By David Dittman, Editorial Director, Dent Research
“It’s difficult to make predictions,” said (maybe) Niels Bohr, Sam Goldwyn, Robert Storm Petersen, Yogi Berra, or (probably) Danish politician Karl Kristian Steincke, “especially about the future.”
That saying, both wise and humorous, sums up one of the main points Howard Lindzon made during a recent conversation we had about “real hype” and “the real deal” when it comes to financial markets.
Howard is one of the most insightful and irreverent voices talking about markets today.
He’s an entrepreneur, the co-founder of StockTwits. He’s an angel investor, with seed money in multiple FinTech, social, and other “Web 3.0” startups. He’s a venture capitalist, the main face of VC fund Social Leverage. He’s an investor, with a long track record of successful trades.
Most importantly, he’s an “idea” guy. And perhaps his biggest idea is that sharing ideas is the key to success.
Soon Howard, with the support of Charles Street Publishing, will launch his first investment newsletter, Peloton. He’ll also be presenting at Dent Research’s fifth annual Irrational Economic Summit October 12-14 in Nashville.
As his long-term mantra suggests – “investing for joy and profit” – this is about more than simply making money. It’s about making a better life. And you can do both at the same time.
We squeezed a lot into my questions and his answers, including cult-classic comedies, signals and noise, how to look at markets and the world, robots, and “8 to 80” brands.
I hope you enjoy it.
And stay tuned for Peloton, and be sure to join us for the Irrational Economic Summit.
Meet Howard Lindzon
Question: First things first: Is or is not Tony Cheeseburger from “Let It Ride” to horse racing (Tony Cheeseburger Gets Advice, Trotter & Tony Cheeseburger Place a Bet) as CNBC is to market information?
Answer: As the market goes higher, CNBC has to get louder. It can only give you one voice at a time. They’re trying to please all people all the time. Indexing has become so popular that they have to get louder to reach people. There’s very little signal there.
That’s not what investors need.
Investors need curation. They need to hear and listen to good voices. They need consistency. They don’t need one person to be an expert in all things. It does take time to develop a network, but it’s worth the effort.
CNBC is easy, and it’s loud. But it’s not very useful.
Question: So what is the most important source of information for you?
Answer: You need more than one channel.
It’s constantly evolving, but for me it’s my network. I’m always finding new people, tracking down new stuff to read, challenging my own preconceptions, visions, and thoughts.
I do that by engaging with other smart people.
Question: Yours is an essentially positive approach to markets, specifically, and life, generally. Why is it important that investors be optimistic?
Answer: This is basically a glass half full/glass half empty question. To me it’s half full. That’s what I’m trying to focus on.
There’s so much noise about income distribution, the 1%. But at the very top level the pie is getting bigger… So forget about the 1%. If the pie’s getting bigger, there’s an opportunity. The question is: How do I get a piece of it?
Question: To borrow a concept from Howard Marks, what’s the most important thing you’ve learnrned during your career?
Answer: Speaking of Howard Marks, I’m pretty sure in that book he also said “you can’t predict the future.” It may be fun to forecast, it may be fun to predict. But you’re best off preparing.
And the best way to prepare is to surround yourself with smart people.
Predicting, forecasting…it’s fun but it’s a time suck. Don’t predict, prepare.
Question: You mentioned during our first meeting that your father was an attornrney in Toronto, working with Canadian mining companies. I used to edit a newsletter called Canadian Edge, and as part of that work I learnrned a lot about the old “wild west” nature of Canada’s resource-focused stock market. I wonder if there was some long-term impact from exposure to this type of adventure-capitalism.
Answer: Well, I learnrned the importance of hustle. I also came to understand the importance of becoming an expert in an industry.
So, yes, there were lessons on the importance of being an entrepreneur, of doing things myself and relying on my instincts.
Question: Wall Street and its traditions are under threat. Low-fee and no-fee platforms abound. Not only that, the way we transact business of every kind seems to be on the verge of a revolutionary phase. Bitcoin is the star, but blockchain is the foundation. Is that a useful way to think about what is or may be happening?
Answer: Bitcoin is the star, but I’m not sure about describing blockchain as the foundation. Blockchain has become sort of “wild west” and confusing. The factions are confusing, like tributaries of the Nile. It’s relatively easy to understand and navigate the Nile, its tributaries much less so.
Bitcoin is, actually, the North Star, the easiest way to participate in this particular disruption. And we want people to participate, not necessarily speculate. Bitcoin is the best participation vehicle right now.
Blockchain is essentially a spine, or a timeline with specific posts marked on it. But now big companies, the big financials, want to create their own blockchain-based systems. So it’s gotten a little messy, less centralized.
I’m more interested right now in the true, central, original vision.
Question: You’ve often said that in the future the only really viable skills will be programming (as in writing executable computer language) and investing (or, more broadly, managing money). As the father of two daughters, one, who plans to be an elementary school teacher, starting her third year of college, the other, who wants to be a surgeon, her second year of high school, I’m highly intrigued by this hypothesis.
Answer: Well, Code Academy can already teach programming on an automated basis. And robots can already do surgery, so…
The most important thing is to be able to program robots, to communicate with them. Automation, robotics…it’s just a modernrn hammer, one that does way more things, yeah, but we’re still in charge of the hammer.
I try not to worry about that. I look two to three years out, and there’s opportunity there.
Look, spreadsheets were supposed to kill accountants. Robots are supposed to kill jobs. Maybe they just make us productive in different ways. We’re trying to profit off this stuff, not hide in a hole.
That’s the “glass half full.”
Question: In your new book, 8 to 80: The Next 1,000% Stocks and Trends Everyone Can Ride, you write:
Over the next century there will be some incredible new and durable old trends that will deliver amazing opportunities for savvy investors.
We’ll mine asteroids, robots will do most of our work, we’ll interact with intelligent machines in various new ways, we’ll travel to space, and we’ll build cities on Mars. Biotech will change the way we do everything, and it will enhance our life exponentially.
All these trends – and some that may have yet to register – will create hundreds of stocks that will go up 1,000% or a lot more. And these profits will be there for the taking by anyone who knows how to grab them.
So, here’s the money question: How do we learnrn “how to grab” these kinds of stocks?
Answer: It’s not that complex. It’s just a way of life. We shop, we eat, we read, we listen, we talk. Even in your small group of friends, we’re all using the same stuff, the same brands.
We’re looking for companies that appeal to everyone from age 8 up to age 80. You wait for a market panic, you pounce. When the market’s good, you’re glad you own them.
Over the course of the year, other ideas will resonate. And if the ideas our approach generates appeal to you, you can add them to your portfolio.
Some of these momentum stocks will indeed grow up into “8 to 80” companies. Some will simply make good trades and hand us good profits for as long as a trend is in place.
That’s what Peloton is for.
Editorial Director, Dent Research
P.S. Thanks to Howard for the engaging conversation (as always).
P.P.S. You can hear Howard for yourself, and meet him, at our Irrational Economic Summit, October 12-14. Reserve your seat now to secure the limited $500 discount.