Erick Mokaya - Achiever And Learner
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Bill: Ladies and gentlemen, welcome to The Business Brew. I am your host, Bill Brewster. This episode features Erick Mokaya. Erick describes himself as a Kenyan living in Sweden, who has a passion for financial markets. He invests in US and Nordic equities and, on a small scale, in small businesses in Kenya. His day job is as an analyst at Klarna. When he's not working there, he is helping @joincolossus running the transcript, contributing to seeking Alpha, getting involved on Twitter, and it seems he never stops working. His story and background are fantastic, and I was happy to chat with him. I hope you enjoy listening to the two of us chat about investing.
As always, none of this is financial advice. All of the information contained in this program is for entertainment purposes only. Please consult your financial advisor before making investment decisions and do your own due diligence.
Happy to be joined by Erick Mokaya, who could go by Mokaya, Mokaya rather, Erick, anything that's easiest apparently. So, how's it going, man?
Erick: It's good so far. Busy day at work. During the day, I work at Klarna. I analyze new consumer targets and how we are progressing in terms of acquiring new consumers at Klarna. That's the day job. So, done now and now focusing on the evening job, which is just reading transcripts of earnings calls around the world. Been a good day so far. How are you?
Bill: I am good. I didn't wake up feeling very well today and then we've gotten in a bit of a catch-up mode since that. So, I apologize that we're starting this out a little bit delayed, but thank you for working with me.
Erick: No worries. I appreciate being here. Thank you for calling me up. It's a rare thing to be on podcast mostly.
Bill: Yeah, well, I appreciate it. People have said that you're an interesting cat to talk to. So, I said, "All right, well, we might as well see how it goes." So, where are you from?
Erick: I'm from Kenya. I've lived there most of my life. Now, almost mid-30s now. Two-thirds of my life has been spent in Kenya. I've grown up in the western part of the country, which is a bit rainy and a bit more foresty than the rest of the country. It's next to Lake Victoria. From home, you could literally see tip of the lake from the far horizon. It's very rainy there. Grown up there and then moved to Nairobi for high school. I was there for high school for four or five years. My high school was deep in the slums of Kangemi, I would say, a small part of Kenya called Kangemi. That's where I grew up. Went for high school, a bit of tough surroundings, lots of people taking drugs, and very early pregnancies and all. But somehow, I managed to go through that and it was very forecast to become really one of the first, at least one of the first people in my extended family to actually get to university directly.
Luckily, I was able to perform very well in the final exams for high school and was able to get to the top university in Kenya called the University of Nairobi, where I studied business and a couple of options to choose. One of my first options was dentistry, if I remember correctly. The second option was pharmacy, third option was business, and the fourth option was lawyer. I didn't get enough points to get to the dentist or the pharmacy, but I got enough points to be in the business department. So, here I am, many years later, still doing business. A couple of gaps in between here and there, but after that, I went to Norway for one year, and then I came back to Kenya for one year, and then I've been in Sweden now for eight years since 2014. It's my eighth year this August. So, that's a short story of how my life has been so far and where I have been.
Bill: You said that, when you were in the slums, there was a lot of, you mentioned pregnancies, you said drugs. What got you through that?
Erick: Having grown up in a tough situation, I had grown up with a single mom and then I'd seen how she'd struggled to sustain us, I think. For me that transformed the way I think about life. I've seen her struggle so hard to take us to school, sacrifice a lot from a very young age for me, around 14 actually left home and went to live with my uncle in Nairobi. And then I got a scholarship for high school in a very, very interesting way. I remember walking up to the principal's office and telling him like, "Hey, if you give me an opportunity to study for the next four years for free, I will not let you down." And then luckily for me, he gave me the opportunity. I told him, actually gave him an ultimatum like, "You either kick me out of school," because we'd spent the whole time chasing in and out. It was a paid high school. I had to pay. But when I came in, I knew they're offering scholarship. I was targeting the-- At some point, they would switch my education to full scholarship.
When I came in the whole time, I didn't pay school fees, I didn't have money to pay for school fees. What used to happen is that, the class teacher would kick me out of class, and then I would go out of class, pretend to be outside for a few minutes, and then come back into playing this cat and mouse game for a whole time.
Bill: Why were you kicked out of class?
Erick: Mostly because I haven't paid school fees. If you haven't paid school fees, you have to go home. We play this cat and mouse game the whole time. But at the end of the time, I remember he wrote in the report card, but I made sure it was the top student at the school. No doubt, the grades were top and then at the bottom of the report card, he wrote, "Don't come back next time if you have not paid for school fees." I go home and guess who the first student to be in class the next time.
Bill: [laughs]
Erick: I'm right there, the first student. The class teacher at this time is now despairing of kicking me out all the time. He sends me to the principal. To the principal's office, I write a small letter and then give it to one of the guys in front of me that I tell him, "If you don't give me a chance-- If you want me to break the cycle of poverty in my family, give me a chance to go through high school." Then he gave me the opportunity to go through high school four years. Since I was given this opportunity to study and I knew that education is something that will transform my entire life and my mom kept emphasizing it from a young age. I just grabbed the opportunity with both hands and was really focused. One day, I was passing by University of Nairobi bus and I told myself like, "I want to be on that bus someday and that's all," in terms of motivation. I worked hard for the rest of the four years to manage to go to university directly.
Bill: Were there any other kids that were in your position that didn't show up to school? That takes a certain amount of gumption to just walk back in and say, "I'm going to be here, no matter what."
Erick: It does. It does take a lot of gumption to be honest. I would say sadly also, for now, looking at the result at the end of the four years, I was the top student in the school. And then I had an A and then the rest of the students had lower grades. It wasn't mostly because of trying also. It was mostly because first of all, a part of it is a lot of luck. I somehow got this opportunity to get access to really good books while at the school. But also, I had a lot of dedication. I stayed late at school, I came on to study the whole Saturdays and Sunday. I was crazy about books, because I knew for me, I did not see a successful life outside education. My gift or talent of studying and being able to understand stuff. I knew that if this didn't work out, I did not have an option B. Because of that, I was extremely driven to make it work, extremely driven. I think that made a difference.
But then, of course, some of the students in the class, I ended up not following the path. Many didn't follow the path that I followed. I've seen one or two have been at least out of the class that I was in also managed to later go to university and that's really encouraging. But at least in the slums, most kids fall out of the way mostly because of lack of role models, or people can inspire them. Secondly, that lack of the gumption, you really want this so badly that you're ready to do anything and you know that this is your way out of poverty. So, I think those are the things that kept me together even during this difficult time, three or four years I spent in the slums there.
Bill: I assume your mother was one of your role models. Is that fair?
Erick: Yes. She is the greatest role model I have had. She taught me a lot. By the time I think age eight there, I'd learned everything that she had taught me. Then she bought books for me. Brought a lot of books and allowed me-- I remember her telling most of the teachers where I went to school that never to kick me out of school, because of a lack of school fees that she would do her best to make sure that she's up to date on that. So, she's the greatest influence I've had in my life in terms of where my career's gone so far.
Bill: What was your uncle like?
Erick: Sadly, my uncle was one of those people who also invested a lot in me, gave me a place to stay for three years to study from. It was tough being there in the sense that, by the time I came in, he had a young wife, and then the wife also brought some kids, and then living in this really small space, it was tough. I think those three years are some of the toughest. But my uncle provided a really good place. He tried his best to provide a good place. I wouldn't want to talk negatively about him. He passed away in 2011. The other person, who greatly influenced is the person who gave me the opportunity to study in high school. Suddenly, also, he passed away in 2008 before I could say thanks to all the things that he had given me. But the opportunity to go to high school, that was great. He gave me a four-year scholarship for high school education. And then my uncle providing me a place, a base to stay in for three years and then there's a really nice teacher, who offered an accommodation for me in the final year of school next to the school, so, I didn't have to walk a long distance.
I think those are key people who influenced at least in my high school days. But beyond that, having not grown up with the present dad, I would say that-- Over time, I've been able to get really incredible people out of the goodness of their hearts, they've opened up their lives and opened up opportunities for me when they didn't have to. I think those are some of the people I'm also really, really grateful for along the way of life.
Bill: That's interesting. I'm just thinking, I didn't have, I guess, safest or best female figures in my life. I think maybe as I've grown older, my stepmom and I have started to see things a little bit closer to the same way, but definitely growing up we didn't. But like you, I had some people around me, specifically friends, mothers, and then a girlfriend's mom who took me in. I think, between them, my grandma, it's the only reason that I'm half normal. Otherwise, things could have turned out differently.
Erick: Definitely. I think you need those kinds of people, who just invest in you and somehow see something good in you, and they just keep investing as much as they can. I know my mom stretched herself to the upper limit to make sure that I get a good education. I stay safe and I'm well fed throughout this year. So, never lacked, at least during those days. I'm very grateful for this I would say myself.
Bill: So, you studied business and then how do you find yourself interested in investing?
Erick: It's a long journey, because when I went to study business, I started accounting like debit credits, spent three or four years just deep inside debits, credit, assets, liabilities, and all. I didn't know much about finance, but I thought accounting sounded very fancy. I had no one in my family, who had been an accountant. Actually, I knew no one, who was an accountant. But somehow, accounting was fascinating from day one when I arrived at the university and then to the very end, so I kept on the accounting path. I did touch a couple of times on investing.
I remember in 2008 in Kenya, one of the biggest IPOs back then is one of the biggest companies now in Kenya called Safaricom. It's the biggest telecom company in Kenya and it owns one of the largest FinTech platforms in Africa called M-PESA. When they listed back in 2008, there was a lot of buzz in the entire country about it. It was the biggest IPO then. I think to date, it's still the biggest IPO. Everyone was super interested in getting a piece of this big company. And then I was like, "Okay, let me get a piece of it." I went in, bought it at let's say, 5 Kenyan Shillings. Just to give you a perspective, a Shilling is like say, $1 is 100 Kenya Shillings. So, 5 Shillings is very, very small. But then I took all this student loan I had and put it in Safaricom or at least a few savings I had. Lo and behold, the share price sunk to half in the space of like a year.
Bill: Oh, no.
Erick: That was my first taste of investing. I began with a loss, but then I stayed away from investing for a long time until again, I came to Sweden. When I came to Sweden, I had worked as an accountant for one year had gotten bored with the debits and credits. Once the system is in place, and no hard feelings towards accountants, but it gets super boring. There's nothing new to learn after you've done the debits and credits and you created an index system for a small startup that I had created. I got tired. When I was coming to Sweden, I was like, "I wanted to change." And then I found this course called Financial Engineering. In my mind, I thought it was finance. But when I arrived in school, I realized it was mathematics, plus a little finance. I think that shocked me. But luckily, along the way, I found out about the CFA research challenge. They have an annual challenge, where students can sign up for the-- You just sign up and then you participate. I quickly formed a team and then we participated. For me, that was a huge eye opener. Then I realized, how you can use accounting information to make decisions about companies incorporating some knowledge. Maybe from outside accounting to be able to make this from this perspective about a company and then use that to make decisions about where to invest your wealth for the future.
Then suddenly, it's opened my eyes to guys like Warren Buffett. I started reading their books and then suddenly, I was super fascinated. I actually did Level 1 of CFA within the space of two or three years. I had actually almost completed my CFA, because I was really passionate about it. This was a revelation for me. Suddenly, then the company that we're analyzing in the research challenge was a Swedish company called Atlas Copco. It is one of the biggest manufacturers of equipment in the world. It's a competitor to Caterpillar, a huge competitor to them. When I found out about them, I analyze the company, I really liked the company I invested. And again, the share price went down after I invested. And lucky for me, so my initiation has always been negative, negative. But then I patiently held. It went down, I think 10% or 20% and I still held, and the day it reached breakeven, I sold everything and ran away. [laughs].
Bill: What's happened since then?
Erick: The share prices 2x or 3x. It had a spin off. I've missed out on dividends like I don't know. It was my young, naive self coming to investing. But I think one or two more of these trials, I even tried day trading, got banned seriously with a couple of friends. But then I realized finally, I landed on my value investing. This concept of now you're buying something for less than it's worth and then, of course holding on until the intrinsic value comes to it. When I read about it, reading The Intelligent Investor, then I thought, "This makes a lot of sense." It aligns a lot with my temperament. I'm not wanting to check stock prices every minute of every day. It's too much stress. Then I realized like, "Okay, I can analyze a company for a little while, invest in it, hold on it for a lot longer, even if it goes down. If it's a solid company to come back up," I think with that kind of mindset then,
I think that's formed my investing done in the last two, or three years, or four years, I would say. And that has helped me now align my investing with my temperament, and skills, and my eagerness to learn and desire to learn about a company deeply much more than just doing technical analysis and all. I think that's been my brief journey towards investing personally. Maybe you can tell me a little bit about your investing journey yourself.
Bill: Yeah. I got interested in investing, so I was in law school, and graduated, and knew I didn't want to be an attorney. Thought that it would be a good idea to start a franchise. I was either not the right person to start that, it was not the right business. It was not the right business for me, it was the wrong time, some combination of events. I was trying to sell floors in 2009, which was not the greatest time to try to sell flooring. Turns out it's a pretty discretionary item. The young naive me said, "Well, no one else is spending any money on marketing, and everybody else is pulling back, and they're all idiots, and I'm going to come in, and I'm relatively well capitalized, and we're going to crush it, because why wouldn't we?' It turned out that what I thought was well capitalized, in Chicago, certainly was not well capitalized was step one. Step two, it turns out that the people that were pulling back had years, and years, and years of experience, and they were in preservation mode for good reasons.
I don't know. Long story short, it was like 15 or 16 of the hardest months that I've ever had. I felt like a complete failure at the end of it. Finally, come to terms that the franchisor, where we agreed to let each other go our separate ways. I think I did a pretty good job actually negotiating my way out of that franchise agreement, but learned a lot, and then I was trying to figure out what was next, and I ended up getting an offer from BMO Harris bank. They brought people in analyst programs. They said, "You're not going to be able to start for, I think it was eight months or something like that." I said, "Whatever. I want to lock in my job. So, I'll do whatever I have to do." During those eight months, my grandmother's friend sent me, The Intelligent Investor, some Bogle book, I forget what it is, and then another book on Buffett. I don't know if he had a sixth sense of humor or whatever, because I basically got super bored of the Bogle book and started to try to figure out the art of investing.
Prior to that, my experience with the financial markets, I had studied options trading a fair amount on my own. Was never any good at it. I double majored in college in accounting and finance. Enjoyed accounting until I started to do pension liability calculations and some of the advanced accounting stuff. I was like, "This is such, one, a waste of time," because pensions were clearly going away. And two, "It was just not something that I want to do for the rest of my life." Yeah, so, I don't know.
Erick: It's a bit of a snooze. When you get to pension liabilities, you get to defer tax accounting. They're complex. You really need to be passionate about these top spins a lot of time.
Bill: Yeah. I think my frustration with the younger me and I guess, this is how you learn, it's the old experiences what you get when you don't get what you want. But missing Apple in 2008 and 2009, when there were like, it's a global recession and there's lines out the door. Here I'm saying, well, it's too highly valued relative to the current earnings or whatever and aren't we in a depression pretty much. Like, "Gosh, that was so stupid to me." Lululemon is another one that I kicked myself for. We'll see how Allbirds turns out, because maybe there's a world where Lululemon and Allbirds are basically the same thing, but I don't think so. My wife, she was just pounding the table and she was like, "You need to invest in Lululemon." I got caught up on a multiple and I didn't understand that you can pay a higher multiple for smaller companies, because they can grow into it. I didn't understand growth and how I can create value as much as I do today.
Sometimes, I worry that the current environment that we're in has heaped such large multiples on growth that I've learned to overestimate the value of growth. But that's where I've come from a little bit of where I'm at and then I tried to start this podcast to, one, have more frank conversations with investors that I respect and people that I want to talk to and two, to create a distributed learning platform. I think that there are some of us on Twitter realize pretty quickly, the value and learning in public and this is just one more form of it, I think, and it's just delivered a pretty immense benefits. That's where I'm at. I still don't know exactly who I am as an investor. I get pitched on some cheap special situations and there's a part of me that can't avoid that, but there's a big part of me that just let stuff sit in reasonably good companies and let some compound. So, hopefully they continued to otherwise, I'll have to go back to the drawing board all over again and then I'll probably just index.
Erick: I get you so bad. Again, at the same time, I've also had a similar experience in terms of not learning that companies can grow and still-- A company can actually be valued at 12x as earnings in 2015 and still the same can be value the same price in and or even lower in 2022 having grown earnings faster than the price has actually grown. My greatest lesson is actually with Apple, because I've never owned the stock at any given point. But I love the stock back. It was in 2016 when Warren Buffett invested in it. It was around $94 share then. I'm like, "This is so highly valued. Why is he getting in?" Everybody knows Apple, stuff like that. That's what I thought.
And then now, looking back, that was one of the greatest investment he has ever made in terms of how it's grown. Not just in terms of earnings, grown its market share, it's produced more products, it's strategically positioned for the future. Now, service revenue has grown to a significant percentage of total revenues. The curiosity be trading at a lower multiple, it's done a stock split since then, huge buybacks, incredible growth, and still has an incredible path ahead for growth. Those have been strong company. I think that from just watching it on the sidelines has been one of my greatest lessons in terms of how, what you say like in terms of companies growing into the multiples and actually even exceeding that expectation at the end of the day. So, I think that's been a great lesson for me.
Bill: Yeah, I think the hard thing to figure out is, in your example, are we drawing a lesson from Apple, which is one of one that doesn't translate in the future. I guess, the old me used to think that, there was more protection in buying current free cashflow. If I have a 10% yield out of the gate that's safer than a 3% yield that I think will grow to 6% and may have multiple compression, I think what I appreciate more now is that, the markets pretty smart. If you have a 10% free cashflow yield out of the gate, you really got to defend why that's defensible. Because I don't think that those are just offered up. And then the other part of that too is I think some of those companies are going to put a very hard management decision to you probably sooner than the growth ones are. But I don't really know that that's true.
I think the thing that scares me about growth investing generally is, if you pay a large multiple on current performance, if you find out quickly that you're wrong, that's really going to hurt. But really, I don't think you should find out whether or not you're right or wrong for three to five years. Because at least the market implies that the near future at least is somewhat baked. I still have some struggles with that. That said, I've never seen my entire life good assets lose relative purchasing power. I've always been the guy that's like, "Ah, Disney can't raise prices anymore" and every single year, it happens. Or, I grew up in Florida. Beachfront real estate, maybe 2008, it took a hit, but it's always been worth paying for. I don't know if that's an interest rate comment, I don't know what it is. But it just seems to me that these truly great and scarce assets tend to accumulate value over time.
Erick: Yeah, I agree. Perhaps something else I've also learned the process of just investing in companies and maybe great lesson is also about paying attention to free cash flows in terms of capital allocation, how companies are allocated their capital, what's their long-term plans versus how they're doing currently, are they overambitious, paying attention a lot to what they say in earnings calls and what they don't say, what they emphasize on, just listening into great management teams expound about how the future plans for the companies are. And bottom line, still paying attention to how free cashflows are being spent in a company. Reinvesting them in earning assets or are they wasting them away, they paying dividends, what are their long-term plans, how do they plan to generate cashflows to sustain the business but also like to pay up investor's dividends and this kind of stuff, if they are going to pay dividends at the end of the day,
I think that's been my greatest lesson. Pay attention to where cash is going. You never go wrong with cash. I think one of the quickest lessons has been also the company, Peloton. I owned it for a little while, but then I sold at some point, and then I saw how managements were fiddling around with cashflow. At some point, they say, we don't see a need for cash and then 10 days later, they want to raise capital in the secondary market. I think that was a great lesson in terms of good management teams plan ahead. They see where they're going and they plan like-- They actually do tell investors ahead of time that you may need cash in the next two or three months or something like that. Yeah, great lessons in terms of investing.
But investing is also a place, where you keep planning every day. It's a place where you wake up every morning. Any earnings call, transcript most of the time, because I spent a lot of time with that. They teach me a lot about how management's, what they think about the economy currently, what they think about the companies, what they think about trends that they're observing in the industry, and what they see the future some of their companies need to be. And then following some of these companies of a couple of quarters you can see what is repetitive jargon or they just churn out for the sake of it and what is actually substance. Now, I spend much less time with an earnings call transcript before I can quickly narrow down to where the good stuff is. It takes me a lot less time now, because I followed some of these companies for a while.
Some of my favorite companies are companies like listening into the CEOs, especially of Netflix and Disney. They have a lot of mutual respect, these two companies. You can feel it in earnings call. Some of the few companies that reference a competitor like Netflix mentioned Disney, and Disney mentioned Netflix in their earnings calls mostly, because of the respect that they have for each other's business models and at the same time because they also take time to discuss their business model, their strategy, why are they in certain markets and not in other markets.
For instance, I think from listening to earnings calls, you clearly can tell why Netflix is not in the news. They're not going to provide you news at some point the same way the TV used to. They're not going to provide you live sports, not anytime soon. They're not going to do advertising, at least not in the near future, it's no in their plan. And then suddenly, you can also see why maybe Disney themselves have greatly invested in growing subscriber growth and now, it's plateaued, and now they've switched to, yes, we can provide a tier that includes advertising. I think the greatest joy for me about investing and interacting with people on Twitter is the lessons. You learn a lot about business models, about people, and about-- Generally, you also learn about how to manage your portfolio better and especially, how you experience as being yourself on Twitter, because you've been there for a while.
Bill: Man, it's been incredible. First of all, the Twitter is the reason that I found-- well, that I reconnected with Toby Carlisle, and then he put me on Value: After Hours, and the connections that I've made through that have been just great, and then I started this podcast, and Twitter's the only way that I've really marketed it. To be able to speak with some of the people that have agreed to come on the podcast is stuff that I never, not in my wildest dreams did I think that I would have some of the guests that I've had. It's just been awesome. Then what I've been able to parlay that into and I'm grateful that I've deserved the opportunity, but I'm also grateful that people have given me the chance.
You're talking about Netflix and Disney, and I partnered with Stream to do some of their interviews to build out their content library. I was just curious, because I hear a lot of people say, "Well, Netflix will probably go ad supported," whatever. I've done some research on building out an AVOD product and they're just like insights. Somebody that was in charge of building out an AVOD product for a company said, one of the problems is, "When you are ad supported, a lot of the glitches when you're watching a streaming product is actually the ad technology in the background." If your Netflix and you're focused on delivering a constant, quick, reliable feed, adding an ad supported tier can actually potentially hurt that. It's just a little insight like that, that makes me realize, maybe this is why they don't want to mess with ad supported, because their core offering is a reliable, quick experience that is subscription based and there's a lot of different examples of that. But I don't know, Twitter has been incredible. It's changed my life for the better.
Erick: Me, too. Especially, in terms of meeting people, it's surprising. I haven't been to the US, but I have a good network of people and friends that I've met on Twitter that we talk to, at least often. And especially, so interact, I would say, through Twitter, I was able to actually meet Colossus, the guys of Colossus.
Bill: Yeah, I was going to ask you about that.
Erick: Yeah, it's serendipitous to be honest. I've been on Twitter for four or five years and actually, you know how I landed on Twitter. I guess, it was mostly because of guys like Masters in Business, Barry Ritholtz. I was listening to the podcast and then they referenced Twitter. And then I came to Twitter and then suddenly, found the Ritholtz. Back then, they were really new. I joined in, listened to all their podcasts and content, read the newsletters, and then I think slowly I found Patrick O'Shaughnessy and then I switched to his content. Also, I've listened to almost his entire library of podcasts from almost the very beginning. And then through that, I reached out to Brent Beshore, got to talk to him a couple of times. It's been evolving. It's been a great network. It's a bit of a rolling stone that keeps gathering some moss along the way, so you keep going downhill or at least uphill, and then you keep meeting all these people, and then if someone knows someone, everyone is kind of one degree removed from you.
Bill: Yeah.
Erick: I talked to Brent and maybe know someone else out there. I think that was what happened. Then I think a year and a half ago or two years ago, what I did is, I really liked the Chris Bloomstran episode of one that they had on Invest Like the Best. The title of the podcast is called it's a quality company like what a quality company is. The reason I love the podcast, it's like a deep dive into several companies. I think the first one is Cummins, they do a deep dive on Dollar Tree, I think. But the deepest deep dive, of course is on Berkshire Hathaway, which spends half the episode says explaining how they do their accounting, how they do-- what are the fascinating aspects of their various business models and then he explained some of the key-- He explains how Warren Buffett has made some of the best deals of his life, acquiring some of the biggest companies since and pivoting from time-to-time from being almost exclusively focused on equity, and then investing in bonds, and stuff like that. I think that was incredible for me.
Having listened to the entire podcast, what I did is I took the podcast, and created the transcript of it, and in the transcript, I added the pictures, I added links to whatever books he had mentioned, I added as much content as possible. It's a loaded transcript. I took the transcript and I sent a copy of it to Chris Bloomstran, and then I also sent it to Patrick. And then Patrick was very intrigued, because for a while, they've been thinking of turning the content that there was an Invest Like the Best into a platform, where you can actually search all these transcripts of all these episodes that it created. I was at the right time at the right place. And then I remember interviewing to being CEO at Colossus. I didn't have the experience. I think Damian got it and then I was recruited in as a pioneer, at least a contributor in the program. I think around November/December 2020, we were working on the transcripts.
Now, I think if I remember correctly, I worked on around 40 to 50 transcripts, adding the links, the pictures, all of this stuff in it. I think that was a Masterclass in Business. Deep Dive into some of the best business minds and investors out there and through that I was able to meet a ton of people at the same time. Even got to meet Chris Bloomstran. Not meet like, have a video chat with him. I've had a video chat with Michael Mauboussin, also. For me those are like me meeting my heroes now, what I've been reading about for so long and then ever since then, so, I work with Colossus, parttime, I do background research on some of the businesses that they-- Some of the-- especially business breakdowns is my favorite. I've done close to slightly more than half of the episodes have touched. I've done something, maybe the blogs, the transcript, listened to the audio, done a bit of feedback, providing feedback on some of these episodes. Yeah, so, it's been a great learning experience for me, especially with Colossus and working closely at least with the team there. Sometimes, I'm getting to meet Patrick also. So, that's the small journey with Colossus on the side.
Bill: You know what great about that story is, you found an episode that you liked, you did something with it that added value to the experience, you sent it to the interested parties, and then good things happened. A lot of the times, people will be like, "Well, how should I get involved or how do I--?" Some people have asked, "How do I get more Twitter followers?" Not in a follower thirsty way, but more like, I sometimes feel I'm shouting into the void and how do I get more out of this? My answer is always like, find the people that you want to interact with, figure out how to add value to their life, and then just try to add value. If you're not, pivot what you're doing. I used to hop in and out of chats like Sean Stannard-Stockton at Ensemble. I love what they do and I like their Twitter feed. I would try to add value to him. I think for a little while, he was like, "Who the heck's this kid with--? I used to have this beer boot as my icon. I think he was like, "Who is this guy?" And then eventually, we started to interact, and then I met him at The Manual of Ideas, and as you said it starts to snowball on itself and it's a really powerful community when you start to add value to it what happens.
Erick: And my take is always like everyone has something to offer. If you're from a non-finance background, offer that non-finance background that you have to the pool. Not all of us know anything about like that says, I have a friend, who's really good at genetic engineering. He understands a lot of that. If you come into the platform and you're explaining to people like, "Okay, this is how this stuff works," people will see value in that. My addition to the FinTech community is mostly, I spend a lot of times in earnings calls and I get good quotes. From those good quotes, I share my insights from that, and then someone else finds them useful, and then that's how we build a small newsletter that small now we have around 8,000 free subs on that, and we've built it over a long period of time.
Also, I think my network on Twitter, it's grown slowly over time. Now, it feels it's big now, but it's mostly because I've been patiently working slowly. The end goal, of course, was I wanted to really work with some of these heroes of mine like Patrick, like Michael Mauboussin. But you have to be patient in that regard. Build the profile slowly, get to network and you'll be amazingly surprised how kind and nice most people are. Most people if you reach out and say, "Hey, can I have 20 minutes of your time just to chat about this company or you can tell me a little bit about how you think about this specific aspect?" People are willing to give you 20 minutes. Well, of course, that 20 minutes we actually make it worth their while also. Share with them what you know and [audio cut] also. So, I think given tech and then we build these platforms at the end of the day.
Bill: Yeah, I agree with that. I think the key is just making sure that you're ready for when those 20 minutes come. You got to not waste anybody's time. What's your newsletter called in case people want to check it out?
Erick: It's called The Transcripts. It's on thetranscript.substack.com. What we do there is that, we aggregate key quotes from earnings calls. It goes out-- Every Monday by 7 AM New York time should be out. We partner with a friend of mine. We've met only once. Again, it's this hunger and drive that actually has gotten me in touch with him. He used to write the newsletter alone like five or six years ago and then I kept seeing the newsletter every week coming in. What I will do is, I realize he picks quotes from earnings calls. I would pick a few quotes, and send them back to him, and tell him like, "Okay, here are my quotes which you can add to your newsletter next week." He was intrigued. This guy, random guy from Sweden sending him quotes and then he was like, "Come in and let help me read a couple of earnings call transcripts." And then of course, I would read. And then with time, he became busy and then I had more time. So, he gave me the newsletter to go on with it. I've taken charge of the newsletter for the last three, four years. We've grown incredibly. We used to be around 3,000. Now, we're under 8,000 during this period. Then during this period is when you switch from just being free to being premium a bit, so that we can pay for some of the services.
We offered it free for almost five to six years, but then last year around May, Substack came, offered us a good deal and then it came on board. Now, it's on Substack and it's available for a small fee. You can support us and subscribe to our content there. Again, as you can see, it's the power of networks. I have met Scott, the guy I worked with only once. Once, and it's because he came to Sweden, and then we met, and had a cup of coffee with his family and my family also. All this it's online. I've met all these friends online and now, I know that I have a really good friend in California, where if I go to visit him, he's an incredibly good friend to me now. All of this started from an email, just responding to an email, and providing value to him, and him seeing the value and finally, now, I handle a product he started and now, he deems me like a co-founder of that newsletter and platform as it is now. It's evolved. Now, we have a small team that helps us also put together a few of the quotes. But generally, most of the time, it's just during weekend, Saturday and Sunday, I read 20, 30 earnings calls transcript, extract really good quotes. I put them together in the newsletter. By Sunday evening, I have the draft ready. I go to sleep, because I'm ahead of him in terms of time. By the time I go to sleep, I leave the newsletter there, and then he works on it in the afternoon, and by the time, he goes to sleep, and I wake up, the newsletter draft is ready, and then we send it out by the time he wakes up in the US. It's like-- [crosstalk]
Bill: It's good. You got yourself working 24 hours there. That's efficient.
Erick: Oh. [laughs] Yeah, people ask me how I manage to keep track of stuff. It's mostly because of I think being in different time zone. As the markets close in the US, I'm off work here and I can check out how the markets are doing. When you guys are asleep, I'm working on the newsletter, and the quotes, and stuff like that. By the time you wake up, in your inbox, you find the newsletter.
Bill: Yeah.
Erick: I think that-- [crosstalk]
Bill: I like it very much. Actually, it was last week, I was driving over this bridge that's near where I'm at and I was thinking about doing something similar, and then I was like, "The transcript already does this." I am one of your subs. I like what you do. Have you read the Restoration Hardware of call? What do you think of that?
Erick: It's one of the most honest calls that you find on earnings calls. It's rare to find a CEO, I think he is a straight shooter and very, very honest because what I found is earning calls, I hope I got all the nuances. There are a lot of nuances that are very unique to maybe US culture that I really had to pick in earnings calls. For those that rely a lot on Scott to help me [audio cut] that. But what I got is that, they are slowing down in terms of investment in the business because the visibility is very poor for them going forward, but they're not saying that they're stepping out completely in terms of investing. But they're very cautious about the future, but they're preparing at the same time for the future. If opportunities come, they will be able to invest as much as possible. That's what I gleaned from him.
I enjoy those kinds of earnings calls, where the CEO just lets loose and gives you straight from the heart and you can feel the difference between those and scripted calls. Scripted calls, this is how it goes. But this one, you could feel he was giving you insights, he was giving you his personal perspective comparing it to 2008 and seeing how things are difficult now compared even to then, and even hit on the-- he threw some jobs at the Fed, because the Fed doesn't live in the normal world, because they view inflexible transitory. If you give a call to a business person, they can easily tell you like, "inflation is not transitory right now," or something like that. What did you think of it? What do you make of it yourself?
Bill: I liked it a lot. I think everybody should listen to it. I don't think it's one of those calls that you should read, because I actually think that some of the quotes that-- I think if I was reading the words and not listening to him, I might think that he was a little bit more alarmist than he actually was. I have this weird thing with him, where I'm not sure if I can trust what he's saying or not, but I also thought that that call was extremely trustworthy. It's attention.
On the other hand, he has executed what he said he would do and it's hard to discount that. I don't love when a CEO comes out and he says like, "We're entering the $200 billion hotel industry." Look at the TAM expansion. That to me feels very, I don't know, selling the stock story. But I also think selling the stock story is actually a fairly important role for a public company CEO. I used to be one of these guys. I was like, "Oh, you should want your stock to go down, you can buy more," and now, I realize how flawed that is as a way of thinking. I think it's nice in a textbook, but I don't actually believe it. I think if he can pull off the vision that he articulated in that call, it's going to be really, really impressive and I wouldn't bet against him. I don't have any bets with him, but I wouldn't bet against him, if that makes any sense.
Erick: I get you completely in the sense of-- I also got the same from it. He's brutally honest. I like that from the CEOs, I really enjoy listening to, but he's also executed well. He has a history of execution. He's not telling you to blindly follow him into an alley or something like that.
Bill: Yeah.
Erick: I'll give him the benefit of the doubt on this one. I think he has greater visibility than most and I respect the fact that he is choosing to take the company in the direction that he wants to take right now. Again, I like you. I wouldn't bet against him, but I don't have any skin in the game here. But I do enjoy. He's one of those CEOs that I've come to enjoy the earnings calls. So, he is quite honest in his earnings calls. That's a rare thing for most unexposed to be honest from what I've seen.
Bill: Yeah, I agree with that. I'm going to be interested to see how they do in Europe. If they can open up, I think what he said there's the Paris store, the London store. I think there's one in Germany. If they can open those up and Europe accepts them as a luxury brand, then I think that my doubts will officially be unjustified. Because to me, if you can make it in Europe in luxury, you can make it anywhere.
Erick: Yeah. The furniture business, it's a tough one to be honest. IKEA has a solid grounding and need to lower end of the market. I think the high end, then you have a couple of stores here, which would give you a run for your money, especially in Sweden. It'd be interesting to see if they can pull it off. They're not coming in Scandinavia soon, because Scandinavia is the home of IKEA and everyone here wants to be an IKEA. So, let's see how they do in Paris and London, of course.
Bill: This I say from feel not from fact. I feel as though their furniture is large and my experience of European hotels and housing has not been as large as America. I'd be interested to see if they shrink the scale. Whether or not, that design takes in Europe or not, but I'm sure they know this. This isn't some secret and I could be wrong. So, the combination of those two things probably makes them more right than me.
Erick: Yeah. Apart from [unintelligible [00:54:14], which companies you do listen to [unintelligible 00:54:13] yourself, like which ones do you spend time with?
Bill: I always like to read J. B. Hunt, because it's early and I like to get a feel of trucking. I check out all the big ones. I stay involved in Twitter. For some reason. I'm not particularly interested in Snapchat and that might be a mistake. I find Google's to be a little bit like not-- It's hard to decipher much from them, from their earnings call. I usually just get as much out of the financials. I always find myself listening to Ali's. I always listen to this guy, Lourenco Goncalves or Goncalves from Cleveland-Cliffs. I don't know. I jump around. But I don't jump around as much as you all do. That's why I like your service. It gives a good recap.
Erick: There're some companies also really do, but I avoid company like Google as you say, no, there is very little you can gain from reading the earnings calls. They are plainness and emptiest. Amazon has a very low-- In terms of noise to substance, they have a lot more noise in the earnings calls to be honest than substance. But really solid companies are the ones I talked to about like Netflix, Disney, the one you said RH, also spending time with companies like Redfin, Zillow, some companies like which other ones do we like. Airlines, they've become very good sources of information in the last especially, two years, because [crosstalk] the impact and they're really hard to explain more to investors what they do, and why they do, and why they need money or how they're doing and projections and all. So, those are some very interesting companies also that we check.
Bill: You listen to Ryanair? Ryanair is my favorite call. He's great.
Erick: [crosstalk] it is. I should actually-- [crosstalk]
Bill: Oh, he's great. Yeah, he's fantastic.
Erick: I enjoy Southwests a lot also. And hotels also, the Marriott Hotels, their CEO passed away very insightful also. We did spend a lot of time in all of these companies a lot. On VDM, the tech companies. In VDM my favorite is Cloudflare, the internet's security providers.
Bill: Yeah.
Erick: Very good ones. They have very good insights. Especially, with Cloudflare, you always get a good story about a founding story from the executives about how the company is doing or at least how the company did in the early days. They speak a lot about their culture, their business model. If you pick any Cloudflare earnings calls, you're bound to learn a lot about the business model, then you can learn by going to any platform on the internet about them. That's how I-- [crosstalk]
Bill: I should read them. I have a friend that just sold the business there or to them.
Erick: Oh, the Cloudfare?
Bill: Yeah, they acquired his business.
Erick: They have one of the best, I think, networks that they're building online out there. The more people use their platform, the more data they have to protect the internet. Their aim is just to protect the internet. They want to make sure that they have the channels through which all the information online flows through and that information is safe. It's a very incredible company for me to follow and learn from. I know the stock price has been going up and down. I invested little a while back. It went up and I think down almost 50% from its all-time highs, but business model is solid still.
Bill: Yeah. Well, everything got a little nutty there for a minute and I think one of the nice things that you talked about early in your career was having some failures out of the gate and then selling back at breakeven. I think it's probably a better experience to have that, so that you're prepared for moments like this when stocks go against you rather than if you bought and all you ever knew was things going up, bound to be ready for a rude awakening at some point.
Erick: Yep. I think that's the other thing I pay attention to a lot. I pay attention to when the stock sinks by 30%, 40%. I always ask myself, "Has the fundamentals of the business really changed that much as to cause that the business is actually 30% less valued or 40% less valued now than it was when I was 14 or something like that?" I'm convinced that the fundamentals haven't changed much and that just people are normally overreacting. Now, for Netflix, people overreact. If it misses earnings, you see it's down 20%, 30% because it's a growth stock and a growth story as it is. I think every time a stock goes down, I always ask myself, "Is it a fundamental problem? Are people overreacting? If they are then, I buy in, and see, and then stay in for a while." Stocks going down don't worry me. I think it worries my wife more, because she looks at the investment and she's like, "You're losing a lot of money" and I'm like-- [laughs] I think that's actually the most difficult part. Explaining to her that, "Hey, this investment, even though it's down, I have the hope that it'll recover." [laughs]
Bill: Yeah.
Erick: I think investing was easier when I didn't have to explain to anyone.
Bill: [laughs] Yes.
Erick: Why? I'm holding on to a losing stock. But now, I have to at least know, because it's a little bit of family wealth and you need to explain, why is the stock down and, yet you're holding it? Then the other question I also have to explain a lot to highs, if the stock is up by 20%, 30% from where I bought it, why are we still holding on to it?
Bill: Yeah.
Erick: She was actually right. In December, she told me, "These stocks have gone up a lot. Can you sell them?" Then I keep telling her, "It's really hard for me to time the market. I can't time. I don't know when these stocks are going to sink." But then two months later in February, almost the entire stock market sank in that sense. And most of the stocks who are down I think at some point around 30%. And now, you are at least back around 10% for the year to date. I think it gives you the human touch, when you're accountable to someone or someone is asking questions on, why you invested and then you have to explain to them, or at least get them to understand your positioning, or in terms of your investments and explain them very well to them, so that they will be like-- At least, either, even if you can't convince them fully to come to your side, but at least they give you the benefit of the doubt that you know what you're doing.
Bill: Yeah.
Erick: I think that's been a great learning experience for me.
Bill: Yeah, I think I have similar-- My wife, she doesn't bug me too much about it at all, but I feel a lot of responsibility for it. I guess, the middle of 2020 to the middle of 2021 was beyond my wildest dreams to the upside and then it started to rollover, which it deservedly should have. I used to play golf a lot and I'm getting back into it, but I used to play a lot. I found that, I played my best when I didn't let my emotions get involved in whether or not I had a great hole or a bad hole. I have found controlling my own emotions through the highs and the lows and I think some of having a podcast, probably exacerbated that in the beginning, because I like doing this and it was something that people enjoyed, and that gave me pleasure. So, I probably could have managed emotions better through the whole process. But at the end of the day, things are okay and we'll see how it turns out over the long term.
Erick: I agree. Managing emotions, I think is integral to success in investment a lot. And especially, emotions are tested most when the markets are going up.
Bill: Yeah.
Erick: And they're going up that is like, everything is okay, life is going well, but when the stocks go down and then they stay down for a while, I think you're tested to the greatest extent possible. I have learned to just not look at my portfolio at all when it's 20%, 30% down. If I have a good conviction about the stock, I just ignore. I don't check as much as I used to perform. I used to check a lot more, like, every day, how is the stock doing, 2%, 3%? But now, I barely check. I think I go there once, or once a week, or once every month now to just check if the portfolio is okay. What can I add, what can I subtract to it? I think learning a lot in the process I think and becoming a better investor every day.
I think that's the goal for all of us to be better investors every day to learn something new every day and to manage our portfolio almost in line with the way our personalities are. One person gets stressed too much by looking at green and red, just close that up and just chill. Let the investments [audio cut] themselves and then just redeem, relax, chill, even if the stock market is screaming, "Buy, buy, buy, sell, sell, sell," just shut it off completely and be like the guy in Omaha, who only comes out to invest when he has a full conviction that this is a good company to invest in. So, I think that I've learned a lot.
Bill: Yeah. The only thing about learning from him and I totally agree with you, but I think a younger him would have more turnover and would be playing. I think if he gave him a smaller pool of capital, he'd been investing in a lot more ideas. I think he'd be finding a lot more and they'd be a lot more obscure. I think some of what he suffers from is just the sheer amount of capital he needs to put out the door. So, it limits the opportunity set I think quite a bit.
Erick: Yeah, it does. In young age, you can afford to be more adventurous, invest more. How better he was more adventurous, even him compared to the people with time. I would bet he was more adventurous in terms of investing in stocks that are great upside, which had researched quite well. I think we can do that also ourselves. You don't have to be boxed in to a particular type of investing, sometimes you can. There's a company that makes sense. Yes, it's highly valued, but it makes sense to keep investing in it. The way he has consistently invested in Apple and turned out to be a massive success for him. Apple, Google are one of those companies, people are like, "Yeah, everybody knows about them. Everybody's investing in them." But actually, very few people are investing in them and earning the dividend in terms of getting value from investing some of these well-known companies that everybody knows, but nobody seems to invest surprisingly. So, I think that's been my greatest lesson in watching him play, especially the Apple. That's been incredible for me.
Bill: Bruce Greenwald said, he had a three-day class that I attended and he said that the way he figured it, only 10% of investors are actually long-term investors and then you've got 90% that are doing something else. I think, I don't know, but I think that that time arbitrage for lack of a better term is only going to increase over time to the people that can truly take a long-term mindset. I will out myself and say one of my biggest problems is I get impatient with certain positions. I manage my portfolio a little bit like I manage a fantasy football team, where I have core positions that I don't touch and then at the bottom, I churn them a little bit too much. And I haven't quite figured out the right answer, because I think, on one hand, I could argue we'll just put more into the core positions, but on the other hand, I don't know that I actually believe in doing that for myself. So, I'm working on those thoughts. I'll probably be working on them for years.
Erick: Yeah, but that's a good one to work on in terms of-- They are saying you're a longtime investor, which is a cool thing to say for everyone. But then there is also looking at your portfolio and actually seeing how often does it-- [crosstalk]
Bill: Yeah.
Erick: I think those are two separate things. I think we can all work towards being long-term investors. It's a slow-by-slow process, because sometimes, you hold a position for long and let's say your wife keeps asking you, "Why're you holding this position?" And yes, it losing money. I'm like, "Yes, you have this conviction." You got to let the conviction that you had in the stock play out over a period of time and not just be within one month, you've turned over the portfolio again into something else. A small example, which I look at his tweet. I bought Twitter a while back like a year ago. It was way higher than where it was. I think it went down by almost 40%. But then, today on the news of Elon Musk, it's up something like 25%. I would never have thought Elon Musk as a catalyst to unlock value on Twitter. Here we are and I'm less down today than I was yesterday and I'm grateful to him.
Bill: Yeah. Well, it's all going to matter about execution there.
Erick: [laughs] A little bit of luck there in terms of the stock itself. But in terms of a company that actually greatly underutilizes the platform [unintelligible [01:08:56]. We met on Twitter. Our networks are mostly built on Twitter. I spend half my day on Twitter checking out something, but they still don't know how to monetize, or how to utilize, how to make me spend money on Twitter. I don't think I've ever spent a single shilling on Twitter ever since I came. I signed the platform three or four years ago, but I would love to contribute to Twitter's growth and development in terms of paying something and [audio cut]
They've extracted zero value, but I've extracted maximum value, because my newsletter runs on Twitter, my networks, I meet them on Twitter, my investing lessons and reflections are mostly on Twitter. I extract 100x more than they will ever extraction. I think in terms of a very aggressively underutilized product, Twitter it is. And someday I hope Elon Musk shakes them up a little and then we can get a few coins from the pockets of Twitter. [laughs]
Bill: Yeah, it'll be interesting. I echo your thoughts. I was part of the super follow testing group and I still can't do private spaces and I just don't understand. Sometimes, I think that the people that work at Twitter don't even use Twitter in a way that would enable them to understand what that asset actually is, which is fascinating to me.
Erick: With Twitter, you can build an entire community of people, but still you go off Twitter to go market them. For me, if our Twitter going to by review, is it review?
Bill: Yeah.
Erick: The newsletter platform, which [audio cut] uses. They should have just plugged into Substack.
Bill: Yeah.
Erick: Everyone on Substack-- You get your user list from Twitter.
Bill: Yeah.
Erick: You can't get your newsletter on Twitter. Subject itself has no natural growth platform, where you can share or at least tell people about it, at least the switching to app and all. But Substack makes more sense than review or whatever it is they took up. I have a strong conviction that they have a massive potential. Just that they need maybe the right people, who actually use the product to actually be running the company. So, I'm grateful that Elon Musk, one of the biggest users is joining. I hope it changes someday.
Bill: Well, if anything, I can tell you that I know that Twitter is valuable for Tesla, because they spend approximately nothing on marketing cost. His use of Twitter is impossible to argue to me that those two things are not somewhat correlated or causal. I don't know, man. Why can't we respond in a direct message? Why can't we respond to a specific direct message? That doesn't make any sense to me. There's just a lot of these issues where it's like, "Do you guys use the product?"
Erick: Yeah, there's like, "Why can't I search for people?" It's such a simple thing. I can't search the messages, because sometimes, I've talked to someone, I can't remember who it was but I remember what the conversation was about. I can't find people. The advanced search function at least that's powerful. But still, I can't save stuff to bookmark. Apart from bookmark, which is crazy in itself searching for something inside there. I wish someday they'll learn to utilize. I'll pay for some of those products if some of those features if they are available, if they would make life easier.
Bill: Are you eligible for Blue, for Twitter Blue? Because that has a pretty decent bookmark function.
Erick: Last time I checked, I wasn't able because I think it wasn't available outside the US.
Bill: Yeah, that would make sense. It doesn't make sense, but it makes sense. I use Blue for a little bit. I didn't get quite the value out of it that I think I could have. But if it had more features, I'd probably keep using it.
Erick: They have the opportunity to enhance the product. If they provide more features, I would gladly pay for Blue at that point in time. So, I feel sad for Twitter for now, but I hope someday they'll unlock their potential.
Bill: Yeah, I guess, I had owned it for a hot minute and then really my experience was super follows is what got me out of it. But I don't know. $40 billion market cap could make sense. I'm not sure that I'm there now. I would like to see more execution. I'd like to at least believe that they know what to do with the product to spend that kind of money on it. But I don't disagree that there's a lot of potential there. I saw at once. I could probably see it again. I'm just need to open my eyes again, potentially.
Erick: Let's hope that they see the value and actually utilize it well. I really hope so in the near future.
Bill: What else do you look at? Do you look at any small caps or anything international?
Erick: Internationally, right now, I'm super interested in African stocks. When I look at the market there, it's where the US are some of these like global markets who are 20 years ago. I will tell you a simple thing. An earnings calendar doesn't exist in some of this even in Kenya. We don't have an earnings calendar [audio cut] of the company. It's something very simple. Something as simple as when companies release their earnings, their earnings are actually present or at least the PDFs are present on the website. That alone, you have to push companies to actually do something basic like that. It's an extremely inefficient market, but there's a lot of opportunity to unlock value again. Also, by pushing managements to actually raise dividends in some of the companies-- Some of those companies, they are performing very well, but the management stacking up cash just for the sake of it. Some of the management teams are being paid insane amount of money without delivering value for shareholders for a long period of time. I think there is a lot of room for activist investing, but also, they're really good companies that are under looked. So, I hope long time to build something there.
Also, at the same time, I've built a small platform where we do a little bit of analysis on companies and how they're doing. If we create now the earnings calendar, at the end of maybe a month we tell them, "Okay, this company reported this date, this company reported this date." Then we show them like, "Guys, you can tell this to us in advance as investors that we can prepare for it." The platform is called Mwango Capital. Mwango is my mom's middle name. It's inspired by her. Then we've grown incredibly, because of the goodwill of a lot of the people. They see that we're doing, we've grown from-- We had 20 followers in 2020 November. And now, last time I checked, it should be 23,000, almost 23,000 followers on Twitter as a platform.
Bill: Nice.
Erick: Growing fast and really fulfilling the need, so, that's a place where I look at. I also look at the Nordic stocks. I haven't really looked at them in a while, because I've been busy maybe building up in Africa. But I'm focused on the US, Sweden, East Africa, and Kenya.
Bill: Would you ever be interested in being an activist?
Erick: I would love to, to shake up some of these companies. But I don't know if I have the-- I prefer management teams that know what they're doing already. I don't know. If I have the patience to shake trees to get fruits, I would love to buy-- We keep poking them. The company is telling them, "Hey, you can do this, you can do that." Some of them respond well and we really have a good time with them. Are you interested in international stocks yourself?
Bill: Ah, yeah. Look, am I interested, yes. How much does my time go into it? Not much. So, I guess, I'm not really that interested. But I am interested. I think where I'm at is, I probably need some help around me in order to start to get done what I want to get done and I take care of my grandma when I'm not doing this and that takes up a decent amount of time. Not a ton of time, but I think if I had a team, maybe I could be a little bit more focused on certain things and outsource some tasks. So, I'm trying to figure out what the right way to go about that is. I think it's probably some combination of, I don't know, if it's Fiverr, or Upwork, or whatever, but hiring some people that can help.
Erick: I have a small team. We can discuss it. I can offer their services to you. They helped me out in terms of background research on some of the projects and stuff that I do. So, I've trained them well. They're really, really good with US companies and stocks or so. We can check that out.
Bill: Yeah.
Erick: They're good. They can help.
Bill: Yeah, it's the training part that is tough.
Erick: Training part, yeah. It's the training part and then also getting them up to speed to your work rhythm. Once they catch up, then they're very, very useful in terms of helping you at least outsource the non-core tasks. Now, with the transcripts, I don't do non-core tasks like edits or how something looks like in the newsletter. That's someone else who doesn't. My core is just generating the content and then ordering it. Then once that's done, then I source out the non-core stuff of editing, sending out the newsletter. Then it frees up more of my time to do other tasks. So, I think that's something that can work for you also.
Bill: Yeah, I definitely think it will. Who's actually quite good at it is Stream. I think I mentioned it in another episode, but the way that they pop in, and help each other, and they're all remote. Even working with them seeing it, even though, I'm from the outside, but just seeing how they clearly have systems in place and I think I got to talk to Troy, he's the founder. I think I got to talk to him about what he thought about in order to create such an efficient machine. Because I think someone's only as good as you give them the opportunity to train them up too, right? I need to make sure that I think about it the right way coming out of the gate. So, I set it up the right way. But I think maybe you've done it, maybe just paying your team is a better idea than creating my own. I'm not sure. [laughs]
Erick: You can discuss and see how they can be of help. You can try them out a bit, but they're really good at the tasks I give them, too, so, we can see which kind of tasks we can take off your shoulder for you for the team.
Bill: All right.
Erick: They're good, though. They're very, very good. They're well trained. [laughs]
Bill: Good. What has been your biggest takeaway from your time at Colossus? I guess, why don't we narrow it down Mauboussin? What have you learned from him that you wouldn't have known without him?
Erick: I think with Mauboussin, he is about just-- Because right now at Klarna, we're working a little bit on understanding consumer churn how that develops across industries. This is something just understanding how new consumers checking out LTV versus calculating it, and they call it customer-based valuation models and also, I've learned that a lot from him. I actually recommended some of his articles to the team at Klarna to have a read, because how good they are, but also in terms of they are good primers. Some of these common tasks that you or at least some of these common concepts that you struggle with. I think that's been one incredible thing. But then again, also, he's an incredible reader, man. He reads like crazy. For me, that's inspiring.
Every time I listen to him, I almost have to record everything, because we will spit out lot of like, "This is an article I read, this is the book I read, these articles, these are books, this is something, someone says the podcast." Then like for him, when sitting down with him, now that is packed with so much that you have to spend almost the rest of the week just unpacking a lot of this stuff. This is same with his podcast. When you listen to his podcast, it is like this article, this article says, this article says, this book says, this article. The other person is saying stuff, so you connect stuff a lot, because of how incredible, well ready. When we interview with him, you can see in the background, it's usually like so many shelves of books.
Bill: Yeah.
Erick: You can already see that. Just outside the shelves, he has also more books. I think for him, I've learned that reading is a lifestyle, man. I would want to replicate. But also, he also combines research and practice very well. His research is not that you would find in the high towers of academia. It is the research that is anchored on what people are thinking about. How is passive investing versus active investing progressing? How is luck versus skill? How do you do a DCF model? How do you think about valuing your customers? How do you think about churn? How do you think about all this stuff? How do you think about intangibles versus tangibles, assets and the evaluation? How these impact value and growth investing?
There's a lot to learn from him in the sense of like he's an incredibly voracious reader, but also an incredibly talented and gifted writer at the same time, whose output is actually really anchored in people's daily needs and daily questions of the house. Sometimes, I look at one of the articles he has produced and you're like, "Ah, man, this is something I should have been thinking about." You are like, "This is something I should have been talking or at least thinking about." But then it's a natural thing when you look at it like, "Ah, yes, I've been struggling with this question and I didn't even know it myself. But now that I've seen it, I want an answer to it," and then you keep going. Have you listened to him?
Bill: Yeah. Well, I've read a lot of what he's written. I think probably my biggest takeaway is on the ideas of Expectations Investing and competitive advantage periods have been the things that I have tried to push myself to think more and more about. I got a long, long way to go and I'll probably never be him, but I hope to interview him in the not-too-distant future. I got to reach back out to him and see if I can make that happen.
Erick: Please do it. He's a very busy guy, but he still has time also for many people. I think that's so touching to see for someone who's that busy, but still makes an hour of his time to actually discuss with me who is never met, who we may probably never meet again, just to have a conversation about investing in finance. I think these are the kind of people are telling you that they're very, very open and then willing to invest in others, and that touches me, and makes me want to also do the same to other people at the same time.
Bill: Yeah, I agree and I think that your view on that and just saying that makes me want to do it, too, is probably why people want to do it for you.
Erick: Yeah, definitely. But I think it doesn't the same thing. If you're open to other people, other people also want to open up their doors. If you're trustworthy, people also want to trust you with their friends, their networks, with their resources, with the people that they have. It keeps going. Then you get a really nice flywheel that keeps coming-- [crosstalk]
Bill: Yeah, indeed.
Erick: You benefit from the goodness of others and you also open up your receptors, so that you can be a blessing to other people at the same time.
Bill: I could not agree more. That's more or less my ethos. I actually think that's a pretty reasonable thought to wrap up the podcast on unless you want to say anything else. But I want to tell you that I really appreciate you coming on and thank you for saying yes. And I hope that this podcast helps you further broaden your network of good people and your flywheel.
Erick: Yeah. Thank you so much for having me. I've been following you for a long while, I think since your cousin, who was involved in the Robinhood case, I think that's when I really got to know you a bit better. Of course, it's really heartbreaking story, but also, I can see the way in which it has transformed you as a person, and also made you become more vocal on Twitter, and be more well-known there. I hope also, for me, also to-- From that story, at least, I've also learned to talk more to my friends about the how they approach investing, like, not to be day traders or at least to trade on margin a bit to matter to be extremely highly leveraged to be more cautious in terms of how they do their investing, especially if you're not knowledgeable or you don't know what you're doing at the end of the day, but also to hold some of these platforms accountable to some of the things that they do on the platforms. I think that's been inspiring or so.
It's really nice of user to reach out and to just want to talk. Really nice to spend time with you also. I've learnt a lot. Also, in this kind of podcast, you reflect a lot on some of the things that you have not really thought about in a while. Once again, thank you so much also for having me and I really look forward to more engaging conversation to as many of your listeners as possible and so with you also in the future.
Bill: Likewise, man. Thank you very much and thanks for coming on.
Erick: Thank you
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