You’ll have to excuse the break in regular programming today. This is the last Fat Tail Daily you’re going to get from me.
I quit.
It’s a weird feeling. Fat Tail’s taken up a big chunk of my working life. But it’s time for me to move on.
Was it really nearly 14 years ago that I walked into a small office in St Kilda, wondering what the hell I was doing there?
That office belonged to Fat Tail – or Port Phillip Publishing, as it was originally called. All I knew was that they published “ideas”.
Yes, it’s true. There I was, 30 years old, with diddly squat to my name.
What was I doing there?
I grew with up with little. My parents never remotely discussed building wealth, stock markets or finance.
There was no head start for me on anything. I bought my first car. I scrounged the cash to go travelling. I saved my first house deposit. It was on an oily rag all the way.
All I knew about making money growing up was that you got a job, and it paid you.
My dad’s favourite phrase was, “I’m here for a good time, not a long time.”
Hey, he’s great fun to be around. But a saver? An investor? No.
In fact, the only time I heard him talk about a share is when his boss was hyping some telco back in 1999 or 2000.
Dad said one night, “Everybody says this share is going to $2.”
It was 20 cents at the time. Dad put $10,000 in it.
It went to zero.
I didn’t know it then, but that was the dot.com bubble.
I didn’t know something else then, either, that I do now.
When “everybody” knows something – take your money and run.
My dad is a man of action. He sails. Golfs. Fixes things.
I don’t think he’s read a word of what I’ve written in 14 years, which is saying something, because we can debate the quality but certainly not the quantity.
He walked by my room once, when I was a young teenager.
“There’s my boy,” he chuckled. “Reading while the world goes by.”
As it happens, reading was the best thing I could’ve done.
I started reading about finance one day…and two decades later I’ve never stopped. It’s been paying the bills for a long time now.
I’m useless as a carpenter. Can’t hammer a nail straight. Engines? No idea how they work. Managing people? Ugh.
I’m terrible at listening. Tell your problems to somebody else.
The military? I’m blind as a bat. These days I have a crook left knee to boot.
Nope, I’m only good for reading and thinking. It’s my superpower. I hope AI doesn’t prove my kryptonite.
That’s why I thought Fat Tail was the most exciting place in the world when I started.
“You’re going to pay me to… read what I would do for free?” I said to the publisher at the time, Dan Denning.
You see…I began at Fat Tail as a subscriber, like you are right now.
In my early naivete I thought the stock market was not for me because it was about numbers. I hated maths at school. Still don’t care much for it now.
But I discovered the stock market is about ideas. The numbers tell part of the story, but not the whole. Oh no.
That’s why it’s possible in the stock market to make a motza on a stock that doesn’t even make money.
Conversely, you can lose a bundle on a dividend paying “blue chip” (CSL, I’m looking at you right now).
Occasionally, the crowd will go nuts for a particular sector. I’m thinking of the marijuana madness about eight years ago.
Most of those firms soared for 6-18 months. There’s barely a viable one left today, at least in Australia.
That’s one example of the hundreds of themes, sectors, stocks and sages I’ve crossed paths with over the years.
In some ways, it’s all the same.
Sometimes momentum works. Sometimes it doesn’t. Sometimes stocks are cheap. Sometimes they’re expensive.
Sometimes the crowd is fearful. Sometimes it’s greedy. Beliefs change. Prices change. Context changes.
You’re in for a bumpy ride if you’re going to sail this sea.
Each day, month or year – even hour – the market deals you some sort of hand.
You can play it. Fold. Pass. Or up the stakes.
How you play the game is entirely up to you.
The only thing you must bring to bear, I think, is a relentless focus on staying in the game.
If you didn’t win today, or yesterday, there’s still tomorrow. Just keep hunting for those juicy ideas.
I’m astounded by the wealth creating opportunities I’ve seen in my time here.
Think of the new titans we’ve seen in the last decade: bitcoin…Nvidia…Tesla…Afterpay…I could go on.
What’s amazing about the markets is how all this goes on, in thousands of different ways.
How can you not be fascinated by it all?
There’s a belief in academia that markets are so “efficient” that the average investor cannot “beat” them.
I don’t believe this to be true.
Granted, not everyone can win. But the average Joe doesn’t expect to win Wimbledon or the F1 race at Albert Park either.
So, all I’ll say is, if you’re going to give this finance stuff a crack, make sure to give it your all.
That means, to me, just keep reading ideas. Absorb them all. You can never know everything, and you can never know enough to stop learning.
I’m bullish gold, as it happens. I read a guy talking gold down this morning.
Great! He’s stress testing the idea for me. Maybe my idea is not so good. I’ll only know if someone tells me, so I can at least consider it.
I can tell you…people used to hate that we published opposing views in the same firm.
They wanted the false comfort that comes from someone telling you what you should do.
Ideas, debates, theories…they are a dime a dozen.
The reality is that the only thing worth a damn in finance is conviction.
That’s your edge. That’s your idea you know better than anyone, because you did the work.
As it happens, I don’t hear that much bellyaching about divergent views here anymore. That’s a worry. That means we’re probably not casting our net wide enough.
I don’t want to hear the usual flim flam you hear in the financial press.
Ideas are valuable…but only if they’re not widely understood.
That’s why the price changes in a big way, if it’s going too. That’s your chance to go for something amazing.
You’ll only find a great idea if you stay curious.
Yes, that’s the way for me to go out.
Stay curious. That’s all I ever did. It seems to work.
Thanks for reading. It’s been a blast for me – and hopefully fun for you too.
Best Wishes,
Callum Newman,
Small-Cap Systems and Australian Small-Cap Investigator
PS. I’m not dying, by the way. You can still reach out to me on LinkedIn or X. I’m sure I’ll share ideas from time to time. Hopefully you will too.
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