Investing

The Language of Investing

By Howard Lindzon  |  June 26, 2018

Editor’s note: Along with Adam, Charles, John, Rodney, Lee and more, our friends Howard Lindzon and J.C. Parets will both be attending our big Irrational Economic Summit this October in Austin. So we thought it would be a good idea to occasionally give you a sampling of the kind of work they’re doing in their own Big Market Trends e-letter. Here goes…

I want to finally get some thoughts out from my two days at the Money Conference in Dublin.

It was fun to be on stage with my friend Yoni Assia, the founder of eToro (I’m an investor), talking about trading and investing.

eToro is a social brokerage with more than 10 million accounts in 140 countries.

The Money Conference social team shared this tweet about my riffs, which is a good start:

Have a look at this chart about languages:

I would’ve never guessed that Portuguese is the seventh-most spoken language, but that’s not the point of this letter.

The point is this: There’s one language that’s universal — the language of investing and trading.

I talk about this trend often, but it’s still in its very early stage.

Over just the last four years global markets have grown, market data is abundant, and most of what you need to start investing is free.

In addition, social networks have proliferated and crypto (at least bitcoin) is in every corner of the world.

Bitcoin might already have more brand recognition than Nike or Coke.

We’re all holding a smartphone easily connected to markets and our small or large groups on our favorite networks, and we can dial in with “experts” and mentors 24/7/365.

I’ve linked to Morgan’s piece, The Psychology of Money, before, but I keep coming back to this part of it:

In what other field does someone with no education, no relevant experience, no resources, and no connections vastly outperform someone with the best education, the most relevant experiences, the best resources and the best connections?

There will never be a story of a Grace Groner performing heart surgery better than a Harvard-trained cardiologist. Or building a faster chip than Apple’s engineers. Unthinkable.

But these stories happen in investing.

That’s because investing is not the study of finance. It’s the study of how people behave with money. And behavior is hard to teach, even to really smart people.

You can’t sum up behavior with formulas to memorize or spreadsheet models to follow. Behavior is inborn, varies by person, is hard to measure, changes over time, and people are prone to deny its existence, especially when describing themselves.

Grace and Richard show that managing money isn’t necessarily about what you know; it’s how you behave. But that’s not how finance is typically taught or discussed.

The finance industry talks too much about what to do, and not enough about what happens in your head when you try to do it.

Do your kids a favor and start them on the path to learning the language of investing.

THIS.IS.THE.TOP!

I was in Los Angeles yesterday for some meetings.

I dragged Rachel along so that we could use the carpool lane, and we did the three-hour drive up and back from Coronado.

Very Larry David.

I’ve tried not to comment much on the “Scooter Boom” that seems to have swept the country, until I at least tried one.

I did today. I chose Bird scooters because I have friends that are investors.

I loved the experience, and so did Rachel. She scootered around Venice and Santa Monica, and enjoyed the ability to cover a lot of ground.

I apologize if this scooter ride is indeed the “top” for the Nasdaq…

Next up, a special shout out to Jack Randall, who celebrated his fourth year at Robinhood yesterday. Jack dropped out of college to join the 13-person team.

I remember meeting him in his first few days and really being impressed. I called him the Doogie Howser of communications.

Here’s his great tweet on his milestone:

Ted Knight as Judge Smails in “Caddyshack” had one of my favorite movie lines everwhen he said, “The world needs ditch diggers, too.”

In an era of founder glamor and celebrity, it’s a reminder that we can’t and don’t all need to be founders.

My friend Josh Elman, who now leads product and growth at Robinhood, said this and it’s gold: “Find the company you love. Reach out. Have a huge impact. Be like Jack!”

If you do want to be a founder, I loved this post on the eight criteria for starting a new company.

And if you’re interested in more from me and J.C., click here and scroll down and you’ll be instantly signed up for our free newsletter, Big Market Trends.

To investing for profit and joy,

Howard Lindzon
Founding Editor, Big Market Trends

Howard Lindzon

Howard Lindzon, multimillionaire entrepreneur, venture capitalist, former hedge fund manager, founder of StockTwits, Editor of the Peloton investment newsletter, founder of Big Market Trends and, most recently, author of 8 to 80: The Next 1,000% Stocks and Trends Everyone Can Ride.Full Bio