Dave Portnoy: Picking Stock Symbols with a Scrabble Bag — better returns than Buffett
Stocks are celebrating all-time highs. Apple, Google, Amazon, Tesla. The list could go on for a long long time. The view into the deep green portfolio is cool. The temptation to throw all the saved cash behind it is great. „Stocks only go up“, they all saying. And at the moment that is true. And the founder of Barstool Sports is right. Dave Portnoy is incredibly entertaining when he raves against familiar faces from the investment industry. The easiest game he’s ever played, he says. Stocks only go up, he says again and again…
Let’s take a look.
One would say it’s certainly bold to call Warren Buffett washed up. To build up an investment company worth hundreds of billions over decades and deliver annual returns averaging 20 percent must first be imitated. But Portnoy did it. He called Buffett washed up. And maybe there is something to it. Buffett himself says that he is no longer up to date when it comes to certain stocks. Amazon, for example, Berkshire missed, lost potential billions (even though they have built up a relatively tiny position in the meantime). Warren Buffett swears by his „Circel of Competence“. Only investing in things, he totally understands.
Was Warren Buffett wrong at Airlines?
And then there’s the other thing. Warren Buffett was wrong, at least when you look at the rear view mirror. When he announced at the annual shareholder meeting that he would close all airline positions at a loss, he was referring to the uncertainty. It was not foreseeable how the travel industry would develop during the Corona pandemic.
But at the moment, airlines are among the winners par excellence — at least if you have bought on the bottom. Several hundred percent were in. Cruise lines were also among them, NCLH having meanwhile risen from a good eight dollars to 24 and more at one point, i.e. over 300 percent.
Scramble some letters together and buy the stock
At the forefront of the people who have put their money on airlines and cruise lines is Dave Portnoy, the founder of the popular sports blog Barstool Sports. Over 1.5 million people follow him on Twitter alone. Every trading day at the start and close of the stock market there is a (really worth seeing) livestream — and then Portnoy delivers. He claims that you can just scramble some letters together and buy the next best ticker symbol — because stocks only go up. On Friday he took out a Scrabble bag, pulled some numbers and banged 200 000 dollars in RTX (Raytheon Technologies Corporation), not knowing anything about the company.
You can also really get excited when he walks through his portfolio and reads out the positions. “Fuck this,” “Fuck that.” He rages against the Suits (“We are pounding the suits”), the hedge fund managers and bankers who urgently warn of the next crash. The valuations of many companies, today higher than before the crash, make no sense, they say. Portnoy repeatedly asserts that stocks only go up.
He also likes to take on Warren Buffett, saying it is not Buffett’s fault that he is old. Portnoy, too, will be old one day — unless his brain finds a way not to age, which wouldn’t shock him — awesome Tweet, to be honest!
A few more tweets over the last few days…
There’s no question, Dave Portnoy is raking in money right now. And his influence will surely have moved thousands to sign up for an online broker. Many of these people are also currently earning a lot of money — certainly also with „scrabble tips” from Portnoy.
According to celebrity net worth he is worth an impressive 118 million. A good piece has been added in the last few weeks.
Because he did not buy anything in the 19-day bear market. Just before everything went down the drain, he even sold all his airline positions, as just mentioned. Warren Buffett is currently sitting on more than 137 billion dollars in cash. If he had used that in the crash, he would have made XX percent now, would have, would have, would have…
Maybe a slip. But very unlikely.
Warren Buffett is 89 years old. If there’s one thing he can do, it’s think long term. 20 or 30 years or even longer is the timeframe he likes to invest. Warren Buffett doesn’t care what a stock price does today, or tomorrow, or next month. He is interested in whether the company is worth more in the long run. Forbes currently puts Buffett’s assets at over $71 billion.
It is well known that the one who laughs last laughs best. So if there really is to be the next big crash in the next few months, which so many fund managers are now warning against, Buffetts Berkshire can slam 137 billion dollars into the market and buy at bargain prices, thereby building up even more gigantic assets in the long term.
Recently, the opportunities to buy were still lacking, Buffett explained at the annual meeting (here is a summary).
It could be one of the last very very big actions of Buffett. To show once again what he has proven for decades. No emotions when it comes to investments. Persistence. Ignore everything around you. And become aggressive when everyone else is afraid. And get rich in the long run. Richer than almost everybody on this planet. And let all those look at you who have spent all their money now because stocks are only going up and will have nothing left, when sh*t really hits the fan.
It’s just a matter of time.
It remains to be seen whether Portnoy will be the symbol of a new bull market with millions of new investors or will represent the end of the this very bull market, as many high-ranking hedge fund managers “predict”. Until then, the potential profit from investments in airlines, cruise companies and the like is huge. The FED keeps pumping money into the market and it really looks like stocks are only going up. At least for now.
How this will turn out, is for the future.
The bottom line: Looking at the past Warren Buffett is without any doubt the better investor of those two. And Dave Portnoy is most likely not the next Warren Buffett. But he’s one of the greatest entertainers. Thats for sure!
Thanks for reading!