Investing on the Scarcest Resource: People’s Time
Time is a funny thing. You don’t realize how valuable it is until you’ve run out of it.
A powerful king, known for his wealth and influence, sought counsel from a wise old man in his kingdom. One day, the king asked, “What is the most valuable treasure one can possess?”
The Parable of the Wise Man
The wise man responded, “Your Majesty, imagine if someone offered you a chest filled with gold and jewels, but in exchange, you would lose a year of your life. Would you take it?”
The king paused and then said, “No, for no amount of wealth is worth a year of my life.”
The wise man smiled and continued, “What if they offered twice the wealth but took two years from you?”
The king shook his head, now understanding. “I would not trade even a moment of my life for all the treasures in the world.”
The wise man concluded, “You see, Your Majesty, time is the most valuable resource because, unlike gold or jewels, once lost, it can never be regained. The true treasure is not in what you possess but in how you spend your time.”
Most of the time you hear stories like this, it’s to preach the importance of spending time with family, friends, etc… but I’m not here to do just that. I’m here to make some goddamn money (then preach the importance of being purposeful with your time). I told that story to reinforce the VALUE of other’s time and how that can be the scarcest resource. For instance, here’s Reed Hastings on Netflix from 2017… battling for your time
“You get a show or a movie you’re really dying to watch, and you end up staying up late at night, so we actually compete with sleep. And we’re winning!” – Reed Hastings on Netflix
I use time spent as a major flag for where to invest. That’s why two of my largest positions are Meta and Spotify. They dominate your screen time and your earworm time. It’s not an exact science, but I like to sometimes think in marketcap versus the share of time companies have of available time. This can lead to huge optionality that the market often underestimates.
Investments on Time
My favorite three investments based on time share from the past 5 years have been Meta (duh, any one of their family of apps would quality), Netflix and Spotify. You can even get a little creative when you look at this and think of a company like Apple (i.e we spend an absurd amount of time on our phones… which Apple found a way to monetize via the app store).
One stock I find interesting in this thought process is Roblox. They have gone up to 17 billion hours per quarter. For reference, Netflix is approximately ~50 billion hours per quarter, but has a 10x higher market cap. I think this gap makes sense… for now. Roblox isn’t profitable and doesn’t appear that they will be profitable (without funny accounting shenanigans) anytime soon. I just don’t think Roblox is a very serious company from a quick review of their P&L. This should be a profitable company and if it isn’t at this scale… I don’t know when it will be. Either way, I think this is a fun way to think about new investment opportunities. It’s just one of many steps in reviewing a stock though. Many of these opportunities are already “priced in”… aka the market has already adjusted for the opportunity.
The Other Side of Time
While I love being a ruthless capitalist, I think you need to be purposeful in not letting these companies slowly swallow your time. Step back and look at your phone screen time / laptop screen time / TV screen time. Be purposeful and don’t let Netflix / Roblox win the battle for your time. The ruthless capitalist in me is betting that you’ll lose that battle though.
