Human Stupidity

Watch it… it’s happening… non-stop…Two ways of making money…

man standing in bathroom with bathtub next to body of water
Photo by Ishan @seefromthesky on Unsplash

Earlier this week we shared a speaking cycle we are holding this month, one event a week, sharing our thoughts on Value Creation, Corporate Finance, and Investing. 

Sadly most of the CEOs and CFOs experts don’t get it right, regardless of attending to our events or not. It’s a human flaw. 

Most people miss attention spark during their lives and bring trash to their bodies and minds that they can not focus their attention for two hours and get what they see. 

There are movies, pictures, images, sounds, memories, and all kinds of crazy stuff, running and ruining their minds that they cannot learn, or cook, they prefer to cook it in the microwaves.

But some can.

Those become excellent businessmen and investors.

Truth is very hard to get… we don’t know it, maybe it’s just us thinking we know it.

Investing in “genius”

However, one thing we know… there are two ways of investing.

  • Long-term value creation (last week).
  • Making money by human stupidity (human flaws, today).

The easiest way to earn money by investing in stocks is the second.

Although you have to know you are not ignorant.

An ignorant ignores knowledge.

They prefer to be the average human being that behaves most like an animal.

In 2010 I went to Kruger National Park, in Africa.

Watching animals hunt can be very entertaining and inspiring.

Humans behave like animals, mostly in a group.

We tend to move in groups, so that’s how we watch the average human behave and pick the right stocks.

We did it with Apple, Tesla, ATVI, META, NVDA, just to name a few.

We foresee what people do, so we prefer not to join them, but make money with their flaws.

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Economic Human Parasympatic Flaw System

That’s like being a contrarian.

In the case of the monetary system, we know it’s a flaw, a huge mistake, a scam waiting to avalanche. So we must be prepared.

Another example is Barbies mentality commented earlier the week…

In times like these, we see the worst in people and business executives.

We really don’t know how they decide capital allocation… maybe some magic ball… or meantime some delusional unstoppable thinking cycle…

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Old money makes money with the New Money?

LVMH returned 1427% over 18 years

Quality and Luxury are not synonymous, yet, people mistake it.

Take Luxury brands as an example, they are having an excellent half-year.

On Prada’s 22 Results Presentation FY, we attended, Andrea Bonini, Prada’s CFO used the term “cost and capital allocation discipline”. That’s wonderful to see. Congrats to him, and congrats to Prada to have someone that knows how important it is.

Take Prada, LVMH, Hermès, Moncler as example.

They have great CFO and investor relations executives working alongside them… 

Business-wise: They are growing. Their best markets are Asia, Japan, United States, mostly, their leather products margins are great, and people like to spend it!

Financially-wise: They are becoming sharp companies.

When you see moments like this it’s almost as if we could see how people react, what they like, and what they will do next.

Society-wise: They do what they want, we do what we have to.

We have to invest wisely and escape the economy and society’s irrationality.

Two ways of making money…

Regards.

Marcelo

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About the author: Marcelo Marini Studant PRO

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