Everybody happy Monday. Thanks very much for being here. Had a good weekend. Hope you had a relaxing time. I try to get the hell out of the house and go do fun stuff. I’m not much a beach person, much of a be a beach person, but I like to be outside. Very active train jiujitsu six days a week. I wouldn’t call that aerobic activity, but it’s good for my mental health. I do do cardio. Usually in my morning break, I’ll put on my trades in the morning and then I’ll walk away if the phone rings. I know I got Phil’s.
I did go down and see the Keith Harring installment at the Broad Museum a week ago yesterday with some artist friends of mine, and it was really, really good. I knew Keith from New York City. I was, I’m old enough to know and have seen the graffiti that he wrote in the subway, not unlike what Michelle Basquiat did with Samo when he was coming up. And then I would see them, they’d have some shows. There were a few dance clubs that we would go to back then the drinking age was 18 and I would sneak in, I might have mentioned this story, but I’d see them at Danceteria or Limelight or especially the area, which was the best club that I liked for going out and meeting people. And the Herring exhibit at the Broad is great there. I have a ton of pictures. Stuff is amazing.
It looks like he did everything in one take. There’s no edits where Jean Michelle would put stuff down and if he didn’t like it, he’d just paint over gigantic sections of the paint of the canvas and then add more, then sit back and see what he liked and edit. When you look at Keith’s stuff, which is really one dimensional, it’s not really 3d. He’s doing a lot with acrylic marker and enamel paint, so it’s very linear, but it was hard to see where the brush strokes and the markers ended. There weren’t like corrections or things that he had to do over. So it was pretty remarkable. If you’re in LA and you have a chance to see it, well worth it. I think I got tickets for all of us and they were, I want to say they were 22 each, but we were just able to skip the line and walk right in.
And there’s some remarkable stuff. There’s some sculpture too. There’s lots of notebooks where you can see what he was writing. There were Polaroids lot, lot of stuff from his foundation that it was pretty remarkable if you like that kind of stuff. I’m pretty much into that. Plus that was when I was really getting into art for myself. And so it brings back really good memories because it was a very creative time. I’m a big fan of that era. Kenny here in LA I believe. Keith Harring, Jean Michelle Basquiat, Andy Warhol, pop artist. There’s a few other ones. But anyway, before I start today, I, I’ve been getting lots of comments. I want to give a couple
Shout Rock, sad, sad Elmo, Dan Rodriguez, bill T, Roman Thomas, Thomas Thompson, dandy Manny, Jose Roman, BZ, Mohamed, mark Kram. Thanks so much. I have a funny story when I hear, I see Tom Thomas, Tom Thompson, who like me had a landscaping background. I started cutting grass in my neighborhood when I was 12 just to make some cash, some running money, if you will. And this is on being self-sufficient leads to having greater confidence. And when I see the alliteration of Thomas Thompson in New York when you’re younger, and probably still today, a lot of people are called by their last names. So I’d be always Martin and we’d call our friends by the last names. It helped too because there were so many Michaels. And so I remember the first time I went to my friend Kevin Lynch’s house. He was Lynch, I was Martin. And so I got to meet his mother who, his parents are amazing, amazing souls.
And she was calling me Martin. She was calling me Martin because Martin sounds like a first name. And so after an hour, an hour or so, I think we were having some pizza for dinner or whatever. And we were big into skateboards at the time. We were also hockey. I was the center. He was one of my left wing in football. I was the center. He played right or left guard, I can’t remember. So he spent a lot of time together from grade school all the way through high school. Really great guy. And his mother turns to me and she says, Martin, what’s your last name? And I go, oh, it’s Martin. And she goes like a dog here in high pitch. He turns and she says, your parents named you Martin. Martin. I said, no, you idiot. You’ve been calling me by my last name for two years.
My first name’s Michael. So it was funny story. You kind of had to be there. But anyway, I appreciate your writing in, some of you have comments, some of you adding, asking questions, this and that. Couple, couple emails I’ve gotten about being on the show. I don’t really have a need for guests, but thanks for the offer. Two, I don’t like teaching for free. Call me a capitalist. I have had two guests, but one’s Victor, who’s partner of mine and the other one was who? Brian Shannon, I think. So I’ve known both of those guys for every TW over 20 years. And I just tend to think this show is unique for the content and what’s covered here. I don’t really need any help with that because there’s only one me, but I appreciate everybody’s interest. Nonetheless, I’m working on some lighting too, because the lighting for whatever reason in LA has kind of
Been inconsistent. I’m going to ganja come in and help set that up the right way. Make sure that color and the tone is good. It’s not really my thing. One email that did come in, it talked about what analysts do I follow? And the answer as you might expect, is actually none. I don’t follow any analysts. The media can’t help but have once a quarter, there’s got to be at least a month of stuff between Charlie Munger and Buffet, which I find a complete snooze. Or having analysts come on talking about upgrades or downgrades or what do they say for the industry or this and that. And this is kind of the problem with financial media is that it’s like Bruce Springsteen saying in the early nineties, there’s 57 channels and there’s nothing on they have to fill the day. And for at least what cnbc, which they don’t even report their Nielsen ratings anymore because they don’t report that stuff. I just find that the more, the quicker you can become indepe an independent thinker, the better you’re going to become. Your confidence is going to grow. And I don’t have to reiterate everything I’ve said about having a high level of confidence.
There was a time when I was starting out that again, like the indicators I used, which I don’t use anymore, they were emotional basically. It felt better to know that somebody who I thought was smarter than me had a strong opinion about one thing or another so that I didn’t feel like I was out on my own. So this kind of stunts your growth, right? It’s like smoking cigarettes. And so I found that it was much better for me to eat, do my own homework, and eat my own cooking. It was a little nerve wracking at the beginning, but I found out the security blanket part of it wasn’t really, there was not the security that I thought I was getting. Do you see what I’m saying? And so I ended up feeling I didn’t resent the people. I wrote about one particular guy who was very bright in the book and he did very well.
It’s just that when you manage risk, you can’t really delegate that to other people. Whether you’re doing something that’s purely systematic on one end of the spectrum, or you’re doing another thing that’s completely discretionary, as they would say, shoot from the hip kind of thing, chart reading, that’s still all on you. And that’s a good thing. You want it to be on you because then once you figure it out, no one can take it away from you. Right? Now, again, analysts are clever because they should anyway. The ones that are on TV typically have a decent command of the English language and they can explain industries perhaps and shed the light on some things. But the way I started to look at CFAs from the early nineties to today is that they’re really a type of accountant. And yes, the CFA exam is very difficult.
There’s three parts to it, and you have to take it in stages, part one, part two, part three, and my hat’s off to anyone who could take the exam and pass it. This is not to shit can these people as human beings. It’s just that I don’t find their skillset useful to me in terms of managing risk. I’ll give you a case in point. I’m, I’m a little older than perhaps some of you. And I remember when Apple went I ipo, I remember when Microsoft went I P O, right? Do you know how much money you would’ve made if you put $10,000 into the Apple IPO O and held it for 10 years? You’d be down 1500 bucks. So you have to be careful when you listen to these fucking idiots who put those things up there and talk about all the millions you would’ve missed out on how much money if you put $10,000 into the IPO O of Lehman, you’d have right now.
Exactly. Warren Buffet does know rich technical an analysts as well. You know, use TA for defense as much as you use it for offense. The smart ones use it for defense. So again, not to blow everyone’s bubble here about smart people, you have to take everything that people say with context because once all the CFA work is done and you have your income statement and your balance sheet and you understand it’s a publicly traded company, there’s a multiple, right? So you get into talking about multiples and valuations, and of course this is a big deal now because of web three and ai. Everyone’s looking at these things. Who are the leaders going to be and what are you paying for the company as far as earnings are concerned if they even have earnings? So you look at those numbers and they say, oh my God, it’s trading 200 times earnings.
It’s fantastically rich and expensive. And I remember back again to bring up Apple and Microsoft, you have to remember there was a PC revolution, right? There were co wars among other things. And when Microsoft didn’t sell its MS dos to ibm, at least it, right? Advent to creating Windows, which then became the operating system for Compact and Dell and any of these other PC clones, if you will, that weren’t branded names like ibm. There was Gateway, there’s so many names I can barely remember, but that’s how Microsoft really proliferated was because that was Windows was on the operating system. It was the operating system for all these PCs, these personal computers, these clones, which was an illusion to an IBM clone, albeit for a much cheaper price. Apple always had its own architecture, so it was separate. I had so many Macs over the years.
I think the SE 30 was, I had two radius monitors with Max. Of course you needed a database because there was no hard drive space at the time to think about. Anyway, I don’t recall in owning Microsoft for as long as I did that the thing ever traded below a 40 multiple. And I can remember people saying, oh, I’m not paying 40 times earnings for a company. And so what ends up happening is you start looking at the numbers and it’s got this Johnny Cochran logic where they tried to put the glove on O j’s hand after it had been wet with blood or water, whatever, and it had obviously shrunk. And they put a gal, a rubber glove on the guy with powder so that there was no way you could get anything over the thing. Even Vaseline wasn’t going to go on the hand.
And he was saying, if it doesn’t fit, you must have quit. Meaning if the glove couldn’t get on his hand, which was engineered to not get on his hand, of course. And so when I hear that type of talk, I realized that don’t fall victim to what the valuation is. The valuation is what whatever everybody who’s trading these names think it is not what some analyst thinks, thinks it is. You see, I’ve seen enough of really good analysts and other people who were in the Mary Meer for example, she was in the right place at the right time with Morgan Stanley, I believe during the internet boom. And now I don’t even see her name mentioned anywhere. And it’s no dig on her. It’s just that you can get sucked into things and start looking to that for comfort when you can do your own homework.
If the price isn’t going up, then don’t buy it in the first place. You see what I’m saying? So valuations, they might be important. If you’re some type of an investor and you have management by objective, you have a mandate with a particular client. So all those rules are written out. But if it’s just you trading your own money, the last thing I would think of to look at would be valuations and PE multiples. You have to do your own cooking. And no, if you marry that with how I feel about people and their ability to predict things, which is very low, on a scale of zero to a hundred, I’d put it in the single digits, right? There are a few people who can develop a good sense of timing and a good sense of markets. They typically don’t have it walking in the front door.
Does that mean everybody? No. But come on, don’t be stupid. Anybody can eventually I suppose, do that. But it’s like anything else in life, whether you make art or whether you write music or whether you have a personal best for the marathons that you’re running. It all comes down to practice. So yes, I concede that for a handful of people, but don’t worry about what analysts you have to follow. Do your own homework. The fewer people and fewer services that you can rely on, the more free you’re going to be, the more liberty you’re going to have and the more confidence, right? You’re going to develop as a person, as a trader. And it should carry forward for you into your life. And that’s when things really,
Really exciting because now you’re a self-contained person. You have your own sovereignty. You don’t have to worry about anybody else for any particular thing. It’s a very powerful place to be when you don’t need anybody. You see what I’m saying? And that’s where I think the best traders live is that they don’t need to rely on anybody for anything. They do their own research, they do their own homework, they have their own conviction, and they know how to execute. Okay? So I appreciate that question. I can’t say when I was starting out again, there wasn’t anyone to help me. So I kind of investigated everything to prove none of it worked right? So learned from me, learn from my mistakes. That’s kind of the whole point of being here. Anyway, thanks again for being here. Please like and subscribe and click the little belly thingy and I’ll see you all tomorrow.
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