The Rich Man, Degenerate Man, Angry Man Economy

The year 2023 is flying by.

It is April and I am heading overseas for a month next week to see how the rest of the world is doing and to enjoy some life with founders and friends.

While I am not seeing the future super clearly, or at least as clearly and confidently as I saw it in 2006 to 2018, I am starting to get more confident in themes as I live this next, older, wealthier, slower, higher interest rate, grumpier, stage of life.

Of course, full disclosure because these are my thoughts and opinions…I live in a bubble called ‘Howietown’. Life has been pretty good and easy in Howietown for a long time. I likely have dangerous biases.

I have never been good at trading or thinking quarter to quarter so these last few years have been brutal with all the massive trend changes. I have really tried hard to do less the last few years, but as new trends start to develop around all the macro changes and growth valuations compress, I am starting to get more confident making longer term bets. The IPO market will not stay closed forever and while multiples could stay down a while, the cash hoarded by the top 100 companies in the world will lead to an explosion of acquisitions in the years to come.

I like to cut away as many words as possible in thinking about trends and ideas.

In looking at thousands of charts and talking to hundreds of smart hedge funds, venture capitalists and founders as well as reading the sentiment as best as I can right now I have come up with my current view of the world and economy which is helping me allocate capital long-term into seed stage companies.

I call this trend the ‘Rich Man, Degenerate Man, Angry Man’ world/economy.

Of course, you could form fit my simple investing hypothesis into any investment idea, but for me it means that I will focus on founders and companies targeting the wealthy 1 percent and the 9 percent chasing and aspiring to be in the 1 percent. They are price insensitive and want the best of service and experiences and activities. Luxury products, services and experiences are what gets me excited. That includes wealthtech and wealth management for us at Social Leverage.

The rest of my investing time is focused on what I am calling the 'degenerate economy' That includes education, experiences and activities. We onboarded and connected hundreds of millions of young people into investing, trading, speculation, crypto and gambling/betting. Furthermore, the government has blessed the craziest of products and can’t stop Elon Musk et all from abusing the system. The SEC wants $2.4 billion to police it which is just more proof that this trend continues whether they get it or not.

While the ‘angry man’ economy is likely the easiest to make money in, I just don’t have the interest, experience or stomach to invest in it.

I think a hedge to this strategy...if inflation truly rages and the angry man economy grows too fast are Gold (which just made quarterly all time highs) and Bitcoin and Ethereum (I own all three).