The Only Constant Is Change

There are times when you just have to say no. It might be tough but it’s the best way. Right now, I’m saying NO to a huge portion of my life I’ve been dedicated to for the last few years. I decided to share some of my thoughts on this with you as it might inspire you to think deeply about what really matters in your life.

But a bit of a background first…

This blog began for me as an accident.

Having sold a real estate investment business I’d built from scratch, growing the initial capital 60x in the process, I’d “retired” to quietly managing my various interests. I wanted to focus solely on investing, trading, raising a small family, and traveling the world with them, looking for both adventure and unique investment opportunities.

I had never considered blogging and, if you’d asked me about it at the time, I’d have told you that blogging wasn’t a career. Far as I could tell it was a weird hobby practiced by camera toting backpackers on their first overseas travel experiences, by bad smelling, pale faced teenagers in their parents’ basements, or by people who spend far too much time worrying about their Facebook status. It simply wasn’t on my radar.

A hedge fund buddy told me I had it all wrong and suggested it was in fact a great way to expand one’s network, fully develop ideas, and grow a business. Having at the time no intentions of a business, the thought of developing ideas and expanding my network was however very appealing. And so, together with a partner I’d recently met and who knew about this “blogging” thing, we began the Capitalist Exploits blog.

What’s the worst that could happen, I asked myself?

I don’t like it? Simple. I stop.

I like it and it expands my thinking and networks? Win.

This seemed like just the type of deal I’ve spent my career hunting for and participating in. Favourable upside and limited downside.

A Product Is Born

Identifying the shift of global capital from public equity into private equity wasn’t difficult. It was a topic I discussed repeatedly on this blog. And so, just as a dog can’t help himself chasing a cat and wishing to get behind this trend, in late 2012 we formed a membership based virtual angel-investing group to explore and invest in exciting opportunities in the private equity space.

It was both a means of leveraging capital and monetizing the blog and it made sense. With my background as a professional investor, derivatives trader, entrepreneur, and recovering investment banker, and with my partner Mark’s background in marketing, web design, and investor relations, a synergistic and beneficial partnership for a membership based service dedicated to angel investing was born.

This allowed members to leverage personal capital being deployed into early stage ventures globally. Between late 2012 and the beginning of this year we invested over $30m into a few dozen promising early stage companies.

Fast forward to earlier this year and I’d started to realize that the membership was no longer serving the purpose for my global viewpoint and personal allocation of capital.

Sometimes we’re so deep in the trees we fail to see the forest. That was me.

I realised the disconnect needed remedying if I was to be true to myself and the clients I’ve been serving, and doing anything else would be intellectually dishonest of me. I’ve never been one who can juggle hundreds of balls. Every time I’ve tried to execute on dozens of varying ideas, the universe has kicked me in the nuts.

Distraction, an enemy of quality and productivity, had moved in like the crazy unwanted alcoholic Uncle. A permanent fixture in my life – eating into valuable time and flooding my thoughts, suffocating all the good stuff.

If there is one thing I do know from experience it’s that my successes have come swift and fast when I’ve been focussed.

Focus Is Everything

Still not convinced? Consider the following:

  • When we schedule less appointments, we can give more focused attention to those we keep as well as breathing easier in the margin.
  • When we expose ourselves to less screen time, we tend to be more creative, less fatigued, not to mention the risk of damaged eyesight.
  • When we have less clutter in our homes and workplaces, we have more peace of mind and better quality work.
  • When we buy less, we have more to save, more to give, and more to invest.
  • When we take on less, we can spend more on what we really care about.
  • When we clear the 80% of noise from our lives, we open up the ability to dramatically increase our lifestyle and this is never more true than when we are investing.

While I know all this, I’d fallen victim to myriad distractions which had infiltrated my life and business.

As my friend Derek Sivers eloquently says, “No more yes. It’s either HELL YEAH! or no.”

Meaning: When deciding whether to commit to something, if I feel anything less than, “Wow! That would be amazing! Absolutely! Hell yeah!” – then my answer is no.

And so this brings me to my “HELL YEAH”.

The World Is Changing

Look around you and tell me with a straight face that things are “normal”.

  • Third parties are rising throughout Europe. Austria, a country brimming with pacifists, came within a whisker of electing a right wing guy into office.
  • Trump, the anti-establishment vote, has the elite class stumped. How did this guy even get a vote, they ask themselves?
  • China, the world’s growth engine, coughs and splutters as the Communist party grapples with the need to sustain growth while containing an imploding credit bubble and capital flight.
  • Japan, facing horrific demographics and burdened with the highest debt to GDP ratio we’ve ever seen, have painted themselves into a corner where the only way out is default.
  • Europe, historically a smorgasbord of tribes, has been invaded. First by bureaucrats and now by immigrants as the most important social contract citizens have with the nation state (that of security) has been shattered. The repercussions will be felt for decades to come.
  • The dollar bull market is likely less than mid-way through and its run significantly affects global commerce and asset prices.
  • Brexit. The manifestation of a simmering discontent has implications far beyond Britain’s borders.
  • Bitcoin (and other blockchain-powered cryptocurrencies), something that some 20 years ago would never have been given the light of day, today offers a realistic alternative to the status quo.
  • Gold is breaking out of the doldrums as the widespread faith in central bank omnipotence begins to show cracks.
  • Iran, arguably the cheapest and most misunderstood stock market in the world, is opening up to global capital.
  • Rather than deleveraging after the GFC scare, global debt has now risen by $57 trillion since the GFC.

These are just a sampling of the global market moving forces at play. The knock on effects and opportunities surrounding many of these events provide us with some of the most asymmetric investment opportunities we have ever seen. It would be a crying shame to ignore them, while caught in myriad distractions.

And make no mistake. It’s not at all “risk-free”. The risks to investors’ capital have probably never been higher. Traditional safe havens such as bonds and real estate are sporting some of the most unsound fundamentals I’ve ever seen.

At the same time the potential rewards in select opportunities are truly asymmetric. This is a time to not only be vigilant but very, very focussed.

With all that in mind, I recently chose to step aside from future involvement in the angel investment membership group. My previous partner Mark is now behind the proverbial steering wheel.

I will continue working closely with a select group of the companies we’ve invested in. I love them, believe in them, and will continue to support them and bring value to them where I can but going forward I will not be spending my time due diligencing companies, reviewing pitch decks, and structuring deals. Please don’t send me any proposals or even ask as I’ll have to respond in the negative.

New Beginnings

And this also brings me to why I write and what it’s in store for Capitalist Exploits.

Over the years Capitalist Exploits has become my avenue for bottled creativity and ideas. I write because I find it cathartic. I’ve grown to love writing as it allows me to clarify my thinking and thus my own investing. I’ve become a better investor for it and I know many of you have too. For me that’s very rewarding.

But equally rewarding (if not even more) is the quality and the size of the network and readership I’ve managed to establish through Capitalist Exploits.

I’m flattered that some of you are known and revered as the most successful investors of our time and that many of you are some of the smartest and sharpest minds I’ve had the pleasure of meeting or communicating with.

A number of you are students looking to learn, grow and develop your skills in finance. Others are further down the road – either as money managers, hedge fund traders, or managing pension funds. We have our collection of family offices, high net worth, and ultra high net worth individuals. It’s been a pleasure working with many of you and I’ve enjoyed some of the most interesting and valuable discussions we’ve shared.

I hope this doesn’t sound elitist in any way. It certainly isn’t intended as such but we certainly have some truly exceptional people in this community and I’m humbled.

The Capitalist Exploits community is as diverse ethnically, geographically and socially as the UN. What we all have in common is a desire to protect, grow and secure our futures no matter our current position in life.

I firmly believe that the stakes today are quite simply too high and the rewards too great to be neglected. I feel like I’ve been honing my skills all my professional life to prepare for what I believe lies ahead of us over the next few decades.

To be the best we can be we need to follow our passions, use our honed skills, and we need to FOCUS.

Asset prices have been distorted by central bankers to a degree never experienced before and this presents us as investors with unparalleled asymmetry to take advantage of.

As an investor, I define asymmetry as the opportunity where a small amount of capital risked in an investment can return many multiples on your investment. To be clear, I’m not talking about gambling. I’m talking about strict risk management and careful timely deployment of capital into select asymmetric opportunities.

Together with a group of extremely successful investors, I will be dedicating my time, capital and focus to exploring and profiting from such opportunities. Capitalist Exploits will be home to these endeavours and I look forward to sharing them with you.

– Chris

“The wisdom of life consists in the elimination of non-essentials.” – Lin Yutang

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