When you’re enchanted, bet the farm.
Enchantment doesn’t come along very often — maybe two or three times in your life.
That’s paraphrasing Charlie Munger.
My first enchantment was my own publishing business. I knew where we were going. I kept expenses low by not being extravagant. And, most importantly, I had a partner, Gerry Friesen, who could do brilliantly at all the things I was lousy at — like sales. thank you, Gerry.
After we sold the business in 1997, I floundered around looking for the “perfect” investment to put all my wonderful (if totally unexpected) gains.
I flounded around for years. I didn’t understand that “Wall Street” did two things brilliantly – selling newly-rich suckers like me and inventing “exciting” new things to sell them.
What they did excruciatingly badlly was managing those things — i.e. making the investments they sold me pan out over the years. Wall Street’s attention span, I learned, was somewhere around a nanosecond, shorter than a gnat. My investments were for my old-age — and that, hopefully, was years away.
I could give you a list of all the rubbish I invested in. You’d conclude instantly Harry was an idiot. Which I was. A gullible idiot.
A dear friend from Australia ended up on Wall Street. He did very well. One day he started a biotech fund — which he knew nothing about. But I thought he did. I invested $1 million. When the fund later went 100% bust. I mumbled something about losing a million. His reply: He lost $10 million.
Then, as now, I was thrilled by technology. The PC was strong. Software was exploding. The Internet was starting. You could sell things on it. Networking companies were exploding.
Then came the Dotcom Bust.
Harry was back to exciting (but safe and high-yielding) muni-bonds. Thank you Todd for saving my tushy. Thank you Todd for teaching me “When in doubt, stay out.” Repeat: “When in doubt, stay out.”
Fast forward to today’s love — AI and its primary beneficiary. Nvidia.
It’s my single biggest holding,
It’s exciting when it goes up — which it’s done for a long, long time.
Then came mid-July. And the world thought two things:
+ AI will never pay off for all the people buying Nvidia-stuffed data centers.
+ So we’d better “rotate” into something else like health care (yuch) and banks (double yuch).
And the world did. And so my huge holding in Nvidia was shedding hundreds of thousands of dollars in the flick of eyelid, viz:
Every day I’m more and more depressed.
But then came today….
Now I’m in Seventh Heaven — or whatever the expression is.
So what have I learned? Anything?
Yes.
Wall Street’s talking heads need a story. The latest one is “Rotation.”
Tomorrow’s story? Who knows?
The only thing I know is that earnings, sales and forecasts count.
Nvidia, I believe, has them in spades.
If you’ve made money because of my Nvidia Nagging in recent months, send me a Thank You email.
If you have doubts, be my guest. Invest in the S&P 500. You would have done OK this year. You would have avoided all the Nvidia Agita.
But you wouldn’t be rich.
That’s it. I’m off to the Olympics in 97 degree heat. Double yuch.
A Shout-Out to Amazon’s Kindle
I’m reading this on my iPhone. It’s fascinating.
I love Kindle. You can read it on your iPhone, your iPad and your laptop. It’s all synched by wonderful Amazon which is up 2.7% as I write this.
Be careful
I caught our 76-year old housekeeper climbing a ladder today.
An 81-year old friend of ours tripped in Time Square and broke her arm.
Hold the railing going down stairs. The most dangerous stair is the last one.
Don’t lift your heavy bag into the overhead compartment.
In short, Don’t Do Stupid.
See you soon. — Harry Newton
