Jonathan Marks

Sell a kidney if you must, but keep the Bitcoin.

Some basic lessons for new investors to live by: 1/ Ignore the crowd. You make money by going against the consensus. 2/ Always pick stocks where you feel you have a research edge. 3/ You rarely go wrong investing in the company with the best product. 4/ Don’t listen to management. They are paid to be bullish. 5/ Study competitors, suppliers, and customer behavior. Be a product junkie. 6/ Have in your mind what you think a stock is worth, which is different from price. 7/ Be able to articulate in one sentence why you own a stock. 8/ Develop specific downside scenarios that would cause you to sell the stock. 9/ The highest quality of growth is unit growth, then pricing, then margin expansion, then cash reinvestment. 10/ Be wary of companies that grow by buying other companies. 11/ Sell discipline is selling a stock once it hits your price target, or your investment thesis (why you bought it) changes. 12/ Short stocks that have bad businesses, and not because they trade at high P/Es. 13/ Two big value creators are brand extension and TAM expansion stories. 14/ High P/Es are a function of high future growth rates, and not the industry. 15/ When investing in growth stocks always look for a controversy (“fight”). 16/ Buy stocks that can leverage key secular megatrends, and avoid those that will be hurt by them. 17/ Always consider cannibalization of existing products when sizing up new product opportunities. 18/ Be wary of “hockey stick” sales forecasts absent new products or expansion to new distribution channels. 19/ Stock buybacks are accretive if the E/P ratio exceeds the after tax cost of debt or return on cash. 20/ Price cuts rarely add value since competitors usually match them.

Hardware is hard. That’s why Elon is by far the greatest founder of all time. Remember — countless startups die just while trying to put stationary beige boxes on desktops. Very smart people get crushed by supply chain disruptions, or China tariffs, or lockdowns, or shipping interruptions, or regulatory delays. Not Elon. He didn’t just survive financial crisis and coronavirus. He managed to build physical things in America while fighting the state and the laws of nature at the same time. Somehow he managed to simultaneously build not just a car company but a rocket company. Those don’t just have “moving parts”, they are a moving whole. The difficulty level here is insane. Hardware is completely different from software. One recall, just one serious bug, can destroy your company. If you are charging $50 for something that costs $40, and you need to recall and replace a million units, you’re usually dead. So just one of these companies — just Tesla, or just SpaceX — would be an incredible accomplishment for anyone. Even a very intelligent and hardworking person would have to live an incredibly boring, disciplined, focused life to possibly maintain the extremely low error rate needed to profitably ship such complex products. Not Elon. He did SpaceX and Tesla while having N children by K women. While also cofounding OpenAI and Neuralink and Boring Company. While fighting and defeating countless journalists, politicians, haters, and short sellers. And of course while buying Twitter, posting all the time, and building a following larger than almost any politician. The better you are, the better you understand how much better Elon is. If you’re good at math you appreciate Ramanujan’s greatness. If you’re good at basketball you respect how amazing Michael Jordan was. Elon is like that, for tech. Everyone in tech understands the sport we’re playing, and he really is the greatest of all time.