Bad Company
So why do want to be?
I was listening to James Altucher in an interview where he dropped this line so casually it almost slipped by: “Yeah, had some bad business deals... raised $60 million, went bust.”
Just like that. Like he’d ordered the wrong Deli sandwich.
Someone lost $60 million. Not his money, of course. Other people’s money. LP money. Capital that trusted his vision. And he’s talking about it the way you’d discuss a bad tennis swing.
That’s when it hit me - I’m sitting in the saloon with the cowboy telling war stories, not riding the range with the rancher who actually has skin in the game.
Every Bar Scene You’ve Ever Seen
Think about it:
Pee-wee Herman walking into that biker bar, completely out of his depth
Luke Skywalker in the Mos Eisley cantina where “you will never find a more wretched hive of scum and villainy”
The bar scene in Blazing Saddles where Mel Brooks takes it to its logical absurd conclusion
The saloon is where stories get told: War stories, Adventure stories, Close calls and big wins. It’s entertainment. It might even be educational in a certain way.
The Internet: History’s Greatest Saloon
The internet did something unprecedented - it gave the illusion of truth by giving you access to everyone’s stories simultaneously.
Discord servers.
Twitter threads.
$XXX/year trading newsletters.
Masterminds.
Zoom calls with “successful entrepreneurs.”
You’re hanging out with people. Learning the language. Absorbing the culture. Feeling like you’re in the game.
But here’s what I learned the hard way, spending time in trading communities: You’re actually getting worse at the craft while feeling like you’re getting better at it.
The problem with bad company isn’t that these people are malicious. It’s structural:
Their incentives run opposite to yours.
The newsletter writer needs you to stay subscribed. They need action, hot takes, and constant positioning. But the real money?
I’m listening to Bad Company’s song “Bad Company” while writing this - “company I keep is bad company” - and thinking about how the song nails something most business advice misses (Brilliant song just listen loud)
Bad company creates false feedback loops.
In a trading chatroom full of gamblers, your reckless position sizing gets called “aggressive,” not “suicidal.” In a peer group of unprofitable founders burning through capital, your cash burn rate is “standard for growth stage,” not “terminal velocity toward zero.”
Bad company provides the wrong vision.
You need contrarian conviction sometimes. But if everyone around you validates all your contrarian positions, you lose the ability to distinguish between “early” and “wrong.”
I had a dream about the market yesterday. And in it, the lesson was simple: No one’s going to give you real advice as long as there’s cover-your-ass policy.
The saloon cowboy can tell you anything because he’s not riding out with you tomorrow. The newsletter writer can take any position because he’s not in the trade. The guru can blow through $60 million and shrug because it wasn’t his ranch that burned.
What You Actually Learn from Bad Company
Here’s the useful part: You CAN learn from bad company.
I learned a tremendous amount about futures markets from bad company:
What leverage ratios destroy accounts
What psychological patterns precede blowups
What “edge” looks like when it’s fake
What time horizons are incompatible with survival
Learned some the hard way. And learned from others by observing.
It’s the peer group where you unconsciously absorb norms. Where you pattern-match to the environment. Where the acceptable becomes the sub optimal.
Here’s the filter I use now:
If someone truly has a consistent edge in trading, they scale capital, not subscriptions.
And yet, and this is the paradox of what I’m sharing, the largest Hedge Fund score was this year.
The lucky trader, Sir Christopher Hohn (gee, how did he get that 'Sir' in front of his name, I wonder?), made $19 billion this year. But LOST 8 billion in 2022.
It paid to stick with him.
So when you do pay for a subscription or stick with a guru, you have to know they are consistent and they are good at what they do, but there will be some heartbreaking losses. But when they win, they are legendary.
So when the bad boy has that feel about him, stick with him. But don’t look for others.
Consistency is key, not profits
The people that make it do it every day. And the ones you’ll attach to are the one that make sense to you. You will only figure it out through constant engagement.
Real edge comes from:
A multi-year track record
Skin in the game unless you earned the right not to
Time horizons longer than the next newsletter issue
And SECOND
Don’t pay someone to think for you. Build your own frameworks.
They (me) are your tool.
Try it and move on
Altucher had an interesting tidbit. Try it, and if it didn’t work, move on; you get it on the next go. The saloon is more fun than the ranch. The war stories are better than the boring work of fence repair and water management.
But when winter comes, the cowboy in the saloonruns out of bullets and booze.
You got to always keep at it.
What I’m Actually Building
For my Substack readers: I’m showing you how to connect the dots. Not connect the 10k, with 4a, and the export data from Sri Lanka, with a murmur from the Prime Minister of Rhodesia, or a smirk from Carney, and a handshake from Bessent. Along with a quant model built with ChatGPT in Python to convert to an upstream Weather prediction model.
For my AI development, I’m sharing my challenges, my vision, and what I’m doing to get my very pleasurable Headlines AI off the ground.
Plus more as I flesh it out
The saloon bar will always be there. The stories will always be compelling. The cowboys will always have adventures to share.
So why do we like those bad boys?
Because sometimes they are the only ones available to save us during the clutch.
And NO I am not referencing Han Solo’s epic save in Episode IV (really 1)
I’m talking about Ulysses S Grant - the down and out West Point Graduate and alcoholic who saved the North.
When he got into business after his Presidency and ran a bank, it didn’t turn out as he expected, and he had to write a book to leave a legacy for his family.
It’s noble. It’s great. I own a copy. I went to his burial in Washington Heights.
He inspired me (and JD Vance’s look)
But if he’s not leading you into battle, there may be better folks out there to help with the investing decisions.
Abe Lincoln stood by that war horse, and it saved the Union
What’s your saloon bar story? Where did you finally realize you were listening to war stories instead of learning warfare? Hit reply - I actually read these.
For subscribers today, I talk about one Aussie stock that’s moving and should capitalize on Aussie appreciation, Industrial metals globally, and economic growth
