Simon Erickson (00:07:31):
Did that through most of my 20s, went back and got an MBA in entrepreneurship, actually, split between entrepreneurship and finance. I wanted to get into the renewable energy industry. And so I worked for a large oil company that had a renewable energy strategy. And so I worked on the venture capital team, the strategy and development team. Went on and we acquired companies that were bringing their technology in and would use it to build solar plants all around the world. Really interesting stuff, but I also, after that I said, “Hey, I think that I want to be an investor. I want to look at things from the outside rather than the inside.”

Simon Erickson (00:08:05):
So rather than building these programs, I wanted to say, “Okay, how can I assess a company, figure out how they’re progressing, where their future lies, if they’re doing the right things.” And so I joined the Motley Fool and I worked there for seven years, ran a couple of services for them, mostly looked at innovative aspects of the market and finding the companies that are taking advantage of those. And Clay, the most exciting part of my career actually started last March, in March of 2020 when we launched 7investing. And I got to team up with several of the other elite advisors that I really respect, seven of us now, we’re finding our very, very top ideas in the stock market, each and every month, and packaging them into a subscription product.

Simon Erickson (00:08:44):
So it’s been a lot of fun. I’ve seen a lot of neat things out there, and always the focus has been reading the tea leaves of what the next big innovative thing is going to be.

Robert Leonard (00:08:52):
Simon, how did you make the transition from a corporate job into an investing job? I get asked that a lot from people, whether they’re brand new, out of college going and trying to get an investment job, or they’re already working a job that they had to take because they couldn’t get into an investment role, or they just decided that they have a passion for investing and they want to make a switch. And personally, I’ve seen how hard it is to get a job in the investment world. So I’m curious how you made the transition from what you were doing in the corporate world into an investment role.

Simon Erickson (00:09:23):
Best piece of advice by far is go all-in on whatever you want to do, whether you want to go back in the NBA, if you do that, go all in and do full time. If you want to switch from a corporate job to an investing job, go all in and do your research and your homework before you even get into the interview. It’s a very hyper-competitive world out there today, especially in the investing world, but I think that for any industry, if you’re willing to do your homework, be very thorough, but also show the passion for what you’re doing and saying, “Hey, I really like this. This is what I want to spend all my time doing.” It really is a huge advantage for anyone who does that.

Robert Leonard (00:09:55):
Did you learn anything from when you were in your corporate job that has helped you become a better investor? Is there anything you can take from that time as a full-time employee to put into your investing process, strategy, thesis building?

Simon Erickson (00:10:08):
Yes, absolutely. One of the biggest ones that are underfollowed is company culture. And by culture, this is an interesting side conversation, I won’t spend too much time on it, but we typically think of culture is like how happy people are, if there’s free coffee and donuts in the break room where people are smiling every morning, I’m like, surely that’s important, but the more important part of culture is how a company makes decisions. Every company out there has a scarcity of resources and a scarcity of people, and they have to make decisions on how they’re going to allocate projects, to what people want to do, how do you get people on the same page for things, how do you spend your money? How do you go after bigger opportunities?

Simon Erickson (00:10:45):
Corporations think about that generally very different than entrepreneurs do in terms of risks, in terms of safety, in terms of how many people they have in a workforce, or in terms of the processes they already have in place. It’s been eye-opening to see the difference between corporate America and working for two of the Fortune 10 like I have. And then also seeing a completely from the other side of being an entrepreneur that started from Square one with zero revenue on day one of when we started 7investing. Anyway, kind of a side conversation perhaps, but it’s definitely a different perspective for both of those.

Clay Finck (00:11:18):
Simon, I’ll frequently have people reach out to me and ask about specific companies that are very popular on Reddit and the Wall Street Bets forum. This year that has been companies like GameStop and AMC. This whole movement really took off at the beginning of 2021 and still seems to have many people involved. I’m curious what your take is on the situation and what you tell people that are asking about investing in these companies.

Simon Erickson (00:11:47):
Well, first and foremost, I’m not dismissive of Wall Street Bets or Reddit. I think that I see a lot of commentaries that just think this is a bunch of dumb kids that don’t know what they’re talking about, and I don’t believe that at all. I think that there is something to the power of crowdsourcing ideas and communities where those ideas can be shared and the good ideas bubble up. That’s exactly what I think is behind what’s going on at Reddit, and then of course, Wall Street Bets, and GameStop, and AMC have become the quintessential examples of this. But the idea behind this was some very analytical work was done saying, “Hey, there’s some short seller manipulation of these thinly traded stocks.”

Simon Erickson (00:12:26):
These are companies that don’t have really any catalysts on the near-term horizon that if you want to pick up a little bit extra money, betting against these companies like so many institutions were doing, there really was no reason not to do that. GameStop as a bricks-and-mortar retailer of video games, for the most part, wasn’t going to go out and quadruple its revenue year over year. And what they realized is if they did have, again, thinly-traded stock, a significant retail presence, a lot of money that was going into this from retail investors, that could be the hidden catalyst that pushed the stock prices higher.

Simon Erickson (00:13:03):
So there is something to this, I certainly I’m not dismissive of what’s going on. I just think that from my perspective, is far too short-term focused. At the end of the day, GameStop or AMC or any of these companies that have now escaped the short-term manipulation that they’ve undergone from institutional investors still have to prove they have a viable, sustainable business. And if you can have a stock price that goes up 10X in a quarter, that’s great, but then you’ve got to prove yourself to quadruple after that, and a year after that and the five years after that, otherwise, it’s just a question of who is stuck holding the bag when the stock corrects the other way, and if it craters 50 to 70%, did you get it out of the bottom or the top? There’s no way to know because the fundamentals don’t support those valuations.

Simon Erickson (00:13:44):
So I’m between a rock and a hard place on this one, Clay. I certainly think there’s power to what Reddit’s doing and I think community is great for individual investors to share ideas with one another, but we should be doing it in a sustainable long-term way rather than just trying to jump in and out within a couple of weeks or a couple of hours.

Clay Finck (00:14:03):
Yeah, I agree that it’s really good that people are talking about investing and they’re interacting and getting ideas from each other, I’m just not so sure that investors should be allocating a large portion of their portfolio towards these types of investments for the reasons that you just mentioned. So for some people, Reddit or the Wall Street Bets forum might be where they get their investment information entirely. If they would like to learn more about stock investing and how to determine what makes a good investment, where would you recommend they go?

Simon Erickson (00:14:32):
The Millennial Investing Podcast, of course. In addition to y’all’s show, which is fantastic, I really would encourage people to check out all the free content we have on 7investing.com. We have a lot of free articles, we have a podcast, we have a live stream, but we’re also opening up a Discord forum next week, which will be available to the public for people to bring in their stock ideas and have them bounced around with other investors. I think that the power of community is very strong. We want to encourage people to say, “Hey, this is a safe place where I can bring my ideas. What do you guys think about company XYZ?”

Simon Erickson (00:15:08):
I would say a lot of social media platforms have succumbed to overly promotional, piping their own companies. Maybe they’ve got a personal interest in it, and they’re just trying to get a lot of people to buy it so that they can gain. I don’t want that. I want an objective research-based community, and that’s what we’re trying to build. We want 7investing to be for a lot of people’s firms.

Robert Leonard (00:15:28):
I want to talk about another topic, like GameStop, AMC, that’s been pretty popular lately and that’s what’s happening in China. We’ve seen a recent crackdown on Chinese companies like Alibaba and Tencent, which has led to a significant pullback in these stocks in 2021. Tell us about what exactly is happening with these companies and the Chinese government.

Simon Erickson (00:15:50):
And regulations are erratic in China. You don’t really know what’s going to happen as an investor. And the lack of stability means there’s a lot of risks. And of course, risk is the ultimate enemy of institutional investors who don’t want to get phone calls from their clients saying, “What happened to my money and why did this stock drop 20% today?” So China is got a huge opportunity, of course, a billion and a half people it’s discovering technology just like America is discovering technologies. It’s a leader on the global stage in AI right now, commissioning its biotech industry and its insurance reimbursements for healthcare are innovating quickly.

Simon Erickson (00:16:25):
But again, you’ve got the uncertainty of what’s going to happen if a company goes all in like a Silicon Valley company would do in America, it’s almost a backlash if you do something the Chinese government does not want you to do over there. Let’s use Jack Ma’s, a perfect example of this. Jack Ma is incredibly innovative, he is a hustler, he is a guy that’s very aggressively developing technologies, and he’s used those to build the most successful e-commerce platform with Alibaba out there in China. But as we saw, he wanted to spin off at financial through an IPO earlier, just within the last 12 months here. And the Chinese government came back and said, “Hey, we don’t really appreciate some of the things that you’re saying out there.”

Simon Erickson (00:17:06):
He was very controversial with the government on his stance on bribes, on his stance on regulations, on his stance on suppressing innovation. And if you follow the financial story, it’s basically pulled the IPO and the government has silenced Jack Ma from speaking in a way that is controversial or critical of the policies that they have. They want to preserve control, they don’t want to have China become Silicon Valley like we saw in America. And so we have to tape a lot of the expectations. When we say, “Oh, this is going to be the Google of China. This is going to be the Amazon of China.” It’s not, China’s completely different. And the consumer preferences are very different over there, and the regulations are very different over there.

Simon Erickson (00:17:46):
Now, is it still a big opportunity when you have 1.5 billion people? Yes, but I think that we need to be very mindful of the fact that at any time, your investment is not safe over there. You don’t have really any control over what the government is going to be doing, especially as an individual for an investor in these companies. So kind of a split, I see a lot of opportunities. Robert, I think this technology is catching on in China, there’s a bunch of brilliant researchers over there, but it’s very different rules than we’ve gotten used to, at least in the American stock exchange here.

Clay Finck (00:18:17):
I very much agree with what you’re saying about China. There may be really good opportunities and some Chinese companies may be attractively priced relative to the US, but there is always that risk that the Chinese government is going to do what they believe is in their best interests, and that might not align with your best interest as an investor in those companies. The bottom line is that the Chinese government has a huge influence in how these companies operate and how profitable they will be. Given what about how the Chinese government operates, do you invest in Chinese companies personally?

Simon Erickson (00:18:51):
Yes, I do, to answer the question directly. I’ve changed quite significantly over the past decade on how I think about China. If you asked me that question about 10 years ago, I would say, “Yes, look at how quickly these small-cap Chinese companies are growing. And don’t you want a piece of the innovation that they’re tying into because you can get a 10 bagger on these stocks?” There is no way I would do that today. In fact, I lost a lot of money on a lot of those bets on very small Chinese, small-cap companies. But I think that really, in my opinion, this is always a risk-reward question.

Simon Erickson (00:19:22):
The risks are elevated, but the valuations have that baked in. If you look at Alibaba, if you look at Tencent, these are massive companies that have got investments in several companies within China and also outside of China too, but they place their bets accordingly and they know how the government operates over there. So if you’re going to invest in Chinese companies, do so recognizing that the risks are high, but the valuation is more than [inaudible] that in my opinion right now. I’m not putting 100% of my portfolio in these companies, but I am allocated through several of the big tech conglomerates that they have over there. And I think they’re going to be just fine 10 years.

Robert Leonard (00:19:57):
What I’ve learned is really important, both from hosting this podcast, also from reading books, talking to as many investors as I have, is not so much taking somebody’s opinion and running with it, but more so learning from them about how they think about something. So hearing that you invest in China, that doesn’t necessarily mean somebody listening to the show has to run out and invest in China. What I think is more important is to learn about how you think about that. And so there’s a bunch of super investors out there, some who really invest in China a lot and really like it. And then there are others who are completely against it. and then there’s somebody like you who is also for it.

Robert Leonard (00:20:30):
If somebody is analyzing a company in China, how do they need to think about that differently than they do in the US? How is the analysis of the company different? How do they need to think about the risks differently than they do in the US?

Simon Erickson (00:20:45):
Again, I think it goes back to the uncertainties of the unknowns, you’ve seen Cathie Wood from Ark pull out of investing into new companies in China, you’ve seen Masayoshi Son, SoftBank’s chief investment officer, who’s notoriously a growth style investor. And even he who’s bet on companies with a 100-year plan in place saying that there’s too much uncertainty for me to put money into these companies, even the large tech companies in China. If you’re thinking about investing in China, you’re seeing the opportunity and the technologies arise, and you’re welcoming the uncertainties of government regulations.

Simon Erickson (00:21:19):
And the impact of that on companies is going to be, in my mind, it’s going to impact the operating profit line, like the new data security laws that China has. Every tech company in China I’ve now got to have these processes in place to make sure that they’re not going to be exposed to cybersecurity attacks. They’re talking about it from America, just like America has got similar restrictions against Huawei, the TikTok, stuff like that. This was all bite dance, all of this was a chess match between cybersecurity protections with tech companies, and China is going through the same thing. They’re going to put all of their tech companies to the same paces.

Simon Erickson (00:21:52):
They got to abide by the regulations and the bar is going to be high for those, but at the end of the day, they’re going to abide. They’re going to do what the government tells them to do and it’s going to cost them money to do that. So if you’re a big tech company, but to your question, which I think is, what types of companies do you want to invest in, I would not invest in a small-cap company that might not be able to abide by those costs that are required for the regulations that the government’s pushing on me. But if you’re a Tencent, if you’re Alibaba, and the government says you got to do this now, you can say, “Okay.” if you’re Tencent and your empire is built upon gaming and digital gaming, the government says, “Okay, since the ship is now higher than it was before, or anyone under 18 in China can only play video games three hours a week now,” you’re going to say okay and you’re going to adapt to that.

Simon Erickson (00:22:34):
And they might change it again in a year or two, same thing, you’re going to adapt to that too. And of course, that’s going to cost you in terms of revenue or in terms of your expenses, but at the end of the day, companies that can adapt and can afford to adapt to that, there’s still 1.5 billion people out there that you have a market that’s addressable. It’s just a matter of how much it’s going to cost you and how frustrating is this going to be for someone like Jack Ma who wants to innovate and do things on his terms, but he’s still got his hands tied in so many different ways.

Robert Leonard (00:23:02):
When you sit down at your computer and you’re about to start your analysis on a company, let’s say you have one Chinese company and you have one US-based company. Are there different metrics that you’re looking at for each company, or is the analysis the exact same? And then what are those metrics that you’re looking at?

Simon Erickson (00:23:17):
So much of this is the digital world now. We have got a completely different way of analyzing companies than we did in the turn of the year 2000, because it’s been more and more focused on recurring revenue and software as a service. And that’s why you see these metrics like net-dollar retention rates coming up, annual recurring revenue, average contract sizes, all of these kinds of things are with the understanding and the expectation that you’re going to have 90% plus retention rates, any recurring model. That’s how the entire tech world operates these days. It’s like it’s a land and expand model, get in there, get some big customers, get more and more sustainable enterprise focused for the most part.

Simon Erickson (00:23:55):
A lot of it is consumer focused, but mostly enterprise focused. And when I think of China, as well as Southeast Asia, it’s more consumer-focused in my opinion. You see stuff like, Sea Limited, you think of things like Grab Holdings, which is coming public now through a SPAC, $35 billion deal. They are building from the ground up, how do they approach consumers? Sometimes in a bunch of different countries. What do they want? What is important to them? How do they culturally buy things? How do their drivers make money? How do you build out a logistics infrastructure? So much of that is different when you think about Southeast Asia and China and how the companies are approaching it.

Simon Erickson (00:24:34):
And I think that might be the opportunity for investors to build something from the ground up, recognizing and respecting the regulations are going to be there and they might change, and there might be some curveballs that hit here and there, but just like Amazon built from being a bookstore and now is the e-commerce powerhouse, and Netflix built from people wanting to watch DVDs and get them delivered to them by mail, and now you can stream everything to your living room, there’s an opportunity internationally to build several of these markets from the ground up, and you’re seeing the winners emerge.

Simon Erickson (00:25:08):
And if there is any similarity, I think, between the United States and other countries, it is that companies get stronger, especially when they have more data as a competitive advantage to make tweaks and changes that they see. Very exciting, in my opinion, not only in China and Southeast Asia, but also in South America in India. I think we’re going to see a lot of emerging market winners arise that return 10 times your investment over the next five or 10 years.

Robert Leonard (00:25:32):
We’re hearing a lot about supply chain issues and shortages across many industries, many different types of products and services, but one you’re well-researched in is semiconductors. So talk to us a bit specifically about how and what is happening with the semiconductor industry and why it’s so important.

Simon Erickson (00:25:51):
Yeah. Robert, say that you have a semiconductor fabrication facility, you have a fab, you have a place that is manufacturing the chips that have the highest performing ships in the world. And traditionally, you’ve served smartphone companies, and you’ve served automotive companies and you serve some industrial customers too. But the problem is when COVID happened last year, several of those industries really completely cut their contracts and their demands with you. Let’s say you’re an automaker and you say, “Hey, we’re not going to hit our forecast because nobody’s going out and buying cars right now, everybody’s hunkering down. So we need to stop the volumes that we had in place with you, Mr. Fabrication of the semiconductors that were going into our cars.”

Simon Erickson (00:26:32):
And you said, “Okay, fine, no problem, great. We’re around when you need us again.” But in the meantime, you don’t have your fab sitting idle, you go out and you find other companies that want to fill that demand. You go out and you work with Tesla because Evs, electric vehicles have 10 times as many semiconductors shifts in them as internal combustion engine, traditional vehicles do. You say, “Okay, great, Mr. Elon Musk come right in. We’ve got some supply waiting for you” You go out and you work with internet of things providers, we want to have everything connected the internet now, and sensors connecting everything that we can take data off of.

Simon Erickson (00:27:04):
And you say, “Okay, we need semiconductor chips for those, let’s fill some capacity with that.” You find these innovative pockets of the market that need high-performance chips, and if you can provide those, you take on that demand. And now we come back, here we are about a year and a half later from the outbreak of COVID, at least in America, March 2020 call it and the companies like Toyota are saying, “Hey, we’re ramping back up now, can you make us the chips that we need for the driver assistance package for our vehicles or for the console, for the dashboard, for the audio and the entertainment.”

Simon Erickson (00:27:35):
You say, “Yeah, great. But now you know what, you’re in the back of the line again, we’ve got to meet all these other demands from the customers that filled the gap during COVID.” And so I think that you’re seeing certainly the manufacturers of those chips are supply constrained right now. That’s why you see Samsung building a new facility in Austin, Texas that’s going to cost tens of billions of dollars. You see Taiwan Semiconductor putting $800 billion CapEx plan in place for the next three years, which is almost unheard of for any industry, in my opinion. But at the end of the day, there’s only so much supply that can go around. And the people that are going to be able to willing to pay the highest prices and have the contracts in place are at the front of the line, which are the smartphone companies right now, they’re going to get first dibs on that.

Simon Erickson (00:28:18):
They get to drink first on this. Everyone else, they’re going to get what they can. Toyota has slashed its production forecast globally by 40% for two months in a row now, and that’s not going to just suddenly ramp back up next month. It takes time to bring capacity online. If you are a production of manufacturing engineer in the semiconductor industry and you live in Arizona right now, you’re probably going to double your salary of the next two years. There is so much demand. This is not just a cyclical thing, this is a step change because AI or the processing that’s required for machine learning is so computationally heavy.

Simon Erickson (00:28:54):
his is a new normal for the civic conduction industry, and it’s very exciting for the companies that design and also the companies that manufacture those high-performance chips.

Robert Leonard (00:29:03):
Sounds like some specific employees are pretty well positioned to benefit from this chip shortage, but who else? What other companies specifically are UCS benefiting from what’s going on in the semiconductor industry? And then on the other side, whether it’s companies, employees, anybody in this situation, who do you see as being most negatively affected?

Simon Erickson (00:29:24):
Moore’s Law pushed down the pricing of semiconductor chips for the past 50 years. We could more densely pack integrated circuits with transistors. And so it drove down the costs, and this led to the personal computing wave, unlocked all the opportunities for Intel and all the opportunities for AMD. And then all of a sudden, you had a PC on everybody’s desk, and all of a sudden data centers pushed the prices down for those even further, and now all of a sudden everything is built in the cloud. But the people who say that Moore’s Law is dead are pointing out that these are getting really, really small.

Simon Erickson (00:29:58):
The nodes, the process technology nodes are now five millimeters or smaller. These are tiny. This is so tiny, and the lithography that’s required for the production of these super complex chips is getting incredibly difficult. I’m of the believer that Moore’s Law is not dead, it’s just getting really, really hard. And so even the world’s largest semiconductor companies, the Intels of the world, are having a challenge to make anything that’s less than seven nanometers chips. The super, super, super small transistors that are allowing a chip to be more and more computationally capable, there’s only a handful of companies that can do them.

Simon Erickson (00:30:36):
The Samsung and Taiwan Semiconductor are the only ones that have reliably shown an ability to produce less than seven nanometers chips. And so if you’re Apple and you need your smartphones to be better every single year and more and more impressive semiconductors that can handle that demand, you go to a couple of companies to do that. Samsung is developing this for their own internal production, Intel wants to do this for US technology companies production, but Taiwan Semi in my mind is a huge winner from this as the world’s only pure play foundry that can handle this kind of computing. And so I think that there’s just going to be a flooded demand that goes to them for their production of these chips.

Simon Erickson (00:31:14):
And then the second one that really catches my attention right now is a lesser known company, it’s Dutch, it’s called ASML, not as followed because it’s a niche specific company. And what they are doing is they’re producing a lot of the capital equipment that’s going into the lithography and the etching of those chips. So Taiwan Semiconductor and Samsung are customers of this company because they’re making these massive machines called extreme ultraviolet lithography machines, EUV, if you want to call them those, that cost $150 million, and they’ve got two years of backlog already in place. They can’t make them fast enough to keep up with these capacity expansions.

Simon Erickson (00:31:52):
A company like that has got, basically, it can’t hire people fast enough to keep up with what it wants to do, and a stock like that is priced at a premium as it should be, but again, it’s of course, it’s not Facebook, you can’t flip the switch and serve 40% more ads when you make an algorithm tweak, you’ve got to train people and you’ve got to get your own logistics in place, your own supply chain in place to do something like that. But again, the demand for something like that is extreme. Extreme UV is necessary for anything that’s less than seven nanometers.

Simon Erickson (00:32:25):
And of course the world’s most complex computing is being done as Moore’s Law gets more and more complex, more and more challenging. This is a company that’s going to be… it probably will have a 10 or 20 year demand in place starting from today and no one’s going to catch it.

Clay Finck (00:32:38):
That’s incredible, just some of the figures and numbers that you’re bringing up around these companies. Do you think the labor shortage is playing a factor in any of this?

Simon Erickson (00:32:49):
Absolutely. Clay, let’s just for the fun of it go out there and apply for jobs in Arizona and say that we’ve got expertise in semiconductor manufacturing, see how many zeros are on the check they get offered to you. There are only so many people that can do this kind of work, it’s extremely challenging. Basically, if there’s any dust or any particle or anything that gets into these fabs, is going to completely disrupt the entire fabrication of all of these chips. Stuff like this is super, super-specialized, has to be done in a vacuum, extreme focus on safety, extreme expertise from the people that do these kinds of things, but it just shows you if you are that person and you’re willing to work for these kinds of companies, there’s a huge opportunity right now.

Clay Finck (00:33:32):
Another industry I wanted to discuss today is the space economy. I can’t say I know too much about this industry, but I’ve seen investors like yourself and Cathie Wood at Ark Invest show interest in it. Could you give us an overview of what the space economy is and what types of companies are involved?

Simon Erickson (00:33:50):
The space economy for decades had basically only one customer who was US government. And it was NASA that wanted to have taxpayer-funded missions that would accomplish something that would progress research. And then that would bleed down into the private sector through things like GPS that would be adopted. And now GPS is used for Uber navigating cars and delivering food to people’s houses. But it was really cool, but there wasn’t really a whole lot of commercial opportunity for this, but there has been an order of magnitude decrease in just the past couple of years, may I remind you, 10 times less cost of launching satellites into space, because rockets are now reusable, because there’s a miniaturization of the electronic components that are going into satellites.

Simon Erickson (00:34:37):
We’ve cracked the code on a lot of this. And so things that might have a couple of years ago cost 30,000, $50,000 per kilogram to launch into space, now, SpaceX and Elon Musk can bring it up there to you for $2,000 a kilogram, but there are strings attached that even Elon’s launches are not always on your terms. You have to do rideshare where you say, “Okay, Clay. I can bring you up into space, but you’ve got to buddy along with Robert here, and we’re going to bring all of them at the same time. You’re going to have 100 other people that are wanting to launch things. And by the way, here’s the orbital plane that we’re going to go to. And you’ve got to wait until the bus gets off at your bus stop.”

Simon Erickson (00:35:16):
But it’s cheap, if you previously had no opportunity whatsoever to do that, you now have an opportunity to launch a satellite into space. I think the more interesting piece of the space economy is going to be dedicated launch where it’s not just rideshare, and it’s not just on the Falcon Heavy rocket that Elon has available, it’s going to be something like a rocket lab, or you can have a dedicated launch specifically for you if you can come up with $5 million, but it’s going exactly where you want it to be. And by the way, they’ll also maintain all the infrastructure.

Simon Erickson (00:35:46):
You don’t have to worry about any of that stuff. You can just work on your application that you want to have a satellite out in outer space to do. And what is that? This is kind of either the fascination of entrepreneurship. This is what I’ve dedicated my career to seeing what is next in line that entrepreneurs are excited about doing. Richard Branson is really excited about showing the world that he’s floating around in zero gravity and how awesome his company is, how awesome Virgin Galactic is. Elon Musk is going to use satellite internet as a cash cow for him to get to Mars. That’s what he really, really wants to do.

Simon Erickson (00:36:20):
Jeff Bezos wants to have these floating living things orbiting around the earth where people can live on one day. Something like that is fascinating for these billionaire entrepreneurs who had no way possibly even think about this 10 years ago, 20 years ago. Now, their creativity is being unleashed and the economics are getting to be actually feasible for them to start doing things like this. And just like we saw cloud computing reduce the cost for companies to launch software and have Amazon hosts your software for you, where you didn’t have to build out all the storage capacity, didn’t have to build out all the processing and all the servers and all the IT infrastructure for stuff like that, Amazon just took care of that.

Simon Erickson (00:37:02):
We’re going to see in the next five, 10 years, all that infrastructure in space is going to be there for you, Mr. Entrepreneur, to go get it and go figure out a business form that makes sense, kind of an exciting time for the space economy.

Robert Leonard (00:37:14):
One of the things you do at 7investing, Simon, is you guys send out monthly research reports on individual stock picks. If you don’t mind sharing, what are a couple of the companies or maybe industries that you’re most excited about right now. We’ve talked about a bunch of them, we talked about space, we’ve talked about semiconductors. It could be outside of those companies or industries, but what are you most excited about right now and why?

Simon Erickson (00:37:39):
Well, Robert, I do have to keep the picks themselves behind the paywall. That is something that out of respect for my paying subscribers, I can’t reveal the actual names of the companies, but please come sign up if you’d like to see them, we have them available for everybody. But I will say to answer your question, the last two picks that I’ve had have been in the space economy, and we just chatted about that one. And then it also recently was the ad tech industry. Advertising is really undergoing this huge change right now where traditionally the highest rates for advertisements were in linear television, which was regional.

Simon Erickson (00:38:14):
If you live in Florida, you’d have Florida-based companies that wanted to appeal to Florida-based consumers. Let’s say, generally you want to put this advertisement up on cable TV station, maybe local advertising, there are handshakes that were being done for directly doing stuff like that. The ad tech industry though is evolving like Google has for the internet where now there’s exchanges. They can use algorithms to facilitate those handshakes. And you can just specify if you’re an advertiser, I want to spend this much money and I want it to appeal to this type of audience.

Simon Erickson (00:38:45):
And we’re getting enough information about websites and podcasts, about connected television stations through streaming and other places that we know enough about who those audiences are that are watching those stations or visiting those websites or listening to podcasts. There’s a connect the dots being done in advertising. What’s that going to look like? Well, it’s going to be very interesting. I think it’s going to follow like the banner ads that we’ve seen Google facilitate for the internet. It’s now expanding into a whole bunch of different other platforms like we just discussed, and that’s going to have a lot of implications for the advertising industry.

Robert Leonard (00:39:18):
If people listening to the show have been intrigued by any of the companies, industries, or opportunities that we’ve talked about in the episode today, now maybe they have too many things to pick between. How do you narrow it down? How do you think about capital allocation? How do you think about portfolio construction, your position sizing, things of that nature? And why is it so important for investors?

Simon Erickson (00:39:41):
Capital allocation is one of the most important topics in all of investing. It’s not really a sexy topic for a lot of people. I’m sure that at least a couple of percentage of the people listening to this program, their eyes might’ve glazed over when I said capital allocation, might be falling asleep as we go into this topic, but it’s incredibly important because there are two parts of the capital. Capital allocation is how do you spend your money? Or how do you invest your money? It’s the same idea from a business perspective or from an investor’s perspective.

Simon Erickson (00:40:08):
To the question you just asked, this is for an investor, what kind of company is an 8% stake in your portfolio versus a 0.5% stake in your portfolio? If you’re going to go take a flyer on a Chinese high-risk tech company, that’s a small-cap, you might not want that to be a 10% stake in your portfolio. You might want to have a very small bet that you place on that, whereas if you see a company that you think is protected from risks and you can sleep well at night, having a greater portion of your portfolio allocated to that. All of that is very personal, we don’t try to tell people how they should invest their money.

Simon Erickson (00:40:47):
That’s personalized financial advice. And of course, we don’t do that with 7investing. We basically just say, “Hey, here’s the types of companies we’re looking at. Is this a high-risk company? Is this a low-risk company? Who might this be a good fit for?” And then we pass the torch to you to make a decision on. The other piece of capital allocation though is the business side of capital allocation, which is, if you do have a business that’s producing cash flows or profits, how are you using those? Are you putting them all right back into growing the business like Elon Musk and Jeff Bezos do, where they just flood their company with R&D.

Simon Erickson (00:41:19):
And Elon says, “Hey, great. We’re going to do space internet stuff now.” “Hey, well, now we’re going to implant chips into people’s brains or Hyperloop or anything that you like. Elon has got a zillion ideas. He always just goes all-in on. Tesla was a perfect example of it by the way. Tesla had less than 10 chances. He thought Tesla would be successful, but Elon put all of his money to almost threaten his own personal bankruptcy into Tesla to make it succeed. But again, super high risk. Even he admitted, “Hey, this was probably going to fail.”

Simon Erickson (00:41:45):
Other companies say, “Hey, we don’t want to go all in and just go into the unknown, risks be damned. We want to be a little bit more discretionary on how we’re approaching growth. And we want to do this in a way that might attract a more risk-averse investor.” So if you’re investing in consumer brands, if you’re investing in really large tech companies, if you’re investing in retailers, these are companies that are more mature in their life cycle, and they’ve got strong brands in place, they’ve got protections from competitors in place. They’re not going to bet the farm on what’s going to happen in the next two or three years. And so they might be paying out a rising dividends.

Simon Erickson (00:42:26):
Vail Resorts is a perfect example. There’s not going to go out there and be all of a sudden, another Aspen, another Vail Resorts that just pops out of nowhere, and there’s a mountain in the middle of Nebraska tomorrow. Those are structurally in place, you can’t replicate that easily. And so companies like that have got season ticket holders, they know what their demand looks like, they say, “Okay, we’re going to put some money back into the business, but we’re also going to share this through a dividend or through a stock buyback.” Stuff like that is just as important for retirement portfolios or lower-risk allocation for someone’s portfolio.

Simon Erickson (00:42:56):
In answer to your question of how do we think about capital allocation, I love finding the fastest-growing companies that are out there. I love finding the most innovative companies that are out there. That is what I am just very passionate about doing. But even I would never put 100% of my portfolio into high-growth companies. You’ve got to be able to sleep at night, and at the end of the day, investing is meant to unlock your personal financial goals. For me, personal financial goals include putting my kids through college, and I do not want to tell them, “Hey, I screwed up and I made the wrong call and now we lost all of the money.”

Simon Erickson (00:43:32):
So capital allocation, again, full circle back to your question, it’s personal for everybody. We recognize that investing is personal for everybody, but I would recommend investors at least consider investing in companies that match their own allocation expectations and their own personal goals for what they want to achieve in the future.

Robert Leonard (00:43:50):
When it comes to your investing, how do you define risk? In academia, a lot of times it’s defined as volatility, and I don’t necessarily agree with that. And so I’m curious to hear, when you are thinking about portfolio allocation, what are you looking at as your risks and how are you defining that?

Simon Erickson (00:44:09):
Risk is the chance of permanent impairment of capital for a company, it’s not volatility. Volatility is in ups and downs. If you go from $100 to $200 in an investment over a 10-year period, it doubles over 10 years, but you’re committed to 10 years, do you care if it goes up to 300 and then drops to $25 and then eventually goes up to $200? You really don’t. It doesn’t matter if you’re a 10-year investor, if it goes in a straight line, or if it goes up and down all over the place. That’s volatility. Risk is when a company screws up and impairs the capital that never comes back, or risk is Altria investing in Juul for vaping.

Simon Erickson (00:44:48):
And they realized after they made this ridiculously overvalued acquisition of a vaping company that had all sorts of regulatory risks involved about them appealing to minors and how they were advertising, and just all this other stuff. They wrote off, what was it? 11 billion acquisition over a course of like 18 months. I forget the specifics, correct me if I’m wrong on that, but there were a lot of zeros on the check that they wrote that they just wrote down, and shareholders will never get that back. They could have paid that as a dividend and that would’ve been a better use of capital.

Simon Erickson (00:45:17):
Again, capital allocation is tricky. They thought they were making the right moves and doing the right thing for their shareholders at the time, but that was an impairment that you don’t get back, it’s permanent. Investors in Altria suffered from that move. That was a risk that they didn’t consider enough.

Clay Finck (00:45:34):
I think that capital allocation and risk management are topics that aren’t discussed as often as they should be. We live in a time where many retail investors are taking on more risk and they might think that because a company’s stock has performed very well over the past couple of years, or maybe even the past couple of months or so, they think that that will continue so they extrapolate that into the future, which might lead to taking on too much risk. Additionally, many retail investors haven’t seen a downturn in the markets outside of March 2020, so they don’t know what it feels like to lose a substantial amount of their portfolio’s value.

Clay Finck (00:46:16):
And I definitely believe it is a topic that should be discussed more. One thing we wanted to do more on the Millennial Investing Podcast is talk about individual stocks. And today we are going to cover Affirm. Could you give us an overview of what Affirm does and why you are excited about this company?

Simon Erickson (00:46:37):
The reason I’m excited is because it’s got Max Levchin as the CEO, and he is a guy that anyone who’s familiar with him was the CTO of PayPal that turned it into the largest digital processor of payments in America’s internet. This was something that people were not just moving money bank to bank anymore, now all of a sudden you had websites, they needed to do commercial transactions online, you wanted to make this as seamless and as simple as possible. And so it was tied to email addresses and people just set up these digital wallets that we take for granted today, but remember, back in the year 2000, 2005, this was a really big deal.

Simon Erickson (00:47:15):
And he had a problem with fraud, PayPal in its earliest days had all these bots that were just trying to game the system and get access to people’s money and do fraudulent transactions that were put money from one account into another and nobody would see what was going on behind the curtain. And so Max Levchin, brilliant as he was, found a way to contain the fraud, to detect the outliers and the anomalies in these transactions. And of course, PayPal now fixed it. They’re the most trusted way still globally, probably to digitally send money and to process the payments for those.

Simon Erickson (00:47:49):
But Levchin did a lot of that work, and he really is in my mind, the expert still detecting those anomalies. This was years ago, the reason I said that he’s the reason I followed Affirm so close is I followed him, but I guess it was, oh, I would want to say three or four years ago, I saw him at a financial conference, he was really pushing for transparency in consumer lending. He really had problems with credit cards and he didn’t like that in America credit cards were racking up 125 billion a year in interest payments. And then on top of that, another 15 billion a year in late fees or in fees you didn’t see coming as a consumer.

Simon Erickson (00:48:25):
And this is why banks are like the most hated industry behind cable companies. Consumers probably hate banks the most, they say, “Oh gosh, look at the fees I got charged. Look at how much I have to pay for my credit cards.” Of course it’s been crippling for some people that can’t out a credit card debt, just this terrible connotation for this whole industry. And Max said, “Hey, it doesn’t have to be this way. I finance can be a way to unlock opportunities for people to buy the things that they want and they need as long as we don’t do bad behaviors and as long as we’re not just putting a sledgehammer on people for taking out loans they shouldn’t have taken out, credit or loans or getting peak credit cards in people’s hands that shouldn’t have them in the first place.

Simon Erickson (00:49:03):
And he was saying, “What if we just were to transparently report all the interest payments and all the fees that you would be paying completely upfront? What if we didn’t have to go out and say, ‘Ah, late fee, I got you again, you got to pay us as much money now,’ and create this hatred. What if we can create a better way?” And so he was talking about an installment plan, and it would have to be paid with a debit card, not a credit card. And he said, “Okay, let’s start Affirm to be this company that if you wanted to go out and buy a Peloton, or if you wanted to go out and book a flight, or you wanted to go out and buy something that cost a couple hundred dollars, maybe didn’t have that right away, but you could pay it over time. And we could see you’re not one of these outliers who’s not going to pay it back over time.”

Simon Erickson (00:49:39):
“Affirm could lend money to those people and they would be willing to take the credit risk because they could detect the outliers and they could do this much better than any of the banks could do by themselves.” And so Affirm wisely goes out and says, “Hey, Max, we want you to be the not only the founder, but the CEO of Affirm. There’s an industry now that’s being called buy now, pay later, which is fulfilling that vision that Max Levchin had years ago. And it’s at the end of the day, an alternative when you are clicking the checkout button of any transaction that you’re making online, you’ve traditionally had, you can buy this with a credit card, you can buy this with PayPal, you can buy this with a debit card or, hey, look, you’ve got a now, a buy now, pay later option that’s now available.”

Simon Erickson (00:50:25):
You’re starting to see that find its way into Amazon, into several different merchants, and to Shopify the largest e-commerce providers out there are waking up to the opportunity that a buy now, pay later as an option. And I think that Affirm is the front runner, in my opinion, in this space.

Clay Finck (00:50:42):
Like you mentioned, the buy-now-pay-later concept is an interesting idea as it extends to the concept of financing the purchase of items. I didn’t really think about how it’s a competitor to credit cards like you had mentioned. So it seems like a relatively simple concept that some of these large companies I would think should be able to build out. So what is Affirm’s competitive advantage and why would companies like Target, Walmart, why would they want to partner with Affirm rather than just build that out themselves?

Simon Erickson (00:51:16):
First, let’s understand how they’re making money, how Affirm’s business model is structured, which is they’re getting money from two different ways. One, they’re getting money from the interest payments that they disclose transparently to anybody who makes a purchase. So we go on, we buy a Peloton bike, we use a buy-now-pay-later, and we say, “Okay, this is going to cost a couple of thousand dollars, but I’m going to pay it off over the next 24 months. This is exactly how much I’m going to be paying in principle and in interest on each one of those payments.” Same as a mortgage. This is a consumer product mortgage that we’ve created. And so Affirm is getting money from me as a consumer who buys a Peloton bike. Peloton is excited to work with Affirm too because it’s a new option that might unlock another type of consumer that might not have said, “Hey, I got a couple thousand dollars, I’ll just go out and buy this mic, or I’ll put it on my credit card.”

Simon Erickson (00:52:02):
“Hey, If I can pay this in installments from Affirm over a couple of years, maybe that’s a consumer they didn’t have access to before.” And the other thing that’s really interesting for them… And by the way, they’re going to pay between three and five to 6% of the cost as a rebate to Affirm for every purchase. Affirm gets a percentage of the gross volume of the purchase that is made from a retailer. They take that because they take on the payments, they take on the risk of the consumer not paying it back. But the interesting piece of this is that there’s a lift, the interesting part for the retailers of why they would want to work with Affirm versus somebody else like Afterpay, versus somebody else that’s a smaller buy now, pay later option is because Affirm has got an app now that has got access to that consumer and saying, “Hey, I saw that you bought a Peloton bike, maybe you want to be in an active lifestyle.”

Simon Erickson (00:52:50):
“We know a little bit about you because of the purchase. Do you want to buy from Lululemon? We’ve identified, maybe we think that you might be interested in this other vendor that we represent, and it might have an offer, 5%, 10% off if you buy something from them.” Now, all of a sudden those retailers rather than building it out themselves, have got access to the X million accounts that Affirm has that might get them even more and more business from people who are buying responsibly from them are going to pay back over time. So it takes the risk off of their hands, they don’t have to worry about people not paying it back, that’s Affirm’s problem now.

Simon Erickson (00:53:21):
They have to pay a little bit in percentage off of the gross volume for that, but it’s also getting more and more revenue for them. They’re getting a lift because the Affirm’s got a pool of people that might want to do business with them.

Clay Finck (00:53:32):
For investors that are monitoring Affirm’s business performance, what are the key performance indicators that they should be looking at to determine if the company is successfully executing as a business?

Simon Erickson (00:53:45):
The first is the partnerships that you’ve seen, who’s winning the big-name partnerships. One of the things with the Affirm is we saw them working with Peloton, we saw them working with Expedia, we saw them working with Shopify, just recently, they’ve announced an agreement with Amazon, it’s going into retailers like Target now. Stuff like that is really exciting to see the biggest companies in the world partnering with them. And so I think we should continue to monitor who’s winning those relationships. The other part that’s interesting that’s a little bit less followed is the net promoter scores.

Simon Erickson (00:54:16):
This is the happiness of the consumers that have Affirm as an app. And again, it gets back to that lack of trust that they’re trying to fix. At the end of the day, net promoter scores were really, really low for companies like Goldman or companies like Wells Fargo, who consumers were like, “Wait a minute, you’ve taken advantage of me. I feel slimy doing business with these kinds of companies.” Affirm had a net promoter score, last that I checked was 78, which is very high. That’s right up there with Tesla, that’s right up there with Apple. These are consumers that want to do business with these companies.

Simon Erickson (00:54:49):
And so as you see other options, if you’re an early runner, you’re an early adopter of Affirm and taking care of you and you’re really happy with them, are you going to leave and go with somebody else if Affirm’s giving you more options with more partnerships, with more companies and they take care of you and you’re very happy? No, you’re going to stay. They’re going to see really high retention rates. And of course, that’s really important as consumers use them for more and more purchases over the next years and decades to come.

Clay Finck (00:55:15):
Yeah, that totally makes sense to me. Earlier you had brought up Max Levchin, who also stood out to me when I did some research on Affirm, he was a former co-founder of PayPal, and now he is the founder and CEO of Affirm. I’m curious, are founder-led companies something you look for when researching needs to invest in?

Simon Erickson (00:55:38):
Yes, that’s very important. I don’t think it’s even as important to be founder-led or have the founder be the CEO or even the operational side of it, I think you have to follow the talent in the industry. Levchin is such a fascinating story, Clay. If I can go a little bit off-script on this and just tell the background, he was born than Ukraine. And as a small boy, a gifted computer programmer for even at a young age, then Chernobyl hits. And he has to evacuate the city and go out to a small cottage in a rural area where he is writing algorithms on pieces of paper and then brings them back years later to do programming when he has access to a computer again.

Simon Erickson (00:56:16):
His mind is functioning on a different planet, who can do that? There are not that many people that are as gifted as Max’s at doing those kinds of things. And that’s why he becomes CTO of PayPal, CEO of Affirm. When you talk to him, as I got a chance to chat with him in person, people like that are very rare. Elon Musk is very rare, and there’s a reason that Tesla is so successful, not everybody can do that. So you’ve got to follow who is it that really stands out from the rest of the herd. And it’s going to be the one in 1,000, one in a million founder that everybody else is fighting it out, but who’s really doing something that nobody else is either looking at or is afraid to do.

Simon Erickson (00:56:53):
Who’s brave enough to go out there and completely disrupt an industry. It’s challenging, but the companies that do it really well and have got founders, or at least people on board that are pushing those companies forward with a tailwind are going to get ahead of the pack. And for investors, we want to find those kinds of companies that have that as an advantage.

Robert Leonard (00:57:11):
Continuing with this buy now, pay later idea, one of my biggest positions for the last few years has been Square. And I did an episode months ago now about Square, I did a deep dive into it. And a lot of people that listen to the episode were really interested in that episode. I got a lot of really good feedback about it. So I think there’s a lot of people that would be interested to hear your opinion on how Square entered the buy now, pay later space with their acquisition. And just some general thoughts you have about whether they should have built it, whether it’s good for Square to enter this industry. And of course, I’m interested in hearing your opinion as well, selfishly with Square being my largest position.

Simon Erickson (00:57:50):
It’s an amazing company, you can’t downplay Jack Dorsey as a vision guy. He wants to become an ecosystem for everything that does digital banking, digital financial services, digital anything. He wants Cash App to be the go-to. Robert, you can buy cryptocurrencies on Cash App now, you can buy Bitcoin. He’s the guy that’s like, “Okay, NFTs,” we’ve talked about non fungible tokens a lot. Well, everyone else is trying to figure out what the heck is an NFT, Jack Dorsey has already gone out and made a 300 million acquisition of title and is bringing recording artists on board and wants them to use his platform to do this.

Simon Erickson (00:58:23):
And Cash App, he wants, again, to be a lot of things that is really innovative at the end of the day. He’s ahead of the curve, he always is. So Afterpay, $29 billion acquisition is really to put one more large base of consumers on what Square is building. He wants people that are embracing buy now, pay later, he’s got some early adopters of people that have already worked with him, but he paid 30 billion because he sees the potential of what this looks like over the next five, 10 and 20 years.

Simon Erickson (00:58:53):
And that’s going to expand, they’re going to make more purchases, and Cash App’s going to be their go-to pretty soon because they’re going to say, “Oh wow, I didn’t realize I could do all this with Square. Man, look at this, now, it’s recommending I can pay with Bitcoin? I’ve never bought a Bitcoin before. Why don’t I use Cash App to buy some Bitcoin and then use that to pay for anything that I’m buying from these merchants.” Those pools get larger and larger from the merchant pool and the consumer pool. You can see where this is going. The money, a lot of people were criticizing the premium that he paid for that saying 30 billion was way too expensive, why didn’t he just build it from scratch?

Simon Erickson (00:59:24):
Well, yeah, but then he’s got to go out and get all those people and convince them to use what he’s built from scratch. Maybe he could do it, he probably could. Jack Dorsey is a smart guy, or he could pay a premium to go out there and get ahead of everybody else and be the leader in a field that he recognizes is going to have a whole lot of potential. Don’t forget, Jeff Bezos did the same thing when he went out and he bought, what was it, 2012? When was it that he bought Kiva Robotics for $775 million to have these cute little robots spinning around in his warehouses? And everybody was saying, “Wait, Jeff, what the heck are you doing spending that much money? This is just a technology. They didn’t even have a commercial presence. You’re buying a science project for almost $800 million of our capital?”

Simon Erickson (01:00:01):
And of course, now you see he’s deployed it everywhere. Amazon is saving, I think 15 billion a year in logistical costs because they have the robots doing stuff that people were doing before. A visionary leader that’s willing to pay a premium for something that’s not well understood by the rest of the industry and all of a sudden they get a head start on everybody else, you’ve got to respect that as a growth style investor.

Robert Leonard (01:00:24):
It’s not quite robots, but I did go into a store recently where you swiped your credit card to get in, grab whatever you want off the shelves. And then you walk out and it just somehow knows what you purchase. And I believe that was implemented and brought to life by Jeff Bezos and Amazon. So it’s interesting to be able to connect the business and investing side where we can analyze and see what Jeff’s doing with those types of things and then actually see it implemented in the real world. I just did that last week, so it was really top of mind for me.

Simon Erickson (01:00:55):
Robert, just wait till the next phase of it too, which is biometrics. Rather than swiping your credit card, it’ll do an eye scan and a fingerprint scan to know exactly who you are. So there’s not going to be a fraud if somebody’s stealing your credit card.

Robert Leonard (01:01:07):
Yeah. The future of technology and FinTech is incredible. People ask me all the time if I’m worried about the Lightning Network and Strike and things like that against Square. And of course, that’s a big concern, but there are things like this that you’re mentioning that are just really exciting as well. So it’s good to be interesting to watch play out. And Simon, as always like you did in the previous episodes, you’ve provided a ton of knowledge, I really enjoyed the episode, I know the audience is as well. For anyone that wants to connect with you further after the show, what is the best place to go find you?

Simon Erickson (01:01:39):
Well, we’re at 7investing.com. Thank you for the chance, by the way, Robert, both to be on this podcast and also talk a little bit about what we’re building. At 7investing, we have it structured that we want it to be educational, we want to go out there and talk about these fun things going on the stock market and have a place that people can share ideas. And our podcast just like yours, we try to go out there and get a lot of perspectives on that stuff. But then the subscribing, if you do take the leap of faith and then subscribe to 7investing, we have seven recommendations every month for people to consider. But we also have a monthly check in with the advisors. We call it a Subscriber Call, which is really a safe place that you can actually ask us about the recommendations.

Simon Erickson (01:02:18):
So you say, “Hey Simon, you mentioned the ad tech company,” first of all, you go out and you see what it is, you read the report and you say, “Uh, I’ve got some interesting questions about that. Hey Simon, what do you think about A, B, and C?” We think of investing as a long-term journey, a very personal journey, but you should have an opportunity to interact with the people that are making the recommendations. And we want to be available and engaging and have a safe place that’s valuable for people to say, “Hey, can you talk a little bit more about this? I didn’t really understand that part.” At the end of the day, we don’t want people just blindly saying, “YOLO, diamond hands, I read about something somewhere on Twitter, I forgot where, but I put all my money into it.”

Simon Erickson (01:02:53):
I want it to be much more methodical where people are saying, “Okay, I’m ready to take some risk this month, what’s 7investing’s high-risk company? And how can I better understand that before I actually take the plunge and buy shares?” And that’s what we’re trying to build. We’re long-term buy-and-hold investors, and we’re having a lot of fun.

Robert Leonard (01:03:09):
Here at TIP, we are typically more value-focused, but I’ve become a bit more interested in growth. And if you’re listening to this show and you’re interested in growth-style investing, I want to make sure that you are using reliable, trustworthy resources. And that’s why I like to bring Simon on the show. If you want to learn about growth, Simon is one of the best places to go to check that out. So I highly recommend you check out anything that Simon is working on, he and his team are building. I’ll put a link to everything he has going on in the show notes below for anybody that’s interested. As always Simon, thanks so much for joining me and Clay.

Simon Erickson (01:03:43):
Robert and Clay, thanks very much for having me. I had a great time.

Clay Finck (01:03:46):
All right everybody, I hope you enjoyed today’s episode. Please go ahead and follow us on your favorite podcast app, so you can get these episodes delivered automatically. And if you haven’t already done so, be sure to check out our website, theinvestorspodcast.com. There you’ll find all of our episodes, some educational resources we have, as well as some tools you can use as an investor. And with that, we’ll see you again next time.

Outro (01:04:09):
Thank you for listening to TIP. Make sure to subscribe to We Study Billionaires by The Investor’s Podcast Network. Every Wednesday we teach you about Bitcoin, and every Saturday, we study billionaires and the financial markets. To access our show notes, transcripts, or courses, go to theinvestorspodcast.com. This show is for entertainment purposes only. Before making any decision, consult a professional. This show is copyrighted by The Investor’s Podcast Network. Written permission must be granted before syndication or rebroadcasting.