In today’s “Truth is Stranger than Fiction” episode, Elon Musk and Mark Zuckerberg seem to be discussing a "cage match." But, for those of us who have been around awhile, we remember the first real billionaire fight when Herb Kelleher, co-founder of Southwest Airlines, settled a business dispute with a rival by arm wrestling in front of an audience at an arena, in an event dubbed “Malice in Dallas.”
This supposed cage fight started because Elon responded to someone on Twitter saying, “I’m up for a cage match if he is lol” to which Zuckerberg posted an Instagram story saying, “Send Me Location.”
Now, their beef isn’t new. Back in 2016, Musk’s SpaceX was contracted to shuttle a satellite into orbit for Facebook. During a routine test, an explosion on the ground caused the satellite to be destroyed, and Zuck to say, “I’m deeply disappointed to hear that SpaceX’s launch failure destroyed our satellite that would have provided connectivity to so many entrepreneurs and everyone else across the continent.”
Ever since, they’ve been going at it. They take different stances on AI. They’ve gotten off each other’s platforms, etc.
OK, it is just a survey - still, that's staggering information.
The younger generation is getting advice from places like TikTok and YouTube (decidedly not The Economist, Wall Street Journal, Bloomberg, or even LinkedIn).
However, social media is a great place to start conversations - or to gain some perspective or context. It is even a good place to figure out some questions to get you thinking about your future better.
The wisdom of the crowd is good. But expert advice is considered "expert" for a reason. And, often, it makes sense to seek it out specifically.
I doubt I'm currently reaching many Gen Z'ers ... but if you're reading this ... please expand your sources for getting financial advice beyond TikTok and YouTube.
For the older crowd ... I have found it hard enough to change myself, so I don't often expect to change others. With that in mind, it may be time to adjust your communication strategy to include TikTok and YouTube. If you can't change them, you might as well meet them where they are.
I just launched a TikTok channel called BotheringMyBoss. It's run by that research assistant. It's a bit outside of my comfort zone. But, hopefully, it opens a communication channel with a younger audience.
Late last year, the FTX exchange collapsed. During the collapse, there was evidence of a Ponzi scheme, overleveraging, and solvency issues. Before it crashed, it was the third-largest cryptocurrency exchange with over a million users. FTX's collapse shook the volatile crypto market, which lost billions at the time, falling below a $1 trillion valuation, and supposedly millions of coins were stolen during the downfall.
This was a massive hit for the mainstream adoption of cryptocurrency. Since then, crypto has been slowly fighting its way forward - and I know many people with interesting opportunities and ventures planned for this space.
Meanwhile, the SEC sued Coinbase, this past week, for potentially operating an unregistered securities platform and brokerage service. The SEC alleged that Coinbase made billions as the middleman between buyers and sellers without giving investors the lawful protections they should as a broker. That lawsuit came only a day after the SEC filed charges against the largest crypto exchange, Binance, for misusing investor funds, operating as an unregistered exchange, and violating many U.S. securities laws.
Here's a quote from Binance's CCO (recorded in the SEC complaint)
“We are operating as a f*king unlicensed securities exchange in the USA bro.”
It is no surprise that Coinbase's stock price plunged almost 20% due to the news.
I don't want to bog you down with the details of the various cases, but ultimately, Binance was supposed to split their business so that their U.S. company would be subject to U.S. regulations and legally allowed to be an exchange in the U.S. But, instead, there was an improper "comingling" of funds. Binance subverted its controls to allow certain high-value customers to continue trading on the non-U.S. platform.
So, this begs the question ... what does this all mean for cryptocurrencies, exchanges, and the stakeholders?
My Thoughts
These recent enforcement actions suggest that the SEC will target firms it sees as bypassing regulation (either by blurring the distinction between on-and-offshore services or by trading unregulated securities).
It's clear that regulators are worried about the security of the American taxpayers' money. Both the FDIC and SEC are cracking down.
Just like with the banking issues before, the issues we're dealing with here shouldn't be particularly surprising if you have been paying attention. We're getting mixed messages on how involved and regulated the government wants these securities to be.
Are more regulations required to ensure trust in the American financial system? Or is this a free market where pain and pleasure point out the evolutionary path?
Finally, there's an even more fundamental question ... are cryptocurrencies truly something new (which requires a unique regulatory approach), or are they simply a new medium of pre-existing financial instruments that the SEC already has rules and regulations for?
Initially, some of the attractive aspects of cryptocurrency were its decentralized nature and its potential to have its own rules and regulations separate from a national governing body.
On the other hand, we've seen what happened in the past when other alternative investments, like Hedge Funds, were unregulated.
Currently, two roads are available to cryptocurrency as an industry - and perhaps it can take both. First, it can become subject to all the regulations of its predecessors and become a mainstream and stable option for the masses. Or, it can remain a "fringe" option that subverts the governing bodies around it, forcing its relatively small group of loyalists to deal with the uncertainty and volatility – but maintain the autonomy it can.
It's unsurprising that Google and social media top the list, but it is interesting to see OpenAI becoming the 17th most visited site last month - with 1.8 billion visits - despite being very new to the scene in comparison to its competitors.
Easy to forget, but also unsurprising is the prevalence of adult websites on this list. One of my most popular articles ever was titled "How Long Does It Take To Get To 50 Million Users?" in it, the takeaway was that Pornhub did it 19 days - faster than anyone else ... up until ChatGPT. Part of the popularity of that article is because Pornhub has very in-depth statistics about its yearly use.
Many of our best decisions, timeliest course corrections, or most significant innovations occur after a seemingly disastrous occurrence. That's why many psychologists and self-help gurus encourage people to focus on the hidden gift that many of these experiences provide.
It's there if you look for it. That painful event becomes the catalyst for either something new, a better way, or a level-up.
Of course, that's not the case for everyone or every event ... It takes the right mindset and the right actions to turn a trial into a triumph.
As we come out of a massive world transformation, and into a new one with the surge in A.I., I think back to 2008 and how a prior incarnation of algorithms fared against it (spoiler alert: not nearly as well as this time). They say the things that don't kill you make you stronger. Here's my trial into triumph story about that.
Too many people become a victim of their circumstances instead of choosing to be the master of their destinies.
Life's harder for people that live a life of least resistance. Doing the hard things, and making the most of bad times, makes your life not only better ... but, ultimately, easier.
Tony Robbins calls this Threshold of Control. If you push through the fear and the struggle ... as you persevere, eventually, what was scary becomes easy. You've increased your threshold, and that's often a permanent improvement.
Examining several instances from my past, here is a list of the seven steps I use to transform almost any situation.
Seven Best Practices for Uncertain Times.
Accept Reality: We are where we are. Focus on being complete with what happened before this – and think about this as a new beginning with an even bigger future.
Do Something Positive: Take action and build momentum and confidence. Big wins are great. Yet, in scary times, even small items are worth noting, building upon, and stacking. Let progress build positive momentum for you.
Take Care of Yourself: Increase your physical activity, meditation, and massage. Take time to eat and sleep well. Many studies show decision-making suffers when you're stressed. Taking care of yourself goes a long way to making many other things better.
Communicate More: The natural tendency is to hide or to recuperate in private. Instead, be open and receptive to help and ideas from friends, partners, or wherever it may come.
Creative Destruction: The old game and the old ways of thinking are over. Shift your energy to what is working. Commit to the result you want rather than the process.
Increase Your Options: It often takes a different level of thinking to solve a problem than the level of thinking that got you there in the first place. So, be open to new opportunities, new possibilities, and more ways to win.
Choose a Bigger Future: Instead of resigning yourself to playing small and doing with less, recognize that a clearing creates space for something even better. Choose what you want and call it into existence through your thoughts and actions.
They say everything happens for a reason. The secret is that you get to choose the reason, what it means to you, and what you're going to do about it. Choose well, and someday you could look back on this time as one of the best things that ever happened to you.
Surface-level statistics - like whether something goes up or down over time - are helpful but don't explain much. I love looking at the patterns and statistics one step deeper.
This example isn't too deep, but it's helpful nonetheless.
VisualCapitalist compiled a chart covering what moved the S&P 500 so far in 2023.
The top 20 stocks accounted for 7.08% out of the 7.55% gain in 2023, but only 29% of the weight of the S&P.
If we look one step deeper than that, we realize that the majority of those stocks are not only Tech stocks, but they are stocks driving the rapid growth in AI. On top of the obvious ones, like Nvidia and AMD, you also have companies like Alphabet and Microsoft investing billions into OpenAI as they begin to leverage ChatGPT into their own chatbots.
The math gets even crazier, though. According to Rowan Cheung, editor of the RunDown AI newsletter, the S&P 500 would be up only 1.4% without the AI-led rally as of May 17, 2023.
One of the things we look for in understanding the performance of indexes like this is market breadth. If many of the S&P 500 companies are performing well, that's a sign of safety. When the market is positive due to the performance of only a few companies, it means you should understand and pay attention to the distinction between the market, as a whole, and the companies (or industries) driving the change. In this scenario, the AI-companies are masking the actual performance of the S&P. How long that can stay true (with banking uncertainty, debt ceiling issues, and more) remains to be seen.
Capitalogix started in my home. The first employee sat at a tiny desk behind me. Their job was to exit the trades I entered. This was an early attempt to avoid the fear, greed, and discretionary mistakes that humans bring to the business of trading.
We started to grow ... and somehow got to 23 people working in my home. It literally overtook my office, dining room, and the entire upstairs. Neighbors noticed (and expressed their displeasure).
Looking back, it seems crazy (and my wife seems Saintly). But somehow, at the time, it felt natural.
Incubating the company in my home, and growing it the way we did, resulted in a closeness (a feeling much like family) that pays dividends, even today.
There is a concept in business expressed by the phrase "measure twice and cut once." It's much easier to do something the right way from the beginning rather than trying to fix it after you mess it up.
It saves time and creates a better end result.
Beginning with the end in mind is powerful. I often spend what looks like "too much" time imagining the bigger future. What will things look like when we are ten times bigger? Who will we serve? What dangers will keep me up at night? What opportunities will we be trying to attract or capture? What strengths will give us confidence? Who will we be collaborating with ... and about what? It helps build a roadmap that makes it easier to understand whether particular activities are aligned with our future (or just something we are doing now).
I prefer to optimize on the longer term rather than the shorter term. That isn't always possible or practical, but that is my preference when it is.
Pace is important - and a focus on "what's the best next step" is an important driver at Capitalogix, but sometimes in order to go fast, you have to go slow. You may miss out on something, but the ultimate payoff is often worth it.
It's a good lesson for personal growth as well. There is no right timeline. No one size fits all. Take your time. Find your path.
Industry is changing fast. In the 1900s, the world's titans mainly produced tangible goods (or the infrastructure for them). The turn of the century brought an increasing return on intangible assets like data, software, and even brand value ... hence the rise of the influencer.
As technology increasingly changes business, jobs, and the world, intellectual property becomes an increasingly important way to set yourself apart and make your business more valuable.
While America is leading the charge in A.I., we're falling behind in creating and protecting intellectual property.
Patents can help protect your business, but they also do much more. I.P. creates inroads for partnerships with other businesses, and they can also be a moat that makes it more difficult for others to enter your space. On a small scale, this is a standard business strategy. What happens when the scale increases?
The number of patents we're seeing created is a testament to the pace of innovation in the world, but it should also be a warning to protect your innovations. Remember, however, that anything you get a patent on becomes public knowledge - so be careful with your trade secrets.
Pornhub via 
Where Gen Z Gets Financial Advice ...
I recently hired a new research assistant and brought her to a conference where I gave two speeches and a breakout session.
After I spoke, I asked her what she thought, and her answer surprised me.
She said there were many opportunities for improvement, and she didn't know why I wasn't already doing it.
She said I ignored the young people in the room ... And that my material, language, and attention were targeted toward older people (like me).
As annoying as it was - she had a point.
Take a look at this survey from Vericast.
OK, it is just a survey - still, that's staggering information.
The younger generation is getting advice from places like TikTok and YouTube (decidedly not The Economist, Wall Street Journal, Bloomberg, or even LinkedIn).
While I am on LinkedIn, Facebook, Instagram, YouTube (and even TikTok), those are not places I would search for detailed financial advice.
However, social media is a great place to start conversations - or to gain some perspective or context. It is even a good place to figure out some questions to get you thinking about your future better.
The wisdom of the crowd is good. But expert advice is considered "expert" for a reason. And, often, it makes sense to seek it out specifically.
I doubt I'm currently reaching many Gen Z'ers ... but if you're reading this ... please expand your sources for getting financial advice beyond TikTok and YouTube.
For the older crowd ... I have found it hard enough to change myself, so I don't often expect to change others. With that in mind, it may be time to adjust your communication strategy to include TikTok and YouTube. If you can't change them, you might as well meet them where they are.
I just launched a TikTok channel called BotheringMyBoss. It's run by that research assistant. It's a bit outside of my comfort zone. But, hopefully, it opens a communication channel with a younger audience.
Let me know what you think.
Posted at 05:25 PM in Business, Current Affairs, Ideas, Market Commentary, Trading, Writing | Permalink | Comments (0)
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