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I am a very superficial and shallow person. If you have an ugly wife or girlfriend, I am going to judge you. In fact, my razor sharp supercomputer mind will draw certain conclusions about you with lightning speed based on your mate of choice. There’s nothing wrong with having a mousy looking wife, or one that is a bit porky, but if you are asking me to put money into your company, I want you to have a smoking hot wife. This tells me that you are a high achiever and that you likely are going to be working until midnight on a Saturday evening.  With this said, have you seen Sam Bankman-Fried’s girlfriend, Caroline Ellison?  I have, and based on this unfortunate image, I would never have spent more than two seconds of due diligence deciding to “give money” to FTX.

I hear you, go ahead and call me an insensitive knuckle dragging Neanderthal. Pissing people off is what I do, but I do it out of love, because I am trying to make you a better investor. Every day I get multiple emails from investment platforms that spew out all sorts of numbers and reasons why “ABC” stock is a buy. Yet, before buying into any business, look at two things. 1) Does it make money by providing a service or product that people want and are the sales of these services and products likely to continue over a long period of time? 2) Character matters, who is running the company? That’s it, there is no sense in viewing balance sheets, income statements, earnings projections, etc. unless comfortable with these questions. I swear, if some talking heads of the groovy financial intelligentsia got behind a company that exclusively sold canned dogsh#t, many of you would open your wallets to invest. Don’t listen to these vacuous snake oil salesmen. See the forest before examining the trees.

Think people. Don’t be afraid to use common sense and show the hipsters of hype your middle finger. Think macro first. Is the industry sustainable?  What type of people are running the company.

The ugly wife/girl friend rule would have opted me out from any FTX involvement, but my sonar would have hit high pitched “Danger Will Robinson” beeps for many other reasons. Here are a few:

Crypto-currencies. Anything that does not involve real cash earnings derived from a free and voluntary exchange of products or services that others willingly buy is subject to strict scrutiny. “Dutch Tulip Bulb” excitement doesn’t excite me.  Mass hysteria to “get in on” deals that seem too good to be true generally are predicative of a future train wreck.

Sam Bankman-Fried has one of those hyphenated names. Since he’s not some sort of British royalty, this tells me he grew up in a house of angry, overly emotional, right brained social warriors who have never had a coldly logical thought in their lives. Grateful dead concerts, hacky sack and sipping green tea does not prepare one for a career in business. Be quiet! Quit booing me. I realize I am a troglodyte. Listen up and you will invest wisely.

Both parents are law professors at Stanford. Danger Will Robinson!!!! Beep. Beep. Beep. Woke entitlement. Hubris. Insufferable know it alls.  To sum up the creed to which they live their lives: “even though I don’t know how to change the oil in my car, and have never had a real job, I am smarter than everyone else and have the right to look down upon you and tell you how to live your life.”  Snore……

SBF dresses like he overdosed on mushrooms and then rolled around in the wet slop at Woodstock before realizing that he had a 9 am meeting.  I’m sorry, Gen Xers, if you want to be respected, dress like it. Respect is earned. Putting deodorant on is not some sort of dreaded submission to toxic bourgeois cultural values, but rather a sign that you respect the exocrine glands of others.  No one wants to see you in a grubby T-shirt and nylon gym pants. You aren’t serious.

SBF is only 30 years old. I remember when I was 26 and my boss and mentor Alex Hamilton scolded me and said “you are really smart, but you don’t know what you don’t know!” How true. I was a cocky little sh#t, and was playing with fire above my pay grade. 30 year-olds don’t know jack, and when they think they know more than 60 year old successful businessmen, disaster awaits.

Woke politics. Beep. Beep. Beep. Danger!!! This simply does not compute!!!! Why would anybody put their faith, not to mention give their money to a man who professes a belief in socialist ideology and latches on to every nonsensical fad of the wacko left?  This is completely antithetical to responsible stewardship of the capital to which he was entrusted, a sure sign that his titanic ship would soon be crippled by an iceberg.

Playing video games during high level meetings. Rude. No respect. Folks the following is the best investment tip you will ever receive, so pay attention. The surest way to tell if someone is a good guy and one with whom you want to invest is to watch how he treats his waitress at a restaurant. I have killed deals where I witnessed a Daddy Warbucks “looking past” and being rude to a waitress. 

Celebrity Status and High Living. Most successful people do not flash their money around. Being  careless and extravagant with one’s money telegraphs a behavior that such person will be careless with your money, not to mention a level  of narcissism that screams of a distorted value system.

Polyamorous lifestyle. Apparently SBF and Caroline Ellison lived in a luxurious Bahaman penthouse with 8 other FTX “workers,” all having sex with one another. Again, creepy, but indicates an extreme sense of entitlement, love of self and lack of loyalty.

Drugs and alcohol. There is much to like about Elon Musk, but I must admit that after I viewed a podcast where he was publicly smoking pot, I have had my lingering reservations. Tesla is a publicly traded company. Do you want the head of the company you have invested money in to be smoking pot and bragging about it? I don’t. Yet, Musk’s indiscretion is trivial and pales in comparison to SBF and Ellison’s  mind altering drug use. Both praised their use of amphetamines in multiple tweets to the world. Caroline was CEO of an FTX sister crypto trading platform, Alameda Research. It has been disclosed that FTX likely transferred $10 billion of client funds to cover Caroline’s bad crypto bets. Here is what 28-year old Caroline had to say in April of this year: “Nothing like regular amphetamine use to make you appreciate how dumb a lot of normal, non-medicated human experience is.” By the way, the obsequious financial media lauded these two as financial geniuses.

Caroline’s father is an MIT economist, generally a useless profession, where inflated self-importance rules. Its adherents blather about issues they know nothing about, but think the world would quit turning on its axis without their blathering. SBF’s parents are now implicated in the FTX fraud. Reports indicate that Mom and Dad had an ocean front “beach house” in the Bahamas deeded over to them, paid for of course by the people who were swindled out of their life savings.   Mom and Dad were instrumental in advising son Sam to give $40 million of stolen money to the Democratic Party. Both parents virtue signal about their love of the downtrodden and how rotten our capitalist system is, but apparently also feel that they are entitled to be rewarded for their compassion by stealing from the people they faux profess to love.  I know the type.

So folks, if you want to be a successful investor, think like an old fashioned troglodyte like myself. If someone is wearing a tie dyed T-shirt and smells like goat sex, be wary. If he has a Che Guevara poster on his office wall, you might reconsider. If you see two empty bottles of Mad Dog 2020 on his desk and purple stains on his rainbow T-shirt, that might be a clue to take your money elsewhere.  I might be shallow and superficial, correction…….., I am shallow and superficial, and I take great pride in being obnoxious and pissing people off, but……I am always right. Remember Rob Is Right. Always. Listen to me. Look at the sustainability of the industry and the type of people running the company first. I am available to share my wisdom with all such that you too can have the keys that unlock the secrets of the universe.

By the way, if any of you ladies need some dating advice, the same rules listed above apply, especially the “Rude To Waitress Rule.” You can thank me by inviting me to your wedding.

Robert C. Smith is Managing Partner of Chartwell Capital Advisors and likes to opine on the Rob Is Right Podcast and Webpage.

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