I started writing this Substack in May of 2022, right as the storms were rolling in. Part of the project, as mirrored by Chris Dixon for writing his excellent book “Read, Write, Own”, was coping with a nasty bear market. Moreover, I felt that the markets were telling me that I was uneducated in too many areas to continue forward.
So, for the past couple of years, I dove into older books, podcasts and lectures to play catch-up on what I felt was lacking as an investor.
That process of learning was this Substack.
I’ve been wrong at points, but hopefully helpful and correct as well. Recently, I found myself struggling to write as my draft folder began to pile up with fits and starts of ideas. I think with the recovery and return of the bull market, my sense is that what lessons or ideas I post will not compete with the attraction of raging prices.
Nor should it.
I think my own enthusiasm for writing dwindling is a function of the purpose of this Substack, being a bear-market project, entering a new season. What I’ve discovered about my investing style is that I’m most comfortable in bear markets, when things seem to be going really poorly.
A contrarian bull. Yet as many shift into bullish modes, I find myself quieting down.
Personally, this new stage is the test to see how much I learned during the “off-season” and how I perform now that its game time. Its funny how markets improving so quickly makes me uncomfortable, but its certainly a function of having less experience and confidence in keeping my head on right with the dizzying effects of a bull market.
Maybe its echoes of feeling so burned from 2022 and thinking how I could have handled that better. I remember in late 2021 to mid 2022 I was all to eager to let the bullish narratives seep in, with little discernment on the sources.
Yet…I’m a bear market investor and these past couple of years will only further reinforce that aspect that I enjoy; which is seeing opportunities when most are calling for the end of the world, and trusting my gut through the process.
Now we’re entering the other side of this, and I’m nervous. To clarify, my nervousness is less about conviction than simply a matter of less experience. “Bull brain” as Chris Burniske would say, is something I fear within myself. I sense its a form of healthy respect, knowing I’m human and that I’m not immune to the casino aspects of this space.
So I’ve implemented the best advice that Chris gave, which was to set all of my internal price targets when things were down and out, and a plan to stick with them. It’s all too easy to change your mind as prices change, but fighting that inclination, and knowing when enough is enough is my goal.
I can’t emphasize this enough, but I’m incredibly grateful for what has happened over the past couple of years. Getting my bell rung led to incredible good. I’ve had the opportunity to connect with many incredible people all over the world who I now consider friends, while also learning more than I ever possibly could during good times. I’m a significantly better investor because of it.
Hopefully, at least.
Moreover, I think I’ve quieted down because I’m focused on watching. Where during the bear market there was little movement, the music and lights now are only going to get louder and obfuscate signs for things potentially getting out of hand. That said, it’s still very early in this new season, but I still have much to learn.
What I can undoubtedly say is by the end of this (feels like Q1-Q2 2025 or so) I’ll be a different person. For instance, on a small scale during mid to late 2019 I was in the process of learning everything about GameStop. Going to stores, talking to employees, earnings calls, quarterly reports… everything (anyone from Bancor now knows what this process looks like). One key to understanding who the core customer of GameStop came in the form of YouTube channels of retro game collectors.
It was one of the key insights to the whole investment… the ones who were betting against the company misunderstood the core customer. The core customer greatly disliked buying digital games, which was signaled by the console makers in that they had to offer both a “digital only” console as well as one with a disk drive. The pre-orders confirmed by suspicion, which was 10-1 in favor of the disk-drive versions, and ultimately extended the life of the business model of GameStop by at least another seven years (i.e. their highest margin product was used games, with console cycles lasting around seven years).
What’s my point?
I still watch those retro game collectors videos today.
In no small sense, I think by the end of this bull market, I’ll be fortunate to have all of the lessons learned during this past bear reinforced. This will undoubtedly mean being much more comfortable during turbulent times, and hopefully a keener eye for great opportunities.
My aim for this next year is to learn how to handle a raging bull market and learn how to gracefully exit when the time comes. Further, I know there is some pain ahead, only in the sense of mentally getting over my skis to have healthy corrections occur before another leg up. I’m not a trader, as I hold positions for years, but you know the feeling.
This is all to say that maybe this Substack quiets down for a bit, in so far as inspiration has been hard to find lately. I truly believe it’s a sign that the bull market is here.
The ground is certainly shifting, and the car is in motion. The time to calmly set exit price targets is likely behind us, and likely also for all the regulatory backlash.
When more people participate in making money, both politicians and regulators magically stop fighting so hard.
Have fun out there, if you made it through the past couple of years you definitely deserve it.
Will