mYCharts - April 21, 2021
Don’t Short a Cult with Gannon Breslin
Q: Give us an overview of your background in the markets. What is your investing philosophy?
A: I started investing over six years ago during my senior year of high school. I didn’t have a job and had only a little money to play with, so I started day trading and swing trading highly volatile small cap stocks. During those early years the growth in my account was mostly a wash, but my skills and experience steadily climbed. My investment philosophy started to take true shape once I went to college. I attended a federal military service academy (USMMA) and, needless to say, we weren’t allowed off campus very often. Instead of playing video games until my eyes fell out (like some other midshipmen), I watched every finance Youtube video I could get my hands on while picking up books like The Intelligent Investor, The Richest Man in Babylon, and others. I even read study guides for the Series 7 even though I had no intention of taking the test at the time.
Fast forward to today, I work for a data analytics company named Tesseract Investments at which we use sophisticated machine learning methods to better estimate the fundamental factors driving the market across all equity indices. I started tweeting my personal thoughts about the market a year ago and that’s when I created my Rebel Market’s Newsletter covering financial education topics and stocks that I own in my personal portfolio. Currently, my overall personal investing philosophy revolves around finding companies that are high growth, easy to understand, have an observational/viral factor, and seek to change the future. Although I consider myself a fundamental investor, I have a passion for all things electronic so I find myself investing in high growth tech companies more often than not. Along with the points made above, I also tune into companies that have an asymmetric risk/reward potential, a strong customer base, are on course to disrupt an industry, have a very active CEO, and if possible are “undervalued” or fairly valued in this ultra-high valuation market.
Q: Can you tell us about the origins of $CULT ETF and your philosophy on the increasingly popular #FinTwit?
A: Investing is incredibly fun for me, and I try to constantly keep my content on Twitter unique and exciting to match that. As much as it’s interesting to read summarized 10ks, I like to shake things up a bit and discuss off the wall ideas. It all started with my semi-serious, semi-satirical thread covering how Peloton (PTON) has turned into a “cult-like brand”. As a shareholder of $PTON, my thread covered how I think it is a unique investment not only because of its incredible revenue and subscriber growth but because of its catchy branding, status symbol qualities, competitive “gamifying” aspects, and push into the music industry. The thread had great reception and a lightbulb went off in my head to make a fictional ETF using YCharts named “$CULT” that holds similar qualities. Whether it be a crazy fan base, status symbol, catchy brand, larger-than-life CEO, or sleek product design, every stock inside of $CULT has a similar theme. I wanted to explore this phenomenon and track the performance of these companies and YCharts’ Dynamic Model Portfolio tool offered the best solution.
Right now, FinTwit is a space that is exploding like never before. I believe that every investor has an entrepreneurship backbone and, likewise, entrepreneurs seem to like engaging with investors in the equities market. FinTwit in some aspects is a niche part of twitter but it is highly valuable because it lives in an ecosystem of all types of investors, financial institutions, venture capitalists, marketers, and now even big name brands. The reason that some finance newsletters and podcasts bring in top dollar advertising and brand promotion is that their message reaches the full ecosystem — not just traders. I love FinTwit because I am constantly learning about not only other people’s due diligence on companies they have researched but also feeding off of ideas from the other content listed above. Both of these make me a well rounded investor and business person. On Twitter, you can receive business and stock news faster than any other social platform and tweets from specific people can and do move markets.Q: What stocks does $CULT hold? How often are holdings rebalanced or replaced?
A: $CULT holds (in no particular order): Apple $AAPL, Lululemon $LULU, Penn National Gaming $PENN, Tesla $TSLA, Grayscale Bitcoin Trust $GBTC, Virgin Galactic Holdings $SPCE, Nio $NIO, and Peloton $PTON. I created a thread that covers exactly why I chose each company for this made-up ETF. Originally, my plan was to rebalance or replace holdings quarterly but due to the superior performance of the stocks inside of the portfolio, I’ve refrained from making any changes. All weightings started off equal but in an effort to hold firm onto my winners I haven’t changed anything. The old saying “if it isn’t broke don’t fix it,” always comes to mind. Incredibly, as of 4/20/21, the one-year performance of $CULT is around 330%, and the 3-year performance sits at 536%!
Q: When you put together the $CULT ETF, what were you trying to understand or communicate?
A: Although $CULT was originally created out of satire, in reality I was trying to communicate to my followers and other investors how much “virality” and social media has taken the market by storm. I specifically picked stocks that had a large social media presence whether it be via Twitter mentions, notoriety on Reddit forums, chat rooms, Instagram, and even TikTok. We are living in a social media era and it behooves you as an intelligent investor to use all data available to make conscious decisions. Make no mistake about it, hedge funds are now combing through these sites daily to follow the trends of retail investors. In the same way that a video, meme, or product can go “viral”, I truly believe a stock ticker can as well. A stock position should not be made merely off of virality but it definitely should be one part of investors’ due diligence moving forward. I truly believe social media, and Twitter especially, has greatly shifted the market. As we all know, stocks can’t move if nobody buys them.
Q: What have you noticed about how your followers respond to your tweets when you include a visual element, such as a chart, GIF, or video?
A: One of the first things that made me interested in using YCharts was how beautifully displayed data is not just within the platform but also when it is shared on newsletters, Twitter, and other mediums. Simply tweeting “Tesla is overvalued” doesn’t have as much impact as sharing a YCharts visual of all automobile manufacturers’ market cap compared to Tesla’s market cap, and accompanied by other financial metrics such as revenue, net income, et cetera. Having a visual component can give followers a better point of reference and, in turn, your message is better received. Before anyone gets up in arms, I am a $TSLA shareholder so I guess I have a pass on using it as an example :).
Q: In what ways does YCharts help you decide components of the $CULT ETF?
A: YCharts helped decide components of the $CULT ETF because of their handy Stock Screener—with which you can add and modify hundreds of financial metrics to screen for stocks that fit your personal parameters. I was able to find “viral” stocks using the screener and metrics such as “short interest”, “30 day average moving volume”, and more.
Q: Is there a secret tip or shortcut that you’d like to share with other YCharts users or someone considering trying out the platform?
A: Something that is huge for me on YCharts are the three Email Reports that I’ve set up to hit my inbox daily. Each morning I get an accurate picture of stocks on my watchlist, trending industries, and daily U.S. economic data. You can set up your own Custom Email Reports or subscribe to pre-built versions by clicking “Tools” then “Email Reports” in YCharts. It’s pretty incredible how much info and data these emails hold, and they are not only the backbone of a lot of my content on FinTwit but have also kept me incredibly up to date on the pulse of the market.