Know Your Worth - Grow Your Business and Stock Portfolio

COULD YOU DEFINE YOUR WORTH

The National Football League (NFL) season is finally upon us. I never get a chance to say I told you in my line of work, risk management and cybersecurity, but at least here I can. Does anyone find is striking that the NBA setup something similar to what I described back in March and their league is thriving...a locked down bubble. As a risk management professional, I get called crazy or told I'm worrying about nothing but there is usually always solutions for my customers to reduce their risk...they just have to determine if the cost is worth it. 

The NFL has had a chance to watch the success of the NBA and they've decided some stadiums will have NO fans and others will be at roughly 25% capacity because the game must go on...but I ask at what cost. I remind you that without an NBA bubble like scenario the National Hockey League had to start and stop their league play multiple times and ended up moving their games up to good ole Canada --- a safer environment for the players health. Major League Baseball has had a number of instances where outbreaks have happened in various clubhouses as it harder to create a bubble with a much larger player base. One thing is for sure, the games will go on because there is toooooo much money to be made. Need more proof, look at the Big 10, a college conference for teams mainly in the midwestern part of the US. They assessed the risk and canceled the fall football season. The backlash has been swift --- cities, fans who are bored, and even some players are less concerned about the outbreaks on campus and more worried about Ohio State's revenue impact to the city of Columbus or the University of Michigan projected revenue loss. It would be funny if it weren't true, but I'm afraid it is --- many schools require players to sign a waiver and that's where I come in. Risk Manager to the rescue -- a waiver ensures that if any of the players get sick or die, the player (or their family) cannot hold the schools liable for their health concerns. So I ask you, how much would it take for you to put your health at risk and play a season knowing you could get sick??

Would you be like college football players --- and play for free?

If it came down to it, do you truly know your worth? That is the question I wanted to pose to my readers today. When I was a young lad coming out of college, I had these rigid set of principles...imagine that. I used to tell anyone that listened or that worked for me --- you need to test the job market about every 3 years. It's easy to get complacent and fall in love with a routine of "working" everyday while others are hustling, learning new skills and challenging companies to pay them what they are worth. There are good reasons to no rock the boat and stay put...but what's the harm in Mr. Market telling you what you are valued. I got complacent for a few years and got into a zone where your employer convinces you that it needs you soooo badly things would go wrong if you ever took vacation and terribly wrong if I ever left. Well I'm here to tell you that companies move on and time moves on...no one person is that valuable and if you are you better be sure they are paying you a king's ransom. So I reminded myself a few years ago that Mr. Market determines my value and my employer simply needs to determine if they agree whether I'm worth it...it's not personal. Many people are quietly cheering this statement at home but if I asked you whether sports players are overpaid...everyone is quick to say yes. haha I wonder if it's because the majority of athletes in some of our biggest sports leagues are minorities...people of color. 

If I asked you to work for NO pay because I'll give you pay for your training courses, would you take it?  Probably NOT. Then why do people get up in arms at college players making billions of dollars for college sports but not making a dime...even off of their likeness.

When Cowboy fans and fans in general are in an uproar about Dak Prescott rejecting a contract extension worth roughly $33 Million a year --- he's called a overpaid crybaby. LeBron is told to shut up and play ball. But Patrick Mahomes and just the other day Deshaun Watson earned contracts that far exceed Dak's offered pay package so fans should you shut up and cheer him on (oh wait that's an oxymoron). I wonder how much of it has to do with the fact that fans usually complain when the player is a person of color, a black man making big time bucks?  I find it odd that no one, I mean NO ONE ever complains at the owner. The owner of most sports teams are white, worth billions of dollars and can afford to pay one man that amount WHY --- because they are bringing in way more that that in revenue. Many owners are business persons and investors like myself...just with a lot more commas in their bank account. My investment buddies are a who's who of owning sports teams:

Investor David Tepper (Carolina Panthers), 

Businessman Tilman Fertitti (Houston Rockets)

Investor Mark Lasry (Milwaukee Buckets)

Businessman and Investor Mark Cuban (Dallas Mavericks)

WHO PAY'S YOUR FAVORITY CELEBRITY'S BILL'S?

Lucky for you the good folks over at FIVETHIRTYEIGHT asked this question awhile back too. Aside from Shahid Khan (the Pakistani-born owner of the NFL's Jacksonville Jaguar football team) and Michael Jordan (who I believe recently sold a majority or all of his stake in the Charlotte Hornets),  ALL other owners across the 3 major sports leagues are white.

NFL Ownership: 97% White

MBL Ownership: 98% White

NBA Ownership: 98% White

Source: The Institute For Diversity And Ethics in Sport

FINDING VALUE - INVESTING IN YOURSELF (GROW YOUR BUSINESS AND PORTFOLIO)

I write this post because my startup cybersecurity firm just signed it's first client and hired and placed my first employee. I couldn't be more proud in trying to accomplish my mission to place talented people of color in corporate IT jobs. I was laughed at along the way, low balled, and even towards the end the companies almost tried to cut me out of my own deal. However; I am a risk manager and with contracts and an knowledge of what I'm worth and what my team is worth --- we won't settle and we didn't. I did it all without a company website because my skillset is the product. I set a target to get my first employee and engagement where I wasn't directly involved or managing the project and determined the profits would pay for my website and official launch. Know your worth, when they laugh work harder, and always be a triple threat player. I have a 9-5 job, manage a growing startup, and actively invest in the stock and real estate market. 3 Threat give me flexibility to shoot, pass, or drive to the basket. Here are my stocks expiring within 1 month, all profitable except one and the one trade that is down is actually good. I own that stock and when that trade is down, it means my stock is up. Know your Worth: ALIBABA (BABA), ROKU (ROKU), NOVAGOLD (NG) , FACEBOOK (FB), JUNIOR GOLD MINERS ETF (GDXJ), DRAFTKINGS (DKNG), KOHLS (KSS), CRONOS (CRON) - Note: Most of these trades w/ exception of Facebook, Cronos and GDXJ were recently added in the last few weeks and are profitable. 

 

2020 Kick-Off - Reflect But Expect Disruptions

If Regular People Did That Sh!t

Carlos Ghosn – The previous CEO of Nissan must have been watching the movie “Catch Me If You Can”. For those of you not paying attention, he had been jailed on charges related to misusing company funds – a charge alleged by Nissan.  Mr. Ghosn orchestrated an escape out of Japan that truly only rich people can get away with. So regular people if you ever get jammed up, follow what rich people do, not what they say:

First he was not required to wear any electronic monitoring device (smh).  Then Carlos evaded detection and took a high speed train to Japan's Osaka airport to board a private jet.  How do you board a plane when you been accused of damaging Japan's iconic Nissan company - well by jumping into a large speaker box used for concert equipment (remember to poke holes in it like he did or it might not turn out good). From there, the plane went to Turkey and his team got him onto a plane to Lebanon.  Why Lebanon – because Carlos’s game is tight he is a citizen of Brazil, France, and Lebanon. And Lebanon DOES NOT have an extradition treaty with Japan so for now he’s untouchable. To plot and possibly test run this escape, it took months and supposedly hundreds of thousands dollars.  So next time you think you’ve made it, ask yourself is your get outta jail card as good as Carlos Ghosn??

No Photoshop – A Real Look Back

I continually assess my performance to ensure I am reaching my goals and targets. Here is a look back at 2019 and when personally reflecting you have to be real about what worked and did not work. But I always caution patience, look at my list from the previous year end and surprisingly the areas where I decided to push forward paid off.  Here is a quick summary of Items that Did Not Work (in Red) and Nice Surprises (in Green):

·          Colony (CLNY) – Due to poor performance at this company, some investors have called for CEO Tom Barrack to step down. Investor(s) rationale: being a close personal buddy to Donald Trump has caused reputation risk to the company and has been and operational distraction for Tom. Who is the agitator: Blackwells Capital. Outcome: Unclear if it’s a coincidence, Mr. Barrack has named, Marc Ganzi, as his successor and the CEO transition will take place in 2021. 

·          AMC Entertainment (AMC) – AMC is a good example of poor risk management on my part. I had successfully traded this position multiple times for small gains. Using options, I was in a position that allowed me to finally own the stock even though I profess to hardly going to the movies because of the costs and now due to the ease of streaming. All was temporarily well after the most recent earnings call – revenue was up however earnings missed the mark. At first glance I was good, the stock rose and I had a profitable position. Bur the EPS miss may have been signaling a more significant problem - AMC is spending significant mounds of money to fuel the monthly subscription service called Stubs-A-List which is supposed to draw people back into the theatres.  Long story short, I should have done a proper risk assessment. It would have led me to a 5 second conclusion: I think movies are slowly declining business as streaming is the new trend. I think once AMC stops burning cash this stock will do well…but they’ve burned bridges with me. I’ll reevaluate after the next few earnings but this won’t be a long-term position.

·          Retail – This sector will continue to be difficult to trade as retail companies are reeling from too many headwinds: 1) Amazon, 2) China Trade Issues, 3) Changing trends (like working from home and athleisure wear), and 4) decline of malls. So yes my investments into Foot Locker, Kohls, and Stitch Fix were misguided because I thought I could dip my toe into the deep end of a pool for a quick buck and hop out.  However, every time Amazon flexed its muscles or supply chain disruptions were identified in China (from the Trump admin – China trade war in 2019) it was more like jumping in the deep end and remembering you’re not a great swimmer.  The positive is jumping in with Foot Locker, Kohls, and Stitch Fix is like jumping in with 2 experienced swimmers and one newbie who poised for breakout, respectively. At current prices, these stock have likely bottomed and but the rebound will take time.  Business and Life Lesson: Always set limits for short term positions and goals and don't be afraid to adjust or admit failure. If NOT, be prepared for the long-haul.  

·          Moore’s Law – If you’re not familiar with this law you should be. This law theorizes that computer processing doubling every year and I believe that semi-conductor chip makers are sitting in the middle of a revolution – Computer’s are more powerful fueling the Cloud, 5G phones, autonomous cars, gaming, streaming, televisions and the COSTS are coming down across most of these product segments. You’ve seen me dabble in chipmakers: Qualcomm and Qorvo but there are many more like AMD I need to evaluate.  I believe it’s fueling the investment trends of the future listed above and impacts all corners of life. See these examples below:

o    Sports - I joke other areas of our lives are impacted by Moore's law and are racing to reach a most optimal efficient state. Take sports – the games have gotten faster, the players bigger and smarter, the hits – harder, and the focus is now all about DATA analytics. When I used to play Sony Playstation's Madden NFL football game years ago, I always picked a team with a mobile quarterback. Fantasy football – same trend I foresaw years ago the path to racking up passing and rushing yards is through mobile quarterback. The rationale – Football is simple à keep the ball moving forward, limit the sacks and incomplete plays and good things will happen. Well we’ve come along way from Randall Cunningham, Michael Vick, Donvan McNabb and others being an outlier. Look who’s in the playoffs this year: Russell Wilson, Lamar Jackson, Patrick Mahomes, Deshaun Watson, Josh Allen, Ryan Tannehill. They took a theme I knew back in the early 2000s when I would pick Donovan McNabb or Michael Vick in Madden…which was "OPTIONALITY".  Just like in life on every play I wanted options - in football it was the option to Run/Pass/QB run to always gain positive yards.  Funny it took the league over 15 years to catch up to the obvious or wait maybe there was something more holding back the inevitable?  Live your life like water - find the most efficient path and then always give yourself OPTIONS.

o    AfroBeats – I don’t love the name for this music genre but hey I guess if Lil Nas X is not country music who am I to judge. The mix of musical influences is nothing new to life, however; I belive the only thing that holds the flow of music is labels and the radio stations. Moore’s Law to me is like water, life will find its most efficient path and that is happening in music. Everything is FLOWING to streaming, the cloud and to blending sounds. The only people that didn’t get the memo are Country Music execs in their denial of Old Town Road, but strangely I hear there are country rappers now. 👂 But back to the message: Amazing artists have blazed a path just like artists did in in Electronic/EDM when they infused the electronic sound with pop artists (unless you were tripped out...who wanted to listen to music with no words). But now African artists are getting their shine. Not sure what took so long because the music has been so good and so rich for so long (clearly when I would attend African parties or watch music videos during my trips to London). So now I’m happy to see really good artists blowing up mainstream:

§   Davido - Fall

§   Burna Boy – Ye

§   Koffee – Toast

§   AfroBeats – Drogba (Joanna)

§   Wizkid – Come Closer

§   Rotimi – Love Riddim

Props to Akon (Senegal), P Square (Nigeria), Rihanna (Barbados), Nicki Minaj (Trinidad and Tobago), and French Montana (Morocco) for continuing to blaze the trail. Even more than ever, we have African and Carribean infused music being played all across the world. Thanks to the streaming outlets for giving the people what they want. So prepare to be disrupted in your life - it's inevitable. Take Moore’s law and the music industry - disrupted Radio music execs and stations who always want to rinse and repeat music about cash, drugs, and sex now have to compete with the endless amounts of music on YouTube, Streaming outlets and Satellite Radio. This is a good disruption because allowing music to easily get out into public brings variety (and a many bad viral one-hit wonders) but I wouldn't have it any other way.  Our society and culture… are so much more that power being in the hands of few trying to curate our lives one song at a time.

Stay tuned - I'll post soon about the fear of World War III and the impact to your portfolio in case you haven't been watching Oil + Gold prices and stocks skyrocketing