Welcome Friends, 

Here’s an assortment of posts shared this week on Trends with Friends. Let’s dive in…

God Bless The Degenerate Economy

Howard Lindzon is grateful for The Degenerate Economy this holiday season. He writes, 

Good morning to all my degenerate friends here…

Here is what retail traders/investors think of institutions in 2023 and 2024…

I don’t like writing very long posts so I am going to do a series of posts over the next week on the data released by Robinhood at their investor day and some data from Stocktwits.

I am getting older, which means a little meaner and grumpier, but I will always have a soft spot for retail investors. I have been one my whole life.

There have been many ‘flippenings’ in the investing world, but one big new one has been the power of retail investors. Here is some data from Robinhood:

Right or wrong, smart and dumb, ‘degenerates’ and closet Warren Buffet’s, there is no going back.

The growth and staying power of retail investors is not a threat to institutions, it is a boon. They will be forced to get better.

Twitter, Stocktwits, Reddit, YouTube, TikTok, Instagram… reading sentiment, tracking sales data, following the ‘great white sharks’… alpha has never been more distributed.

At the same time that alpha is being distributed, indexing has never been easier or more effective.

Read Lindzon’s latest here. 

THIS WEEK IN AI

Michael Parekh reviews Google Gemini 2.0, Apple Intelligence, AGI, Nuclear and more in this week’s AI Summary.

It’s a must read.

And in case you missed it, Michael Parekh and Phil Pearlman dive into all things AI. Watch the pilot program here. 

FITNESS ALPHA

This week, Phil Pearlman joined Barry Ritholtz on Bloombergs’ At The Money podcast to discuss Fitness Alpha. 

Phil shares, 

The basic idea goes like this – The healthier you get, the better you perform across multiple areas of functioning including:

1. Stress Tolerance & Resilience

2. Executive Functioning & Decision Making

3. Focus & Concentration

4. Energy & Endurance

5. Self-Control

6. Emotional Regulation

7. Self-Confidence & Self-Efficacy

8. Strength & Controlled Force

9. Flexibility & Balance

Improved functioning in these areas leads to enhanced performance for challenging endeavors, especially competitive & stressful ones like money management.

You can listen to my discussion with Barry below. 

ALL EYES ON SEMIS

Larry Thompson is stalking semiconductors. Larry writes, 

I don’t make the rules.

The Market does.

And right now, the market demands we pay attention to semiconductors.

They’re a monster and the symbolic leader of this Bull Market.

If semiconductors were their own sector within the S&P 500, they’d rank as the 4th largest, bigger than Energy, Utilities, Real Estate, and Materials COMBINED.

Looking at the chart, a tight consolidation is forming.

I don’t get caught up in naming chart patterns. Doing so often creates false precision and unwarranted confidence

This is simply consolidation and a contraction in volatility, which typically lead to explosive resolutions.

I lean toward the expansion breaking in the direction of the underlying trend, but we need to be prepared for either outcome.

Where this resolution takes us will likely dictate the next move for the market:

If we break out to the upside: It’s go time. The Bull Market has done what it’s supposed to do, solving our worries, and we can continue to think opportunistically.

If not: It’s time to shift focus toward risk management in our positioning.

WILL AI EAT THE BROWSER?

Om Malik poses the question, Will AI Eat The Browser? 

Here’s the money quote, 

While browsers are so ubiquitous that it may be hard to imagine life without them, the truth is that we humans have had to adapt to what has been a document-centric web experience. We have been forced to adapt to technological constraints, rather than technology truly adapting to human needs. 

Read Om’s full post here.

BIG IN JAPAN

Ted Merz shared how Bloomberg increased its efficiency in Japan. Merz mentioned, 

Bloomberg’s plan called for the installation of a high-speed Hitachi fax machine and the hiring of almost two dozen skilled typists to work in a temporary newsroom set up in a windowless warehouse near the Tsukiji fish market.

A software engineer, James Rolle, wrote a program to add numbers automatically into templated stories and calculate the change.

When a fax arrived, a reporter would shout out the number corresponding to the company followed by four numbers in a specific order – EPS, profit, sales and forecast.

Another worker would type them into a template with a third person watching over their shoulder to verify the accuracy.

A sequence might look like: 6758 for the company and then 32.37. 23399. 935132. 900000.

The computer generated story appeared in both Japanese and English.

Bloomberg sent hundreds of stories like that and managed to beat Nikkei on some.

Paul told me Bloomberg’s sales reps would then use those victories to pitch clients.

It wasn’t a serious threat to Nikkei’s dominance.

But it was the crack Bloomberg needed to make inroads and build a business.

There are so many lessons here.

Catch Ted’s full post here.

7 LESSONS OF 2024

Charlie Bilello shared 7 lessons learned from 2024. He writes, 

1. Returns Are Lumpy

2. Price Targets Are Pointless

3. Embrace Panic

4. Tune Out The Noise

5. Diversification Is Simple, But Not Easy

6. There Is No Impossible In Markets

7. Time > Money

Read Charlie’s latest here.

TRENDS WITH NO FRIENDS

Trends With No Friends sifts through the noise and discovers stocks above $1B market cap with high relative strength and low social following.

The publication shares 52-Week Highs and Lows sorted by followers on Stocktwits. 

Why is high relative strength and low social following important?

Stocks that are outperforming tend to continue to outperform. Stocks that have a low social following are, by definition, undiscovered by the crowd. Stocks that have both Relative Strength and Low Social Following can really outperform as more investors discover them.

This week, Trends with No Friends featured… 

Liquidity Services ($LQDT), Pearson ($PSO), NewAmsterdam Pharma ($NAMS), PriceSmart ($PSMT), Karooooo ($KARO) and more.

THIS WEEK’S EPISODE

And in case you missed it… Howard Lindzon, Michael Parekh, JC Parets and Phil Pearlman are joined by Lucky Strike Entertainment executives Lev Ekster and Bobby Lavan to discuss AI, entertainment gamification, Google’s quantum quest and more in the latest episode of Trends with Friends. 

Tune in today.

GET IN TOUCH

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