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Jason Hall: Hey friends, welcome back to Investing Unscripted, where we ask and answer the hard questions about investing. I'm Jason Hall joined as usual by the voice of the [00:01:00] people, Jeff Santoro, who is my good friend also. Jeff, I did it again. 

Jeff Santoro: You did. It's fine. You're the only person who calls me their good friend. So as long as you say it, I'm a happy man. Yeah. 

Jason Hall: So we've got a great guest on dynamic side to talk about. We'll introduce him in a minute, but first. Get a little housekeeping. 

Jeff Santoro: We do. So a couple episodes ago, I implored our wonderful listeners to take a moment to give us a five star rating and a review on the podcast apps.

And since I did that, we received a handful of these reviews and ratings. So I want to thank those that did it. We got a new Apple podcast review this week from Chris Cof. So thank you, Chris. That was very nice of you. 

Again, that's the easiest and best way to support the show other than directly sending it to someone. It helps the algorithms. Show our podcast to new members or new listeners. So if you could take a second to give us that rating and review, that would really be great. And as always, reach out to us with questions, suggestions. You can find us on all the social medias. You can find us on YouTube. You can subscribe to our newsletter at [00:02:00] InvestingUnscripted.com. 

All right. Housekeeping over. 

Jason Hall: Okay. Let me welcome to the show, somebody I've known for a very long time. Former colleague, consider him a friend. He is one of the best investors out there. Simon Erickson. Hey, Simon. 

Simon Erickson: Jason, I am so thrilled to be here. You and I have known each other for at least a decade.I, we drank a lot of bourbon together. And for this show, I hope you guys know this. I purposely did not shave. I know that it was a prerequisite. You had to have at least a little bit of a beard for this show. So I did this one for you guys here today. 

Jason Hall: That's true. That's true. Simon, thank you for making that sacrifice for the good of the podcast.

Simon, I thought a good way to start this off. Something that we try to do with most of our guests that come on. I know you, I've known you for a long time. Jeff knows who you are, knows your history from talking to me. And of course, following you with 7Investing, Motley Fool before that.

But there's probably a lot of people that don't really have that same depth of knowledge. And we'll talk stocks. We'll talk some things you're excited about later. But I would love to talk a little bit about your backstory. What is the origin story of Simon Erickson? 

Simon Erickson: [00:03:00] It started in Iowa. I was born in Iowa and a small hospital out in the Southeast part of the state. That's where I began. 

Jason Hall: I didn't, I didn't know that. I just learned something new about my friend, Simon.

Simon Erickson: So four and a half decades later, here we are. The rest is, you know, just minor details. 

Jason Hall: So did you, did you buy a stock that day in the hospital or did it come later? 

Simon Erickson: I think so. I think it was, it was the day of my birth that I bought my first stock.

It sounds about right.

No thank you for the question. Actually, Jason, you know, we we have a shared interest in helping individual investors. I just think that, you know, if we're being honest, there's a lot of bullshit out there. There's a lot of bad financial advice out there. And if you're not in the weeds and in the trenches, you know, eight hours a day, you might not know who to trust out there.

And for people that are investing hard earned money, you know, you're bringing it back, you've got families, you've got something you want to use it for probably the worst case scenario is if you invest in something, you get burned if somebody gives you really bad stock advice or bad financial advice.

It's just very, very frustrating. And so kind of the ethos of 7Investing was to be, you know, do damn good research, do our homework, go out there and actually [00:04:00] really empower individual investors to make better decisions. Here we are four, four years later, four and a half years later, still going strong, my friend.

Jason Hall: Well, and the past four and a half years has been quite a roller coaster ride. There's no doubt about that. We'll talk a little bit more about that, but Jeff, go ahead. 

Jeff Santoro: No, I was going to ask. Oh yeah, I would agree with that. You picked a hell of a time to start. All right. So backing up a little bit from there, you know, I'm curious as someone who was a, I've been an investor since I started working, but only in, you know, passive index funds through my retirement accounts.

It's only in the last four or five years that I started buying individual stocks. So I'm always curious to know at what point in your life did you become an investor in however way you want to define that? 

Simon Erickson: Yeah. I mean, right out of college, I went into a job called technical sales, which is basically you travel all the time and the company's dime and you go out and you shake a lot of hands and you make the money and you're staying the same.

You know, Marriott courtyard, Marriott hotel room, it becomes your room four days of the week. But I got to fortunately, you know, put a huge port part of my paycheck just into you know, kind of [00:05:00] a short term savings account in my bank. And over time you start saying, Hey, is there a better use for this money rather than just having it sit, you know, collect a couple of percentage points of, of interest.

That kind of led me into stock market. Like you, I kind of started in funds and long term dated funds and then got into individual stocks. And then the more and more you learn about it, you start always, Questioning is there a better option for this for me and what I want to accomplish with it?

That's where he ended up today. 

Jeff Santoro: Yeah, so I I know from following you on Twitter, Simon, that you're a pretty astute observer of the stock market generally. So one of the things that Jason and I thought it'd be fun to kind of kick off the conversation with was a very broad 30, 000 foot macro view of the state of the investing world right now.

You know, there's been some interesting news stories just in the last couple of weeks and months. And of course the longer term big news story is probably anything involving AI that seems to be the. Thing we're all talking about here in late 2023 and 2024. So I'm just [00:06:00] curious, like 30, 000 foot view.

Like, what are you observing in the market right now? What's interesting to you? What observations do you have? 

Simon Erickson: Well, I do think it's just, maybe it's some interesting context is what is the market anymore, Jeff, you know, we've always kind of used the S&P 500 as a. Traditional benchmark. It's always, Hey, how did you do versus the market?

Could you have done better just investing in this simple index fund? And I think it's worth at least pointing out to anyone listening to this show that the S& P 500 itself, even though it's the 500 largest market capitalizations of the largest American companies which is a weighted average, the top 10 constituents are now about a third of that index.

You know, we talk about the magnificent seven all the time. It's these giant platforms that have hoarded data Transcribed to the benefit of their shareholders and now they're a trillion dollar plus valuations. And so when you're comparing yourself to the market, you're really comparing yourself to Microsoft and to Apple and NVIDIA and kind of a handful of other companies out there where there's a lot in the middle that have not gotten the same you know, attention from, from large funds that put [00:07:00] billions of dollars of client assets into them.

So to answer your question, you know, of where do we stand? Where does the market stand? You've certainly seen kind of a, a tale of two types of stocks, right? You know, the large caps, the mega caps have done phenomenally well for the most part. In 2023, and it's certainly here in the beginning of 2024. I personally think that there's a lot of innovation happening in the midcap space, 10 billion to 50 billion companies that haven't gotten the same kind of variety.

Jeff Santoro: That's something that we, we talked about recently, which is like, I think we actually looked into some of the data behind it on an episode, maybe a month or two ago, the whole idea of like, I remember the narrative during 2023 when the magnificent seven had that crazy, crazy run. Was that the rest of the market was severely lagging what they were doing.

And I think they've, the rest of the market, the rest of the S&P 500 has caught up a little bit since, although I'm not looking at any data that backs that up right now, just anecdotally, if I remember correctly. 

Jason Hall: I can support that a little bit. Just in the past couple of days, I've taken a look at the S&P 500 equal weight, which weights all 500, the same percentage of, [00:08:00] of the index returns.

And over the past year, the S&P 500 is up close to the market cap weighted is up. Roughly 30%, give or take a little and the equal weight is up about 21%, right? So it's still, it's a good market overall, but again, we're still talking just a large caps, right? We're not even getting into small cap, micro cap, other opportunities.

And, and I think that's one of the things, Simon, we can talk a little bit about too, is thinking more broadly. But Jeff, go ahead with your point. 

Jeff Santoro: No, I was just gonna, I was gonna pivot to another question about the market, which is one of the things I'm wondering about it. Because it feels bubbly to me, not quite like 2021 did, but it still feels like there's a lot of really high valuations.

It, it feels like if we saw a big crash at some point this year, I don't think anyone would be like super surprised. But I'm curious what your thoughts are, just, I guess, around like valuations and maybe how bubbly or frothy you think the market overall might be, or is, or is some of that [00:09:00] just, In certain industries or certain types of stocks.

Simon Erickson: Yeah. I mean, one of the metrics that I guess a lot of investors will look at is the cyclically adjusted PE ratio of the market, right? The Cape ratio, you know, kind of, you normalize some of this stuff out, you know, how cheap or expensive is a market. I forgot what the number was. And maybe it was 26, 28.

It was higher than the historical average. So people were starting to say, Hey, it's. It's overvalued. It's frothy, you know, people throwing out things like bubble as a word. I tend to think that more, maybe that's the wrong way to think about it. It's more just as the dynamic of, of how these things work.

You know, what is it? 93 percent of trading is algorithmic done by software. And so right now, when you have big. Companies getting bigger and attracting more and more attention naturally more funds flow into them, right? Fund managers don't want to be missing out on Nvidia right now. No, no one's selling Nvidia.

If you sold Nvidia a couple hundred dollars ago, your clients are calling you saying, what the heck are you doing with my money? And so you tend to get these things where you kind of go, it does it over. Does it overshoot with the intrinsic value? A lot of these large companies is yeah, it certainly does.

Tesla [00:10:00] did the same thing, you know, Apple, people could say did the same thing a couple of years ago, but on the other hand, that is kind of just how markets work. You know, it's a confidence gain. There's animal spirits. It's just how it goes. I have been less concerned about the multiple, unless it's just.

Nosebleed valuation. You know, if you really need to cut based on valuation, make sure you're not doing it for 5 percent or 10 percent of our value. Make sure you're doing it. If it's 300 percent overvalued, but other than that you know, markets are going to do their thing. It's a little bit frothier than it was certainly in 2022.

And there was kind of an exodus out of it. But I think that more generally, Jeff, if you look at the fund flows and where the capital is out there, it's still in money markets. You know, we saw a trillion dollars of assets, just go into money markets last year, five to 6 trillion. That's still sitting on the sidelines because everyone's just waiting for the Fed to cut rates and they've talked about it, but we haven't really seen it yet.

Inflation isn't under control yet. Until that happens, people aren't going to put money back into equities. 

Jason Hall: Yeah, I think that's true. One thing I want to say too, Simon, I think is relevant for folks that are listening in [00:11:00] is thinking about your focus as an investor. You're not a deep value investor. Generally, I want to completely speak for you, but your investing style has generally been towards finding great transformational growth opportunities.

I think that's. Largely where you look and the, where I sit on that. And I want to hear your thoughts on it is you kind of answered already talking about valuation not getting too tied up in valuation, particularly if you, if that's where you're looking, if you're looking at deep value, five or 10 percent could be your, that could be your return, right?

That could be the difference in making the return that you're trying to make and the type of investments that you generally are looking for. It's really more about the execution on the idea in the business plan, delivering the product, because you can overpay 25 or 30 percent and if it's a massive addressable market and they have the opportunity to 5X their revenue over the next decade and hit operating leverage and generate substantial cash flow, as long as they execute, it doesn't matter that you overpaid.

And overpay or get value if they don't execute, it doesn't matter [00:12:00] what you paid.

Simon Erickson: That's right. I would agree. The the part about massive addressable market is an interesting one because everybody in every investor presentation I've ever seen, you know, claims that they have a massive TAM to grow into, you know, we, we are 1 percent of this massive market that, you know, we're going to go out and we're going to.

Capture just when you're raising money, when you're fundraising, of course, you're going to, you're going to try to convince people that you're the best thing and you've got a massive market. The reality is, you know, every, every company is not that. 3d printing certainly was not that. Pot socks were not, you know, you remember when long Island ice tea changes into long Island blockchain, you know, it just stuff like this happens.

And, and it, it burns a lot of investors when they're just investing on hopes and dreams rather than execution, like you just said. But there's another part of it too, which is, I think you have to keep an eye on what actually is. I think that, you know, it's one thing to kind of trust an investor presentation.

You certainly need to look at the execution you see for the revenue growth, you know, the profit growth, all those kinds of things. But I think that also there's an edge to really just being in tune with what's going on out there when I was at the Motley Fool, I ran a service called [00:13:00] Motley Fool Explorer and one neat thing that was part of the service was every month I got to go to a conference.

Every single month I got to go to a conference and interview an expert in whatever field it was we were talking about. And it gave me an appreciation that, you know, when you're, when you're talking with techies, are you talking to people that don't think about things from investing perspective, but they think about like, you know, how am I going to use this for my job to get, you know, success or whatever else it is.

Jason Hall: Stuff that adds up to benefits for us as investors, but it's the stuff that really matters. 

Simon Erickson: That's your market. That's demand from the market. That is the addressable market. You know, that is some, that is doing https://fool.com/unscriptedsomething different that is solving a need that's out there. And if you pay attention to that, you're a step ahead of a lot of other investors.

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Jason Hall: So I think this kind of ties a little bit into this next question. And I think that might be the answer, but I want to still ask the question. I want you to think about it a little bit. Thinking about your personal investing process, there's, there's the service, the idea service that you run with your team at 7Investing, which is just that it's, it's your job is to help generate market beating ideas.[00:14:00] 

And it's up to the members of that service to then apply that to their portfolio, right? And then to manage their portfolio. So now thinking about that idea. process that you have and now thinking about your personal investing process, what is something about your personal investing process that you think investors, particularly maybe new investors should absolutely thinking about making part of their 

Simon Erickson: framework?

I mean, I would self describe myself as a growth style investor, you know, for all the reasons we just kind of discussed. But, one thing that is necessary if you're an investor that I think everybody should do in their process is like, you know, when you see kind of headlines or you see kind of news stories, like, you know, think about in terms of how is this actually going to make.

Profits, you know, you know, there's a lot of hype. There's a lot of sizzle. Well, you know, when you're talking about the future, you're talking about AI, you know, kind of all these things, you get a little more, a lot of momentum. There's, there's a hype cycle that feeds on this. I think that as an investor, you, first of all, you have to find the right companies that are executing really well.

And then, and then ask yourself, you know, what, what do you want to see them doing? Are they just riding this, this hype train? And then they're going to crash and burn, you know, [00:15:00] when it, when it sizzle goes away. Or is this something that did the necessary things like NVIDIA did in a lot of ways that has positioned it to ride this trend.

I think that all investors should do that. 

Jeff Santoro: Is there any specific, like, just to kind of build on that, are there any specific things that you go to first? Like if a new idea comes across and you're looking at a new stock and maybe even aligned to what you were just talking about, like, how are they going to make profits?

Are there certain metrics that you are drawn to immediately to sort of as like a first pass at it to see if it. You know, is it worth going any deeper? I'm just curious, like what your first step 

Simon Erickson: is. The first screen depends on the cycle of the company, right? Like if you're early cycle company, you've got to look for revenue growth.

That's not growing when times are best and everybody's adopting it. You're doing something wrong. As you kind of get to that next level, you've got to actually, and we've seen this with a lot of Silicon Valley companies, just like the last couple of years, you've got to scale. You've got to show operating profit improvement.

Operating margins have to increase. Because you're able to get a, get a handle on sales and marketing and your R and D costs as you get bigger and then longer term, you know, [00:16:00] capital allocation is certainly the most important thing of, you know, are you, you've got a business, you're, you're churning out profits, you've done the hard part, but now you've got to figure out how to do this for the good of investors.

You just pay dividends and then you called it a day. It's a lot more complex and harder than that. Now. 

Jeff Santoro: Yeah. I like, I like thinking of it kind of in those, in the buckets of like where they are as a, as a company. So let me now let me flip the script a little bit. Is there like, so I've said before, like, I think there's probably a lot of value, a value in keeping an investing journal, but I don't do it.

So I'm wondering if there's anything that. You think might be a good part of your process that you don't do. 

Simon Erickson: You know, I think one thing that I've, it's not something that I don't do. It's something that I didn't do that. I'm starting to incorporate more is a really kind of having a respect for the technicals and knowing that this is a giant market and it's transactions that are taking place with people buying and selling.

You know, I, I think a couple of years ago, I just said it was all about fundamentals, you know, don't worry about all that stuff. You know, people are going to come around and they're going to buy good companies, no matter what. [00:17:00] Yeah. Eventually. And that's not really the case, right? You know, institutions and wall street and those price targets and, you know, these intrinsic values and all this super important, you've got to have credibility with, with institutions.

If you want your stock to survive, it will inflate your stock price when times are good, and it will save your stock price when times are tougher. So look at kind of who the ownership is, you know, is it a founder? Perfect. If it's not a founder, is it a reputable venture capital or fund that's behind them?

Or is it just a whole bunch of momentum? That's got a stock going up and down like GameStop and AMC did. You certainly, if you're a long term investor, you want to have the right other long term investors along for the ride with you. Yeah, I think that's 

Jason Hall: important because, you know, it is an absolute truth that, over the longterm, the fundamentals will Prove out right.

And if you deliver a value that will be reflected in the fundamentals of your stock. I think the problem is most investors have a massive disconnect between what long term really looks like. And frankly, it's not five years. We're talking [00:18:00] 10 years sort of thing. And if you're investing in a lot of these sorts of companies that are still in that may need to raise capital existence, the technicals do matter.

You're, you're absolutely right. That's. That's the case. And you need to know what you're, what you're buckled onto as an investor. If that's the case. 

Simon Erickson: Yeah. If I could add to that too, just real quick, Jason, you know, one other part of that too, we talked about capital allocation, super important, right? This is one of those softer things.

You know, a lot of people, you talk about culture and, you know, all of these kinds of other things. It's like culture is not necessarily, if you get like free breakfast and you love your job every day, it's like, like culture is how does the company make its decisions? Like is a manager's management was tied to paying a dividend to its institutional investors.

That's going to sacrifice growth because it has to pay those. And it's going to raise debt, you know, just to make sure it pays that dividend. You know, that's, that's a culture that a lot of these established companies have, or is it going to be a little bit more flexible where it's like, okay, we're gonna do the best things for shareholders.

If you want to get the best, if you want to get the best returns in the market, you have to look at things like that. If you're making decisions as an individual investor, yeah, [00:19:00] I 

Jeff Santoro: think the most extreme version of like culture and how it relates to maybe a stock's performance and the company's performance could be like Boeing right now, you know, like they, they put their focus somewhere that has led to some, some tragedies on, on their, you know, on some flights.

And I think GE is like the other example from further ago, you know, the, the, the focus on the short term hurt the longterm. 

Jason Hall: Well, and even like a focus on with, with GE and certainly with Boeing, the focus on just even on like returns that they were looking at, like returns on equity and things they were using, because there's ways to game those that really are the ways to game those sorts of things that result in.

You know, hollowing out the value part of your business. And we've certainly seen that Simon. So I think you're, you're spot on with your comments there. 

Simon Erickson: Yeah, it's super important. And then, you know, maybe one other example is Intel, right? And Intel a couple of years ago was run by a basically a CFO CEO.

He was doing financial engineering of the stock, buying back shares, using as much capital as possible to make the stock look as pretty as [00:20:00] possible. What did he, what'd he do? He robbed the corporation of keeping up with Taiwan Semi. Conductor in the foundry side of, of the semi, the manufacturing of the chips.

And then he also fell behind AMD and Nvidia in the design of the chips. Yeah. And now to Intel's credit, it's, it's brought Pat Gelsinger back. You know, this is a guy that worked with Gordon Moore 30 years ago, 40 years ago now, and has really said, you know, we're cutting the dividend, we're cutting back on the buyback.

We're gonna put money into r and d. And our foundry capacity and Intel today is a very different Intel than it was five years ago because of the culture of the top of this, of this company. 

Jason Hall: Do you think Gelsinger is going to be able to do it?

Simon Erickson: I think he's got a lot of wheels turning. I think that, you know, Intel for years has needed focus.

I think their focus right now is on Foundry, which is the right focus. And having, 

Jason Hall: having that part of the siloed from their, their integrated business is the only way they're going to be able to make it work. It 

Simon Erickson: has to be competitive internally, right? Like, like now they're competing internally for demand from the, from the Foundry as just as they're competing [00:21:00] externally.

Never was that way before. 

Jason Hall: That's what I'm following pretty closely. 

Jeff Santoro: And I don't know this space nearly as well as you guys do. But one thing I think about on the Foundry side of it is I think any, any company that's able to get any sort of, work done on the foundry side stands to benefit if we ever do need to more quickly than we're already maybe planning to have less things built in Taiwan, you know, just from like a geopolitical risk.

Standpoint you know, if they're able to help us pivot in that sense, they could end up being in a really good spot if, if things go wonky over there.

Simon Erickson: Yeah. And, you know, it's, it's very interesting, you know, AI where we, I almost hate it when people say AI bubble, because to me, it's more of AI point of inflection, right? So there's about 40 billion that were spent globally on AI focused chips, right? The chips that were going to the data center for machine learning , for training and inference and that's two parts, right? NVIDIA did all the training, you know, Hey, is this a picture of a nose? It's a nose. It's a nose. All of a sudden you trained your neural network to know what a nose looks like. And then the inference. So then when a car sees something or, you know, if the [00:22:00] camera sees something, it knows what it's looking at.

NVIDIA has dominated the first part of this market. Now it's opening up the second part of the market, which is the inference side of it. And that's a two horse races between Intel ships and it's between a video chips. And now AMD is a third competitor in this as well. And so it's self serving for them to say this, but the estimate that Lisa Sue from AMD CEO.

Has said is by 2027, there's going to be 400 billion of AI specific chips sold globally. So if that's even directionally close in four years, you're seeing a 10X increase in order of magnitude increase. It's the same thing that Sam Altman saying out there right now. This is not a bubble. This is a point of inflection.

Jason Hall: Yeah. Jeff and I, on our most recent live stream, we talked about this exact same thing. I think it was this live string or was it the Q and a that we did, but we had a question that was asking specifically about the AI bubble. It was our last mailbag about, you know, almost when you go through these bubbly periods, do you have to look the other way?

And Jeff and I came down the same thing is that, and I think inflection point is the right way to think about it. Certainly. Anytime there [00:23:00] is a massive disruption that kind of grabs , the animal spirits of the market, there are bubbles within it, right? We know there's a bunch of crap companies that aren't AI that are talking about AI.

Jeff Santoro: Yeah. Everyone is saying AI on their conference calls right now. Every 

Jason Hall: time. Every time. Even, even Warren Buffett managed to kind of squeeze it in a little tongue in cheek. In the, in the, his latest shareholder letter that just came out a few weeks ago. 

 I'm going to have a one more follow up comment talking about that. Potential number that even if it's directionally correct, that 400 billion, roughly in an AI specific semiconductor sales in just two and a half years from now, if you go back two and a half years ago, and you look at the consensus from within the industry was that by I think 20, 29, the, the semi global semiconductor sales were going to be about a trillion dollars total.

So we're, we're talking about that number by itself, right? Because we're not saying 45 percent of that's going to be, you know, AI [00:24:00] specific chips, we're going to say 400 billion of it's going to be semiconductor chips, and it's going to be like one and a half trillion dollars in semiconductor sales. So it's a really, really compelling, compelling industry.

Jeff Santoro: And to me, the, that number, if you want to, what do you want to call it? A Tam or whatever you want to call it is way more believable because. The other thing I hear people say is like, oh, this is just like 3D printing, or this is just like, the metaverse. It's not. Like, I think with 3D printing, you could make the argument that this will never catch on.

With the metaverse, I think a lot of people are making the argument that this might not catch on wholesale. Like, I don't think there's any way we don't see AI used everywhere over the next forever. Like, it just seems like it's going to be here. Now, will it be like robots walking around and, you know, Terminator?

I don't think so. Hope not. That didn't end well. But it, it does, it does feel like this is a thing that will stay. And like, to your point, Jason, there's going to be bubbles within it, but I, I agree with you, Simon. Like, I like the idea of thinking of it more as an inflection point. Cause [00:25:00] this does seem like.

Yes, it's a new trend. So to speak, but it's one that has legs. I think the 

Simon Erickson: next, the next 10 years are going to be the decade of, of Sam Altman. The last 10 years were the decade of Jensen Huang. You know, NVIDIA is a fantastic company. It trained developers how to use GPUs to do the computing for whatever they needed to do in parallel, right?

More efficient computing in terms of Watts of power you were using for computing horsepower that you needed to do, but that's hardware guys. That's boring. That's just computing. That's just stuff that you put in a data center and you sell. Now, the interesting piece is like, how do you actually get. The bang for your buck.

Now you've done all this training on this machine, machine learning models that you created. What is open AI going to enable the world to do? Holy cow. 10 years is going to be a very interesting, it's gonna be interesting decade that we got coming up here. Yeah, I agree. 

Jason Hall: And as, as much as Nvidia has been just a bonkers investment and could continue to run and write, could continue to grow and become more profitable.

If, if I'm anybody out there that's looking to [00:26:00] buy GPUs, you know what I'm doing? I'm looking everywhere else I can possibly look to. Because you have to have competitors. You it's really going to open up. It's going to be pretty remarkable to follow. There's, there's no doubt about that. Simon, let's pivot.

Look a little bit. Let's go back to what we were talking about with, with you individually and thinking about. How you invest, think about how you think about investing. And we talk a lot about evolving as an investor over time as our financial goals change, as we get closer to those goals of, as we have kids, as we send those kids off to school, as we reach financial milestones, all of those things, as our jobs change, like all of those things affect, and we should evolve as investors along the way too.

One of the things I'm curious about, Jeff came up with this question and I'm a little sad that I didn't come up with it because it's a really great question. Simon, you and I've known each other, like we've talked about for a long time. And for the bulk of your, your career, you spent working for somebody else, right?

Doing kind of the same job, but for somebody else. And now your name's on the door, so to speak. I don't think a lot [00:27:00] of people realize your middle name is 7Investing. 

Simon Erickson: And the tattoos too, right? 

Jason Hall: Exactly. There you go. But now the, you know, it's changed. Now you own the business. You, you've gone through a lot of, basically you've had 10 years of investing cycles in four years at 7Investing.

And I am curious how has running 7Investing how has that changed how you invest personally? Yeah, 

Simon Erickson: man. What a, what a fantastic question. And before I answer this, I mean, Jason, you always ask fantastic questions here. So Jeff, Jeff, thanks to you for coming up with this one.

Cause that's a very Jason kind of question there. 

Jeff Santoro: Well, it's been me feeding them to him all these years. I think now's the time to let everyone know. I've 

Jason Hall: known Jeff for 17 years. 

Simon Erickson: Much respect. Yeah, it's appropriate that it's a good question because that's kind of the answer to the question is, is ask tough questions, right?

You know, it's, it's easy to invest in a bull market. It is very easy when there's zero interest rate policy to pick tech stocks and start throwing darts. And if you saw on Twitter, everybody was bragging about the 200 percent gains that [00:28:00] they made, you know, I was so good at this 2 years ago. Gosh, it was, it was getting terrible that, you know, when you, when you saw that, it was just kind of like, there's something very wrong here.

And anybody who expects you're going to get 200 percent a year in the stock market every year is. You recalibrate that that's, that's not normal. No, but I think that the best part of 7Investing and why I've learned more in four years than the previous 20 years as an investor was you have to go through the cycle and you have to actually be honest with yourself and objective with yourself and say, okay, what was the market that we were in here in 2020?

Before March of 2020. And then how did that market completely change in March of 2020, at least for United States investors, you know, then how did that change? What the regulators, I don't know what the lawmakers were going to do. And the money spigot certainly opened up. And then how did that change in 2022 when they realized they needed to close this money, money spigot, right?

Like you said, that's, that's 15 years. Of a, of a normal market cycle that was compressed there into about four between COVID between [00:29:00] the zero interest rate policy before that, between the reaction of the fed, when inflation started getting out of hand and all the supply bottlenecks and everything else like that, as an investor, you have to say to yourself, Hey, maybe what I was doing in 2017, isn't going to work in 2022.

And then also the things that hurt in 2022, don't dismiss that that was wrong. Just at that year might not have been the most effective way to do it. So I think that you have to, you have to evolve. You have to ask questions. You have to repit. You have to be honest with yourself about what worked well and what didn't work well.

And then also how is that impacting companies? A lot of companies that raised money through SPACs in 2021 got burned. Last year, why they did a great job raising money. They did exactly what they were supposed to do, which is raise money at the peak and put it all on the balance sheet. But then they also burned it, right?

They hired way too many people that did too many unprofitable programs. And they had to cut back on those with their tails between their legs. They thought 

Jason Hall: what they thought what worked at that moment was going to work again in two years when they needed to do another capital raise. 

Simon Erickson: And so you got half of it, right?

You raised the money, right? But then you burnt the money and that, that burned your shareholders [00:30:00] too. But there are companies that I, that are in, we can talk about these a little bit later on, but there were companies that raised a lot of money. At the right time and are benefiting from consolidation now that the rest of their competitors are putting themselves up for sale.

Jeff Santoro: Well, so I have a follow up to that because this is something that I think about a lot, which is it's very easy now in March of 2024 to feel like all that craziness that you just highlighted in that answer is past us. And I think it's worth remembering that in a lot of ways it's not like so. And I mean this in two ways.

Like there are still some companies that are still. You know, year over year anniversary ing craziness. And the second piece is, and this was something I've learned over the past couple years, which is, I thought we would see the impact of the higher interest rates on some of the weaker balance sheet companies Already, and we have to some degree, but I'm starting to like, wonder slash believe that that's still to come as debt needs to be rolled over and and companies are finally [00:31:00] actually facing the higher interest rates because there are still a lot with weak balance sheets that are probably rolling, you know, finishing out the debt that they got it.

Zero or 1 percent and now we're going to have a significantly higher rate when they have to roll that over. So I'm curious your thoughts on that. Like, do you, do you feel like it's still not quote unquote normalized after all the craziness and that we still may have some, some things to kind of transition 

Simon Erickson: through?

I mean, another two-beer conversation, right? You know, this is one that we could go a bunch of different directions, I guess, to package it all up into a 30 second answer. The first is that what is the market again? Like, you know, what was it? Was it the JP Morgan Wells Fargo, one of them just put out a, an expectation.

The S&P is going to fall 17 percent this year. That's the headline that made it out there and everybody's freaking out. But again, what are you looking at? The S&P you're looking at these kind of potentially overvalued mega cap companies that are going to give a little bit of active that because of valuation contraction.

So that's one, what is the market to inflation? Impacts different companies in different ways. Inflation. If you are a raw materials company that needs to pass those on to a [00:32:00] customer is very different than if you're a software company, who's got wage inflation that you got to pay people. And then that brings me to the 3rd point, which is that there is a deflationary factor.

It is working against the inflation. That's the result of technology, right? AI is replacing a lot of full time employees right now. That stinks. Nobody likes higher unemployment. Everybody wants to be able to provide for their families out there, but for investors in this ruthless business world that we live in.

These companies are becoming a lot more efficient and getting their margins a lot higher because they're replacing a lot of people that need insurance and need benefits with an AI script that can do it for them. And so that's a deflationary factor too. That's working against us too. Again, this is a lot of storylines that are all rolled up into one.

I think that the nuances is lost in a lot of these headlines. 

Jason Hall: Well, one thing too, I want to follow up on that. The thing's important is that. There's nothing new with that Simon tech technology generally and automation mechanization. I mean, the first time somebody figured out how to hang up plow on the back of an ox, the people whose job it was [00:33:00] to go through the field and pull out the rocks and plant all the plants individually.

Like, guess what? Those people just lost their jobs, right? This has been going on for as long as humanity has been around, but the other part of that Tailwind that like that curve is More economic opportunity gets created. So just like an example is you think about like, in, in banking right now and in investment banking and accountancy firms and places like that, they're starting to use AI a little bit to do like some basic things, but then they still have to have a human fact check it, and follow up and make sure that it's right.

And what they found is that for junior bankers and for junior level positions in the past, that those were the people that were doing like the grunt work that AI is now doing, they're bringing them up to higher levels. More quickly because they're going back behind and they're following up to make sure that what the AI is doing is, is accurate and correct and taking on more responsibility [00:34:00] to make decisions instead of just doing the grunt work.

And so over time that's, that's how technology expands. But we're myopic, right? That's, we always, we always focus very narrowly on things like that. 

Simon Erickson: Some industries need efficiencies, right? Like, you know, Palantir is one that I've called, followed a little closely here recently, you know, this is one that worked with the US government department of defense and the Army and all these kinds of big contracts kind of things.

Similarly businesses want to be more efficient and have more Intel into how they're running their own operations too. And so they've released this artificial intelligence platform. It's, it's growing like gangbusters, right? 70 percent year over year growth. With US commercial customers, right? That's exactly what we're just talking about here, right?

Companies figuring out how do you use something like this? There's a reason that Palantir is showing 70 percent year over growth, even as large as it is, because they're figuring out how to be more efficient. A lot of industries need to be more efficient, right? $4 trillion a year on healthcare? Are you kidding me? You know, we gotta do better than that, you know, and that's a, that's a cost that's absorbed by everybody.

So there's some, some tough questions to answer, but I think that generally [00:35:00] innovation is good, is good. You know, you wanna pay less for things. You don't have to pay more for. 

Jason Hall: Healthcare Investors just said, sir, find another industry to pick on.

Jeff Santoro: One of the things we ask pretty much every guest that comes on Simon, is, you know, 'cause, because we're very much open and transparent about. All of our questions and uncertainties around investing. So we like to talk about our mistakes. In fact, we've done whole episodes on mistakes, so you don't, you 

Jason Hall: don't basically Warren Buffett because, you know, Warren Buffett writes a lot about mistakes he's made.

Yes. We did. We talk about it a lot, so we're 

Jeff Santoro: just Warren Buffett. That's we're basically Warren Buffett. Yeah. That's, that's what I'm getting at here. He also. Was once our age. So we're exactly like Warren 

Jason Hall: Buffett. So hope to eventually be his age. That's right. 

Jeff Santoro: That's really the goal. Can I get into my nineties?

All so you don't get to skate through without answering this question, Simon, and you can take it in any direction you'd like. It can be stock specific. It can be just a general learning. What's, what is a mistake you've made as an investor and what have you learned 

Jason Hall: from it? So I, I will leave it up to you whether or not you want to discuss being short puts on 3d Systems, circa 2014.

Simon Erickson: Man, the big, 

Jason Hall: those that don't know being short puts is like the worst way to be long something when the stock is going down, because you have an obligation to buy that stock at the former high price, no matter how much it's fallen. Did 

Simon Erickson: 3d systems after writing those puts? Jason, is that, was that the punchline?

Whole body. Yeah. I've got plenty of mistakes. You know, if you think you're going to go into this game and not have mistakes, you are sorely mistaken. You know, if you think that you're going to bat 75 percent of the stock market, that's, that's a, you better recalibrate that expectation. I think in general, Jeff, the biggest mistakes that I've made have been too eager to get back into a stock.

When it sells off, I think that too often I convinced myself based on my previous expectations that a stock was a good company that I wanted to own more of, and then it sells off and I would tell myself, Oh gosh, it's down 20 percent today. Buying opportunity. Let's back, back up the truck. Let's load, let's load up with more shares.

When in reality, you know, a lot of the reason [00:37:00] that the initial rejerk reaction happens by the way, which is so pronounced, you know, you'll see stocks now violently move volatile. It's because analysts are changing their price targets and they're just Instantaneously selling, right? It's, it's a result of a model where you change an input.

Most probably this year's earnings that then impacts everything downstream of that, that impacts the price target and then the immediate sell. And then if we want to get back in, we get back in. And so I think that my biggest mistake is, is maybe a little bit more respect for, for those, you know, the, the trading side of this, you know, the institutional side of this, but then also if you do have a company that's underperforming, you know, even if I've convinced myself, it's a good company.

Things change pretty quickly out there and companies that were fantastic companies are no longer. A lot of the times, fantastic companies. And so maybe, you know, sit back a little bit have a cup of coffee, you know, read through things rather than just immediately assume that something that sells off is immediately a buying opportunity.

That's my biggest mistakes in 

Jeff Santoro: general. So I like that a lot because I think we've all had that. reaction when you own something and it drops [00:38:00] 20%? And you look at the results and go like, doesn't look that bad to me. But you're saying like, that actually could be a signal. Forget the percentage, like, forget, forget the percentage drop, but it could be a signal that could at least give you pause.

Is that an accurate way of interpreting what you said? 

Simon Erickson: Yes. And perhaps interpreting, you know, why is it selling off? Why are people selling this stock? Why is it not growing as fast as it used to? It typically, especially those early stage companies, we talk about the life cycle, but early on, it's pretty easy, not easy, but it's a lot easier to get from 0 to a billion dollars than it is to get from recurring revenue, or at least revenue.

It's easier to get from 0 to a billion dollars than it is to get. It from $1 billion to $10 billion. And I shouldn't say easier.

Jason Hall: Yeah, Simon. We are closer to 0 than a billion.

Simon Erickson: Lemme say that a publicly traded company that's got resources can get to a billion dollars.

More easily than it can get to 10 billion because it's just, it's just harder. You've got a bigger market. You have to grow and you have to convince the mass market to do this. It's called crossing the chasm. [00:39:00] If anyone's a Clayton Christensen fan out there. 

Jason Hall: Well, this is like the, this is the the, this is where the TAM starts to prove out, right?

Simon Erickson: Yes. And you know, you've kind of got early adopters, you've got the techies and the people that embrace it. You know, you can show a hundred percent growth rates and get a lot of people excited early. But then can you consistently grow for a decade? That's really, really hard to do. Even five years is really, really hard to do, especially with everything going on out there right now.

Every company out there has got it. The next, you know, company trying to disrupt what they're doing already lined up and probably taking it, taking aim at them. So I think that that's it, you know, things change, you know, Even as a long term investor, I don't really think of things in 10 year time periods.

I think of them in three year time periods. And then I reassess you got to give management a little bit of time to do what they're going to say they're going to do. But I think that to buy and hold and pray is dead. 

Jeff Santoro: So if you, if you own a stock now and it drops precipitously after news earnings, whatever old you might've jumped in and bought more because you saw it as a buying opportunity, knew you now waits and then.

Are you just going back to the [00:40:00] fundamentals that your, your thesis for that company, the metrics you track to sort of see what the issue was? Is that, is that like what you do now versus what you used to do in terms of like how to proceed after that drop? 

Simon Erickson: Yes. Yes. It's, it's kind of like, you know, it's, it's a perception and reality and execution game all tied up in together.

The companies that create markets, whether it's GE or Exxon or Cisco or whoever you want it to be. You know, all of those are 500 billion companies at one point, that have given a lot of that back as, as their own markets have changed, have gotten disrupted. Why

NVIDIA is a darling in the market right now. This is a fantastic company. That's made a lot of shareholders, a ton of money. Do you know how many people are trying to make more efficient chips than NVIDIA right now? I mean, all the large hyperscalers are designing their own AI chips just to replace NVIDIA and their own data centers.

And then a lot of smaller companies, a lot of smart brainpower and design that now you can get a manufacturer, an American manufacturer, like Intel, the manufacturer for you this can be some big changes in, in the semiconductor industry in the next five years. 

Jason Hall: I want [00:41:00] to talk, I want to talk more about semiconductor industry before we wrap up, but I just have thinking about what we were just talking about with.

Mistakes that you made and having a process. We talk a lot about frameworks on Investing Unscripted and kind of our thesis here is the problem with rules is rules just tell you what to do, which can be useful at times. But it can also lead you to make bad decisions. Whereas a framework, you build an investing framework that has to do with your long term financial goals, your short term financial goals, your own investing philosophy, your own wiring, like how are you wired as an investor?

To build in friction in places that you need to prevent you from making mistakes, but also lubricating things that, you know, work really, really well. So you can act more quickly on all of those. talking about creating spaces. Sit down, have a cup of coffee. Think more about it. A big part of my framework.

To kind of avoid those exact same mistakes that you've talked about that I've made myself is almost having a rule [00:42:00] where I have to wait. Like I have to apply a couple of market days before I act on something. So thinking about mindset, thinking about your own process, what's in your framework to help with your, the mindset side of investing?

I, 

Simon Erickson: you know, Jason, I might not be the best person to answer this because I'm one of those investors that does not use a checklist. You know, I don't have something that I kind of go through all the time framework wise, but but I do have a very good coverage universe, right? Like, we've made over 300 recommendations at 7 investing in 4 years.

We've got a pretty good general idea of what's going on with these companies and what to look for. And then I guess if there's anything that is a framework or something that leads a lot of minus, it just is something out of sync, is something way too cheap right now or underappreciated right now?

You know, they're like, you know, maybe, maybe if it's 10 percent undervalued, you know, I don't, I don't always have to do a DCF or, you know, pull up a model that says, okay, I'm buying. And then I'm getting back out and then I'm buying back or anything like, it's a signal like that. But I can tell you if something is.[00:43:00] 

Completely mispriced. Those are sort of the dislocation. The pitch right down the middle. You know, CrowdStrike a year ago was a pitch right down the middle at a hundred dollars a share, right? Super microcomputer was a pitch right down the middle a year ago. You know, it's just these, these companies that were completely out of touch with the valuation with what they were realistically going to achieve.

And so if you can do the financial statement analysis, That's something that I spent a lot of time in, you know, MBA in finance from Rice University here in Houston. And that was kind of my focus of any part of that MBA experience was the financial statements, digging in, looking at acquisition costs versus, you know, lifetime value of a company, looking at how to build a DCF, the assumptions that go into those, you know, how is a business using its own resources?

Stuff like that is, is very numbers heavy. It's more of like the science part of this and the art side of it, but that'll keep you sane, you know, the, the numbers after a while of a company is using its resources really, really well. It's creating equity value for shareholders. That's what you want to look for.

Yeah. I, 

Jeff Santoro: I, I like the numbers piece of it [00:44:00] and I can't do the DCFs and all the stuff that you can do. I don't have an MBA, but I will say I do find that understanding the numbers to the degree that I'm capable of is my way of. Checking the story, right? Checking the story that the companies, because if you read enough conference calls or look at enough investor presentations or CEO interviews, you'll find yourself convinced to buy almost anything.

So I, I like the numbers as a way to balance the art and science to, to use just the way you framed it, because it's a way to sort of check against, well, they're saying this. But for six consecutive quarters, I've seen this, you know, and it's a way to, to balance that. So your answer actually segued perfectly into the next question I wanted to ask, which was how long after a new idea crosses your desk, do you feel comfortable investing?

Is it, is it sometimes quick? Is it sometimes long? Is it always long? I'm just curious, like how that part of it works for you either personally or with the service. 

Simon Erickson: Yeah. So my answer on this has changed now that I have two small kids, right? And they [00:45:00] have all my money now. It goes to them instead of myself.

You know, for me, the answer is in the, I will, I will buy something when it replaces something else. You know, I'm not, I'm not putting a ton of new capital in, but I am saying to myself constantly, okay, here's my portfolio. If I'm buying this, why, why am I buying that and what am I taking out? What's my last best idea and how is that better than, than what I've got 

Jason Hall: right now?

So you almost need a reason to sell something to have a reason to buy. 

Simon Erickson: That's right. And I've got a pretty high conviction in the companies that I, that I've owned. You know, it's not like I've got just something on there that I don't know why I've got it. But it doesn't, that doesn't mean you shouldn't put something new in, if it's a better idea.

Jason Hall: No, that's true. That's true. So I just realized Jeff you first and then I'll, and then I'll make 

Jeff Santoro: my comment. Well, because mine was sort of the flip side question to Simon, which is like, so if, if you're, if you need to find a reason to sell something to buy something, what kind of things go into a sell decision for you?

Simon Erickson: Something has screwed up, you know, something is not what it was supposed to be. [00:46:00] Things are going wrong and the business is suffering for it and you have to, you have to pay attention to that. Like a Twilio, we just saw Twilio. I mean, Twilio is not the same business today that it was, that it was with Jeff Lawson running the ship.

They, they You know, took, took out a lot of dead and, you know, did all these acquisitions and make sure your shares to do it. And it was all go, go growth mode. And then now it's all about profit, profit, profit mode. And we've got to slice back on things. I mean, that's, that's a stock that you would sell because the thesis has changed.

Invitae, same thing, right? This is a company that was going to grow multi genomics platform. You know, really the future of healthcare was going to be more proactive. You could do a whole bunch of genome screens. We're going to have doctors sharing with insurers, sharing with patients, his giant genome network, Cathie Wood with ARK Invest, you know, put a ton of money into this, Softbank put a ton of money into this, didn't allocate Responsibly, you know, burned a lot of shareholder capital on that because the growth has gone now. And now it's just a completely business that just is going bankrupt. Others are similar to stuff like that, but you will sell, or at least I will sell when, when you have to be like, okay, is this the same [00:47:00] story that I bought the stock.

With the expectation of it doing if it's not why stick around, it's not going to turn around very likely turnarounds do not turn around. 

Jeff Santoro: Yeah, if I could put what you said into my own words, it's no why you own it. Like that's that. That's a thing. I'm trying to get better at myself is only selling when the reason I bought it is no longer the reason I want to.

Keep holding 

Jason Hall: it. So I'm gonna have a quick follow up question before we wrap things up and talk a little stock talk and industries that you're interested in. Do you, do you ever think about starter positions with stocks and build out your position over 

Simon Erickson: time? Always, every time, not even sometimes, always.

Jeff Santoro: Can I ask a follow up to that? Do you, do you think of it, do you think of it as like. A dollar amount, a percentage of your portfolio, like I'm just curious because this is something I struggle with a lot. So this is a question about for me, not for the audience. How do you think about a starter position?

Is it always the same amount? Is it, does it depend? 

Simon Erickson: So those that know me, you know, it kind of, a lot of people think I'm just a growth style [00:48:00] investor and it's YOLO investing you know, it's how it, but it's not, I'm a barbell investor. I go for the growth. And then I also have this kind of. Retirement portfolio.

It's just, you know, reinvest dividends, strong competitive advantage, stuff like that, stuff like that are much more comfortable having large position sizes. The growth side of it is, is to me, it has to be something you add to over time because companies change over time. You want to get more comfortable with it over time.

Yeah. Well, they have to 

Jason Hall: execute and earn 

Simon Erickson: your capital. Exactly. And it's very hard to just dump something in that is what I would consider a growth stock, you know, a company that's growing 50 60 percent a year. That's great. You maybe I'll take a small state just to get me following it more. And then I'll add to it when I see what I want to see.

But again, I, I'm not a back the truck up investor, at least for the revenue side. Of those growth companies. Yeah. I appreciate 

Jason Hall: that. All right. Let's, let's have a little fun here and, and, and get out of the philosophy and talk industries, talk stocks. What's a stock or an industry that you're particularly excited about right now?

Simon Erickson: You know, this [00:49:00] is a fun one that, you know, does get a lot of attention because it's kind of cool, especially for anybody who's a Star Trek or Star Wars fan out there, but the, but the space economy is something that I really have excited about. This is if you want to get big contracts with the government who is giving out, who's got the deep pockets to do it, or if you're a commercial company that can just do things better using satellites to, to improve your own business.

And so the industry and the, and the company are both space economy companies. I like Rocket Lab. That's a company that kind of has earned a lot of credibility in this space. And I think it's got the runway to build a larger rocket that carries a larger payload that improves their margin profile and rewards their earliest investors.

Jeff Santoro: So I know it's not a publicly traded company, but I'm curious only because I just read the biography of Elon Musk, this is on my mind. So when you are looking at whether it's Rocket Lab or another space economy company, how much do you factor in the, the idea or the fact that. One of the biggest competitors in that space is a private company that you can't invest in that you don't know that much about like, does what Tesla [00:50:00] I'm sorry, does what SpaceX is doing factor into your decision making and what publicly traded space stocks you do invest 

Simon Erickson: in?

Yes, because the ironic part is that Elon Musk, the great disruptor of businesses is now so large that he is getting disrupted himself. You've got different markets within the same market, right? So the space launch market has been dominated by ride share, right? The Falcon Heavy is this giant rocket that Elon's going to put up there.

Cause he wants Starlink to have satellite internet with very low latency. And so you want to hatch a ride. Great. Get on the bus, but you're getting off for the bus stop stops. You've got to go to the same orbital plane where Elon's going. And that might take two years to wait. If you're a small business, can you wait two years to get your satellites up in the air?

Probably not. Or you probably aren't too happy about it. If you have to, and that's the rocket lab comes in, right? There's this new disruptive part of the industry where it's like, okay, we can do small satellite launch, you know, 300 kilogram payloads, and we'll do it exactly when. You want to launch and we'll do it exactly where you want to launch.

So if you want it to go to, you know, geosynchronous, you know, it's just a [00:51:00] certain place for, for Jason's home, because he wants to super, super fast internet that you can do that now, or you can actually get into space to do something like that. It's like the 

Jason Hall: equivalent of, of less than load trucking being interrupted. Disrupted by Uber. I mean, it's so, it's so interesting. 

Simon Erickson: Yeah. And you know, when you talk about things like disruption, that, that's how it starts. You get something that was not even being considered by the largest players, by the Elon's, by the SpaceX's out there. But then you also start thinking, okay, well, if this is going to be a new industry, what else do they need?

They need communications. They need to build those satellites. They need somebody to operate those satellites. You know, kind of the same thing that happened with cloud computing, which was at first just hardware and infrastructure. Now you've got a whole industry about it. You've got Amazon, you've got, you know, Google, you've got Microsoft, everybody's doing that.

And a zillion other companies building cloud based software. The same thing is happening with infrastructure in orbit for the space economy. 

Jason Hall: You know, it's really interesting. Just an observation that just came to mind. And I'll be interested in your thoughts on this, that ties into rocketry in most industries.

You want to scale up, right? That's where you get operating leverage. But when it comes to putting stuff in [00:52:00] space, bigger is usually worse because for every kilogram of payload, you're adding, you have to add, I don't, I'm making this number up, but it's directionally right. You have to add two kilograms of fuel, right?

To do it. So it's like in a lot of ways, Getting smaller can generate potentially better economic results, 

Simon Erickson: which is why Elon only goes to where he wants to go, right? You don't want to be spending more on fuel to be sending your rocket all over the place to deliver the satellites where they need to go, go where you want to spend the least amount you can on fuel and the most that you can on the payload.

That's awesome. 

Jason Hall: Simon, this has been a lot of fun. We're almost an hour in and it's been worth every single minute. We would be remiss if we didn't make sure. Sure. Plenty of folks on Twitter know where to find you. Where can the folks that aren't on Twitter, where can they find you? Where can they find more about 7Investing?

Simon Erickson: Yeah. And thanks very much, Jason, for the opportunity. It's really nice to chat with you again. And I really appreciate being part of your show. You know, our, our website is 7Investing.com. We make stock recommendations each and every month, new recommendations. [00:53:00] We also then follow up with our best buys.

You know, we mentioned that we've got a huge scorecard now we'd like to highlight which of those we have the highest conviction in, and we put all of them transparently, even the, even the bad ones too, just as transparently as the good picks that we've made on a scorecard. And so it's 7Investing.com. You get started for $1 at 7Investing.com/subscribe and see everything that we have to offer. 

Jason Hall: I encourage people to check it out. Find him on Twitter too. We're going to put all this in the show notes. We'll have links in the transcript as well. You can sign up to get the transcripts in your email every Wednesday when the podcast comes out, go to InvestingUnscripted.com. We'll have that link in the show notes as well. Jeff. 

Jeff Santoro: I agree. 

Jason Hall: You're supposed to say I have nothing to add. 

Jeff Santoro: I'm not stealing. I'm not stealing Charlie's line. 

Jason Hall: Fine. Fair enough. 

Jeff Santoro: I'm making my own line. My line is I agree, which is not nearly as cool. 

Jason Hall: No. No. I have nothing to add. 

Again, Simon really appreciate you coming on.

It's a lot of fun. Look forward to having you on again sometime soon. 

Simon Erickson: Thanks very much, Jason. Thanks, Jeff. Appreciate it guys. 

Jason Hall: As always, everybody [00:54:00] like to remind you, we love to give our answers, these hard investing questions. Have great, brilliant people like Simon come on, give their answers to these hard questions about investing, picking stocks, making the best decisions you can for yourself and your family.

But it is always up to you. You have to own it. You have to find your own answers. You can do it. I believe in you. 

All right, Jeff. We'll see you next time. 

Jeff Santoro: See you next time.