof: But the relief that came with that, like, because this was the only one stock in my portfolio that I would designate as, as a worrisome position. And now having that gone and clean, I feel like I just took a cold shower, which I did. So maybe I, it was , the fact that I took a cold shower, or I sold this.
and I can’t tell most investors listening to this, that this might be like the kind, the hardest kind of decision to make. And it’s probably why someone like you, Luke, who has all this experience in decades of doing this, even you still has 5% in these worry positions because it’s so fucking hard to, to actually say, I’m out.
[00:50:49] Luke: we are human, right? Our human emotions come into play and. You know, that sense of just kind of fixating on the price and like, Oh, you know, I can’t sell this now, it’s so low. Like I need to get back to even, I’m just gonna let it go to zero, You know, just cause I, but that’s, that’s real money You could take, you know, reinvest in something else.
Let me, I’ll, you know, just I was glancing at my worry list just there to kind of throw out an example or two. But, um, you know, on my worry list, uh, is actually, I’ll pick a different example cuz one of them is, one’s an active seven investing recommendation.
[00:51:25] Krzysztof: Yeah. Well, actually, I mean for,
[00:51:29] Luke: we are debating, we are debating it internally. We are debating this company internally. So a different example, that’s not a seven investing recommendation is five. The, uh, you know, like the marketplace for services. I’ve been a shareholder for a couple of years. Like, I’m sitting on a massive drawdown.
Like, does the business model work? I don’t know. I mean, maybe I just got it wrong, but. You know, I’ve got like half something like 0.75% of my portfolio in that company. Like I could happily redeploy that.
[00:51:57] Krzysztof: Yeah. And there is a name to, to this particular one. I mean, there’s many biases involved that kind of make it such a, maybe the, the hardest problems investors have to solve for themselves. But this one, I think the dominant core is the sunk cost fallacy in a great analogy for that, I think is if you think about all the people that stay in a bad relationship, and the reason they they do it is because, you know, or bad marriage say, because they, they say to themselves, Well, I’ve already been with this person for 12 years and we own this together, and that, and then they stayed miserable for another 10 where they could have been, ha, you know, like, life’s too short.
[00:52:39] Luke: Chris off your, uh, your pot committed. Just to bring a poker analogy in. Write at some point your pot committed and you just gotta see it through to the end.
[00:52:47] Krzysztof: Well, in that case, I mean, what’s fascinating is there’s a correct mathematical way to decide, right? You, if you’re, you could calculate the pot odds and that tells you like, do you stay in the pot? And sometimes in that case, yeah, if it only costs you another $10, but you can win a million. Yeah. You stay, but most of the time, right?
Yeah, you’re right. You’re overly pot committed, It’s just too hard to lay down that hand knowing you could still potentially win.
[00:53:17] Luke: Exactly, exactly. Fiver could make me a rich man. I don’t think it’s gonna happen. Maybe I just need to get off the pot and get rid of this one.
[00:53:24] Krzysztof: Yeah. But man, I feel you, I, that worry category is, uh, such a pain in the ass.
[00:53:32] Luke: I’ll make it part of my, uh, to-do list maybe for next week, cuz this is a busy week to get through. At least half of those are worry stocks and decide what I’m gonna do with them.
[00:53:41] Krzysztof: Yeah, I’d love an update next time we talk two weeks from now to see what happened with your worry category. For
[00:53:47] Luke: see. I can get that, get that percentage down of it. Cool. Well, uh, hey, we’ve, uh, we’ve been talking for an hour and I even if I edit this down, it’s a long episode. Do you wanna talk about, uh, the Lex Friedman episode? You listened. Recent lesson to.
[00:53:59] Krzysztof: Yes. Because we’ve been talking a lot, what’s interesting is that this was the eight hour long podcast, which might have gone down as the, a record long interview because it’s basically an audiobook. So I listened to this on all my runs and drives and whatnot. I, I think it took me two weeks to get through and I wanted to say, Luke, I wanted to encourage you to listen to this so that, because the topics that come up are so.
Fascinating, overwhelming, complex, and we could talk for eight hours ourselves, go going through the list of stuff that comes up. But instead of actually me going deep into any one of them, maybe I’ll just give in the overview. Uh, this, I’ve now listened to many conversations with Balaji, he’s a angel investor, big tech guy. Uh, former CTO of Coinbase. But what’s fascinating about him is he seems to have an extraordinarily learned overview that’s historical and geopolitical. So he, I, he has a, I believe a PhD in the engineering, uh, from Stanford obviously knows his science, his math.
but most of the time he talks in terms of things like China, India, communism, capitalism, and like sees these mega trends unfolding. And it couldn’t be, it’s some of the most fascinating, I don’t know if it’s theorizing, but it’s almost like, um,
putting names to such massive patterns in, in, in paradigms that when you hear them expressed in, in the form of a sentence, you’re like, Oh my God, why didn’t I think of that? Or Wow, of course that’s where we’re gonna be in 10 years. Right? And so it’s utterly fascinating and I’ll give you one example.
He was talking about. The problem of divisiveness and polarization in making cases for, call it left wing agendas, right wing agendas and so forth. But it, that, it’s not enough of course to, to name polarization, but what do we do about it? And from his view, he’s a real advocate and believer in blockchain technology.
And I think he’s quite sophisticated in his understanding of it and the way that it might help us too. Upgrade or evolve regulatory organizations, for example, like the FDA as the key example that comes up. And to evolve things like science. Journalism, like the ways we get data, not to mention finance and everything.
And, and you know, his cases, it’s, it’s, it has the blockchain technology has the potential to drastically help us out of this quagmire of disinformation and polarization and biased arguments that are just dragging everything down. That’s just a quick preview. There’s so much more to say. So I guess the, the link for any listeners, if you wanna keep up with our conversation about this in two weeks, if Luke goes ahead and listens to it, is that, that’s on the Lex Fridman podcast.
Balog look for the eight hour, uh, interview. Take notes. Wear a helmet,
[00:57:20] Luke: Thanks for the wreck. We’ll, uh, hopefully, uh, next returns a favor and gives our podcaster a, uh, a bump at some point. So buddy, are you ready for the, uh, round three of three conversations game?
[00:57:33] Krzysztof: Let’s do it.
[00:57:35] Luke: So quick, quick reminder for, uh, for anyone who hasn’t listened to us before. So we generally now got into a habit of closing out every episode with the three conversations game. And this week I’m asking Krzysztof. So I’m gonna give him three random topics of conversations. Some are fun, some are business, like he’s going to eliminate one of them that he has no interest in talking about.
And then I’m gonna kill the other one and he’s gotta talk articulately for a minute on the one that’s left. So here are your three. Um, is it better to be Twitter famous or TikTok famous? And why
[00:58:08] Krzysztof: Hmm.
[00:58:11] Luke: Uh, is cybersecurity recession proof? and what is the easiest way to break a world record?
[00:58:23] Krzysztof: Uh. Hmm.
Easiest way, Huh? . It’s a big Wow. Why that one is, uh, that one is stumping me, the world record one,
[00:58:33] Luke: Okay.
[00:58:34] Krzysztof: so. Oh. But that so interesting.
Oh, man. Uh,
yeah, I, I get, I’m stumped by the world record one, so I guess let’s nix that.
[00:58:45] Luke: Okay. Um, alright, let’s keep it fun. Uh, so, and also cuz I’ve just started using TikTok, so I would like to hear about, is it better to be sweater famous or TikTok famous?
[00:58:55] Krzysztof: All right. In its current form, Twitter is not what it needs to be. So maybe in its evolved form with proper verification, whatever Elon is setting out to do, Twitter has a case. I think currently, I would argue if the young generation has said no to Facebook for their, for, for seemingly, they, they have their reasons and you wanna have any kind of potential if, if being famous has any use at all.
Let’s even go there, right? Like, cuz maybe fame itself is, is a poison rather than a benefit. But on the assumption that being famous gives you some kind of leverage ideally to do some kind of good, maybe, hopefully right. Then being famous with the young generation. It seems like it would have more benefit both to you as maybe call it the content producer and the way you might influence that younger generation through say your sharing of wisdom, that that would be easier to do on TikTok.
Because let’s say it’s more, now this is me talking out of ignorance, but maybe because it’s more esque and more like entertainment ish, whereas on Twitter, it seems like it’s still stuck in that polarized, you’re only going to influence your own echo chamber because people who don’t agree with you is are just gonna block you and you’re preaching to the choir.
So TikTok is the vote, and I don’t, I have no idea what I’m talking about.
[01:00:30] Luke: Sounds good. I like you brought in like ethics and uh, you know, clearly as a lecturer, you know, your focus on trying to improve the world by engaging with the next generation had a big kind of play there. That’s a good answer. I think my answer would’ve been different, but, um, but I prefer yours given
[01:00:48] Krzysztof: Okay.
[01:00:48] Luke: Yeah,
[01:00:49] Krzysztof: Sweet. Right on. Awesome. All right, well, uh, this wraps up episode four.
[01:00:57] Luke: It does. So
[01:00:58] Krzysztof: yeah. And we have so much already to talk about on our next episode.
[01:01:02] Luke: Thanks everybody, for, uh, giving us an hour of your time to listen to episode four of No Limit with Krzysztof and Luke. And don’t forget to go follow us on Twitter,
[01:01:08] Krzysztof: , @7FlyingPlatypus and @ 7LukeHallard.
[01:01:12] Luke: Perfect.
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