Mental Models, Options Trading & Shopify vs. Amazon
Happy Friday Friends,
U.S. Stocks Had Their Best Month Since 1987. Despite, a now-total of 30 Million Americans (19%) having filed for Unemployment in the last 6 weeks. Oh, and the government released a video of UFOs.
2020: you are officially a very confusing year. Curious if the next generation will think the expression “hindsight is 20/20” was derived from this bizarre year, somehow.
Let’s dive into a few things I “learned” this week…
What the heck are “Options” and “Puts”?
Whenever there is money to be made on {a thing}, there are more eyes are on said {thing}. The stock market has been super volatile the last couple months. As such, tons of new folks have flooded in to learn how it works, in hopes of striking gold.
/r/wallstreetbets now has over 1.2M “Degenerates” (self-described members). It’s an entire subreddit focused on day trading (making “bets” on Wall Street).
This week, I finally spent some time digging into how Options Trading actually works. Below is the best “starter video” I found, if you’re interested. FWIW - I’m just trying to learn “how the game” works, not trying to “play”.
Mental Models
The secret advantage to optimize your decision-making. I’m only halfway through all the resources in this article by Farnam Street. But I’m already wishing I had read it 10 years ago.
TLDR: it gives you frameworks to help you think better. And “learn how to learn” (what I believe is the #1 skillset of high-achievers).
Mental Models: The Best Way to Make Intelligent Decisions (109 Models Explained)
“How to Build a Breakthrough”
In this week’s episode of “What’s bouncing around in the techochamber”, I bring you an article written by Co-founder/Partner at Floodgate VC.
It was my favorite read of the week. Here’s a quick summary:
Shop(ify)!
Speaking of breakthroughs, Shopify made a huge announcement this week. They released a new product, called Shop. Folks are saying it will challenge the behemoth* that is Amazon.
Here’s the product:
Last week, prior to this announcement, Shopify had become the 2nd largest public company in Canada, (#1 is the Royal Bank of Canada) at CA$100B Market Cap. This week, they announce Shop. I can’t imagine them going anywhere other than up, from here.
Shopify went public on May 21st, 2015. So later this month, they’ll celebrate their 5-year anniversary. And they have much to celebrate. Their stock price has increased by 2,100% since going public. Yes, you read that right. So if you had invested $10k then, it would be worth $250k today. But hey, hindsight is 20/20, right?
I plan to do some deeper research on other first-5-year-performances of public companies, this week. But I imagine Shopify will be high on that list, if not number one.
*One (large) side note from Amazon, the Behemoth…
Amazon diversified beyond eCommerce, many years ago. And one bet, AWS, is paying off. Big time. This week, they announced:
“AWS…crossed $10 billion in revenue for the first time in the first quarter. At $10.22 billion, Amazon Web Services revenue grew 33% on an annualized basis.”
This is absolutely bonkers growth at that scale.
Quote I’ve been chewing on this week:
“He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me.”
-Thomas Jefferson
Thank you for continuing to read. And thank you for reaching out to me when you enjoyed a certain piece.
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Be Well,
Brendan J Short