"If you create it for yourself, it’s art.

If you create it for others, it’s business."

@naval

So I tried to explain the GameStop situation to some of my students using Pokémon. And I think what I said is mostly true so I figured I would share here (A thread)
#GameStop

Let’s say 10 Weedles costs $20. Weedle here is a metaphor for Gamestop’s stock

Ash Ketchum has 10 Weedles.

Gary Oak thinks he’s smart so he’s going to try and short Weedle. He borrows these 10 Weedles from Ash thinking that the price of Weedle will eventually go down. He sells them immediately thinking he can buy them again later at a lower price and return them to Ash then.

After seeing what Gary is planning, Brock and Misty talk to other Pokémon trainers and they all start buying up EVERY Weedle on the market. This will eventually force Gary to buy the Weedles from them. Remember, he needs to eventually return them to Ash since they were borrowed.

The early Disney company had several near-death experiences, some due to exogenous shocks and some self-inflicted (bad labor practices, weird technology choices), and all through it, a power struggle between "Roy people" (finance) and "Walt people" (tech/art).

1/

After WWII, the company was transformed, with Roy ascendant and financial discipline the order of the day. Walt - who struggled with depression - sought desperately for an escape from the company.

2/

He came up with plans to outfit a train with traveling exhibits that he would drive around the country, putting thousands of miles between him and his brother.

3/

Another plan called for Walt to build an ambitious model train system and transform his role in the company to showing people around his trains.

4/

In 1953, Walt came up with the plan that stuck: a park called "Disneyland" that would be his own fiefdom, a commercial project that would justify the kinds of R&D and experimentation that Walt doted on and Roy looked on as high-risk, potentially ruinous follies.

5/

My path as a founder:

a. didn't do any marketing - no growth
b. hired an agency - no growth
c. became a marketer - 4x growth in 1 year

Skip a and b.

Step c. helped me make sales, and I had enough money to hire a content writer, then a marketing project manager.

She became head of content, then CMO, and now has her own team.

Now, when we know more about what works, we successfully hire agencies.

But as a founder, you never stop being a marketer.

You always think about the distribution of your product, ideas. And not just to your customers, to your investors, team, press, public.

Copywriting is a skill that never goes out of need.

@ReformedTrader That is a long post, but well written. Real estate is a claim on the future prosperity or ruin of a geographical location. Real estate intrinsic values is its ability to generate cash or similar costs to rent in that area. Intrinsic value is above zero in most cases.

Ironically enough, the location that benefits most from property ownership are places where rising living costs expand faster than rising middle income wages. Deflationary areas are hostile to property ownership as price is falling make collateral and borrowing difficult.

Homes are bought using leverage with agencies loan subsidies by the governments. As long as you have fixed rates, the costs of living expenses for your housing is set for 30 or 15 years which allow family to budget. Wealth can be accumulate over time as asset and income risen.

Time passed, real estate become detach from intrinsic values. Monthly mortgage rocket pass incomes and growth in the area. Quick money into real estate turn into a landmine. The 2007 fiasco could have been better or worst, but the free market is effectively dead as an ideology.

At the time, investors attack the institutional that vulnerable to the MBS and structured derivatives linked to real estate bubble risks. Since many financial institution owned the agencies MBS, defaulting on these security means downward spiral for M1 and M2 in developed nations