Shownotes
BIO: Jack Farley is the host of the Forward Guidance podcast. He is interested in all things liquidity, macro, and central banking.
STORY: Jack bought a lot of put options on the markets and individual stocks, notably Tesla, in February 2020 when the market was bearish. When the market crashed in March 2020, Jack made so much money. But, soon, the market started going up, and his position dropped to zero.
LEARNING: Don’t view the market as a place to create wealth; view it as a place to grow it. Don’t confuse being lucky with being an intelligent investor.
“When you get a windfall, realize those gains, and at the very least, trim the position down.”
Jack Farley
Guest profile
Jack Farley is the host of the Forward Guidance podcast. He is interested in all things liquidity, macro, and central banking. Jack graduated from Brown University with a degree in Economics and has done nearly 500 long-form interviews on investing and macroeconomics.
Worst investment ever
Jack had gotten quite bearish on the market in January and February 2020. So he bought a lot of put options on the markets and individual stocks, notably Tesla. All individual stocks crashed throughout early March 2020. Jack made so much more money than he ever thought was possible.
He continued consuming this bearish macro content from CNBC, Bloomberg, and the Wall Street Journal. When the stock market rallied from March 23 to April 1, Jack was told it was just a bear market rally and believed it. But the market continued to grind higher, and Jack’s position kept falling until it reached zero.
Lessons learned
- Know the difference between winning because you were smart and made the right decision and when you were lucky.
- It’s really tough to beat the market.
- The ultimate hack is to beat the stock market and then invest in the S&P 500 for the rest of your life.
- When you get a windfall, and you’re lucky enough to win the day, don’t assume it’s because you’re so smart because, most likely, you’re not.
Andrew’s takeaways
- Set up your wealth creation engine. That’s either your business or your salary.
- Don’t view the market as a place to create wealth; view it as a place to grow it.
Actionable advice
Don’t play in markets where you don’t know what you’re doing.
Jack’s recommendations
Jack recommends listening to his podcast for a deep-dive conversation on finance. The talks are associated with what’s going on now.
No.1 goal for the next 12 months
Jack’s goal for the next 12 months is to create kickass content for his podcast and grow the show.
Parting words
“I feel like a winner for having been on the show.”
Jack Farley
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