RR Journal No. 9

Updated: Oct 6

Rust never sleeps.

- “My my, hey hey”, Neil Young

We’re monolithic

As I walked through the airport in Istanbul this afternoon surrounded by thousands of people, I had a vision. We, humans, as glaciers drifting over time in one direction or another. Individually powerful, each set in motion by unique passions, habits, and tempered by the beliefs we have about ourselves. Slow but deliberate, we’re a force of nature to be reckoned with. Human creativity, our secret sauce to problem-solving, is unstoppable once pointed in the right direction. We can seemingly get ourselves out of the tightest jams, and innovate out of any struggle, like a house cat landing on its feet after taking a tumble from the top of the fridge. If things aren’t working out, it’s a result of our habits or clarity of direction. No one can stop a glacier.

Drifting

Our problems only start when we overlook our power and begin drifting in the wrong direction. We drift in small increments, but the end result is massive. If we don’t exercise today we won’t be fit in six months for the marathon. If we skip our weekly language class, forget about joking with cool people at the wine bar in Spain. We make excuses. In years, we’re someone we never wanted to be. An imposter in our own bodies.

There must be more to achievement than following through on a clear direction, incrementally. Surely, some people are born with “it”.

Comically, the passport control officer checking my credentials had the look of a villain from a Bond film. Yet, there he sat stamping passports. Suddenly, the aura surrounding all successful people struck me as arbitrary. What separated this dude from someone walking the red carpet? Probably beliefs and a few habits. Not that this guy had any desire to be in a Netflix series, that’s just my projection. But if I saw him appear from the shadows on the silver screen to challenge Bond to a duel, I wouldn’t question it.

We sit in fear about achieving our dreams when we possess the same exact circuitry as industrial titans, financial giants, and genius entrepreneurs. How dare we look at someone else’s accomplishments and think “oh, I’d never be able to do that”... It is an absurd presumption. We better be chasing down what we want every single day habitually no matter what that thing is.

Belief

If we believe we’re unstoppable, trust me, we are. We’re creative to a fault. In fact, we’re so creative that we’re going to find the easiest way out. If we believe we have an escape route, we’ll take it, even if this means taking ourselves off course. For the fortunate among us, that may be letting your parents bail you out if your startup blows up or heading to grad school when you’re unwilling to determine what exactly it is you want to do. Just knowing your parents (or rich grandparents) will bail you out will screw your head up. Consider yourself lucky if you have no one to bail you out. And don’t go halfway to what you want, either. Don’t end up stamping passports if you want to fly planes. Don’t fly planes if you actually want to build jet engines. Don’t build jet engines if you actually want to join a rock band.

Choose your direction and build the habits to achieve what you want out of life - single-minded and unafraid. If you don’t want much, that’s okay. But, if you want plenty, don’t settle for a few crumbs.

So, burn the boats

A few months ago, I received a DM from a recent grad who wanted a few top tips for success. While I had a few particularly suited to his situation, my tip was “burn the boats” (from Sun Tzu), or remove anything from your mind that will allow you to accept defeat. No plan B. Because we’re only powerful as strong as our belief in the finish line. This is how we use our creativity to the fullest. This keeps us headed in one direction. I’d rather live on the street until I got on my feet again than accept a good-natured hand-out. I’ll die before I fail.

Vision Hacking

You can hack this. In my life, when I was most in doubt of my vision or goal, I’d sit down in the morning immediately after waking up to think about exactly what I wanted for thirty minutes. What it felt like. What shoes I was wearing? What the room smelled like. Insane, minute details. After a few months, the vision was burned into my subconsciousness, it became clear when I was veering off course.

Don’t feel like filming a TikTok today? Well, the guy (that’s me) in your vision is quite well-known and successful, he didn’t get there by accident, I’d say to myself. I’d get back to work quickly after that.

Now, I catch these slips a lot faster when I agree to a project or to build something that doesn’t mesh with my vision for my end state. In my vision, I achieve success without it making me dull. In the future, I’m the guy who accomplished a bunch of big things and still doesn’t need to check his phone at the dinner table. I’m a glacier constantly working my way towards my goal and so are you.

So, who are you going to be? What are you going to do? I’m looking forward to seeing you arrive, no matter how long it takes, where you always intended to go.

This week, I’m taking meetings from Miami, FL

 

Global Markets: Don't Sleep on Inflation Hedging


During times of economic chaos (specifically stagflation), investors react in one of three ways: run, freeze, or pivot. Run is the exact wrong thing to do when inflation is high: dumping your stocks or other assets and moving into cash means you’re losing twice. Once from realizing the initial loss on a lower stock price and again when suffering negative interest rates in cash thanks to inflation. By selling stock, you’re effectively “buying” cash. It’s like hitting the gas, instead of the brakes, as you see a cliff approaching. Let’s all take a deep breath and ensure we’re not reacting this way with our savings and portfolios as eerily tempting as it may be.

Freeze? I think 90% of people react this way. You watch dumbfounded as the price of your shopping cart, gas tank, and home electricity bill climbs slowly but surely every month. How is this possible? Your wages haven’t adjusted to match, of course, so that means you’re just getting poorer quietly. We suffer in silence, unsure of what to do next. The solution here is education and the path becomes a bit clearer for the average investor. I’ll make a few suggestions in a moment.

Now, having spent a week in a country with incredible culture, solid economic output, and infrastructure, but outrageous inflation (and bubbling civil unrest), I’m returning home with the idea that holding excess cash is basically insane. I froze. Sure, USD is much better than holding the Turkish Lira, but it doesn’t mean it’s logical if you think things will get worse before they get better. Extreme scenarios help you understand your own with more clarity. If you’re in a country with relatively low inflation compared to the next guy, congratulations, you’re a little luckier.

When it comes to pivoting, there’s a strategy for each age group. If you’re young (fresh out of college or your first job), it would make more sense to get paid in anything else besides cash right now. Take the damn stock. Work for free if you’re going to learn and level up faster. Don’t take the highest paycheck, take the highest learning upside. Don’t take on additional debt in the form of expensive education. Don’t blow your money on sneakers when you have less purchasing power than last year.

For the rest of us, it’s time to make a move. I, like many, underestimated the real inflation rate early on and was willing to pay a small premium to hold cash for future opportunities. Not anymore. Rarely does an inflation rate turn hard on a dime - it may take a decade to tame if we look at American history and Volcker’s strategy in the 80’s.

You need to own assets that at the very least move in tandem with inflation (real estate, fractional ownership in real estate via REITs, commodities, or companies that sell consumer staples) and have intrinsic value. If you believe that your cash will continue to get eroded by inflation over the next five years, why would you still have a savings account full of it? I’ve recently begun moving out of my excess cash and will continue to do so over the next few weeks. As Ray Dalio says, “cash is trash.”

Suggestion: We’re still early in the cycle. Consider what assets you think will weather the next 5 to 10-year stagflation period. And slowly move excess cash in this direction. Increase the amount you set aside for your 401K - or take hold of your allocations moving into REITs and ETFs. Think for yourself here and buy things you want to own for the long run. For me, that’s hard assets, consumer staples, and EV technology.

Holdings: S&P500 (modest), REITs, EV Battery Tech, emerging EV manufacturers

Bullish: Residential real estate, collectibles, and Brent crude oil

Neutral: NA

Bearish: UST Bonds, Euro Equities, PayPal

* This isn't financial advice and is for educational purposes only.

 

Listening: The Yawpers


There’s a fearless state that I can put myself in with the right song. It’s the relaxed but ready flow of a fighter entering the ring. Warmed-up and loose. Every prizefighter has his or her song. It’s the ritual that calls you to the task at hand and lifts you up further than you thought you could ever go. You become extremely dangerous in achieving whatever it is you must achieve. Even if that’s just coding a new feature on your app or selling an extra license for the SaaS company you work for.

Punk music, by definition, is a rebellion against the status quo. A loud wake-up call for when we fall asleep at the wheel. We could all use one. We should all feel badass every now and then.

A friend recently shared The Yawpers, a Denver three-piece, who’ve woven together their own outlandish, cinematic, muscular, psych-punk and sent it to the moon thanks to their musicianship. Players will inevitably nerd out over the arrangements which sound impossibly massive for a three-piece. You may get a new favorite guitar player out of this. It was one of those bands you’re ashamed that you didn’t already know about them. Fans of The Black Angels and Thee Oh Sees will feel right at home.

Start with their studio record Boy in a Well and move to their recent live performance on Jam in the Van. The lyricism is poetic and evocative, a verifiable field trip for your brain to a strange land.

The next time I walk into a big meeting, I’m listening to Armistice Day beforehand.

Listening: The Yawpers

About this newsletter.

This weekly email is written by me, Nicholas Crown. Meaning: this email is not professionally edited (yet), so please reach out with any suggestions or errors by replying. This is not investment advice.

If you want to meet me 1:1 you can always book a time here.

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