I Bought Into the Biggest IPO in History While Reading the Book That Told Me Not To

And how the Seven Kingdoms game ties into my investment strategy

Image Credit: Seven Kingdoms

I’m halfway through The Intelligent Investor by Benjamin Graham right now.

The biggest lesson so far? Avoid speculative investments as much as possible.

Speculation is not the same as investing, especially not intelligent investing.

And while that lesson was sinking in, I bought SpaceX.

What Intelligent Investing Actually Means

Intelligent investing means you do your research on a company. The leadership team. The financials. All of it.

I can make a bet that most people generally don’t do that.

I don’t even do that myself for every investment I make.

Instead, what I do is a mix of speculation and investing.

I look at one question: what do we need next to thrive or get to the next level?

I’ve always thought this way. Even when I was playing Seven Kingdoms as a kid, I was investing strategically in research so my civilization could grow, expand, and understand the things that would bring economic power, or help us build more resources, or build in a way that’s more sustainable.

Same game. Higher stakes now.

The Ladder

Here’s how the question plays out in real life.

I believe AI is here, and it’s not going anywhere. We need semiconductors for AI. But AI takes up a lot of power, so we’re now seeing a transition into nuclear. I believe we’re going from coal to nuclear. So naturally, I’m like, well, I’m going to invest in nuclear. And have you learned about the others in flight? Those are really interesting — especially the hydro one.

Then the next rung. If AI is built on semiconductor chips, those chips can only be built so close together. Then you start stacking. Then what? You need something else that can take AI to the next level. I think that’s quantum.

And I’m pretty sure quantum is not profitable right now. It’s still heavily in the research phase. But it could very well be the thing that takes AI to an even more powerful level.

Then the last rung. We currently live on Earth. There’s tons of space out there, a lot of exploration, a lot of unknowns happening. I truly believe Earth has its limits. Eventually, we will need a new frontier.

As you can see, I thrive on speculation. A lot of people do the same; they just won’t admit it.

Why SpaceX Specifically

I was in a fund, and the fund went public, and it did 31x. Part of that public fund had SpaceX shares. Shortly after that, SpaceX itself went public. And I bought more.

Now, I know mega IPOs are traditionally not the wisest move. They tend to be overvalued. But I believe in something Cathie Wood’s actions have conveyed for years: there are certain bets you make because of conviction in the actual person running the program.

If something impossible has to be done, it will likely be done by Elon Musk.

I think about the Return to Space documentary immediately, watching him get rockets to the point of reusability, something the industry treated as fantasy. That’s one of the reasons I invested. I’m betting he will do whatever it takes to get to the next destination.

Notice I said betting. Not knowing.

I’m not buying SpaceX in bulk. I bought a position I’m willing to lose. That’s the deal I made with myself: some of my portfolio goes to speculation, to the big bets, to the ones people think will absolutely lose. Sized so that if they do, I’m still standing.

The Part You Can Steal

Most people are not going to be Warren Buffett. You’re not going to study financial documents every day, all day. Fine.

Then study your market instead.

I work in technology, so I’m watching where technology is headed. What tools are we starting to need? Which tools are becoming obsolete, and which are becoming absolutely essential?

Study the people behind the company. Study the projects they’re working on. Whatever genuinely interests you, learn about it, and stay current on it. I’ve always had an interest in space (Mars is the best planet, of course). That interest became an edge.

That’s my philosophy. That’s why I bought SpaceX.

One More Thing

Graham is still right. Speculation dressed up as investing destroys people and their portfolios.

The difference is whether you’re honest about which one you’re doing.

So here’s your choice: study the financials and/ or study the people and the market. OR pick one and go DEEP.

Doing neither, buying on hype, on headlines, or on what your coworker mentioned at lunch, isn’t speculation or investing.

It’s donation.

Cheers | destinyh.com

Disclaimer: This article is for informational and educational purposes only. It reflects personal perspectives and lived experience. Always use discernment and consult multiple qualified experts before making decisions that affect your finances or life.