Shoulder Season
Avoiding the madness of crowds
This is Silvia. She’s built like human artillery. Quite possibly the strongest woman I’ve ever met.
She took me on a tour of this 100-year-old wine cellar, basically a ventilated cave attached to her family’s restaurant. There she delivered a colorful story detailing the history of Ischia, her family’s generational home.
Pronounced “Is-key-yah,” it’s an island off the coast of Naples, Italy. Just a bit north of better-known Capri.
It’s a volcanic island… with an unusual number of thermal springs. They’re everywhere. Part of the beach even boils with piping hot steam seeping through the sand. Like simmering quicksand. I heard but did not verify that you can wrap your lunch in foil, shove it into that sand, and let it cook while you swim in the Mediterranean.
The volcanic springs also produce drinking water with unique mineralization. Silvia claims it boosts female fertility. Then she introduced me to several of her eight siblings…six brothers and two sisters.
In some ways, it’s a misunderstood island, Ischia. It’s not as posh as Capri, Positano, or the Amalfi coast. Yet it’s only ~1-hour away by high-speed ferry…which runs so frequently you almost don’t need to plan in advance.
While Ischia looks similar to these better-know places, this island is more relaxed, more rural. Locals say, “more natural.”
Visitors show up here expecting seafood. Logically, as it sits right in the middle of world-class fishing waters. However, the Ischians eat rabbit. Lots of it.
Silvia explains the importance of rabbit in the culture. Mario Carbone, owner of the eponymous New York and Miami restaurants now so popular they sell memberships for access to reservations, came to try the rabbit. Stanley Tucci did too. There’s an entire wall of visitors pictured with her.
Rabbit is Sunday dinner on Ischia. The man of the house approves of the rabbit, the ladies cook it, and divvy up the meat. It’s a cultural thing… even making its way into the traditional process of asking a father for his daughter’s hand in marriage. They’re proud of the dish, and it’s delicious.
Before The Crowds
In a few weeks, I’m not sure I’d be able to get a table at Trattoria Il Focolare, or anywhere else on Ischia. It’ll be full of summer tourists, mostly wealthy Europeans.
That’s why I visited during the shoulder season. It’s the time after things open back up, after the weather turns, but before the tourists show up. It happens again in September…that’s the other shoulder.
I’ve had a habit of this for years. I’ve never enjoyed battling it out for a table during peak season visiting places like Montauk at the end of Long Island, NY, or Jose Ignacio at the north end of popular Punta del Este, Uruguay, or Miami Beach in January.
Peak season brings a crowd that seems to forget the purpose of being in the beautiful place. They throw elbows to get into the restaurant, the party, or the social club… it matters a lot, to them.
Once in, it always seemed to me like the setting could be anywhere. From Palm Beach to Palm Springs, table placement meant more than whatever natural beauty backdrops the place. The famous cuisine, rabbit in this case, becomes more an expectation to these peak season travelers, than an appreciated treat.
Meeting Silvia during shoulder season meant getting the entire history of rabbit on Ischia, the backstory of the cuisine, the culture, the restaurant, and all kinds of other information I’d never get in peak season.
Plus, try getting a decent hotel room in on Ischia in mid-August. Same goes for Amalfi, Positano, or Capri…forget about it.
I stayed at the 5-star Regina Isabella Resort for half the summer rate… and had dinner at its Michelin 1-star restaurant Indaco with 24-hour notice.
There’s plenty of other stuff to do on the island too. It’s about six miles wide, with ~2,500-foot Mount Epomeo jutting up through the center. That’s a quick rise from coastline to peak. I know because I almost laid down the rented Honda scooter descending hairpin switchback turns on the way back from Silvia’s restaurant in the dark.
Plus, as a gringo who presents as northern European, my Italian isn’t strong enough to read signs while gunning the scooter. I blew through a restricted traffic zone triggering a ~€500 fine. Gregorio, the overly formal concierge at my hotel, promised to “handle it” with the local police for a €50 gratuity…we’ll see if it works.
Missing The Point
Maybe I’m missing out… on something bigger, or better.
It’s possible. The Regina Isabella had a gigantic spa, with two dry saunas, thermal pools, and way too many treatment areas.
With the place largely to myself, yet fully staffed for summer, I took full advantage. Every morning starting out in the 87-degree sauna (194 Fahrenheit), followed by a soak in the thermal pools… with plenty of space to relax.
When someone else did show up, we talked. A banker from Milan was there doing about the same thing. She’s a top merger-acquisition dealmaker focused on the fashion industry…and had plenty of fun facts about deals that made headlines over the last few years.
People seem relaxed and approachable during shoulder season. There’s less posturing, or pretense. It’s easier to have a meaningful chat than on a busy Saturday night battling standing-room-only crowds during peak season. It seems that way at least… Or maybe I just don’t know what I’m missing…
For some reason, there’s an allure to the packed spaces, the lines, the exclusive invitations, and the sparkle of anything people agree is the best. It’s the same way with popular stocks, crowded trades, and hot ideas. FOMO overtakes the decision-making process.
These peak season settings turn into a popularity contest, with little awareness of the true value in winning. When you get away from it, you have a better view. The behavior looks a lot like the symptoms list of the More disease, we talked about last issue.
The problem with More is, when the music stops, you might not have much to grab on to. Anything meaningful that is…
The Danger of Cliques
I learned about Ischia from a friend named Suzanne, aka “Sauna Suzie.”
She told me the island had 100 thermal springs, and I just must visit. Turns out, the locals on the island told me they guessed there might be 10-times that many.
Either way, sauna people, like Suzie, always seem to have some incredibly interesting fact for you. They’re up to stuff, health hacks, travel adventures, or just generally something off the mainstream path.
To be clear, I didn’t fly all the way to Southern Europe to sit in thermal springs and eat rabbit. I had four full days to kill before going to Rome last Monday. Something we’ll talk about more in today’s Postscript. Since it was the middle of shoulder season, I thought I’d go early and visit one of the ritzy summer destinations. That’s where Suzie’s tip proved timely.
Most people don’t travel this way. They need a plan, approved of by friends back home. Telling people you’ll go to some unknown place to nearly die on a rented Honda scooter and eat rabbit doesn’t play well. That’s within the clique at least…
For some reason, we don’t like it when people scoff at our choices. It’s a natural part of being human. It’s the instinct to herd up. There must be some historic, biological safety in it. But those days of primal danger are largely over.
Cliques have major drawbacks. The primary issue is people put more energy and emotional stock into what the elevated clique members think of their choices than they do of the choices themselves… meaning approval becomes more important than experience.
What I learned early on in life, by some accidental circumstance, is the elevated clique members don’t usually like the people they judge anyway. In fact, the more people live in an effort to please them, the less they like them. It’s a paradox.
Meanwhile, the common belief is the outsiders, those not fortunate or unfortunate enough to be in the clique, face some social danger. Maybe so… but in the end, the clique leaders marvel at what they’re made of… these outsiders who have the superpower of not caring.
I’m not sure you can fake it…the not caring what people think. I’ve had this trait as long as I can remember. I didn’t choose it.
All the way back to primary school, which went down in an incredibly small and rural eastern North Carolina town, there were cliques. The kids of tobacco executives, bankers, and the local beer distributor, formed an impenetrable clique. What never made sense to me was the school occupied a remodeled horse stable and farm, with a few “newer” buildings from the 1970s. Given the setting, I could never make sense of the arrogance.
Fast forward, those clique members amounted to nothing enviable. They turned into commercial real estate brokers, or insurance agents, pretty much careers with low barriers to entry.
Meanwhile, an entire world waited for me outside the school. A world the cliques didn’t seem aware of. I didn’t care about status in the horse stable, or the now-impoverished town…I wanted to see the other 99.999% of the planet. And I did.
Change Your Perspective
The view from inside must be the problem. You can’t see where you are when you think you’re the center of any story.
It’s why people herd up into trades they think will get a favorable response from social acquaintances. It seems safe if the smartest people are doing it. That’s a bad litmus test for any decision.
Just like with the symptoms of the dangerous and often financially destructive More disease, the cure is in changing the question. Instead of what people might think, we need to decide if we’ll be happy owning something, regardless of price.
If you look over a portfolio and ask that question about the holdings, the answer should not change with price.
For instance, in a July 2023 issue of TTL we bought a food stock focused on natural ingredients… the kind that aware people might become interested in over time.
Slowly, people caught on. The stock is up ~350% in 22 months… and now seems to be something people all-of-a-sudden care about.
Sure, we’re profit-seeking investors… that’s obvious. But we owned the stock because we liked the business, the set-up, and how its leadership approached what looked like a coming surge in awareness. And it worked.
Our starting point wasn’t popularity…it wasn’t even price. It was our preference. We wanted to own the company as a real shareholder. And it paid off. ~350% slowly accruing over 22 months is hard to beat.
It’s more than money, it’s about clarity. It’s about getting on a train with the right destination, and less about the assigned seat.
You Have It…Or You Don’t
Keeping a clear mind means being a little odd at times. It means you might not get invited to all of the best parties. Or if you do… you might get the occasional funny look. New ideas always look odd initially. We should worry when they do get popular.
So far, gold is not one of those popular ideas. When we see a headline about gold investors needing bodyguards, we might sell. We’re a long way from that right now.
The issue is, with a total known value of ~$22.5 trillion, gold is still unpopular in the mainstream. ~$22.5 trillion compares to ~$2.2 trillion as a value of Bitcoin (XBT). Subscribers know more about how we approach this in the Trustee Portfolio.
What’s odd about gold is the average person seems to have no clue how to buy it, own it, or why they’d want to do either. Compare that to XBT, which in addition to plumbers owning it, or lesser cryptos like meme coins, even assistant plumbers know how the trade works.
In Why Gold? Why Now? I did what I consider my personal best to explain the means and methods of owning gold… meaning physically having it.
There’s about every imaginable way to run into trouble buying gold… buying an antique carpet in Fez, Morocco is more straightforward. It’s why for most people, sticking to the four most respected sovereign minted 1oz coins is a good starting point. (See chapter 20 of the book)
You can skip the last two pages…of that chapter, where I list several dealers I’d done business with at the time, back in 2020.
Things change… and recently, I’ve been stunned at how much they change… in just five short years.
As the book explains, dealers make a spread. It’s the difference between the 1oz of gold contained in the common coin, and the sale price. While this is low by percentage… it gets quite large by dollar amount with today’s gold price.
What shocked me most recently is the behavior of dealers, who I’ve known for many years. Some are unavailable, having apparently made too much money to answer the phone.
Others appear wayward in not shipping product. That means, requiring payment prior to waiting 5-8 weeks for delivery… which is unacceptable.
Unacceptable because I have it on good authority that the distributors, known typically as authorized purchases (from the mint) have tons of product. Take this statement for instance, from another dealer.
“Absolutely no premium on 1 oz gold coins. 1 oz random dated gold eagles for essentially $15 over spot! They can’t make them for that. No bid on low grade 1879 – 1933 U.S. gold – yesterday I melted 2 pounds of it.”
I ordered 20 coins from the 8-week delay dealer… who I’d know since 2008. These are common coins, Krugerrands and U.S. Eagles. We’re not talking about rare French coins from Napoleon’s estate.
While it’s impossible to know, receiving a wire then waiting eight weeks to ship product gives the look of using customer cash to float the business. Especially when competitors offer delivery in days.
Only the owner would know what’s really going on. So, I emailed him asking for an explanation… and he didn’t answer. This is after doing a lot of business there over many years. The optics are not good.
While I’d love to re-write Why Gold? removing Chapter 24, another instance where things changed drastically from the 2020 plan, and now striking the last few paragraphs of Chapter 20 replacing it with, “These are the coins I buy and use a Google search to find a dealer,” I’m not going to do that… Going nip-tuck on printed work goes against my personal code, as a writer.
Writing a book means taking a big risk, printing things as you see them…at a moment in time. It means sometimes you’ll be wrong. Other times, things change. This is one of those cases.
That said, we will fix typos in TTL post-publication. There are not many. But Joe A. emailed after the last issue to chastise us over two such errors… which we promptly attended to.
What Joe A. couldn’t know was on the eve of that issue the crew of Air France flight 11 from JFK to Paris informed us after takeoff, “Zee wee-fee will not be working tonight” which left an impossibly short amount of time to final polish TTL from the Charles de Gaulle T2 Air France lounge.
While we shoot for zero typos, it happens. If you find one, and it bothers you, tell us, so we can fix it.
Modern Profits
There’s a new trade in the market. It’s fast, and once you see it, there’s opportunity for very quick profit...it’s a modern side effect of centrally managed markets.
Before we get to some examples, let’s clear up the three ways to read TTL…
Free – Have access to the first section of the issue up to a paywall. When it’s time, cross over and join us.
Paid – You know the benefits… locked-in annual renewal pricing avoiding increases, regardless of inflation. Plus, the Postscript, and Portfolio.
Founder – This is one notch above and includes at least quarterly updates from the desk. More recently, it includes notable market anomalies showing up between issues.
There’s a reason I have all those screens behind me in TV interviews… and recently, they’ve more than paid for themselves.
Early this month, Founders got an unexpected note about the state of America’s waistline… which is stunningly large. This was not an issue of TTL you missed. It was merely a timely point to Founders between issues.
While the shape of America is unspeakable in sensitive circles, people finally figured out they’re eating themselves to death… and there’s another way.
We knew this a while ago, like decades, and Founders even got a look at my personal BMI measurement, among other things… the purpose of that unscheduled, early May issue was to point out the wall of money sending select stocks vertical within a few short weeks.
While not a TTL recommendation, some Founders surely used it for action…which showed up quickly.
There’s a much bigger point here. It’s the unusual surges of money rushing to single-stock trades… then away, and sometimes back again.
This stock shot to highs in February, with the overall market. Then fell in the April swoon, then shot back up again to try for a new high…
That led to a roughly ~40% move, in about two weeks… which is staggering.
And it’s not the only one…
While people claw the walls waiting for NVDIA Corp (NVDA) to get back to ~$150/sh or whatever arbitrary number they have in their head, Founders know those NVDA holders probably won’t sell when they get the rally.
The average stock owner is so bamboozled with narratives they can barely get a grip with FOMO before it’s time to panic again…
About the time the panic fades, the symptoms of More disease flair up. It’s more than people can handle.
We’ve lost the investor skill set needed to think rationally, navigate, and own. We’re a nation of speculators, desperate for more. Yet unable to say how much more would satisfy us.
That’s why brokerage Charles Schwab Corp (SCHW) made “thousands of pre-margin-call-calls” reigning in over-leveraged retail traders… during what now appears like something people forgot about…the April panic.
People prayed from foxholes for relief… only now to worry they’ve missed out on something. Neither is true.
The charts below show how several stocks moved in the post-April rally… and it looks weak. If that’s true, now’s a great time to distinguish between stocks worth owning, and the ones people use to gamble, unaware the price can go down as fast as it went up.