Can I get a hell yeah?

Today is the 100th journal—wow, two years flies 😲. Here’s to the next 100. Thank you all.

Menu:

1. Subscriptions are doubling.

2. Howard Marks Is it A Bubble?

3. Why I own Bitcoin.

Personal Finance

Has your income doubled in 5 years? Have you doubled your investment contributions? If not, your personal profit margin is decreasing at someone else’s benefit.

You probably haven’t noticed because auto-pay is designed to fly under the radar, but your subscription prices are doubling.

And because they seem like small numbers at sign up—$13 here, $29 there, $49 over there—you forget about them.

Since 2021:

• Apple TV +150%

• Crave + 120%

• Disney +111%

• Netflix + 36%

Oh and Netflix is now attempting to purchase Warner Bros Discovery, so you better believe that Netflix price will go up. Some select quotes from their press release on the matter:

• “This acquisition will improve our offering and accelerate our business for decades to come” (charge more).

• “This also allows Netflix to optimize its plans for consumers” (charge more).

• “Netflix expects to attract and retain more members, drive more engagement and generate incremental revenue and operating income” (charge more and expand profit margin).

I wrote a peice in April 2024 called “Subscriptions Are Killing Your Finances”. Excerpt below.

This is how they get you. They convince you to buy the $1,500 iPhone 19 plus, because the 3-Camera 5-Mega-Pixel ensures you will be a professional photographer and become famous as you take 75 pictures of the same sunset.

Now, even more important to mention is a point that often gets overlooked: when I say, oh, cut out the monthly Subscriptions of $50/month, invest at 10% for 40 years, then you'll have $318,000 more money in retirement. The interesting thing is that the $50 subscription BELIEVE YOU ME is not a static number. 

These Lions have you by the balls, addicted to and in “need” of their services. And every couple of years they will "bump" up the price of that $50 and pretty soon it will be $100. So that $318,000 you could have had in retirement is actually double.

When Apple and Google say, we are going to increase the price of your data storage by 3x and by the way if you don't pay it you'll never have access to your beloved sunset photos. They have you trapped. Hunted. You are a Gazelle. 

Conclusion? I think we are in a pandemic of overconsumption, convinced that new shiny object will change our lives. I think many of us are here, either ignorantly or perhaps completely aware but doing nothing about it.

I don't advocate 100% austerity and being a cheap bastard, because no one likes a cheap bastard. Plus, consumer spending is good for the economy, good for business profits, good for stocks. 

Just do a desk audit of your monthly subscriptions once in a while and cut the fat where you can. 

And if you are going to be a customer of these Lions, you might as well join the Pride. 

Buy stocks.

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Stock Markets

Howard Marks on AI stock market bubble concludes:

“Since no one can say definitively whether this is a bubble, I’d advise that no one should go all-in without acknowledging that they face the risk of ruin if things go badly. But by the same token, no one should stay all-out and risk missing out on one of the great technological steps forward. A moderate position, applied with selectivity and prudence, seems like the best approach.”

Even one of the best investors and thinkers of our time can’t definitively say it’s a bubble and believes a barbell approach is warranted. Attempting to play one side of the possibility and making a mistake can result in complete ruin, or being completely left behind. Best to participate in a measured way. Invest what you can afford to lose and with a long time horizon. No short term gambling!

Read his memo here.

Bitcoin

Reader asked about my Bitcoin allocation.

Call me a believer. I've owned it since 2018 after listening to this podcast: 

Listen to it. It's shocking how much of it still rings true today—prolific is the word—by far the best initial intro to the Bitcoin project. 

I don't like the modern currency system; having to essentially ask my bank permission to send a wire or be subject to the hidden tax called inflation and money printing. 

I also don't like the idea that the world is based on the idea of selling time to earn money but the money in which we save is destined to collapse (~90% collapse in USD since 1971, ditto for the Loonie).

You can make good money, but if you don't then become a DIY investor or hire a portfolio manager to build you a diversified portfolio of stocks, real estate, bonds, etc., to beat the invevitable debasement, you are essentially accepting paycheck to paycheck rat race and defining your time spent as worthless.

But even understanding that truth, most people either don't ever invest (50% of Canadians/Americans don't have any investment account, I'm trying to fix that) or don't have the million dollars yet created to be worthy enough for a good portfolio manager to take them on as clients. 

Gold encompasses the same idea of protecting against monetary debasement or distruption in world order. Bitcoin is just a digital analogy to it, except the digital currency solves many of the gold’s challenging attributes (divisibility, verifiablity, portability, new supply etc). With Bitcion, there will never be more printed. And you can do expressly whatever you want with it; transact whenever, wherever, and with whomever.

As good as that sounds, the learning curve is brutal, to say the least (see drawdown chart). You buy some, panic through your first 75% drawown, learn some more, buy a little bit more, goes parabolic, then WHACK! Another +35% drawdown. Eventually you become numb to the volatitlity because utlimately you know it beats the guaranteed negative expected value for fiat currency.

Now these 30-40% pullbacks are 'nothingburgers' to me and over the years I have built it up to 25% (not a recommendation, just an FYI).

But if you just bought above $100,000 or $120,000 you are now licking your wounds with the price down to $90,000. And with media headlines that read “Bitcoin is starting to look like a digital tulip” you are probably disheartened or already sold out. Even though the analogy is sufficiently weak—Tulips die in a matters of days.

Or you say that two weeks ago would have been a good time to buy when it was at $80,000. Today it’s $90,000, too late now.

That’s called anchoring. Rather than look at it’s potential, most will focus on the recent moves and call it a day.

Through an incredible amount of up, down, sideways markets, and relentless doomsday scenarios, Bitcoin has ammased a $2 Trillion market cap as the network and participants continue to grow. The question of does it work or will it survive is clearly answered in my opinion.

And it is still is less than 10% of Gold’s market cap.

1 Quote

“For those who believe, no proof is necessary. For those who don't believe, no proof is possible.”

Stuart Chase

A Question

Who's a stranger you will never forget?

I remember meeting Santa Claus a 70 yr old long white bearded man on the dock up north in Bella Bella. He just paddled in on his little row boat. Looked a bit strange with a bunch of stuff in his boat. So, naturally, my dad strikes up a conversation, finds out this guy has been rowing all the way from Vancouver—500km as the crow flies! And he’s not done yet—en route to Alaska, another 430kms!

People are awesome.