Getting Drunk, Buying Stocks

Hello Outsiders,

Do you get drunk?

Sometimes, all the time, none of the time? It’s fine…

Until it isn’t.

If you do — and I’m guilty as charged — I would recommend that you don’t invest while doing so. I actually have been quite successful doing so somehow. But I’ve also made some seriously bad decisions…

I once got drunk and bought too many shares in a mining penny stock. It went to zero.

But I once got drunk and did a day’s worth of yard work. I figured that it was a good time to buy Home Depot stock. I’m up 132% on my own and — more importantly — my Crow’s Nest portfolio. So if you do decide to take a tipple off the nipple, please invest in something you know and understand.

Such debased things are happening now more than ever…

A new survey from consumer finance website Magnify Money found that 32% of U.S. investors have made trades while drunk. That sounds charitable, based on some drunk conversations I’ve had with high-net worth people. We had drinks, and they all had stories about bad decisions they made while under the influence of the devil’s brew.

They were typically older, and still had their wits about them.

Gen-Z, however, had a 59% rate for drunk trading, due to Robinhood and inexperience. The survey found that 66% of all Americans admit to making impulsive investing decisions.

The boomers are only saying 9%. Liars…

I don’t blame any of them, though. It’s the equivalent of swiping right on some dating app in the late hours of the night.

“The app’s simplicity and graphic design make trading feel like gaming. The platform has drawn in young investors by presenting complex financial instruments like a fun game,” the Addiction Center wrote in a post. “Unfortunately, financial experts believe that instead of helping users, the app is purposely downplaying trading risks. They suspect it to be a method to get users hooked to their platform.”

“When a new member joins the platform, an image of a digital scratch-off lottery ticket pops up on their screen. The picture is a welcome stub, a gift for joining Robinhood’s community. The app’s stub promises a free share of stock worth anywhere from $2.50 to $200. If the new trader wants the prize, they have to play by ‘scratching off’ the image like a lotto ticket,” the Addiction Center explained.

That is what you want to avoid…

I asked around the office and heard about a bunch of interesting stories in this vein. I will allow them to remain nameless, but here are a couple of the office Slack chats I had:

i drunkenly bought NOK while taking a piss at the wisp ski lodge… lost 12.7% on the trade.. just sold it on like tuesday haha

— M

i bought a chinese bio-fuel company at 1am from little havanas one night… put the MARKET order in on a saturday and didn’t remember doing it, so it executed at monday’s open

 

4 weeks later Seeking Alpha published a short attack on it and the stock cratered

 

— K

 

I got ripped on rum after one of our office pirate cruises and put in a buy order for Diageo. made about 25% so far. not bad!

 

— J

 

Knight Trading collapsed a number of years back and I made money on the Dead Cat Bounce. buying and getting out whilst inebriated. it was a sweet move. rebounded and made 80% in two days

 

— JC

As you can tell, like with any investing, results may vary. It’s kind of like what they say about writing: write drunk, edit sober. You need to be able to keep track of your finances. You need to understand why you’re investing in a company before pulling the trigger. You need to do your homework so that when you do make that impulse buy, at least it was well-reasoned at some point.

 

 

That’s why I travel the world in order to vet companies before I make that stock recommendation. For the Adventure Capitalist — my brand-new service — I go where other financial writers won’t. I’ve traveled to Transyvania and sat down with agriculture executives to enjoy palinka, the Romanian equivalent of moonshine. It’s a fruit spirit that has been around the area since the middle ages. Vlad Drac — the inspiration for Dracula — certainly imbibed. It is a taste I won’t soon forget…

 

I flew to Colombia to visit the world’s largest outdoor cannabis farm. I dined on bandeja paisa with CEOs and finished dinner with aguardiente — the national liquor of Colombia. It loosely translates to “fire water,” and is distilled from cooked sugarcane, typically coming in close to 30% ABV. It burns. It burns a lot…

 

I’ve done the same with powerful people in all areas of the world: Mezcal in Mexico, Labatt Blue in Canada, and Gammel Dansk in Copenhagen (hilariously considered a breakfast drink). You need to be able to get powerful people into comfortable situations if you’re going to have any shot of getting the truth out of them.

 

I have prepared an entire presentation about why and how I do this, which you can watch right now.

 

 

My next adventures are just ahead. I can’t wait to show you the next crazy drink I enjoy in a foreign land. In the meantime, dream drunk, invest sober.