Since I started posting at Seeking Alpha two years ago, I've given you two Top Ten lists, up 79% and 42% respectively, urged you to be bullish on stocks, warned you about IBM (NYSE:IBM), and exposed the debt issue for what it is, a media fiction. (I'm still waiting, by the way, for a "single shred of evidence" that debt is stressing the economy. Cue Ferris Bueller's teacher, "Anybody? Anybody?").
I'll be retiring from these pages at the end of this month. Two years of being "out there" is enough for this neurotic, and I'm anxious to return to the cave. Before I go, I hope to post a few columns to help you navigate the market in the years to come. In this column, I'm going to reveal some of my sources, the characters I listen to and learn from. But before I do, let's talk charlatans, it's always fun. Here are the characters I choose to ignore (and maybe you should too).
Ignore (except for the entertainment value):
Fear mongers: You can safely ignore Rick Santelli and Joe Kernan of CNBC, Marc Faber, and all of the silly fear mongers, including the Tea Partiers. It would be different if these guys had one fact to back up their claims, but all they've got are ridiculous linear projections out to 2035. Rick and Joe: find another issue. Our debt is measured, reasonable, and in line with other mature economies like Germany, Canada and Great Britain.
Any and all politicians: I'm giving both political parties an "F" in basic economics. Raising taxes (any sort of tax, it doesn't matter) and trimming deficits is what you do when you want to sloooowww the economy. The agenda should be growth, growth, growth. Both parties are so focused on debt, they've ignored the obvious solution. We should already be in the process of building ten more Hoover dams, whatever it takes, and yes, we should be doing it with deficit spending.
Other money managers: With very few exceptions, most money managers are behind the curve when it comes to changes in the economy. I like Michael Larson's and Warren Buffett's always-solid portfolios [except for IBM, a model which looks like it's about to implode]. Other than David Tepper's work, I don't see any imagination or flair in the portfolios currently listed at dataroma.com.
Here are characters I'm learning from:
Venture capitalists: Think of stock picking as a connect-the-dots exercise. Three dots: Past, present, future. Past and present are based on data, or facts. And then there's the future. We don't have any data on the future. No facts, just conjecture. So what do we do? The lazy way to discover the future is to draw a line, and linearly extrapolate. The fun way to discover the future is to study it. You can learn a lot from venture capitalists as they refine, iterate and deploy new business models. Here's the blog of Jeff Jordan, a partner at Andreessen Horowitz. There are scores of others, like Chris Dixon and Peter Levine. These are the smartest investors out there, and they're on the front lines of innovation. You should be there too.
Benedict Evans: One of my favorite newsletter writers, Benedict obsesses over the same things I obsess over. The competitive arena is changing at warp speed, cherubs, and Benedict - in the area of mobile - will help you figure out who will survive and who will perish. (As an investor, you know, it's kinda cool to figure out these things in advance.) Check out his comments on Facebook (NASDAQ:FB), on how and why the migration from the desktop to mobile imperils their model. Great stuff.
Clayton Christensen: Read Jeff Stone's fabulous book, The Everything Store, to see how Jeff Bezos used business theories advanced by Clayton Christiansen in the development of Amazon Web Services (NASDAQ:AMZN). If you want to be a successful investor you've got to be well-versed in the process of disruption; it's my overarching theme for the next decade or more.
As we look to the future, business in the aggregate is going to grow in value at a healthy rate, but that's not where the real action is. The rules have changed (in some verticals, we don't even know what the rules are). It's a free for all. The pie is being divided up anew. To this crazy, old stockpicker, it doesn't get any better than this.
Shuffle up and deal. This is gonna be fun.