Tuesday night I hopped on the last flight out of Indy to make my way to New York City for Stocktoberfest East 2018, a tremendous investment focused event put on by the fine folks at StockTwits. The late flight, early morning arrival and full day of learning made for a long Wednesday, but it was definitely worth it–Stocktoberfest East will be added to my annual conference list!
I thought I’d share some of the highlights from the day:
The morning started with StockTwits CEO, Ian Rosen, welcoming everyone and sharing some information about StockTwits and insights on what’s to come on the platform. He then welcomed Howard Lindzon to the stage to kick off the day; for me, hearing Howard speak was worth the trip alone. I’ve followed him for years on Twitter, recently subscribed to his newsletter (the only investment newsletter I’ve ever thought about signing up for), Peloton, and really enjoy his humor and views on the future of investing. If you’re not following Howard and are interested in keeping up to date with the trends in investing and where opportunities for investing in the future are, you should be.
I wanted to share an analogy Howard made regarding his investment style because not only does it apply to investing, but I think it applies to life and our careers as well. When looking for new investment opportunities and/or disruptors Howard said he tries to be a pilot fish, not a shark–he finds the brightest people with the best ideas and follows their lead (follows the money) and is careful not to get too far ahead of the shark. His analogy then transitioned to cycling…everyone wants to be a leader (or the shark), but it’s more beneficial for everyone to stay in a group and take turns leading. The majority our time will be spent in the pack, but “once or twice you’ll get the opportunity to lead and others will follow.”
It’s funny the comments most memorable to me occurred at the beginning of the day, had nothing really to do with investing and seemed to be said directly to me…there are so many talented advisors, writers, etc. in my FinTwit circle and without trying, I’ve found myself as a pilot fish just following along, learning from and improving because all of them, and I’m looking forward to the day I get to lead for awhile and then fall back into the group of advisors leading the industry forward.
Finally, Howard shared the areas he is most interested in, which are probably worth noting and following:
- Cloud companies
- Cannabis industry
- Crypto and Blockchain
- Subscription Services (ahem, RLSWM’s WealthFusion™)
After Howard started the panels…
Cryptocurrency and blockchain aren’t going anywhere.
I wouldn’t say crypto and Blockchain were the focus of the day, but they were both topics of multiple discussions. Since the prices of cryptocurrencies have come back down to earth, it seems as if the excitement around the asset class has died down–at least in my circles. But, for those working and living in the space, the excitement and belief in the future have not diminished. I haven’t had the privilege of speaking with many individuals actually working on Blockchain and cryptocurrency projects, so I’m not sure if the panelists were the norm or the exceptions, but they were all very realistic about the future of Blockchain and crypto. There weren’t your Twitter crypto-bros spouting ridiculous predictions for valuations. Instead, they were aware of the obstacles and risks to the future of the space, but still optimistic about the long-term for Blockchain and crypto.
- One of the most bullish admitted: There are over 1,600 different tokens. 90% of them are probably trash and will go to zero.
- Sophisticated investors are getting back in, or in for the first time (I always laugh at “sophisticated” investors, but seeing institutional investors, family offices and larger investors adding to their crypto investments is promising).
- Don’t expect more runs like 2017.
- Talent is leaving other industries, like tech and biotech, to work in cryptocurrency.
- Custodial services and management of assets will be a huge opportunity for businesses in crypto.
- Keep an eye on mergers. M&A makes the space more centralized, which ironically is the opposite of what makes crypto so valuable for many, decentralization.
- Focus on the top 10 tokens and ignore the rest.
- Whitney Tillson- “If you own cryptocurrencies, you will be annihilated!”
An important benefit of Blockchain and crypto that I think is lost amongst those of us in the U.S. (or other developed countries), is that for citizens of corrupt governments, like Venezuela, Blockchain and cryptocurrency brings freedom. The freedom to control their wealth without the government intervening, which is something they’ve never been able to do. When I first started my research in Blockchain and cryptocurrency, this was a case study that really opened my eyes to the potential. One of the panelists was from Venezuela, and she brought up the point that to those outside of America, cryptocurrency is more than just an investment and store of value. FWIW, I think this is huge and important to remember.
StockX…why didn’t I think of this?!?!
I can’t be considered a sneakerhead because I don’t collect shoes, but I definitely appreciate a good pair of J’s; my parents used to make fun of me because the first thing I used to look at when seeing people was their shoes. I even recently bought myself, Roman and Leo each a pair of retro Jordan’s–I splurge on my love of shoes every once and awhile. So, getting to hear Josh Luber, the co-founder and CEO of StockX was a treat.
Josh explained StockX is the “stock market of things”; it started as a market to buy and sell hard to find Jordans, Yeezy’s and the likes. But it has evolved to more than just an eBay alternative; it’s a market where there is less concern over authenticity, pricing, and other issues common when purchasing shoes on eBay. Buying and selling shoes is even transacted just like a stock, with bid and ask prices.
Not only is StockX a market for buyer and sellers to exchange things, but has also become a market for the release of new shoes. Nike did an “IPO” of the Lebron 1’s as a fundraiser and it was a tremendous success. StockX was the only place the Lebron’s could be purchased, the market set the price for the shoes, and they even allowed buyers to resell the shoes without ever taking delivery of them…they created a future’s market for shoes. What a time to be alive!
And now StockX is moving beyond shoes to other things like watches. I love hearing stories like StockX; it makes me dream big!
Trends In Financial Media
I was really looking forward to this panel because 1.) I write a financial blog and 2.) it was a chance to hear Downtown Josh Brown talk in person (he was surprisingly quiet early on in the panel), but he didn’t disappoint. The panel covered a range of topics:
- The future of financial news consumption and how to charge.
- The difference between financial journalism and actual practitioners writing, and how there is becoming a blurred line between the two.
- No love for Cheddar (a financial news channel geared toward Millennials).
- Financial media like CNBC probably does more harm than good.
Artificial Intelligence Eating Financial Services
I disagree with the title of this panel; artificial intelligence is definitely making its impression on financial services and it will continue to do so, but not all areas will be devoured by it–like financial planning (hopefully this ages well!). Instead, I think certain areas like financial planning and advice will leverage artificial intelligence to better serve clients. Artificial intelligence will be a tremendous tool for advisors, but won’t completely replace the humans meeting with clients. Financial advisors should prepare to leverage artificial intelligence in their practices, which I welcome because it will allow me to focus more time on the details of planning machine can’t do and spending more time with my clients. While many in my profession are concerned A.I. might replace advisors, I say bring it on and help me be more efficient and do a better job for clients.
Nonetheless, it was a great panel of crazy smart people and it was wild to hear about what companies are doing with artificial intelligence, data science, and deep learning.
Changing Narratives In The Financial Ecosystem
This was one of the more important bigger picture panels, and the women on the panel had the tough task of being up right after lunch, but that didn’t stop them from having a great conversation. To paraphrase the most memorable quote, “when men have wealth, they are encouraged to invest and brought opportunities to create more wealth. When women have wealth, they are asked to give and donate.”
Finance is notorious for a lack of diversity and being underrepresented by women; I’ve always known that to be true from an advisor perspective, but I’ve never thought about it from an investor perspective.
That is changing.
Whitney is one of the best value investors and it’s not every day you get a chance to hear a legend talk about his career. In about 20 minutes, we learned the story of Kase Capital and several nuggets of investment advice:
- Keep costs low.
- If you’re successful, remember it only gets harder as you grow.
- Build a team.
- Have good filters.
- Valuation matters, but don’t keep blinders on.
We also learned that he is not optimistic on cryptocurrencies…see the quote above. I wish he could have had another hour to talk, it was that good.
Fractionalization and Decentralization of Markets
A continuation of sorts from the StockX presentation. Josh Luber was joined by the co-founders of Rally Road and Pangea, which are companies giving investors access to asset classes they’ve never had before. At Rally Road they are allowing investors to invest in classic cars without having to purchase the classic car. By purchasing shares in classic cars, investors now have access to an asset class that has historically appreciated and has a low correlation with the stock market (meaning it’s growth is not directly impacted by the stock market). Pangea is doing a very similar thing, only with real estate, and it’s doing it on the Ethereum network showing how blockchain technology has crossed over into business and is more than just the foundation for cryptocurrencies.
Be sure to check these companies out to see what the future of consumerism and investing is looking like.
As a wannabe technical analyst, I was humbled as I watched the contestants explain the charts they prepared for the competition; I know nothing about charting compared to them. Chart of the competition had to be Michael Batnick’s first-round submission…century candlesticks for the Dow Jones. Check it out…
Investing In Cannabis
Cannabis and the legalization of marijuana have been common stories in the news over the last year; this panel highlighted the opportunity for investing in cannabis and the opportunities coming down the road. This conversation focused on the medical uses of cannabis, not the recreational use. Due to perception and regulatory complications, institutional and larger investors have not started to invest in cannabis, but as it continues to become legal in more states and the perception changes, the panelists expect the growth in cannabis to be bonkers.
I was blown away by the cases cited for the benefits of cannabis, specifically one of the co-founders of the fund who has benefited from cannabis to treat seizures. It’s important to understand very few of the medical uses for cannabis require smoking it, and they do not result in getting high; the psychedelic component of cannabis is stripped out and the result is an actual medicine derived from a natural plant. The panelist suggested in the coming years cannabis will be prescribed by doctors and filled at your local pharmacy. I see the potential.
- Regulating Wall Street (think regulating crypto)
- Tinder: $13B in 5 years
- Hedge Fund Developments
- FinTech Investing (FinTech is great, only getting better, and is simplifying finance on all levels)
I had a great time at Stocktoberfest. I learned a lot. I met some great people. I got to see some friends. Although very little, if any, of the Wednesday’s event, will show up in the work I do with my clients, I think it is important to stay up to date with the trends in investing. Just like my initial interest in cryptocurrency and Blockchain was to be able to handle clients’ questions, learning about these new investment opportunities and trends now will help me answer questions when the trends become mainstream, which they will. It’s part of my job to know my clients’ questions before they even have them, and I’m feeling ahead of the game after Stocktoberfest.
Shoutout to everyone at StockTwits for a great event….see you next year!
Disclaimer: Nothing on this blog should be considered advice, or recommendations. If you have questions pertaining to your individual situation you should consult your financial advisor. For all of the disclaimers, please see my disclaimer page.