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The Really Rich Journal

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The Weekly Tone

Innovation, that is, the advancement of a particular field, comes from the outside. Mathematics is advanced by physics, medicine by AI, and entertainment (much to Hollywood's chagrin) by Chinese technology companies. The "in-group" often has such difficulty seeing the forest from the trees, that it takes an outsider to step in, who isn't subject to the same dogma and social pressures to push things forward.

The in-group is obsessive, focused on the wrong problems, and tends to conform to the herd mentality. They think about improvements in terms of what's already been done as opposed to what's maximally possible. It's human nature. Most people just bump along doing their jobs on a daily basis. Today looks a lot like yesterday.

Actually, doing something in a completely new, but improved, way may even get your ass kicked in certain circles - like motorcycle customization, NASCAR, tattoo artistry, academia, and street art.

This phenomenon is happening RIGHT NOW, everywhere from high school lacrosse fields to geology digs.

This discovery isn't my own. It was popularized by mathematician, trader, and author, Nassim Nicholas Taleb in his book, Skin in the Game. The notion stuck out to me enough to highlight in my Kindle for reflection at a later date. In other words, I knew I'd need to know about it at some point in the future.

From my current vantage point, I can undoubtedly say that this concept isn't only true, it can also be flipped as an advantage. This is because skills are transferable cross-field and you're more of an outsider statistically than an insider at any one time.

Here's why:

• Your skills are transferable

• A big picture perspective is often more valuable than a molecular perspective

• You're unencumbered by social pressures and herd mentality

• You don't know how "everyone else is doing it" you just know how to do it better

• You don't care about your reputation because you're not a member of the group in the first place

• Most people, especially so-called experts, don't actually know what they're doing

We have a false belief that if we aren't already "part of the club" be it tech, medicine, law, auto racing, somehow we're barred from entry forever. Certainly, practicing law or medicine require overpriced degrees for the time being (be patient), however beyond certifications, it doesn't mean that you can't disrupt those industries in some meaningful way both enriching you (the innovator) and helping the field, and thus society as a whole.

And, let me tell you, the barriers to entry are paper thin.

I'm an outsider in not one, but two (!) fields, right this second: social media and AI.

You'll think I'm joking when I tell you that I didn't touch social media before creating TikToks about a year and a half ago. I shared the standard fare of useless photos on Instagram to make myself look cool or funny to a minuscule group of my closest friends. I wasn't born into the dogma of the entertainment industry (I was a trader), influencer culture (I'm a third-rate photographer and model), or comedy (I've never taken a class, performed standup, or know much of anything about the art of comedy).

So joining TikTok and rising through the ranks didn't really stress me out in the beginning because I didn't know what I was doing. So, I remained open-minded, didn't care about my reputation, and didn't follow the unwritten rules of professional comedians or entertainers. Essentially, I didn't do what everyone else was doing. And I grew way faster than them.

However, and this is a big, however, I could still: crack a joke, educate and explain, and work diligently and consistently. I learned these skills far before the invention of TikTok.

Notice how core skills can be grown outside of the field in question to be applied at a later date?

Imagine what you could achieve when you look at life this way!

You become the ultimate "bull in a china shop" thrashing around and remaking things for the better. A new multitude of potential appears out of thin air.

Now, allow me to further blow your mind.

AI is a rapidly evolving field that is quite literally changing the world right before our eyes. You would think that the most equipped individuals to further this technology, with amazing products and solutions, would be incumbent Silicon Valley investors, devs, and engineers.

Wrong.

After a call with a large AI and web3 incubator, I can assure you that "they" have no clue where things are headed as compared to a random passerby on the street. The incumbents are suffering from the deepest "forest from the trees" and arrogance that only comes with total oblivion. My call with these folks will go down as simultaneously one of the most shocking calls I've had in my life AND the most lucrative. I can now, more confidently, take advantage of the myriad of blindspots in the marketplace with my AI company. The experts don't just lack an edge over the outsider (me), they're at a disadvantage.

OK, enough about me. Let's play a quick game.

Think about what you're good at and try applying it to a completely new field, industry, role, etc. Make a list of five to ten. Then, seriously consider joining them, competing with them, or collaborating with them, especially if you're unhappy with your current seat.

It's likely a faster path to success than starting completely from scratch.

Remember, by being the outsider, you wield an incredible amount of power. And the best part? No one ever sees it coming.

Just like in an Old Western film, the doors swing open in the Old Saloon, and there you stand: dusty, calm, and ready. A quiet falls over the barroom because everyone knows, in that instant, that things will never be the same in town again.

This week, I’m taking meetings from Miami, FL

Assets: The Three Houses

I just re-established my relationship with my local AD (authorized dealer), via the principles of "Rich vs Really Rich" over the weekend. That is, for the uninitiated, acting in a kind and courteous manner and being interested in what the other person has to say (humility). While wrist wear is top of mind, I thought it would be valuable to compare the three, most popular brands: Rolex, Audemars Piguet, and Patek Philippe while offering a little perspective on why something costs what it does.

These three brands are known for their exceptional craftsmanship and attention to detail, but they also differ in terms of pricing, watch output, and marketing strategies. I care about pricing because it determines who the market is (different people buy $5K watches versus $50K watches), output because that's the yearly supply (or "float"), and marketing because brands that have to market a ton are ofter not investment-grade.

We'll take a closer look at these differences and discuss which brand might be the best investment for the long term.

Pricing:

• Rolex: Rolex watches are known for their classic, timeless design and are considered a safe investment (aka you won't lose much money if you purchase at MSRP). Prices for Rolex watches start at around $6,000 and can go up to over $100,000 for certain models.

• Audemars Piguet: Audemars Piguet is a luxury brand known for its complications (skeleton, etc). Prices for Audemars Piguet watches start at around $20,000 and can go up to over $1 million for certain models.

• Patek Philippe: Patek Philippe is a prestigious brand known for its attention to detail and the most understated of the three. Prices for Patek Philippe watches start at around $20,000 and can go up to over $1 million for certain models.

Watch output:

• Rolex: Rolex is the largest producer of high-end luxury watches, with an estimated output of around 800,000 watches per year.

• Audemars Piguet: Audemars Piguet is a smaller brand, with an estimated output of around 40,000 watches per year.

• Patek Philippe: Patek Philippe is the smallest of the three brands, with an estimated output of around 30-40,000 watches per year.

Marketing strategies:

• Rolex: Rolex primarily uses traditional advertising methods, such as print and television ads, as well as sponsorships of major sporting events.

• Audemars Piguet: Audemars Piguet primarily uses social media and influencer marketing to reach its target audience.

• Patek Philippe: Patek Philippe primarily uses traditional advertising methods, such as print ads and sponsorships of high-end events.

Which brand is the best investment long-term?

When considering which brand to invest in, it's important to consider liquidity and price appreciation, which are a factor of pricing, output, and marketing.

In terms of liquidity, Rolex stands out due to its high production output and widespread recognition, making it easier to turn a watch into cash in a pinch. This may be important for some, who merely need to park some cash in the meantime while hunting down another investment or protecting against inflation.

In terms of price appreciation, Audemars Piguet and Patek Philippe have an edge due to their smaller production outputs and higher prices, which can potentially lead to higher returns if demand for their watches increases. However, it's important to note that these investments may be riskier due to their limited market and lower liquidity (only a small percentage of people ever consider purchasing one of these watches).

In other words, the price swings are bigger. Much bigger.

Ultimately, it's important to do your own research and consider your personal investment goals (and taste!) before deciding which brand to buy, however, one thing is clear: be patient, don't overextend your budget, and do your best to not pay over the list price.

*This isn't investment advice.

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